Impact of 15 dollars an hour minimum wage | Page 3 | The Compost Bin | Forums

farmboy2 said
not able to keep up with the current conversation, as it is quiet lengthy ...

Heh. I'm in it and have contributed to the length but had to step away in the interest of time.

KVR said
and a franchise is totally a small business for the record, are there some that are under an umbrella corporation? Yes, but most franchisees have 1 or 2 stores at the most.

Not definitely. There are no absolutes here.

earthenstead said
Incidentally, as you already illustrated for me, to think of a franchise as a small business can be relative. ... Franchise owners are not all “smaller businesses”. Often they are part of a larger business portfolio which often include multiple franchises, different franchises, and different businesses.

 I used looser language like "relative", "not all", and "often". A business requiring millions of dollars is hardly a small business in the eyes of some, nor is a business requiring hundreds of thousands of dollars when there are businesses which only required a few hundred, a few thousand, a few tens of thousands of dollars. That's relativity. While the smallest businesses may not have employees, it is certainly possible to have a small business with employees while remaining under the million dollar mark.

If you know and want to share what the percentages are for Franchise ownership or want to look it up, by all means do. I'm not in the restaurant business and you are. The businesses we know may differ greatly and certainly impact our impressions. As you know, I'm a native born Manhattanite. Opening a franchise there can be quite expensive, but then they usually are renovating existing spaces as opposed to buying a lot and building out a complete free standing structure with parking lot and signage the size of a van or bus. Here in LR I can tell you that all the Dominos have 1 owner, all the Pizzahuts, Taco Bells, and Kentucky Fried Chickens are a single corporation. Those are ones I know of first hand. Here, 2 large owners make up the majority for 4 of the major Franchises, yet I still tried to keep from implying that it was that way everywhere.

I'm trying to dispel assumptions, not imply them.

@DangerDuke

I'll begin by reintroducing an abbreviated version of Randall Munroe's Money Infographic. Since there was so much empty space, I embellished with some stratospheric visuals -- the point being that I HAD the space to work with. So worker hourly pay average went up 10 cents even though productivity has grown. Meanwhile CEO pay has risen -- you guessed it, stratospherically. So what added value have CEO's brought to their companies to justify such a dramatic increase in compensation? Is it a representation of their extraordinary productivity? If its all just supply and demand then it would be. The increase is not an indicator of supply and demand. It's an indicator of greed, and that kind of greed extends beyond just CEOs. Granted, not everyone is so greedy, but those that are can never have enough.

Greed encompasses 2 essential aspects. An excess of "wants" and a lack of compassion for the welfare of those depended on to attain those excess wants.

Federal minimum wage is currently $7.25/hour. At 40 hours per week, that's $290 per week before taxes. There are 52 weeks in a year which if a person worked without vacation a steady 40 hours per week for the entire year (2080 hours) would be $15,080 annually before taxes.

MIT has a nifty Living Wage Calculator based on 2080 hours and converted into hourly pay for easy comparison. It’s numbers are conservative (low). Let’s use 6 examples of state averages, 2 each for you (DangerDuke), KVR, and for me (earthenstead). For DD: WV & CA, for KVR: ME & PA, and for me: AR & NY…

Examples from MIT's Living Wage Calculator (Too Low)

To attain the "Living Wage" figures, the above charts account only for Food, Medical, Housing, Transportation, and Other. To check accuracy I viewed the places I know best: Pulaski County, AR and New York County, NY. They had...

Food at $251.83/month and $292.42/month.

Housing at $532.00/month and $1163.00.

Transportation at $391.42/month and $313.67/month.

Other at $187.75/month and $174.67/month.

All of which is very restrictive but would be possible IF life never threw any curve balls and until you look closer at Other and Housing and Transportation. You'll note the absence of utilities listed. Those either need to come from Housing or other. If utilities come from Other, there may be nothing left, and if utilities come from housing, rent is no longer realistic. Never mind all the other things not given any allowances like initial deposits on apartments or down payments on a home, deposits on utilities, car loan payments, auto insurance, periods of unemployment, etc. Transportation does not allow a large enough margin for gas, maintenance, and auto insurance. Transportation in NYC is actually VERY generous if only using public transit requiring a Metrocard. Unlimited ride 30 day Metrocards are only $116.50. The remainder could be applied elsewhere, yet is still inadequate to cover the difference between the allowance provided for Other and what life would likely require.

That means that the Living Wages proposed by the MIT charts are below what a living wage would require. Of the 8 charts that I viewed, all listed Living Wages at higher than federal minimum wage, yet all were inadequate to make ends meet if ONLY working 2080 hours per year.

Obviously the solution would be to work more than 40 hours per week if a person could find it, and there's countless variables which are too vast to explore of what opportunities exist, schedule conflicts, overtime, working less than 40 hours at a job, periods of unemployment -- all of which become extremely critical considerations when living paycheck to paycheck.

This brings us back to greed. Specifically to "a lack of compassion for the welfare of those depended on". Even if we say that employers are not responsible for ensuring their employees make a living wage, there is still a line of human decency that should not be crossed that too often is. Returning to food service, there are some places that will consistently assign a steady 38.5 hours per week, and others that will only provide 14 hours per week. Yet it is an industry of low job security, high turnover, and high potential for shifting work schedules where workers are sent home early on slow days and called in on days off.

Granted, shifting work schedules are business needs and are absolutely tied to supply and demand. Yet in order for that food service employee to work a consistent 40 hours or more per week, it can be quite the complication and make it difficult to attain the hours necessary to make a living or to juggle more than one job.

That's my response to your first sentence, here's my response to your second sentence...

Kidding.

We're well beyond responding point for point. I will address a few though.

DangerDuke said
I would counter that profit growth, by nature is what a business is meant to accomplish. If I open a business with the intent of creating a stream of income for myself, whether I wind up having employees or not, the function of that business is to create a profit for me. That’s it. It doesn’t matter if that profit is five bucks a month or five million

That is fine until there are employees involved. If you are making (a conservative range of) say $250K to $5 million in profit, most of that is likely on the backs of employees. If you keep compensation of those employees disproportionately low as compared to net profits, then you are being greedy, immoral, and unethical. If you are paying them something that is both a living wage and reflects their contribution to your company up to say $70k, and are still able to make boatloads of money, I've no objections.

Your example of businesses willfully loosing customers doesn't hold up. To speak broadly as is required for this convesation we cannot assume regulars. Customers in this case are a numerical metric. If you move your lemonade stand and loose 100 customers from location A but gain 500 customers in location B that is a gain of 400 customers, not a loss of 100.

I already expanded on touchscreens in response to KVR. I think it covers much of what I might have said to you except to reiterate the point that without any wage increase, when the tech is viable and reaches the right price point it will replace employees. It never gets sick, needs a day off or medical, you never need to fire it and spend time and money training a new one, repairs will occur, but you can swap tech with a spare so repairs do not create delays. Tech also does not require management so that job can be cut back too. The reason we are facing wage hikes is because they've been virtually frozen. Had wages increased incrementally at a rate businesses could have easily adjusted to we wouldn't even be discussing this. Instead, we're facing the equivalent of a person that kept paying his mortgage off at the same fixed rate when it has gone up to adjust for inflation and then wonders why the bank wants to evict him. You are arguing that it is just businesses being fiscally responsible, while I'm trying to point out that it is DECADES of being irresponsible that is now coming to an inevitable "foreclosure".

I was not implying that you were crying about franchise costs. It was a turn of phrase. For expenses vs greed/huge profits, I've not said that is the case every time. Sometimes it is the case. I am saying it is bad when it is and I am saying that it is a cascading effect from the top down, and never from bottom up. That means to use the running Wendy's example, that it begins at suppliers to Wendy's corporate, then from corporate down to franchise owners and then down to managers and down to employees. A small franchise may only be scraping by. But the higher up the food chain you look, the more disproportionate it gets. That's the greed element. Don't view this as me necessarily talking only specifically about Jane Smith the local Wendy's owner. I'm saying when business is stable and profits are good, if pay at the top is soaring while pay at the bottom is unlivable there's a big problem, and that problem is greed.

DangerDuke said
However, the pursuit of profit that you consider to be greed, once again is actually the pursuit of growth. Wendy’s as a corporation, (and many others) is a publicly traded company, and as such has a very real, fiduciary responsibility to it’s shareholders to remain profitable, and produce dividends.

I am not talking about growth. I've said it many times in multiple ways but perhaps I've failed to communicate it effectively or perhaps it was missed in the length and breadth of everything. To be clear, I have been allowing for business growth, for reinvesting and expanding, for taking good care of investors, and good care of top brass. What I have been talking about specifically has been pocketed take home. When the people with the most do not look out for the people under them with the least is where my concern is.

You are welcome. There was a time when I could have poured more time into this and I do not feel that I have done justice to what I would have preferred to communicate, but I simply do not have that kind of time. I've already spent far more on this than I should.

I had to skip things you said that I wanted to address, but oh well. For the book, while I keep exclusively to non-fiction and that does fit, I also stick to what I must for what I must accomplish. While the day may come when I can justify it, right now I'm sorry to say I will not be able to follow up on your book suggestion. I do thank you for making it though.