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What's Wrong With A Living Wage?
- Thread starter Ford
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arkirk
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Last night about 9 p.m. I walked to McDonalds seeking my occasional ice cream cone. While standing in line, I could not help but notice the working conditions there. The crew seemed to be about six people. There were peeping alarms going off on the deep fat cookers and people rushing around slapping burgers together and on every face, the same blank look. It actually was a terrible sight to behold. I commented to one of my fellow line standers: "Can you imagine being stuck in one of these jobs?" The guy just shrugged and said, "I know, watching it makes you less hungry."
It occurred to me that raising their wages would not be enough. The only thing I have seen that was perhaps worse was being a mail sorter at the post office. Somehow the idea an employer can simply "rent" people for something called "work" and that "work" could be equivalent to a hamster running in a wheel seemed repugnant to me. The guy who made my cone was a true expert and heaped as much soft ice cream on as I have ever seen on a cone that size. I complimented him and his "skill." It is good the management doesn't know about that guy...they would fire him...possibly for using too much ice cream.
What I have really been driving at here is that here is an ugly structure and no matter how good the product may end up being it still is a matter of individual actions of employees. What is it worth, converting all those young and not-so-young people for a period of hours to drudge drones rushing to silence alarms? More than they are being paid!
Well, this is a new one on me and I've been doing this for over 15 years.
Hey loren, do you have a concrete example that you can just share the numbers with us? Maybe I can tell you how to handle the penny correctly.
I won't even charge you my normal $36 internet accounting advice fee.
arkirk
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C'mon guys! This thread is about a living wage. That certainly has NOTHING TO DO WITH PENNIES!
bilby
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Check? That's nothing. I still remember my first day at the NatWest bullion centre, being presented with a bin containing about 2 million pounds sterling, in fives, tens and twenties, and being asked to count it. Took most of the day, and that was mostly using a balance to count off blocks of 100 or 1000 bills at a time. A million pounds in circulated small denomination banknotes takes up a surprisingly small space.
I find I can't eat in a US McDonalds, or similar. The atmosphere is just too... oppressive. UK fast food is less bad. It's also more expensive, but I can actually bear to go into the restaurant.
Sure--but that doesn't mean there is a solution.
Lets take an extreme case to make it obvious: The tax rate is 100%.
Price: 1 cent. After tax, 2 cents.
Price: 2 cents. After tax, 4 cents.
Note there's no 3 cents. No possible starting price produces an after tax price of 3 cents.
In that situation you sell it for 1.5 cents and when you file your taxes, since no US tax form that I'm aware of requires you to put in a fraction of a cent, you pay 1 cent in taxes and keep 2 cents for revenue or vice versa.
The customer doesn't care how you book it as long as they get their 3 cent invoice.
Or you stick the difference in a price variance account if you do full cost accounting.
The customer doesn't care how you book it as long as they get their 3 cent invoice.
Or you stick the difference in a price variance account if you do full cost accounting.
It didn't even add up much in my case--the most I ever saw on the roundoff was a nickel.
I presented an example upthread.
You obviously have access to Excel or the like--create a spreadsheet, make a column counting up by one cent per line. Add a column next to it with the tax applied. Note there are gaps in the second column--those are values for which no possible original value could create the final value.
And accounting went ape over that.
Do the math right.
The worse one was a report that had to be deliberately fudged by a few pennies for similar reasons.
Jobs allocated $x (based on what was in the job) for installation. A certain percentage of that went to the installer (a portion went to payroll taxes, a portion to the guys who inspected the installation etc), the numbers carefully figured so it came out in even dollars per unit of work. Unfortunately, it didn't actually come out even, there was a systematic error of a fairly small part of a penny--and being systematic it added up.
Now, the simple way to calculate things (and what was done on everything but the installation reports) was to simply add up the install budget and then apply the various multipliers to get the amount in each category. However, for anything the installer might see I had to calculate the price for each item, making sure to discard the fractional pennies, and then add them up--their reports couldn't contain the slightest hint there was more in the install budget than they were getting. (They would complain they were being ripped off if they didn't get 100% of the budget, they didn't understand it was our costs, not their paycheck.)
Thus even on the normal report that simply listed a total I had to carefully discard the fractional pennies (because occasionally they would gripe that they were being shorted on a job--two "identical" jobs with different pay--which really meant two jobs that were designed identically but where variations in the walls meant a size had to be changed and that size change was just enough to push it across a pricing point) and so the installer reports would show a different amount for installation than the overall reports. (And this discrepancy could be a dime on a big job.)
Accounting finally agreed to accept that that's the way it had to be (only after the CEO put his foot down, the reports are how they need to be!) but they were never happy with the mismatch.
Ford
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I don't need to imagine it, and I know what that blank look feels like. I spent part of a summer working the grill at McDonald's. Lunch shift. I'd come in late in the morning, set up my station, then around 11:30 when the rush started I'd just kind of go into a burger-flipping trance. Next thing you know it is 1 o'clock and the rush is over. Clean up, work another hour or two, then go home. Lather, rinse, and repeat the next day.
More than just an ugly structure. The fact that people will leave these jobs due to the hard work and low pay is built into the system. Turnover is almost intentional. Get 'em in the door, train 'em, work 'em to the bone and when they quit it isn't a big deal because having people quit is part of the business model. That kid that made your cone? Management doesn't care about him one way or another. At some point he'll figure out that taking pride in his work won't help him earn more money from McDonald's, and he'll either leave and go somewhere that does appreciate effort, or he'll become jaded and will take that attitude with him.
Lumpenproletariat
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Why punish consumers who have to pay higher prices to subsidize the higher labor cost?
We are ALL "punished" because companies are prevented from producing as much and hiring all the help they could in order to improve their service to us as consumers. We are all punished by having to pay higher prices in order to pay all the extra costs that are imposed onto employers.
Why is it good to do this injury or harm to all consumers by forcing them to pay all the higher prices that are necessary in order to subsidize all the whining crybaby employees most of whom could easily be replaced by workers at lower wages?
And all consumers benefit from the lower labor cost of business due to the oversupply of labor. Aren't we all better off when a company is able to save on costs by replacing those expensive workers with machines, as they continue to do? And so why aren't we also better off when it is able to replace them with lower-cost labor?
Why is it that that the employer-bashing "living wage" crusaders never answer the above question?
I'll repeat it again, for the continuing non-answer which it always receives:
Why isn't it good to replace higher-paid workers with lower-paid workers, to save on labor cost, just as it's good to replace them with machines? Why isn't that good for consumers?
It's OK for labor cost to increase when there's a labor shortage. Consumers benefit from that, because otherwise the needed work wouldn't get done, which would be bad for consumers. Better to get some needed work done, even at higher costs/prices than to not get the work done at all.
But when there's an oversupply of labor, it is right for the workers to be paid less, because consumers benefit from this, and this benefit to consumers is the whole point of business, not providing higher-than-necessary incomes to whining workers.
To the detriment of consumers, who are always better served by competition rather than price-fixing or wage-fixing.
It's true -- those who have low value also have low leverage or bargaining power. Their low compensation rightly reflects their low value, and if they want more, they can either improve their performance and thus their value, or they can whine and be crybabies, which is what the "living wage" is all about.
Yes, those who are of lower value and in great oversupply justifiably are disadvantaged in the market, because they aren't needed much and are so easy to replace. Dime-a-dozen job applicants should not expect to have much bargaining position, and though a company might hire some of them out of pity, or as an act of charity, the more successful workers generally will be those who gain advancement from improving themselves and making themselves more valuable, not by whining and demanding pity, such as through "living wage" or other welfare or charity schemes to make parasites out of them rather than productive performers in the economy.
Yes, those who are more valuable and are taking greater risk and who are in shorter supply and in greater demand, because of the greater value or benefit they offer, have more bargaining power and more need to control cost and turn down someone of low value and discriminate in favor of higher quality and better performance, and especially to not waste the company's assets on paying its suppliers (including wage-earners) out of pity instead of their performance.
So the employers do make those necessary choices, deservedly having a wider range of choices to make out of their responsibility to serve consumers, and yet the market does penalize them if they make the wrong choices, and their wrong decisions can lead to far greater cost and damage to the economy than that of a whining job applicant not getting hired or a whining worker not being paid more than his/her value.
Why do you put quote marks around this, as though you are quoting someone? "poor employer" is your term. Quote marks are supposed to be used when someone else used the term first, unless you acknowledge that you are introducing the term yourself for the first time.
No, it's the wage-earners who are whining and demanding pity, not the employers. They are the ones demanding more than their value, and demanding laws to force employers to pay them more than they are worth, and thus forcing all consumers to pay higher prices than necessary. And it's all of us, not just employers, who are punished in order to subsidize the whining wage-earners who have to be paid more than is necessary to get the needed work done.
And of course the employer should NOT pay any higher, because this is not only bad for the company but also for the whole society. The idea that the employer should pay higher than is needed is the same as the idea that the workers should be paid out of PITY for them instead of for their performance. And it's PERFORMANCE by workers that is good for society, not pity for them.
Yes, low bargaining power due to their low value. Precisely. They are paid low because their VALUE IS LOW. You are correct to note that their low pay is due to their low value.
But how "productive" is that work? If that worker can easily be replaced, then that work has a low value and is very low in its "productive" contribution to the economy. Just because that worker burns lots of calories does not make the work "productive" or valuable.
There are plenty of employers who suffer from barely being able to make ends meet, especially those on the margin, starting up, or taking high risk. And what they risk and might lose is far greater than what any employee stands to lose.
But it is not necessary to pander to either the struggling employee/job-seeker or to the struggling company/employer. We have no need for crybaby companies demanding corporate welfare that we all have to pay for, anymore than for crybaby low-paid employees whining for "living wage" or other government pity that all the rest of us will have to pay for.
And consumers who would have to pay the higher labor cost in the form of higher prices.
You're right, those of low value also receive low profit. However, there are some workers of high value who do profit. It is good that those of higher value, such as the better workers, and also the investors and business owners and shareholders, get more profit than those of low value, like the dime-a-dozen low-paid workers.
And those low-paid workers who can do nothing but whine and whine and whine will remain the low-value pitiful drain on our economy that they are, consuming more than they produce, and driving up the prices all the rest of us have to pay.
We are ALL "punished" because companies are prevented from producing as much and hiring all the help they could in order to improve their service to us as consumers. We are all punished by having to pay higher prices in order to pay all the extra costs that are imposed onto employers.
Why is it good to do this injury or harm to all consumers by forcing them to pay all the higher prices that are necessary in order to subsidize all the whining crybaby employees most of whom could easily be replaced by workers at lower wages?
And all consumers benefit from the lower labor cost of business due to the oversupply of labor. Aren't we all better off when a company is able to save on costs by replacing those expensive workers with machines, as they continue to do? And so why aren't we also better off when it is able to replace them with lower-cost labor?
Why is it that that the employer-bashing "living wage" crusaders never answer the above question?
I'll repeat it again, for the continuing non-answer which it always receives:
Why isn't it good to replace higher-paid workers with lower-paid workers, to save on labor cost, just as it's good to replace them with machines? Why isn't that good for consumers?
It's OK for labor cost to increase when there's a labor shortage. Consumers benefit from that, because otherwise the needed work wouldn't get done, which would be bad for consumers. Better to get some needed work done, even at higher costs/prices than to not get the work done at all.
But when there's an oversupply of labor, it is right for the workers to be paid less, because consumers benefit from this, and this benefit to consumers is the whole point of business, not providing higher-than-necessary incomes to whining workers.
To the detriment of consumers, who are always better served by competition rather than price-fixing or wage-fixing.
It's true -- those who have low value also have low leverage or bargaining power. Their low compensation rightly reflects their low value, and if they want more, they can either improve their performance and thus their value, or they can whine and be crybabies, which is what the "living wage" is all about.
Yes, those who are of lower value and in great oversupply justifiably are disadvantaged in the market, because they aren't needed much and are so easy to replace. Dime-a-dozen job applicants should not expect to have much bargaining position, and though a company might hire some of them out of pity, or as an act of charity, the more successful workers generally will be those who gain advancement from improving themselves and making themselves more valuable, not by whining and demanding pity, such as through "living wage" or other welfare or charity schemes to make parasites out of them rather than productive performers in the economy.
Yes, those who are more valuable and are taking greater risk and who are in shorter supply and in greater demand, because of the greater value or benefit they offer, have more bargaining power and more need to control cost and turn down someone of low value and discriminate in favor of higher quality and better performance, and especially to not waste the company's assets on paying its suppliers (including wage-earners) out of pity instead of their performance.
So the employers do make those necessary choices, deservedly having a wider range of choices to make out of their responsibility to serve consumers, and yet the market does penalize them if they make the wrong choices, and their wrong decisions can lead to far greater cost and damage to the economy than that of a whining job applicant not getting hired or a whining worker not being paid more than his/her value.
Why do you put quote marks around this, as though you are quoting someone? "poor employer" is your term. Quote marks are supposed to be used when someone else used the term first, unless you acknowledge that you are introducing the term yourself for the first time.
No, it's the wage-earners who are whining and demanding pity, not the employers. They are the ones demanding more than their value, and demanding laws to force employers to pay them more than they are worth, and thus forcing all consumers to pay higher prices than necessary. And it's all of us, not just employers, who are punished in order to subsidize the whining wage-earners who have to be paid more than is necessary to get the needed work done.
And of course the employer should NOT pay any higher, because this is not only bad for the company but also for the whole society. The idea that the employer should pay higher than is needed is the same as the idea that the workers should be paid out of PITY for them instead of for their performance. And it's PERFORMANCE by workers that is good for society, not pity for them.
Yes, low bargaining power due to their low value. Precisely. They are paid low because their VALUE IS LOW. You are correct to note that their low pay is due to their low value.
But how "productive" is that work? If that worker can easily be replaced, then that work has a low value and is very low in its "productive" contribution to the economy. Just because that worker burns lots of calories does not make the work "productive" or valuable.
There are plenty of employers who suffer from barely being able to make ends meet, especially those on the margin, starting up, or taking high risk. And what they risk and might lose is far greater than what any employee stands to lose.
But it is not necessary to pander to either the struggling employee/job-seeker or to the struggling company/employer. We have no need for crybaby companies demanding corporate welfare that we all have to pay for, anymore than for crybaby low-paid employees whining for "living wage" or other government pity that all the rest of us will have to pay for.
And consumers who would have to pay the higher labor cost in the form of higher prices.
You're right, those of low value also receive low profit. However, there are some workers of high value who do profit. It is good that those of higher value, such as the better workers, and also the investors and business owners and shareholders, get more profit than those of low value, like the dime-a-dozen low-paid workers.
And those low-paid workers who can do nothing but whine and whine and whine will remain the low-value pitiful drain on our economy that they are, consuming more than they produce, and driving up the prices all the rest of us have to pay.
I agree! Let's reduce the highest-paid workers of all with lower-paid workers to save on labor costs! I'm certain there are CEO's and similar workers more than willing to work twice as hard for far less money/benefits.
Jayjay
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Ok, let's say that the employees who demand higher wages are whing crybabies. Do you think that their whining is a cost-free endeavour? Who pays for that cost?
The problem with your argument is that you think it costs nothing to keep people unemployed and below substinence wages. In reality, that is not the case. At some point, the cost saving that you get from lower wages is less than the externalized cost of having a poor underclass that you have to keep in line by combination of welfare and police. What you save as a consumer is offset by what you lose as either taxpayer or from having to maintain private security to keep out the rabble from your gated community.
The whining crybaby consumers you mean?
Why should the employer be allowed collective negotiation, but employees shouldn't? Unionization is just evening the playing field so that both sides have collective negotiation power. It is no more "wage-fixing" for employees to band together and demand a certain minimum wage, or none of them will work for the employer, than it is for the said employer to dictate a maximum wage and refuse to hire anyone who asks for more.
No, it's not only about low value. It's that the employment relationship is indivisible for the employee. You either have a job, or you don't. The worker who's value is less than 50% of the job requirement doesn't get half the job, he gets no job, and that puts him in a worse bargaining position than the employer for whom a single employee only presents a fraction of his work force. That imbalance exists regardless of the value of the employee and that's where unionization comes in.
Lumpenproletariat
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No one can say why higher-paid workers should not be replaced with lower-paid workers.
Of course -- companies should outsource ALL jobs, high- or low-level, to anyone who will do the job for less and at the same level of performance, or in other words, they should shop for lower-cost replacements.
So you agree there should be no "living wage" or "living salary" laws that restrict a company's freedom to reduce its compensation/wage/salary levels as low as it sees fit in order to save on costs, for the same quality of performance, and thus better serve consumers.
Of course -- companies should outsource ALL jobs, high- or low-level, to anyone who will do the job for less and at the same level of performance, or in other words, they should shop for lower-cost replacements.
So you agree there should be no "living wage" or "living salary" laws that restrict a company's freedom to reduce its compensation/wage/salary levels as low as it sees fit in order to save on costs, for the same quality of performance, and thus better serve consumers.
laughing dog
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Companies should do just that if they wish to insure their employees will treat their job as a job without any concept of loyalty or quality in the long-run. On the otherhand, if companies wish to inculcate some sense of loyalty, then perhaps they should not outsource all jobs to those who are willing to work for lower pay in order to insure that productivity does not suffer in the long-run.