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

theguardian.com

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

#151

Post by SketchySeaBeast »

Konnstann wrote: post #90
EliRivers wrote: post #52

Earlier quoted context omitted.

I understand that a popular philosophy is that they're rich because they deserve it; they're simply better people. There's no shame to be had; it's simply the natural order of things, it's morally right.

While I agree with the absurdity of rich people being "better" than the less wealthy, what makes someone "deserve" to be rich? I would argue that no one deserves to be poor, but whether or not it is morally correct to buy nice things doesn't sound to me like a debate worth having. At what point does someone need to be ashamed of the money they make? Is anything over the $50k figure that is quoted as the maximum happi…

I don't think it's a matter of shame, but it's a matter of realizing that while it may have been hard work, it was also a fair amount of luck that got you to where you got to be, and that a lot of people put in the same amount of work, but due to the fates they don't end up in the same place.

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

#152

Post by coredog64 »

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…

The grocery business is, and has been for a very long time, a low margin business. You’re not going to get phenomenal service at any grocery store.

That said, anecdotally, I do the grocery shopping and prefer WalMart. The produce is better, there’s a larger selection, and I can get the odd household item while out for groceries without paying an extortionate price. I’m saving at least 10% on my grocery bill without even trying. Hell, Walmart even does free curbside pickup where the other grocery chain wants to charge me.

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

#153

Post by beat »

SketchySeaBeast wrote: post #88
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…

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…

Economics is amoral. It doesn't know good from evil. The biggest mistake on the right is thinking that capitalism is Good. The biggest mistake on the left is thinking that capitalism is Evil. It just is. It's like thermodynamics. If you get burned by a hot stove, it doesn't mean physics is evil. And it doesn't mean getting burned is just your imagination, either.

Without intelligence guiding them, such systems can easily destroy themselves with feedback loops. Power differentials etc, in an amoral environment, lead to low-level employees getting screwed and owners/upper management getting rich. This feedback loop can eventually destroy a company, or a society.

So what I find hard to understand isn't that employees go along with this system that screws them (they need to eat, y'know?), but rather that they think it's good, that it's what's best for everyone, that maximized profits will be equitably distributed. We have an angry, populist working class that has completely accepted the systematic inequalities of neoliberal-flavored capitalism, and the socialist welfare-state hacks that come with it mostly to keep the whole thing from self-destructing this year at least. They're mad they're getting screwed, but think their bosses are completely right to screw them.

It's really hard to grok that.

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

#154

Post by curyous »

coredog64 wrote: post #148
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.

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 additi…

If your business is only viable when paying people below what they need to live, then your business shouldn't exist. The fact that you can do that now is simply people in power exploiting the weak.

Effectively what is happening is that those without power are subsidising the business by supplying them labour below cost. Generally in economics, making a business only viable through subsidies is a bad thing. It is much more efficient to give that labour to better businesses.

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

#155

Post by geodel »

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…

Well it absolutely needs to be written. Consider the incessant whine here that people ( mainly software engineers) need to be paid in proportion to "value" they deliver. According to them the lower paid employees like office staff or janitors would not deliver much value so they might as well work for nothing.

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

#156

Post by whatshisface »

js8 wrote: post #146
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…

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.

>promoted to a supervisor... in order to alienate her from others and suppress her pro-union stance

That sounds like a great way to encourage pro-union stances...

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

#157

Post by saalweachter »

Kalium wrote: post #136
saalweachter wrote: post #134

Earlier quoted context omitted.

Eh, you take it out of the stock grant refreshes and the noise of stock fluctuations will make it rather difficult to notice in your total compensation. EDIT: Also, you're taking income off the top of the tax brackets and giving it to someone at the bottom of the bottom, so you get a tax multiplier where you take $1 from me and give $1.50 to someone else. Also, you probably don't need even a 2% or 3% haircut off the…

Google's published numbers put their engineering headcount at below half their overall headcount. I'm not sure a 3% haircut on engineers at Google would give them enough funds to make every support position $100k while also doing what you suggested and bringing all the contracted services in-house. If we assume a 3% haircut on an average engineering compensation of $250k, and 45% of the organization, you have $6k and…

I actually don't have enough numbers available myself to support this, so this conversation is doomed to a lot of hand-waving.

However, one point of definitions, I am not using "support staff" to refer to "non-engineers", I am using it to refer to "workers who perform services that are not part of the company's operations, such as building maintenance, cleaning, and cooking". Most of the non-engineering staff at Google are not support staff, they are non-engineering employees doing non-engineering work equally related to the core operations of the business. Sales, partner relations, data center management.

I also don't know how much these individuals are payed, although I hope to god it is "well above minimum wage".

In any case, sure, you're probably right and you can't actually bring everyone up to SWE-minimum-wage (100k$+benefits) with a small haircut off the engineering staff, but a small haircut off engineering, distributed to the 10-20% of employees and contractors being paid the least is a life-changing amount of money. +$15k / employee / year to the bottom 20% of earners is "quit your second job" money, it's "get the car fixed" money, it's "have money to put aside for a rainy day" money, it's "send the kid to college" money, while $7.5k less per year is "retire three months later" money for an engineer.

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

#158

Post by pjc50 »

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…

> Employer B takes the money they save by paying employees less, and invests in newer, better facilities or R&D or whatever.

In practice, Employer B takes the money and pays Employer B (ie the senior staff) with it.

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

#159

Post by rayiner »

I wish redistribution to the very bottom was a bigger part of the political debate. Our politics is currently focused on redistribution from the very top to the middle class. (Stuff like free college or universal healthcare would primarily benefit the top half, because those folks are the ones who are in a position to be accepted to and attend college, and aren’t already covered by Medicaid.) The math of that is tough, because 70% of all income is earned by households in the 50-99% income range (between $40,000 and $480,000 household income).

But the bottom 50% earns just 11% of all income, a little over $1 trillion. You could really improve their standard of living with even modest redistribution of the $9 trillion earned by the top 50% to the bottom 50%. But unfortunately middle class taxation is a complete non-starter in the US, even though that is how almost all European countries pay for their welfare states.

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

#160

Post by nanoservices »

WhompingWindows wrote: post #133
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…

He took action and doubled the pay to 15/hr, then it further increased to 16.50/hr. I didn't think he was stumbling on a new lesson, your reading was a bit more cynical than mine. Simply put, he hadn't realized the plight of those on 7.25/hr until he heard what his employees were going through. How else can we improve things if we don't allow people to change their views? Mocking a CEO for changing his view is the op…

I agree with you about allowing CEOs room for growth and increased understanding. This case though really points out the glaring problem we have today, it shouldn't take a more than a basic high school diploma to understand that $7.25 is an unlivable wage. I'm sure the CEO has had to go out for dinner with his family and is able to do quick mental math to realize that most of his employees would have to work for days to be afford a meal like that.
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