Millionaire boss who began paying his employees $70,000 minimum wage is thriving

[Strapped]

@DEAD7

Mr. Free markets

 

[Oldschooler]

@Rhakim we are in agreement. I am just assuming the most likely scenario which would be CEOs wage remaining high and profits increasing or remaining the same due to shareholder pressure. In this case companies have no choice but to increase 1) their productivity by pushing employees to work harder and 2) cost of products/production to consumers. Thus assuming these 2 things, the lowest paid earners will always remain poor no matter what the minimum wage is.

As for the other point you make about tickle up. This never happens in theory because the goal of all businesses in capitalism is to maximize their profits. If you don't agree with this then it's fine but we are onto another topic at this point which would be redestribution of wealth through a radical change in political system. This will happen eventually when the gap between rich and poor becomes so great that the hierarchy of society breaks down. This has happened a lot of times throughout history.

 

[analog]

You would think the positive outcomes of changes like this as common sense but some folks will still argue against it

 

[Professor Emeritus]

@Rhakim we are in agreement. I am just assuming the most likely scenario which would be CEOs wage remaining high and profits increasing or remaining the same due to shareholder pressure. In this case companies have no choice but to increase 1) their productivity by pushing employees to work harder and 2) cost of products/production to consumers. Thus assuming these 2 things, the lowest paid earners will always remain poor no matter what the minimum wage is.

As for the other point you make about tickle up. This never happens in theory because the goal of all businesses in capitalism is to maximize their profits. If you don't agree with this then it's fine but we are onto another topic at this point which would be redestribution of wealth through a radical change in political system. This will happen eventually when the gap between rich and poor becomes so great that the hierarchy of society breaks down. This has happened a lot of times throughout history.

But it literally did happen in Seattle in our most recent, specific example of this policy in action.

Seattle passed a $15 minimum wage law in 2014. Here's how it's turned out so far

Businesses like dikk’s have seen their costs go up. dikk’s pays above minimum wage, with some locations starting workers at $17 and $18 an hour, and most workers are students in their 20s. Benefits like 401(k) plans and health insurance are also available to workers regardless of the number of hours worked. But higher minimum wages citywide pressure employers to increase pay even if they are already above that threshold, in order to compete for talent.

Meanwhile, the Seattle law has been life changing for workers like Martin Johnson, who lobbied for higher pay with the advocacy group Working Washington. He works three minimum wage jobs — as a temporary cook on game days at the city’s stadiums, as a janitor at Costco on the overnight shift and as a handyman in his own small business. The raise brought with it more dignity for workers and boosted morale, he said.

“Instead of being paid $9 an hour, you’re getting $15 an hour to do the same work. You feel better about yourself — you feel appreciated,” Johnson, 54, said.

Since the wage increase began in 2015, Seattle/Tacoma’s job growth has slightly outpaced the state of Washington as a whole, at 12.9%. The city’s population has increased some 13% over 2015, according to the Washington state Office of Financial Management. Average hourly earnings were $39.38 in October, an increase of 14.5% from the same month in 2015.

When the minimum wage increase in Seattle passed, Chad Mackay, CEO of Fire & Vine Hospitality, a Pacific Northwest hospitality group, he decided to reevaluate his business model.

“When we projected out the minimum wage increases, and the loss of a tip credit [which allows employers to count tips toward minimum wage], we realized we would be functionally bankrupt if you were to fast forward seven years in the future. We decided the business model was broken, and it’s time for us to change,” Mackay said.

Fire & Vine has long paid above minimum wage in the front and back of house due to demand for talent in the market and the company’s beliefs on professional pay. The company moved to a commission-based model, with a 20% service charge for diners. Servers are paid out an hourly wage and a 15% commission and can make $70 or more per hour in the Seattle market, up from some $45 an hour earlier. Guests can also leave extra tips for servers if desired. Those in the back of the house like dishwashers begin between $17 and $20 an hour — some 40% over where they were prior.

The wage increases haven’t hurt his business: He’s nearly doubled in size, with some 600 workers today with 12 locations under management, during a time when other restaurants have closed their doors.

 

[Copy Ninja]

Greed is a human condition that needs eradication

If possible, would you support human engineering where they get rid of the DNA that causes greed? Or the movie like Equilibrium where in the future they take supplements to suppress emotion.

 

[DEAD7]

Greed is a human condition that needs eradication

 

[DEAD7]

People being paid more will increase your business’s bottom line but greedy capitalist focused only on profits refuse to do so... ok guys.

 

[hashmander]

the birthrate part is an eye opener, but not surprising. a good number of people (should be a vast majority but it's not) plan their families and don't want to bring children into the world if they can't financially support them. so if they were barely getting by, kids are the last thing on their mind.

 

[DEAD7]

...And quit throwing greed out there like that means anything at all.

 

[Master Teacher]

So 19.23/hr isn't a living wage in Seattle.

I'm not sure this story really makes a statement that paying people 15/hr meets that standard.

It does show two things:

Lowering executive pay provides a vehicle for increasing employee pay.

The need for more mid level jobs.

30 an hour is 4800 a month before taxes lol

What makes you think 20 dollars an hour is a livable wage lmao maybe if your 16 and live with your parents

 

[Professor Emeritus]

People being paid more will increase your business’s bottom line but greedy capitalist focused only on profits refuse to do so... ok guys.

Paying more is good for the business (in terms of product quality, revenue, stability, etc.), but in order to do it you likely will have to eat into top-level salaries/shareholder profits.

People who run businesses think as a matter of course that workers should have to sacrifice in order to maintain the business's viability, in terms of accepting low wages or layoffs, and they're always dealing in bullshyt like, "You'd rather have this than just have us go out of business, right?" But it appears far more likely that a high floor to employee pay and low executive pay/profits would be much more likely to build a thriving business.

Yet due to greed, extremely few business owners are going to say, "I need to keep my employee pay up and my own pay and profits down in order to ensure this business thrives in the long term."

 

[Professor Emeritus]

30 an hour is 4800 a month before taxes lol

What makes you think 20 dollars an hour is a livable wage lmao maybe if your 16 and live with your parents

I grew up in a 5-person family that made less than that (like $11/hour at the time which is around $18-19/hour now) and it was a livable wage. But it depends on a lot of factors. My dad had to move us to a low-cost area so we could do okay on that salary, it was a government job so the insurance was good, my parents were smart with their money, we didn't have any debt, and never had any big tragedy or disaster. And he never lost his job until all us kids were well out of the house.

I think a "living" wage might be anywhere from $12/hour to $25/hour depending on where you live. But the OP was shooting for more than that, he was shooting for an "ideal" wage, one that was best for satisfaction and peace of mind rather than just being enough to get by.

 

[analog]

People being paid more will increase your business’s bottom line but greedy capitalist focused only on profits refuse to do so... ok guys.

So increased pay for those at the top improves the bottom line for reasons that does not apply to those at the bottom?

 

[Black Nate Grey]

If I was a billionaire who owned companies I'd do the same thing.
Less Executive pay (including myself), more worker pay.

The Billionaire Socialist lmao.

 

[Pressure]

Greed is a human condition that needs eradication

Greed prosperity.