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Dan Price raises minimum wage at his company to $70,000 a year

 
 
 
Trausti said:
SimpleDon said:
The fallacy is that the labor market pays what the labor is worth. That some magical clockwork mechanism sets wages to the proper level that all of the factors of production are set to, the level that represents the marginal value added by the production factor to the product, especially if the government says out.

By the magic mechanism theory then profits are higher because capital is scarcer and must be rewarded with more than it use to, executive salaries are higher because executives contribute more than they use to and labor is paid less because they contribute less than they use to. But this is a magic and that doesn't exist and never existed.

In the real world,

  • Businesses pay the wages that they have to pay, and no more.
  • The less that they have to pay in wages the more profit they make.
  • The more profit they make the higher the executives' salaries are.
  • Executives don't have to work as hard to make profits and higher salaries.
  • Marginal businesses are better able to stay in business.
  • Wages are lower when the workers feel insecure in their jobs.
  • This occurs when unemployment is high and when employment is low.

Conversely,

  • When unemployment is low and employment is high then workers can demand and get higher wages.
  • When everyone who wants a job has a job profits are low.
  • When profits are low executives' salaries are low and executives have to work harder to raise the profits to raise their salaries.
  • Marginal businesses are more likely to fail enabling better more productive and more innovative businesses to increase their business.

So the choice is how are we going to run the economy. On what basis, what are we trying to do with the economy?

The current answer is clear. Over the last thirty five years we have run the economy to produce more profits and relatively lower wages. We have done this by maintaining higher unemployment and lower employment, by redistributing less money through the tax system and by increasing workers' insecurity by other means like making it harder for workers to organize, sending increasing amounts of production to low wage countries and by reducing government regulation over wages and work rules, that is regulations like the minimum wage and time and half for overtime. Businesses reduced non-wage compensation such as pensions, health care, sick time, vacation days, etc.

All of these boosted profits, increased executives salaries, etc.

So the question is, what is it that we want from the economy? Is this it?
Click to expand...

You seem to be suggesting that some third party, err government, ought to be in charge of setting wages and earnings. I hope you're not. But if you are, screw that.
Click to expand...

Yeah, heaven forbid we end up like that economic basketcase Germany.
 
SimpleDon said:
So the question is, what is it that we want from the economy? Is this it?
Click to expand...


Part of the problem is that what "we" want from the economy is predicated on the idea that "we" will not wind up the recipients of lower wages, lower employment, etc.

We've been sold on the idea that with a little elbow grease and effort, everyone who wants to can become an "entrepreneur" and make enough to buy that nice McMansion in the gated community with the BMW parked out front. Hey (the narrative goes) you don't have to worry about the minimum wage or health care because you - yes you - are a special person who can start their own business and become not just the boss, but a "job creator." As everyone knows, "job creators" are far more important to the economy than some schlub working at the Circle K, right? So even if you're a schlub working at Circle K, don't forget to vote Republican because when you do finally start that million-dollar business and sell it to the guys on "Shark Tank" or win the lottery, you're gonna want lower regulations on business and lower taxes on the wealthy!


Because you - yes you - will someday be a wealthy businessman. Why worry about income inequality when you're never going to have to worry about it? (that is, once you get your business going)


And if by chance you read about some guy who decided to split his profits with his employees, or some business that pays far above average even if it hurts their bottom line, well you can safely look down your nose at their lack of business acumen because remember...you are special. Never mind that the 70k a year CEO is already rich. Never mind that Costco is very successful despite paying a living wage. No, you're smarter than those guys.


We have the economy "we" want now because "we" have bought into the bullshit notion that we've actually got more than a ghost of a chance to become one of those high paid captains of industry, and that we've got to make the economy more favorable to our inevitable rise into the 1%.
 
Trausti said:
SimpleDon said:
The fallacy is that the labor market pays what the labor is worth. That some magical clockwork mechanism sets wages to the proper level that all of the factors of production are set to, the level that represents the marginal value added by the production factor to the product, especially if the government says out.

By the magic mechanism theory then profits are higher because capital is scarcer and must be rewarded with more than it use to, executive salaries are higher because executives contribute more than they use to and labor is paid less because they contribute less than they use to. But this is a magic and that doesn't exist and never existed.

In the real world,

  • Businesses pay the wages that they have to pay, and no more.
  • The less that they have to pay in wages the more profit they make.
  • The more profit they make the higher the executives' salaries are.
  • Executives don't have to work as hard to make profits and higher salaries.
  • Marginal businesses are better able to stay in business.
  • Wages are lower when the workers feel insecure in their jobs.
  • This occurs when unemployment is high and when employment is low.

Conversely,

  • When unemployment is low and employment is high then workers can demand and get higher wages.
  • When everyone who wants a job has a job profits are low.
  • When profits are low executives' salaries are low and executives have to work harder to raise the profits to raise their salaries.
  • Marginal businesses are more likely to fail enabling better more productive and more innovative businesses to increase their business.

So the choice is how are we going to run the economy. On what basis, what are we trying to do with the economy?

The current answer is clear. Over the last thirty five years we have run the economy to produce more profits and relatively lower wages. We have done this by maintaining higher unemployment and lower employment, by redistributing less money through the tax system and by increasing workers' insecurity by other means like making it harder for workers to organize, sending increasing amounts of production to low wage countries and by reducing government regulation over wages and work rules, that is regulations like the minimum wage and time and half for overtime. Businesses reduced non-wage compensation such as pensions, health care, sick time, vacation days, etc.

All of these boosted profits, increased executives salaries, etc.

So the question is, what is it that we want from the economy? Is this it?
Click to expand...

You seem to be suggesting that some third party, err government, ought to be in charge of setting wages and earnings. I hope you're not. But if you are, screw that.
Click to expand...

It sounds to me like he is suggesting that a second party, err workers, ought to have some say about their wages and earnings, rather than being pushed into a race to the bottom by the threat of replacement and unemployment. I hope you don't find that idea hugely objectionable. But if you do, screw that.
 
bilby said:
Trausti said:
You seem to be suggesting that some third party, err government, ought to be in charge of setting wages and earnings. I hope you're not. But if you are, screw that.
Click to expand...

It sounds to me like he is suggesting that a second party, err workers, ought to have some say about their wages and earnings, rather than being pushed into a race to the bottom by the threat of replacement and unemployment. I hope you don't find that idea hugely objectionable. But if you do, screw that.
Click to expand...

They do have a say. If someone says "do you want this job it pays $35,000 per year" they can say "yes" or "no" or even something exotic like "I'll take it at $37,500" or "Magic Brownies".
 
dismal said:
bilby said:
It sounds to me like he is suggesting that a second party, err workers, ought to have some say about their wages and earnings, rather than being pushed into a race to the bottom by the threat of replacement and unemployment. I hope you don't find that idea hugely objectionable. But if you do, screw that.
Click to expand...

They do have a say. If someone says "do you want this job it pays $35,000 per year" they can say "yes" or "no" or even something exotic like "I'll take it at $37,500" or "Magic Brownies".
Click to expand...

Do you have something against an employer paying their employees what they think they are worth?
 
Nice Squirrel said:
dismal said:
They do have a say. If someone says "do you want this job it pays $35,000 per year" they can say "yes" or "no" or even something exotic like "I'll take it at $37,500" or "Magic Brownies".
Click to expand...

Do you have something against an employer paying their employees what they think they are worth?
Click to expand...

I don't even have an objection to an employer paying his employees vastly more than he thinks they are worth. With his own money.
 
dismal said:
bilby said:
It sounds to me like he is suggesting that a second party, err workers, ought to have some say about their wages and earnings, rather than being pushed into a race to the bottom by the threat of replacement and unemployment. I hope you don't find that idea hugely objectionable. But if you do, screw that.
Click to expand...

They do have a say. If someone says "do you want this job it pays $35,000 per year" they can say "yes" or "no" or even something exotic like "I'll take it at $37,500" or "Magic Brownies".
Click to expand...

You have to know it's more complicated than that. Compensation levels affect effort, loyalty, turnover, productivity, efficiency, ...

If you offer someone a job that pays $35,000 per year they might take it. They also might avoid filing their TPS reports on time and only do about fifteen minutes of real actual work in a given week...
 
Nice Squirrel said:
dismal said:
I don't even have an objection to an employer paying his employees vastly more than he thinks they are worth. With his own money.
Click to expand...

What about a CEO?
Click to expand...

I think this guy owns the company and is CEO too so it's his money. I have no problem with him spending his own money on this.

I also wouldn't have a problem with him spending other people's money on it if the other people had agreed to let him do it.
 
ksen said:
dismal sure is posting a lot about something he has no problem with
Click to expand...

A more interesting question is why everyone here feels the need to keep making posts about me having a problem with it when I have stated a bunch of times I don't.

If I didn't have to keep pointing this out I wouldn't be posting so much.
 
Nice Squirrel said:
My boss is currently lamenting the lack of applications for our open position here. It is advertised at $14/hr. New hires will make $19/hr... Yes, we have lots of turnover.
Click to expand...

You can't get new hire because it's too freaking cold there. :hitsthefan:
 
dismal said:
Nice Squirrel said:
What about a CEO?
Click to expand...

I think this guy owns the company and is CEO too so it's his money. I have no problem with him spending his own money on this.

I also wouldn't have a problem with him spending other people's money on it if the other people had agreed to let him do it.
Click to expand...

Do you know how corporations work? I mean in the real world, not the ideal world where stockholders are consulted about wage and pay issues and give consent.
 
RavenSky said:
dismal said:
I don't even have an objection to an employer paying his employees vastly more than he thinks they are worth. With his own money.
Click to expand...
Are you suggesting that is what Dan Price is doing?
Click to expand...

That is what he's doing. In negotiation it's call betting against yourself. But he's half owner of the company (his brother is the other half). Like Cartman, he can do what he wants.
 
I have to agree with dismal on this one.
Reminded me the mega-rich guy who during Great Depression tried to support stock market with his money, he eventually went bankrupt. I know ultimately Dan Price is just a decent guy who wants to feel better about himself but I think there are people who deserve a "raise" way more than his clerks.
It also could be a relatively cheap publicity stunt, maybe he wants to go into politics?
 
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