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Why doesn't the word "rent" appear in here anywhere? If the landlord becomes aware that the restaurant pays way above industry norms, it will raise the rents at the earliest opportunity to squeeze that money back out of the business. Either they own the building or have an existing long-term lease.
Earlier quoted context omitted.
We have tons of worker-owned cooperatives in Berkeley, including Cheese Board Collective that is successful, and one block from that The Local Butcher, also worker-owned. A few blocks down was the worker-owned bike shop but it went under for reasons related to having admitted a notorious bozo into the co-op. We also have Nabolom Bakery that failed after decades as a worker co-op but survives today as an owner-owned b…
Is Zachary's Pizza in the same category? (I seem to recall being told there was something unusual about their structure but I can't recall the details)
Why doesn't the word "rent" appear in here anywhere? If the landlord becomes aware that the restaurant pays way above industry norms, it will raise the rents at the earliest opportunity to squeeze that money back out of the business. Either they own the building or have an existing long-term lease.
That is generally not how things work. Your same argument could be made if they realized the restaurant was very popular/profitable (with low empoloyee wages). Rents have to be somewhat in line with market. They can't just increase rents ignoring the rest of the market. If you are arguing that switch costs are high, so they can. That may be somewhat true, but I know of multiple restaurants in my area that have moved.…
No, that is actually pretty much exactly how things work. Successful restaurants get higher rents on lease renewal which is why they're incentivized to sign longer lease terms. The restaurant is usually paying for all the necessary renovations to kit a property out with their equipment, decor, and branding, so the switching costs are very high, and the landlord is heavily incentivized to squeeze them. It's one of the largest, most common, and most existential issues for restaurants as a business, and a major reason why the largest and most successful chains usually operate on a franchise lease-back model where the corporate entity owns the free-standing building, preventing mis-aligned landlords from making the business unsustainable and eating into their profit-margins. Have you ever wondered why an Applebee's or similar is a free-standing building even on a mall property, even though it doesn't need a drive-through? Because Darden Restaurant Group, just like McDonald's, is as much a real-estate investment company as it is a restaurant company, and it understands that both the franchisee/operator and their primary corporate entity benefit from cutting out landlords that are incentivized to be a rent-seeking as possible.
Your comment is deeply misinformed and it's clear you've never been involved in running a restaurant as a business. Rent is often the #1 factor that can drive a restaurant out of business, because it's the thing you have the least control over. You can often structure your menu to help manage food/ingredient and staffing cost, but you cannot do the same about rent. Restaurants are somewhat unique in that for single-location entities, too /much/ success can actually kill you because of asshole landlords.
Earlier quoted context omitted.
We have tons of worker-owned cooperatives in Berkeley, including Cheese Board Collective that is successful, and one block from that The Local Butcher, also worker-owned. A few blocks down was the worker-owned bike shop but it went under for reasons related to having admitted a notorious bozo into the co-op. We also have Nabolom Bakery that failed after decades as a worker co-op but survives today as an owner-owned b…
Is Zachary's Pizza in the same category? (I seem to recall being told there was something unusual about their structure but I can't recall the details)
One thing that I never understood was, if an employees wages are tied to the success of the company, would that not incentivize better work ethic as a whole? That is how it works in the start-up world. You get equity, you have literally invested in the company, and you know that your work should (in theory) directly benefit you financially. Instead we end up in a system where the employee/employer relationship is inh…
Ever done a group project in school? Free riders ruin shared incentives.
I would love a retrospective on the role of Slack and Discord as tools of revolutionary politics in the last decade or so. Seems like no matter where you fall ideologically, there's a Slack channel or Discord server for you and it's doing the emoji vote thing.
One thing that I never understood was, if an employees wages are tied to the success of the company, would that not incentivize better work ethic as a whole? That is how it works in the start-up world. You get equity, you have literally invested in the company, and you know that your work should (in theory) directly benefit you financially. Instead we end up in a system where the employee/employer relationship is inh…
It would probably incentivize you to ensure everyone else's work was up to par. This doesn't seem that different from a small startup with heavy equity comp -- everyone is incentivized to work hard, but there are also plenty of times where people want everyone else to work hard but not themself.
In the extreme case, imagine two co-founders. It is common for each co-founder to try and take distracting side jobs / consulting or not quit their dayjob, while the other puts in the hard work to grow the value of the startup. Generally this is a hard-NO from an angel/vc investment standpoint, but outside an external party clamping down, there is an incentive to cheat.
One thing that I never understood was, if an employees wages are tied to the success of the company, would that not incentivize better work ethic as a whole? That is how it works in the start-up world. You get equity, you have literally invested in the company, and you know that your work should (in theory) directly benefit you financially. Instead we end up in a system where the employee/employer relationship is inh…
I think it would incentivize bailing out as soon as times get slightly rough, and last thing you want is all your best (and most mobile) employees quitting when you need them most. For example, if my company has a bad quarter and makes $0 net, does everybody get paid $0? Most people wouldn’t stand for that and would start job hunting pretty quick. The “work for equity at a startup” crowd does it because they can affo…
But part of it also hinges on the organization being small enough that individuals can actually make a difference. Otherwise it's back to just being a prisoner's dilemma / shared commons, where the incentive is to slack off and let everyone else carry you.
One thing that I never understood was, if an employees wages are tied to the success of the company, would that not incentivize better work ethic as a whole? That is how it works in the start-up world. You get equity, you have literally invested in the company, and you know that your work should (in theory) directly benefit you financially. Instead we end up in a system where the employee/employer relationship is inh…
It looks at how Toyota took GM's worst plant and made it one of the best using the same workers. And how GM's management refused to learn lessons from that.
I think the current antagonism is something that started with management many decades ago. But now it has a lot of momentum, such that people on both sides are used to it and will carry it forward. I remember reading a great zine piece from a video game tester who'd had a variety of shitty jobs. He finally found one that was really good: good pay, good working conditions, nice bosses. But he felt compelled to steal office supplies in bulk because that's what he'd done at his shitty jobs. He was sort of mystified by it, but he couldn't stop.
However, there are alternatives. I live near an Arizmendi bakery [1], which is a worker-owned co-op. It's great. The food is really good, it's sanely run, and the people behind the counter seem serene and present. It's inspired by the founder of the Mondragon co-op [2].
Or you could look at companies that shift to employee ownership later. Bob's Red Mill was actually started by a guy named Bob who sold the company to his employees in 2010. [3]
I don't think those are going to be utopias. But I do think they lack some of the structural disincentives against sanity and compassion that you find in the typical corporate structure, where every dollar in a worker's pocket is a dollar less in economic rents for the owners.
[1] http://arizmendi-valencia.squarespace.com/
Why doesn't the word "rent" appear in here anywhere? If the landlord becomes aware that the restaurant pays way above industry norms, it will raise the rents at the earliest opportunity to squeeze that money back out of the business. Either they own the building or have an existing long-term lease.
If a landlord becomes aware a company pays it's managers above industry norms, do they raise rent? How does any company make a profit in such a world?
Land value tax would solve this. (We have property taxes, but they're not as good, and in California they're capped.)