5 ms·

> It is in no companies fiscal interest to pay their employees more. I'm actually not sure this is true. From a short term perspective, perhaps. But longer ter

by revscat 11y ago

> It is in no companies fiscal interest to pay their employees more. I'm actually not sure this is true. From a short term perspective, perhaps. But longer term it is more beneficial for everyone if there is more money to be spent.

savanaly 11y ago
You said you're differentiating between long and short term, but I think you're actually talking about the difference between "one company's interest" and "all companies' interests". It is possibly in all companies' interest to all pay their employees more as it would stimulate demand for their products. But any given individual company's own workers are such a vanishingly small fraction of its own customer base that it could hardly ever be argued that it would be best for that particular company to pay its own workers more for the purposes of stimulating demand.
- lfowles 11y ago
  Your workers will be more invested if they can comfortably afford the product, though. Obviously this depends on the market.
  - savanaly 11y ago
    Oh, no doubt that can be a reason. The literature around the "efficiency wage" is well developed [1], my comment was only disputing that there were a reason to pay above market clearing wages for reasons of stimulating demand. [1](https://en.wikipedia.org/wiki/Efficiency_wage https://en.wikipedia.org/wiki/Efficiency_wage)
  - ktRolster 11y ago
    Your workers will be more invested if they can comfortably afford the product, though. Most of the companies I've worked for I would never buy their product: either because I didn't need it, or because I knew its true quality, or both.
SpaceCadetJones 11y ago
I wonder if this is different for companies like Walmart / Costco / Meijer where they carry the majority of goods you need day to day. What if they started paying their employees higher wages, meanwhile giving them discounts at the store to encourage them to spend there? Maybe the lowered profit margins could be made up by the increased spending at their store. Not to mention it would also be a good PR move
- tanker 11y ago
  Obviously, you would have to avoid the "Company Store" problem. I think it could be a terrible PR move. If you effectively pay your employees less and justify by giving them discounts. A program that begins with good intentions could end badly. Especially if the program is conceived in an era of high profits. In low profits, management makes different decisions. Also, you often get new management.
  - SpaceCadetJones 11y ago
    I'm a bit confused, where does the effectively paying less come from? I suggested they increase their pay while also giving them a discount at the store to give them an incentive to spend their new income at the store.
    - tanker 11y ago
      I communicated poorly. Paying your employees more and giving them a discount is harmless. Lots of employees receive a discount. I meant you run into problems when you end up effectively paying them less and justifying via a larger discount. Management could end up doing this gradually as times get tough. For example, a company announces lay offs and pay cuts, but softens the blow with a larger discount. I guess I'm recommending caution. I would avoid making a discount a major part of employee compensation. A worker deciding to apply for jobs at Walmart and Costco could end up weighing a better health plan against a higher discount on basic goods. That seems problematic to me.
      - 11y ago

by revscat 11y ago

savanaly 11y ago

You said you're differentiating between long and short term, but I think you're actually talking about the difference between "one company's interest" and "all companies' interests". It is possibly in all companies' interest to all pay their employees more as it would stimulate demand for their products. But any given individual company's own workers are such a vanishingly small fraction of its own customer base that it could hardly ever be argued that it would be best for that particular company to pay its own workers more for the purposes of stimulating demand.

lfowles 11y ago
Your workers will be more invested if they can comfortably afford the product, though. Obviously this depends on the market.
- savanaly 11y ago
  Oh, no doubt that can be a reason. The literature around the "efficiency wage" is well developed [1], my comment was only disputing that there were a reason to pay above market clearing wages for reasons of stimulating demand. [1](https://en.wikipedia.org/wiki/Efficiency_wage https://en.wikipedia.org/wiki/Efficiency_wage)
- ktRolster 11y ago
  Your workers will be more invested if they can comfortably afford the product, though. Most of the companies I've worked for I would never buy their product: either because I didn't need it, or because I knew its true quality, or both.

SpaceCadetJones 11y ago

I wonder if this is different for companies like Walmart / Costco / Meijer where they carry the majority of goods you need day to day. What if they started paying their employees higher wages, meanwhile giving them discounts at the store to encourage them to spend there? Maybe the lowered profit margins could be made up by the increased spending at their store. Not to mention it would also be a good PR move

tanker 11y ago
Obviously, you would have to avoid the "Company Store" problem. I think it could be a terrible PR move. If you effectively pay your employees less and justify by giving them discounts. A program that begins with good intentions could end badly. Especially if the program is conceived in an era of high profits. In low profits, management makes different decisions. Also, you often get new management.
- SpaceCadetJones 11y ago
  I'm a bit confused, where does the effectively paying less come from? I suggested they increase their pay while also giving them a discount at the store to give them an incentive to spend their new income at the store.
  - tanker 11y ago
    I communicated poorly. Paying your employees more and giving them a discount is harmless. Lots of employees receive a discount. I meant you run into problems when you end up effectively paying them less and justifying via a larger discount. Management could end up doing this gradually as times get tough. For example, a company announces lay offs and pay cuts, but softens the blow with a larger discount. I guess I'm recommending caution. I would avoid making a discount a major part of employee compensation. A worker deciding to apply for jobs at Walmart and Costco could end up weighing a better health plan against a higher discount on basic goods. That seems problematic to me.
    - 11y ago