More dyspepsia for poverty wage “job creators”.
The Great Resignation Was Fueled By Workers Who Were Fed Up With Being Broke
https://www.buzzfeednews.com/article/venessawong/great-resig…
intercst
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I wonder how many businesses, both small and large, built their business models on cheap labor where the workers had no choice but to accept poor wages and limited to no benefits?
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I wonder how many businesses, both small and large, built their business models on cheap labor where the workers [chose to accept the wage and conditions in exchange for giving their time to the business]?
FTFY.
Employment is an at-will arrangement. There are no prisoners in these circumstances.
If you don’t like the job, leave it.
If you don’t like your options for food, work, scenery and nearby neighbors, change it.
People trap themselves all the time.
When they get reawakened through the events that have occurred over the last 24 months, a good bit of churn should be expected.
Painting this as a victimhood for either the JCs or their employees/contractors is being intellectually dishonest.
I have friends and family that choose to work for $10/hour, 50 hours+ per week and no benefits. They like the OTHER benefits of the job.
I have friends and family that work for near 100 hours per week who are so busy they opt to not return phone calls, texts or invitations in favor of more work. They like the benefits of their job.
Free will is a varied and wonderful thing. It’s amazingly hard to call shots for others who choose the situation they’re in.
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You made a number of points that did not answer the question I asked.
As a retired teacher who graded many essay questions, I hate to say this; you failed.
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Free will is a varied and wonderful thing. It’s amazingly hard to call shots for others who choose the situation they’re in.
Great post! Food for thought.
I had a client who was an assistant bank manager. It’s a crappy job with crappy pay with no authority. Just a glorified messenger boy. His wife made more money than he did. I asked him why he didn’t get a better job. “I like being a banker.”
The Captain
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If you don’t like the job, leave it.
The problem is that people have to eat and, in general, unemployment insurance will not pay you if you quit.
So you take the chance of becoming destitute if you leave.
COVID cash payouts allowed people to choose where/when they returned to work.
Jeff
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I wonder how many businesses, both small and large, built their business models on cheap labor where the workers had no choice but to accept poor wages and limited to no benefits?
I heard of a family so poor they could not afford beds for all of them. While half of them slept the other half worked. Being bakers from Vienna they called their business “Pasteleria Vienesa.” My future stepfather drove the delivery van. When my (step) uncle retired they sold the business to Pepsico International.
The Patel motel business also fits your query. As I remember, when the Patels were kicked out of Africa they came to America and built a Motel Empire.
As a new immigrant to the United States in the early 1970s, Jayantibhai Patel slept very little. By day he held down a job at a bank in San Francisco. By night he toiled in the city’s run-down Tenderloin district at the Vincent Hotel, a property he had acquired not long after moving to the country. Patel’s sleepless nights paid off.
https://www.nationalgeographic.com/culture/article/south-asi…
I believe I read the story in The Dhandho Investor: The Low-Risk Value Method to High Returns Hardcover – Illustrated, April 6, 2007
https://www.amazon.com/Dhandho-Investor-Low-Risk-Method-Retu…
The Captain
our fate is not in our stars but in ourselves
without permission of the author, WS
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The problem is…
Some people always find ways to be sorry for themselves.
The Captain
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Employment is an at-will arrangement. There are no prisoners in these circumstances.
Actually there are. When employers of low wage labor constitute a monopsony (by law or custom), then those workers have no “free will.” They still must eat, pay rent, take care of families. Absent a living wage they are wage slaves - or criminals.
You might notice that the fewer worker protections a state has the lower the wage rate as well. And yet the better economies, state by state, seem to have higher wages. (I offer California, New York, Pennsylvania, Illinois, Massachusetts, Maryland, Washington, and others; or on the other end of the scale: Mississippi, Alabama, West Virginia, Missouri, Louisiana, Arkansas and more.)
There is an optimal point, of course, but waving your hands while saying “free will” lifts your argument into the realm of airy theoretical while ignoring the actual evidence and reality of how the economy - and human beings - work.
Or, as my mother said when I told her I wanted to be a Libertarian when I grew up, answered “Make up your mind. You can’t do both.”
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Employment is an at-will arrangement. There are no prisoners in these circumstances.
Actually there are. When employers of low wage labor constitute a monopsony (by law or custom), then those workers have no “free will.” They still must eat, pay rent, take care of families. Absent a living wage they are wage slaves - or criminals.
These people are not paying any income taxes or they are getting a full refund at the end of the year. They do have a very heavy payroll tax burden for SS and Medicare. Burden means relative to their incomes.
There is a strong movement in the US to have these poor people pay income taxes come hell or high water. It is an evil ignorant movement. The reason for the movement is to cut taxes on the 1% even further.
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Pucks,
Of course I realized I didn’t really answer your question after I hit submit. !!!
Please bear with me as I continue to not provide a ratio (answer) to your question. (it’s unknowable without prima facie understanding of their internal workings)
So, here’s some additional perspective that has seen first hand experience. (I’m sure many of you have also interacted with this problem either as an officer in your own company, or as a mid/senior level team leader at another, or, possibly as a contributor for someone who has to directly support these plans.
The problem is really one of modeling. Most people really suck at this. Full Stop.
If you can sort out those who actually build a model (business plan) AND THEN actually tweak it for conditions and company initiatives, you can finally grasp at the ratio of those who are conservative and those who are aggressive.
Conservative: (remember, if they didn’t model their business, they can’t even be lumped! - except to say - lucky, unlucky)
Plans for gross margins, capital management, employee growth (number of positions, development) and thresholds for working capital, supply agreements, and other reserves to form a fixed costs basis have all been completed.
Variable costs like labor are part of this assumption and are tied to a rate, with inflation and staffing changes as part of this. Our business models employee costs with an 4% inflation to include all benefits and support requirements and has a 5 year outlook that we revise every year.
Aggressive:
Many of the above assumptions are modeled, and fixed costs tied as a percentage of growth and alternate plans to “keep costs low” when pressure on margins presents itself. Reliance on out performance or new product development are themes to push top line growth and are factored into justifications for “growing revenue faster than costs”
When the market turns or a black swan shows up, aggressive plans can find managers stacking powerpoint presentations next to the commode.
My company immediately pivoted to allocate and develop 300,000 sqft in another location to increase our labor flexibility (more geographic area to source workers)and split operations to right size production accordingly.
(note: this execution plan was stated to be completely reversible should the market evaporate and consolidation of operations be required - another hint of conservative approach)
When the plan was announced, roughly 22% of our hourly staff immediately requested a transfer to the location. It was closer to their homes/kids activities. (we surveyed them before announcing, of course)
People move when they feel like it. Paternalistically trying to ‘push’ them is more 1950’s business modeling and central planning than 2020’s indicated ‘pull’ through self awareness and circumstance.
Unfortunately, many just get accustomed to the pressure of current circumstance, choosing to lean on wild eyed pipe dreams built upon a best case scenario that is not likely and not under their own control. This is the travesty.
When people are more voluntary and flexible, we see very large changes in business operations modeling to match. Wage and benefits differences between companies ARE visible today. This is the churn from the reawakening.
It’s happening.
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There have been several posts about people not having control to make a change.*
You must know that is a fallacy. Unless you view their desires to be in the same location, with the same opportunities as a supreme right (it’s not).
The desire to better your circumstance MUST be accompanied by willful effort to actually make it happen.
When you declare a person is powerless, you are both insulting them and being intellectually lazy.
*There are exceptions in extremely rural locations where job opportunities are limited. Having grown up in and having second hand understanding of these locations even today, I can promise you that there are very high paying jobs in these locales if you choose to build your skillsets. Plumbers, carpenters and handymen are paid 400% more than the counter clerk at the feedstore.
I completely agree that education and experience in our culture are fostering some of this victimhood, but it is secondary to the individual’s free will
Excuses - getting in the way of progress for millenia
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*There are exceptions in extremely rural locations where job opportunities are limited. Having grown up in and having second hand understanding of these locations even today, I can promise you that there are very high paying jobs in these locales if you choose to build your skillsets. Plumbers, carpenters and handymen are paid 400% more than the counter clerk at the feedstore.
I completely agree that education and experience in our culture are fostering some of this victimhood, but it is secondary to the individual’s free will
Excuses - getting in the way of progress for millenia
The response is pat.
Taking “powerless” out of the equation, the economic pie in the US for the last 40 years, 1981 to 2020 has grown so slow as to deny people as much as possible. This has been achieved by some people’s sheer greed, having a “user society” of 42% of the public who get paid less than a living wage, delegating people to the scrapheap because there were not enough good jobs to go around, denying people medical care especially parents being denied so their children suffered economically longer term, denying American children education, and cutting taxes for the greedy to make labor cheap for the greedy.
Our pull yourself up by the bootstraps economy has been a terrible mess.
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Mama was a wise woman.
Given the income of low income earners, the percent of their income that goes to taxes is much greater than those of higher income earners. Sales taxes, gas taxes, property taxes, car taxes (licensing), sin taxes (alcohol & tobacco), idiot taxes (lottery tickets), tolls for roads and bridges, … are either the same for everyone or the same percent for everyone. If a low income earner pays $3,000 per year in these taxes (excluding the voluntary ones) on an income of $15,080 ($7.254052) a high income earner, someone earning over $400,000 for argument’s sake, would have to be paying $79,575. And someone earning $4,000,000 would have to pay over $795,000.
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