I froze the salaries of my executive team to benefit other workers • Hacker News Board

Re: I froze the salaries of my executive team to benefit other workers

#141

Post by fwip » Thu, May 16, 2019, 2:40 PM UTC

username444 wrote: post #112

res0nat0r wrote: post #107

Earlier quoted context omitted.

Sounds like a great argument to increase the federal minimum wage so everyone is forced to pay their employees more.

Great idea. Until you realize that no level on minimum wage is adequate in SF, while $10/hr is livable in rural Arkansas. It's not a silver bullet even with COL factored in. Higher staff costs? Replace them with automation. You can see the largest employers of minimum wage employees (eg. Mcdonalds) hedging against a rising minimum wage with kiosks to replace cashiers. At $15/hr for labor, those capital investments st…

The cost of technology falls much faster than wages rise.

Wages currently are responsible for about 4% of the cost of the burger. https://www.purdue.edu/newsroom/releases/2015/Q3/study-raisi...

Re: I froze the salaries of my executive team to benefit other workers

#142

Post by overthemoon » Thu, May 16, 2019, 2:40 PM UTC

lotsofpulp wrote: post #102

SketchySeaBeast wrote: post #88

Earlier quoted context omitted.

I was watching a sitcom called Superstore a little while ago, features the employees in a Wal-Mart like store, and the protagonist got a promotion to the head of the store. There was a whole plot line about how her wage was now in the 6 figures, and I was incredulous until I did a bit of research - Wal-Mart store managers can absolutely make that much money while their employees live in poverty. How you could make th…

Supposes employer A chooses to pay their employees more than other employers. Employer B chooses to pay their employees less. Both employers are selling products or services that the purchaser finds the same, i.e. they have no preference for who they buy it from. Employer B takes the money they save by paying employees less, and invests in newer, better facilities or R&D or whatever. Now employer B is selling a bette…

> To be a successful business, compensation decisions can't be based on people's feelings

Great, good point, so let's base it on what's equitable and humane instead. People aren't mad because their feelings are hurt, they're mad because they can't make ends meet or prepare for the future.

Re: I froze the salaries of my executive team to benefit other workers

#143

Post by autokad » Thu, May 16, 2019, 2:42 PM UTC

allworknoplay wrote: post #85

This is insane -- paying a $7.25/hr minimum wage to people you call "teammates" and expecting them to stick around is preposterous. In anything but a terrible economic downturn, minimum wage says to employees that you just want a body doing a job right at this moment, but aren't willing to invest any further in them. Why would anyone stick around, or care to do more than the most basic job requirements? These jobs ar…

> "Why would anyone ... care to do more than the most basic job requirements?"

They are called promotions or achievements for your next role. That's a terrible attitude to have above, and as someone who started out working minimum wage, people who had that attitude generally didn't do as well.

Re: I froze the salaries of my executive team to benefit other workers

#144

Post by [deleted] » Thu, May 16, 2019, 2:44 PM UTC

toasterlovin wrote: post #113

Miner49er wrote: post #109

It's amazing this article even needs to be written. You'd think the executives pulling in these crazy salaries would be competent enough to know that paying their "team members" next to nothing is going to result in high turnover and be a bad business decision in the long run. This article frames his choice to actually pay his employees as some big discovery, but it's not. The fact is, execs already know, but they pu…

Never ascribe to malice that which can be explained by incompetence. Lots of things persist because “that’s the way it’s always been done”. Probably what’s going on here, in my opinion.

[deleted]

Re: I froze the salaries of my executive team to benefit other workers

#145

Post by mercer » Thu, May 16, 2019, 2:45 PM UTC

Kalium wrote: post #123

mercer wrote: post #82

Earlier quoted context omitted.

What if you were to add up the income of not just the CEO, but all high level management or, say, those who make more than 500.000 a year? Honest question that I'm not sure how to answer myself, but I suspect the benefit to the lower ranks would be much more than the $200 a year.

That's an excellent question! Let's see if we can address it with some math. I'll start with this: http://ir.united.com/corporate-governance/company-leadership This says there are 24 executives at United (I counted). If you assume literally every single one of them is paid as much as the CEO is and redistribute all that money across the whole of United, then that's 24 * $200 = $4800. $200 was rouding a bit ($207 is u…

Thanks for the calculation! I think limiting it to the 24 execs is still a bit on the conservative end of things (as far as equalizing pay goes), but it's interesting to think on.

I'm actually surprised how merely broadening the calculation a bit already results in a quite significant amount. 5k is quite a bit!

Anyways, thanks again :).

Re: I froze the salaries of my executive team to benefit other workers

#146

Post by js8 » Thu, May 16, 2019, 2:49 PM UTC

lotsofpulp wrote: post #102

SketchySeaBeast wrote: post #88

Earlier quoted context omitted.

I was watching a sitcom called Superstore a little while ago, features the employees in a Wal-Mart like store, and the protagonist got a promotion to the head of the store. There was a whole plot line about how her wage was now in the 6 figures, and I was incredulous until I did a bit of research - Wal-Mart store managers can absolutely make that much money while their employees live in poverty. How you could make th…

Supposes employer A chooses to pay their employees more than other employers. Employer B chooses to pay their employees less. Both employers are selling products or services that the purchaser finds the same, i.e. they have no preference for who they buy it from. Employer B takes the money they save by paying employees less, and invests in newer, better facilities or R&D or whatever. Now employer B is selling a bette…

In Norma Rae, the main heroine is promoted to a supervisor (with a higher salary) in order to alienate her from others and suppress her pro-union stance. I suspect a similar dynamics can also happen in Walmart.

Re: I froze the salaries of my executive team to benefit other workers

#147

Post by Kalium » Thu, May 16, 2019, 2:50 PM UTC

mercer wrote: post #145

Kalium wrote: post #123

Earlier quoted context omitted.

That's an excellent question! Let's see if we can address it with some math. I'll start with this: http://ir.united.com/corporate-governance/company-leadership This says there are 24 executives at United (I counted). If you assume literally every single one of them is paid as much as the CEO is and redistribute all that money across the whole of United, then that's 24 * $200 = $4800. $200 was rouding a bit ($207 is u…

Thanks for the calculation! I think limiting it to the 24 execs is still a bit on the conservative end of things (as far as equalizing pay goes), but it's interesting to think on. I'm actually surprised how merely broadening the calculation a bit already results in a quite significant amount. 5k is quite a bit! Anyways, thanks again :).

5k is definitely a lot!

You have to be wildly fantastical to get there, though. Meaning it's not a number that should be taken at all seriously as anything other than a work of numerical fiction. $250 is a number that's likely much closer to reality, though probably still too high unless you can find a much broader swath of people to freeze the salaries of.

Re: I froze the salaries of my executive team to benefit other workers

#148

Post by coredog64 » Thu, May 16, 2019, 2:51 PM UTC

res0nat0r wrote: post #107

lotsofpulp wrote: post #102

Earlier quoted context omitted.

Supposes employer A chooses to pay their employees more than other employers. Employer B chooses to pay their employees less. Both employers are selling products or services that the purchaser finds the same, i.e. they have no preference for who they buy it from. Employer B takes the money they save by paying employees less, and invests in newer, better facilities or R&D or whatever. Now employer B is selling a bette…

Sounds like a great argument to increase the federal minimum wage so everyone is forced to pay their employees more.

In economic theory, this is what’s known as an efficiency wage. If you pay more, there’s more competition for your openings and you attract a better class of employee.

As other comments have pointed out, simply raising the minimum wage doesn’t accomplish the same thing. Instead, all those people who were marginal at $7-8/hour simply don’t get hired, and employers use automation or forego the opportunities that additional labor offers.

Re: I froze the salaries of my executive team to benefit other workers

#149

Post by JimBrimble35 » Thu, May 16, 2019, 2:53 PM UTC

toasterlovin wrote: post #113

Miner49er wrote: post #109

It's amazing this article even needs to be written. You'd think the executives pulling in these crazy salaries would be competent enough to know that paying their "team members" next to nothing is going to result in high turnover and be a bad business decision in the long run. This article frames his choice to actually pay his employees as some big discovery, but it's not. The fact is, execs already know, but they pu…

Never ascribe to malice that which can be explained by incompetence. Lots of things persist because “that’s the way it’s always been done”. Probably what’s going on here, in my opinion.

I think what you are identifying as incompetence is, in fact, well-aged malice.

The greedy behavior that leads to the kind of inequality faced by today's society is now so well established that it has become hard to recognize for what it truly is.

The fact that this article's author seems to find it novel to trickle down the proceeds of the company to the bulk of it's employees is a pretty good indication of that.

Re: I froze the salaries of my executive team to benefit other workers

#150

Post by FollowSteph3 » Thu, May 16, 2019, 2:54 PM UTC

lotsofpulp wrote: post #126

toss1 wrote: post #111

Earlier quoted context omitted.

True, but Employer-B now has employees who DGAF about anything in the business, and often have an adversarial, even 'eff them! attitude to the business. Employer-B's customer service and general care of its facilities & inventory will suck, and they will have much higher turnover costs, even if they have better products. So, what is the relative advantage? Moreover, the article was specifically about the tradeoff in…

There’s a reason Walmart and Dollar General are crushing others, and it’s because either their customers can’t afford good customer service or they don’t care for it and choose to shop there anyway. The proof is literally the fact that mom and pop stores and others like Sears went out of business, customers preferred saving $5 over good customer service. As I prefaced above, this is true for business where customers…

Yes but what he’s saying is that if you take that money from high executive pay then you can offer both. You have three variables rather then just two, most businesses ignore the executive pay. That’s where the example breaks down. Now if you want to keep executive pay high then yes a lot of people select price over service and you are correct. But those aren’t the only two variables then it’s a lot more variable. Pardon the pun.