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

#201

Post by rockinghigh » Thu, May 16, 2019, 3:58 PM UTC

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.

Many Europeans in wealthier countries also have phones worth over 1000€. Buying iPhones is not exclusive to Americans.

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

#202

Post by lifeformed » Thu, May 16, 2019, 3:58 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…

Employees under employer B would quit and work for employer A instead.

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

#203

Post by AnthonyMouse » Thu, May 16, 2019, 3:59 PM UTC

mgkimsal wrote: post #176

AnthonyMouse wrote: post #173

Earlier quoted context omitted.

> 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 m…

> 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, but that's the point. Should the manager not get $100K just because there is no way the employees could? What if that's what it takes to get a good manager?

And even at the numbers you're suggesting, multiplied by hundreds of employees, turns into millions of dollars a year. That's more than the store's entire profit. And it's also still above the threshold where it becomes profitable to automate many of those jobs.

> 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).

But whose fault is that? Employers generally shouldn't provide any "benefits" -- they originally came about as a tax dodge at a time when non-monetary benefits weren't considered taxable income to the employee, and that's still the primary reason they exist. Company cars disappeared when they became taxable income, employer-provided health insurance didn't because it's still a tax deduction. But in every case the employees would be better off with the equivalent in cash and the only reason they don't have it is dumb laws.

It's even worse for low income employees because the rules keep trying to "help them" by giving employers huge incentives to cut their hours.

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

#204

Post by setr » Thu, May 16, 2019, 4:00 PM UTC

mcguire wrote: post #167

setr wrote: post #116

Earlier quoted context omitted.

One interesting result of that is it becomes more viable to look for strategies that eliminate the employees altogether, eg the food-ordering terminals that are going up everywhere, as the relative cost diminishes with wage increase. In such situations, it becomes an irreversible effect, as the cost to transition was mainly up front.

One interesting question: is the tipping point for switching to automation in the range of the minimum wage? Does increasing wages move you across that tipping point, or is it cheaper to get rid of employees no matter what the minimum wage is?

The existence of minimum wage at all enforces the property — you can otherwise just keep lowering pay until its not worth replacement (eg india can get away with paying very low wages, so the threat of automatic replacement isn’t nearly as high).

So the real question is: at what point does minimum wage draw automation as a response?

And that of course depends on the economics of automation at any given point in time — if a human isn’t drawing enough value (compared to the cheaper alternative), then the only rational thing is to replace the job entirely.

But minimum wage is also independent of automation (or any other alternative) costs, which is why its a bit of a hamfisted solution — it ignores the possibility that human labor simply isn’t worth that much. So you get this awkward line where everyone above the line is better off, and everyone below the line is homeless — the line being how much value you can produce.

Using India again as an example, that line doesn’t really exist — you have a fluid scale of wealth, where the bottom-most aren’t jobless (we can always produce enough work, if the price is right; you don’t want a daily maid?), but they barely make anything, and they live a lifestyle that we as a first-world country would deem unacceptable, but they find acceptable (especially compared to the alternative — no job/money at all).

Notably the poor indian probably lives better than the poor american, because the economy of the poor is significantly more developed. Partly because there are so many poor people in india, and partly because their income is allowed to be so much more fluid.

So there’s also the additional question of whether minimum wage “starves out” the poor economy, compounding how bad life can be at the bottommost rungs of our society

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

#205

Post by toss1 » Thu, May 16, 2019, 4:06 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…

Enormous selection, and economies of scale (massive purchasing & warehousing ops reducing costs, lower cost/sqft of store area, etc.) are also reasons that Walmart, Dollar General, etc. can out-compete local stores.

It is not only lower labor costs. And they are clearly willing to spend on the appearance of customer service, paying 'extra' people to be greeters, etc.

Viewing it as if the people who produce your products and services are a mere cost instead of an asset is stupid.

And, just because a lot of "successful" finance types implement this view, dies not mean that they are also not stupid.

Oversimplifying is not a solution to most problems.

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

#206

Post by gbersac » Thu, May 16, 2019, 4:06 PM UTC

pdimitar wrote: post #175

WhompingWindows wrote: post #133

Earlier quoted context omitted.

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.

No one is prepared to be a leader. You have to learn on the spot. Admitting he made one and acting to solve it made him better than most of the leaders.

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

#207

Post by pdimitar » Thu, May 16, 2019, 4:08 PM UTC

thatfrenchguy wrote: post #187

pdimitar wrote: post #175

Earlier quoted context omitted.

> 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.

Or higher taxation and less inequality so that the people whose parents are on minimum wage end up being the people making the decisions, not the people whose parents are from rich suburbia who never had these issues in life.

That might help as well. But so far our civilisation doesn't work in terms of meritocracy. I am hopeful you are right though.

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

#208

Post by dragonwriter » Thu, May 16, 2019, 4:09 PM UTC

justaguyhere wrote: post #61

HeWhoLurksLate wrote: post #54

Earlier quoted context omitted.

Putting so many laws into place about how much you have to pay workers / etc. makes it harder for small companies to even start. To me, seeing a company pay its workers more voluntarily is the best option, and also one I wish more companies would go with.

Have you noticed the behavior of markets, especially big companies? The only things they seem to be doing voluntarily are those that help increase their profits. CEOs are getting paid tens of millions of dollars while laying off thousands of people and closing factories. Companies do every dirty little trick to avoid paying for healthcare/pension. And so on. We have already tried the "markets will fix things, markets…

> There has to be minimum wage laws

Minimum wage laws, like employer healthcare mandates, are a feudal solution (specifically, viewing employers as feudal lords responsible for the minimal upkeep of their employer-subjects) to a capitalist problem. They are better than nothing, but worse than making minimal upkeep a public function, taxing appropriately to support it, and doing less to impose additional costs or barriers to mutually beneficial employment.

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

#209

Post by HoochieKoo » Thu, May 16, 2019, 4:11 PM UTC

thatfrenchguy wrote: post #187

pdimitar wrote: post #175

Earlier quoted context omitted.

> 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.

Or higher taxation and less inequality so that the people whose parents are on minimum wage end up being the people making the decisions, not the people whose parents are from rich suburbia who never had these issues in life.

Totally agree with you. By the way, your user name checks out.

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

#210

Post by bsenftner » Thu, May 16, 2019, 4:12 PM UTC

gbersac wrote: post #206

pdimitar wrote: post #175

Earlier quoted context omitted.

> 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.

No one is prepared to be a leader. You have to learn on the spot. Admitting he made one and acting to solve it made him better than most of the leaders.

No, the current "leader / management" culture in MBA America is toxic. MBA speaking. They are toxic to their peers and double to their disposable employees. The "enlightened caring manager" is also ridiculed as a "libtard" and never promoted. Young managers are selected for their superior manipulation skills and lack of empathy.