Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

theguardian.com

Post reply on HN
Print view View original

171–180 of 325 posts

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

#171

Post by vonmoltke »

curyous wrote: post #154
coredog64 wrote: post #148

Earlier quoted context omitted.

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…

> Effectively what is happening is that those without power are subsidising the business by supplying them labour below cost.

How do you define "cost"?

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

#172

Post by mcguire »

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…

Don't know about Dollar General, but isn't Walmart successful because they're big enough to dictate terms to their suppliers and simply squash their smaller competition with convenience?

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

#173

Post by AnthonyMouse »

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…

> 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.

The problem is fundamentally this: A typical Wal-Mart store has around 300 employees. If you take the manager's entire $100,000 and distribute it to the employees, they each get less than $500/year, a raise of less than $0.25/hour.

Meanwhile you're never going to get a good manager for the price of a stock clerk, because it's skilled vs. unskilled labor. But you still need a manager.

And nice as it would be to pay all 300 employees $100K/year, that would immediately bankrupt the store. Moreover, it would be more than the amount it would cost to automate most of those jobs.

This is not a problem with glib or moralistic solutions. And the solutions that do exist are probably more along the lines of making housing cost less so lower income people can afford it, rather than chastising the employers who actually employ unskilled workers.

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

#174

Post by gnaritas »

overthemoon wrote: post #142
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…

> 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.

> so let's base it on what's equitable and humane instead

Those are feelings.

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

#175

Post by pdimitar »

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…

> he hadn't realized the plight of those on 7.25/hr until he heard what his employees were going through.

That's the crux of the problem right there.

If you need somebody to start living with their kid in a car to get this grand epiphany then you are hilariously mis-prepared to be any kind of a leader.

To be a leader, you need a much better [emotional] education than this.

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

#176

Post by mgkimsal »

AnthonyMouse wrote: post #173
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…

> 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. The problem is fundamentally this: A typical Wal-Mart store has around 300 employees. If you take the manager's entire $100,000 and distribute it to the employees, they each get less than $500…

> And nice as it would be to pay all 300 employees $100K/year, that would immediately bankrupt the store

I don't think everyone necessarily expects $100k/employee. But many (most?) of them work for 30-35 hours per week - not out of choice, but because their schedule is controlled by the management. And they've generally been paid at or under $10/h. In the last few years there's been moves to increase that, but even moving from full time (which not everyone gets) at $10/hr to, say, $14/hr... That's $28k? Loaded cost with taxes and stuff might be ... $35k? $40k? Maybe? That's still a far cry from "we can't afford to pay everyone $100k". Sure, you can't, but that doesn't explicitly justify paying most people $9/h part time when they want full time (and the store has a need for full time staff, they just don't want to have to provide X benefits that come with full time).

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

#177

Post by pdimitar »

geodel wrote: post #155
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.

Never in my life have I seen this. Not once. Where are you from?

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

#178

Post by blacktonystark »

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 figured out if I treat my slaves better than the plantation down the road, I would get more results!" -CEOs

Slavery is the problem, not the treatment. Making 200x more than the people who actually know how to do the job that makes your company run is ridiculous and the core issue.

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

#179

Post by vonmoltke »

systemtest wrote: post #124
CalRobert wrote: post #87

Earlier quoted context omitted.

I think most Americans have phones that are used, and not Apple, and not flagship. Europe is pretty divers so I don't know if you mean Greece ~€1000 or Norway ~€4000 but it still seems like a stretch https://en.wikipedia.org/wiki/List_of_European_countries_by_... When I lived in the US I thought more Europeans lived in gorgeous architecture and had excellent public transport. Living in Europe, I find a lot of people…

There are twelve countries in the European Union with an average net income of less than 1000 euro. The two poorest ones (Romania & Bulgaria) are at 515 euro and 406 euro. So it's not that of a stretch that Americans have phones worth more than a European monthly wage.

It is a stretch to say most Americans do, though.

Also, your original post needs a qualifier on the scope of "European countries".

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

#180

Post by blacktonystark »

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…

Maybe there shouldn't be "bottom tier" vendors at all if their existence means pushing and exploiting an inequitable standard of living.
Post reply on HN