Hum Dinger
Gold Member
- Aug 19, 2008
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Wages should be set according to the real productive value of the work done by the employee.
If a person is 'low skilled', but their labor producing large profits for their employer, then they should be well paid.
No I disagree with that even.
Because for example, the cost to opening a McDonald's store, averages around $2.5 Million dollars.
The average McDonald's store owner, has invested a million dollars of their own personal money... and they have borrowed another million and a half. And then you think that the burger flipper should paid well for what?
McDonald's stores fail all the time too. The store I worked at in high school is closed.
If that store closes, I being the owner now am $1.5 Million in debt, and I lost the $1 Million I invested... but you the burger flipper think you should be paid well? For what?
If the business fails you lost nothing. I lost millions. You will leave without any debt from the business. I'll end up with $1.5 Million in debt from the business.
You simply find another job. I end up in bankruptcy, or a lien on the house, and spending years paying bankers.
Not to mention the fact that in the event there is a problem, who do they call? You, the low-wage employee? Or me the owner of the store? You don't own the responsibility of anything. I do.
And lets not forget that the business owners and CEO, are often working 50 to 70 hours a week, while you put in 40 hours and leave.
So this idea that you should be paid tons of money for low value work.... just because it generates more wealth... no. I don't buy that at all.
Y'know, people always go on about "McDonald's is a big corporation, so I'm SURE they can afford to pay their burger flippers $15 an hour." Truth is, McDonald's Corporation actually operates very few of the McDonald's restaurants. Their primary business is franchising. Most of the stores are individually-owned and -operated. They are, in fact, small businesses working on a small profit margin with, most likely, not a lot of capital to act as a cushion.
So I was working at Wendy's back in high school. I remember talking with the manager of the store, who said the store had lost money that month.
Now obviously they didn't lose money every month, but we had a bad month, and we had gone over budget on food costs, and didn't make up for it with additional sales.
It just so happened that that very same month, there was a huge story in the papers about how Wendy's had posted record profits, and everyone in the store was talking about how they should get a pay raise, because Wendy's posted a huge profit.
I remember being confused about what to think, because I saw the story and knew Wendy's had posted huge profits, but here people were asking to get a raise when the store we were at posted a loss.
Of course I did not understand then, what I do now, that every franchise, and indeed even ever store, has it's own budget, it's own profit and loss, and it's own wages to pay.
Even if the store is owned by the the corporate itself, rather than a franchisee... it still is run like a completely separate business.
The company isn't going to pay out to keep a store open, that is losing money. If the store loses money, they close it. Why would you keep a business going that is losing money?
So this idea that X.corp made a profit, so I should get a pay raise when my store I work for is losing money... no. That's not a thing.
Exactly. What Wendy's the corporation made a profit on was franchising fees, not on selling burgers.
Each of those franchises makes there money selling burgers. Increasing wages can be offset by passing the costs to the customer...and by lowering the cost of the franchise...and by reducing the standard of living of the franchise owner.
No more Cadallacs!!!!
Do you know how much money it takes to open a store? Like take McDonald. Do you know how much money it takes to open a McDonald's store?
The average is $2.5 Million dollars.
Do you know how much money you can make investing in the stock market, in just a regular nothing fancy, index fund?
You can make about 7%.
7% of $2.5 million is $175,000. That means for the cost of opening a McDonald's, you could sit at home doing nothing, and collect $175,000 a year.
Why would anyone open a McDonald's, instead of just sitting at home collecting money from your investments? Why would spend $2.5 Million dollars on a McDonald's?
Because you do know that restaurants close all the time. Why would you risk $2.5 million dollars on opening a store, if you could sit at home collecting $175,000 a year on your investments?
You want to know why? Because you can make a ton more by running a store.
And if you make it so that people can't make a ton more running a store.....
Then they won't run the store. They won't open the stores. Won't create jobs. Won't serve customers. They'll close. They lay off all the workers, and go invest in the stock market, and make money there.
Do you see the problem? No one is going to provide jobs, unless they can buy a luxury car. No one is going to lower their standard of living. They will just lay you off, and do something else.
What you are saying is not going to happen. You can say that until the end of time, but it isn't going to happen. Never has by the way. In 2007 when they jacked up the minimum wage, no employer anywhere in the entire world, was saying "aww bummer. Gotta sell the BMW now..."
Never happened. And never will.
That's why investors are rich by the way. If you make it so that it isn't profitable to do something... they just stop doing it, and invest somewhere else where it is profitable.
If you make it so employers can't live the life style they want... they don't stop living that way... they find something else to do, and lay everyone off.
When Hostess went bankrupt, the company didn't cut wages to all the executives. The executives just filed for bankruptcy, laid everyone off, and then left to do other things. They are fine today. Still driving BMWs. You know who didn't fair so well? The employees who wanted hire wages, and were laid off to earn zero wages.
That's how this works.
You can layoff the workers, declare bankrupcy and reinvest elsewhere.
But soon some marketing analysts will find that there's a consumer demand for a fast food restaurant in the area, then investors will invest and a new franchise - based on a business model that accounts for fair wages and serves better quality food - will open, and the workers will be back at work at much higher wages.
Nobody will be sorry that MacDonalds is gone.