7 ms·

I find it very interesting that most people assume it should be the employer's responsibility to provide for the employee's wellbeing. Call me naive, but I thin

by whack 7y ago

I find it very interesting that most people assume it should be the employer's responsibility to provide for the employee's wellbeing. Call me naive, but I think it should be society's responsibility. What about Hedge Funds, Technology companies, Law Firms and every other company that hires primarily 6-figure white collar employees. Should they be completely off the hook, just because their business model only requires small numbers of white collar workers? What about yuppies and millionaires who eat at nice restaurants, shop at Whole Foods and cook our own meals, instead of buying from McDonalds. Should we be immune from minimum wage increases just because we can afford to pay for the finer things in life? Minimum wage laws are fundamentally a tax on low-margin businesses and the low-wage workers who frequent them. There's a better option available. The Earned Income Tax Credit (EITC). It can ensure that workers take home $15/hour, while also ensuring that the cost is borne by the entire society. Not just a few specific industries and the specific demographics that rely on them.

frgtpsswrdlame 7y ago
Corporations are a part and a result of our society. The government should not be in the business of subsidizing companies who aren't profitable enough to pay a living wage, it should just mandate a living wage and companies who aren't able to meet it go out of business. 'Creative destruction' and all that.
- scarface74 7y ago
  How many YC funded companies have ever been profitable? VC backed tech companies “aren’t profitable enough” to pay a living wage. Small businesses outside of the tech sector don’t have the access to capital that tech bro’s have.
  - frgtpsswrdlame 7y ago
    I don't think access to capital is a mitigating factor. It doesn't really matter why you can't pay a wage that a worker can live on. If you can't do it you should go out of business.
    - scarface74 7y ago
      So now people who are trying to make a living with a small business don’t deserve to be in business but tech bro’s who can convince people to invest billions in companies that will probably never be profitable should stay in business? Especially since we know that most venture funding goes to people who “pattern match” with Zuckerburg not the people who are running small businesses. Yeah that’s going to make the poor better off while people in tech shake their finger at them - or in other words let them eat cake! If low margin companies don’t deserve to be in business then why do money losing companies deserve to be in business? What if we made it against the law for public pensions to invest in VC funds or made it illegal for companies that don’t show that they can be profitable to be listed on the public market?
      - sjy 7y ago
        This is whataboutism. Believing that businesses who can’t afford to pay their staff a living wage shouldn’t exist doesn’t entail any position on the issue of unprofitable tech companies.
        scarface74 7y ago
        Why not? Left to their own devices they couldn’t afford to pay their employees anything. The mom and pop shop can’t get millions of dollars thrown at them because they “pattern match” what a successful founder “looks like” without a business plan. They actually have to be profitable.
        sjy 7y ago
        Suppose that this was fixed, and tech companies had to be profitable to stay in business, like mom and pop shops. Would that do anything to improve the circumstances of the McDonald’s worker described in this article?
        scarface74 7y ago
        Would it do the worker or the franchise owner (who on average makes between $65K and $150K a year) any good if the company was out of business? What if capital wasn’t chasing after money losing startups where the VC partners take 20% management fees no matter how badly the fund performs - much of that money coming from public pensions?
excalibur 7y ago
Yes, it should be society's responsibility, but until we all accept it as a group the onus remains on employers. I haven't qualified for the Earned Income Credit in quite a few years, but I have nonetheless claimed it a number of times. I experienced none of the magical properties you seem to think it has.
- whack 7y ago
  The only "magical property" I claimed, is cash in your wallet, funded by taxes. I'm not sure what other magical properties you were expecting. My proposal is that instead of increasing the minimum wage, we beef up the amount of support provided by EITC
  - excalibur 7y ago
    You suggested that this existing tax credit that we've all been accustomed to since the '70s was a suitable replacement for a decent wage. Completely aside from the SUBSTANTIAL increase in cost it would take to make the numbers fit, what leads you to believe that an annual tax refund is an appropriate substitute for a regular paycheck? Do you expect them all to save it all in a bank account and only spend a set weekly amount? If they were in a financially stable enough position to pull that off, they wouldn't be working at McDonald's.
    - Noumenon72 7y ago
      He stated that it _could_ give workers $15/hour, not that it does. (It maxes out adding a little over $3/hour.) You can get a Notice of Withholding to get the credit in your paychecks instead of at the end of the year. I don't know how well it works. It's clearly possible in theory to get $15,000 on April 15 and $15,000 from McDonald's and live the same lifestyle as someone who makes $30,000 from paychecks. I could manage it easily, it's basic consumption smoothing. Should be able to borrow against the credit if necessary, too, since it's guaranteed.
    - bzbarsky 7y ago
      It doesn't have to take the form of an annual tax refund. It could take the form of lower, or negative, paycheck withholdings. The hard part is making sure that people don't end up owing a bunch of money at tax time, of course, because they're not going to have it lying around.
k-godwin 7y ago
> Should we be completely immune from minimum wage increases just because we can afford to pay for the finer things in life? You aren't immune. Minimum wage laws impact the supply chain that feeds Whole Foods and nice restaurants by increasing the cost of rural labor. https://www.indeed.com/salaries/farm-worker-Salaries https://www.indeed.com/salaries/farm-worker-Salaries A quick google will show you that farm workers are well below the $15/hour goal most progressives are touting. The argument that "society should carry the cost" is based on your opinion that is in error. Society carries the cost of minimum wage increases because we all have to eat. We all have to patronize low margin businesses to some degree (even if it is indirect). You can argue the EITC is a better "solution" than a minimum wage but if you are trying to ensure $15/hour for people paid $10/hour, you are really talking a negative income tax or UBI. At which point, you are probably better off supporting those proposals instead of pushing the EITC. Personally, I'm not a fan of subsidizing low margin businesses that from a Capitalist perspective should probably be allowed to die if their workers can't afford to live on what they pay.
- whack 7y ago
  You're right that the "trickle down" effects of minimum wage laws will impact everyone in society to some extent. But it seems like a fairly obvious conclusion that people eating at McDonalds and shopping at Walmart, will be impacted more than someone who only buys premium organic food and spends the majority of his income on other luxuries. > you are really talking a negative income tax or UBI. At which point, you are probably better off supporting those proposals instead of pushing the EITC. I do support UBI too but it seems like an extreme stretch to say that is easier to sell than EITC. Especially when you consider that EITC already exists today as a federal law, and UBI does not. https://en.wikipedia.org/wiki/Earned_income_tax_credit https://en.wikipedia.org/wiki/Earned_income_tax_credit > Personally, I'm not a fan of subsidizing low margin businesses that from a Capitalist perspective should probably be allowed to die if their workers can't afford to live on what they pay. Allowing McDonalds to hire workers at wages set by supply-and-demand, is the very opposite of a subsidy. Killing off profitable low-margin businesses, will by definition, lower the nation's GDP and tax base. Everyone, especially the workers like the one featured in the article, will be far better off in a world where profitable low-margin businesses aren't killed off by government regulation. It's far more effective to tax McDonalds, as well as every other profitable company, in order to fund the safety net that every citizen deserves.
rland 7y ago
The level of control employers exert on society essentially equivocates the two.
ShinTakuya 7y ago
Low margin businesses fundamentally operate by exploiting low paid workers. What's wrong with making the playing field even by taxing them? The prices of food will go up, but that's okay. We do it here in Australia and nobody is crying over having to pay 12 AUD for McDonald's vs 9 AUD in the US.
- scarface74 7y ago
  Low margin businesses are also franchise owners and mom and pop shops. Who do you think is hurt the most if prices go up on fast food and at Walmart?
  - ShinTakuya 7y ago
    You think the countries with minimum wages don't have these mom and pop shops? Hint: I live in such a country, and they're doing just fine. The prices are higher across the board, including the prices they sell their products for. The margin shifts, it doesn't disappear.
    - scarface74 7y ago
      I bet your country also has universal healthcare and a better safety net.
      - ShinTakuya 7y ago
        Sure, and there's nothing stopping your country from doing the same. I mean healthcare is basically irrelevant since minimum wage workers can't afford to look after health conditions regardless of whether or not they have a job. Regardless, there's no observed correlation between minimum wage and unemployment if that's what you're getting at.
        scarface74 7y ago
        Well, the unemployment rate in most European countries is twice that of the US....
virmundi 7y ago
If the society will carry the individuals, can it require they not reproduce? While not necessarily germane to this report, many in poverty make it worse by having children. Can require those on the government programs be temporarily sterilized? If not, we will only continue the cycle of poverty.
grrowl 7y ago
> Minimum wage laws are fundamentally a tax on low-margin businesses "For the fiscal year 2017, McDonalds reported earnings of US$5.2 billion" Why are you making this sound like a bad thing? What's with the EITC drum-beating in this thread?
- scarface74 7y ago
  You realize there is a difference between revenue and profit? https://www.prnewswire.com/news-releases/mcdonalds-reports-fourth-quarter-and-full-year-2017-results-and-first-quarter-2018-cash-dividend-300589866.html https://www.prnewswire.com/news-releases/mcdonalds-reports-f... Their net income was less than $700 million and it’s not corporate McDonalds that pays the employees in the stores - it’s the franchise owners. Franchise owners make less than $70K a year per store. https://work.chron.com/average-income-fast-food-franchise-owners-24587.html https://work.chron.com/average-income-fast-food-franchise-ow...
  - Spooky23 7y ago
    McDonalds franchise owners make 3x that. The average is dragged down by low rent chains like Subway or Wendy’s Keep in mind that the owners make that after leasing the building from McDonalds. It’s a turnkey business and there are many, many people who have gotten pretty rich on operating these places.
    - scarface74 7y ago
      From the cited article. So after investing $1-$3 million dollars, a McDonalds franchise owner makes about the same as a software engineer in a major US city and the software engineer didn’t have to spend $1 to $3 million and has a lot less risk. Most franchise owners aren’t “starting a business” they are “buying a job”. But a 2013 report from Franchise Business Review dug down into the numbers and came up with a net profit of $66,000 per franchise. McDonald's did much better with an average of around $150,000 per restaurant. But when you consider that a McDonald's franchise costs more than $1 million and can easily run more than $2 million, even McDonald's doesn't generate excellent average returns on investment. The fast-food franchise business is tough, and success doesn't come easy.
brandonmenc 7y ago
> I find it very interesting that most people assume it should be the employer's responsibility to provide for the employee's wellbeing. Call me naive, but I think it should be society's responsibility. You're right, but then we have the employer class generally lobbying against society actually providing these things.
big_chungus 7y ago
I'm baffled that no one has suggested that an individual is responsible for himself. Corporate health insurance, for instance, started due to wage & price controls. This shielded consumers from direct price increases. Instead of increasing wages, employers silently absorbed most of the costs, as evinced by the data [0] [1] [2]. Consumers almost certainly have more elastic purchasing preferences for insurance as a group, as they are much more granular. Insurance companies love negotiating with companies, because fewer, larger customers with greater inertia and specially-negotiated deals enable greater price discrimination than a mass-market product compared directly to others. This has further enabled the rise in prices. I firmly believe that the individual is better-equipped to make his own decisions than any central planner or procurement department. We've messed things up enough with centralization; it's time to shift back to letting consumers make their own choices. Rather than taking even more choice by further centralizing from an oligopoly to a government monopoly, give people a chance to make their own decisions. I picked health insurance as it is a particularly hot topic, but this reasoning applies to many other areas. [0]: https://fm-static.cnbc.com/awsmedia/chart/2019/8/19/image%20(3).1566239610216.png https://fm-static.cnbc.com/awsmedia/chart/2019/8/19/image%20... [1]: https://www.insurancejournal.com/news/national/2018/10/08/503575.htm https://www.insurancejournal.com/news/national/2018/10/08/50... [2]: https://www.insurancejournal.com/app/uploads/2018/10/2018-ehbs-news-release-chart-final.png https://www.insurancejournal.com/app/uploads/2018/10/2018-eh...

by whack 7y ago

frgtpsswrdlame 7y ago

Corporations are a part and a result of our society. The government should not be in the business of subsidizing companies who aren't profitable enough to pay a living wage, it should just mandate a living wage and companies who aren't able to meet it go out of business. 'Creative destruction' and all that.

scarface74 7y ago
How many YC funded companies have ever been profitable? VC backed tech companies “aren’t profitable enough” to pay a living wage. Small businesses outside of the tech sector don’t have the access to capital that tech bro’s have.
- frgtpsswrdlame 7y ago
  I don't think access to capital is a mitigating factor. It doesn't really matter why you can't pay a wage that a worker can live on. If you can't do it you should go out of business.
  - scarface74 7y ago
    So now people who are trying to make a living with a small business don’t deserve to be in business but tech bro’s who can convince people to invest billions in companies that will probably never be profitable should stay in business? Especially since we know that most venture funding goes to people who “pattern match” with Zuckerburg not the people who are running small businesses. Yeah that’s going to make the poor better off while people in tech shake their finger at them - or in other words let them eat cake! If low margin companies don’t deserve to be in business then why do money losing companies deserve to be in business? What if we made it against the law for public pensions to invest in VC funds or made it illegal for companies that don’t show that they can be profitable to be listed on the public market?
    - sjy 7y ago
      This is whataboutism. Believing that businesses who can’t afford to pay their staff a living wage shouldn’t exist doesn’t entail any position on the issue of unprofitable tech companies.
      - scarface74 7y ago
        Why not? Left to their own devices they couldn’t afford to pay their employees anything. The mom and pop shop can’t get millions of dollars thrown at them because they “pattern match” what a successful founder “looks like” without a business plan. They actually have to be profitable.
        sjy 7y ago
        Suppose that this was fixed, and tech companies had to be profitable to stay in business, like mom and pop shops. Would that do anything to improve the circumstances of the McDonald’s worker described in this article?
        scarface74 7y ago
        Would it do the worker or the franchise owner (who on average makes between $65K and $150K a year) any good if the company was out of business? What if capital wasn’t chasing after money losing startups where the VC partners take 20% management fees no matter how badly the fund performs - much of that money coming from public pensions?

excalibur 7y ago

Yes, it should be society's responsibility, but until we all accept it as a group the onus remains on employers. I haven't qualified for the Earned Income Credit in quite a few years, but I have nonetheless claimed it a number of times. I experienced none of the magical properties you seem to think it has.

whack 7y ago
The only "magical property" I claimed, is cash in your wallet, funded by taxes. I'm not sure what other magical properties you were expecting. My proposal is that instead of increasing the minimum wage, we beef up the amount of support provided by EITC
- excalibur 7y ago
  You suggested that this existing tax credit that we've all been accustomed to since the '70s was a suitable replacement for a decent wage. Completely aside from the SUBSTANTIAL increase in cost it would take to make the numbers fit, what leads you to believe that an annual tax refund is an appropriate substitute for a regular paycheck? Do you expect them all to save it all in a bank account and only spend a set weekly amount? If they were in a financially stable enough position to pull that off, they wouldn't be working at McDonald's.
  - Noumenon72 7y ago
    He stated that it _could_ give workers $15/hour, not that it does. (It maxes out adding a little over $3/hour.) You can get a Notice of Withholding to get the credit in your paychecks instead of at the end of the year. I don't know how well it works. It's clearly possible in theory to get $15,000 on April 15 and $15,000 from McDonald's and live the same lifestyle as someone who makes $30,000 from paychecks. I could manage it easily, it's basic consumption smoothing. Should be able to borrow against the credit if necessary, too, since it's guaranteed.
  - bzbarsky 7y ago
    It doesn't have to take the form of an annual tax refund. It could take the form of lower, or negative, paycheck withholdings. The hard part is making sure that people don't end up owing a bunch of money at tax time, of course, because they're not going to have it lying around.

k-godwin 7y ago

> Should we be completely immune from minimum wage increases just because we can afford to pay for the finer things in life? You aren't immune. Minimum wage laws impact the supply chain that feeds Whole Foods and nice restaurants by increasing the cost of rural labor. https://www.indeed.com/salaries/farm-worker-Salaries https://www.indeed.com/salaries/farm-worker-Salaries A quick google will show you that farm workers are well below the $15/hour goal most progressives are touting. The argument that "society should carry the cost" is based on your opinion that is in error. Society carries the cost of minimum wage increases because we all have to eat. We all have to patronize low margin businesses to some degree (even if it is indirect). You can argue the EITC is a better "solution" than a minimum wage but if you are trying to ensure $15/hour for people paid $10/hour, you are really talking a negative income tax or UBI. At which point, you are probably better off supporting those proposals instead of pushing the EITC. Personally, I'm not a fan of subsidizing low margin businesses that from a Capitalist perspective should probably be allowed to die if their workers can't afford to live on what they pay.

whack 7y ago
You're right that the "trickle down" effects of minimum wage laws will impact everyone in society to some extent. But it seems like a fairly obvious conclusion that people eating at McDonalds and shopping at Walmart, will be impacted more than someone who only buys premium organic food and spends the majority of his income on other luxuries. > you are really talking a negative income tax or UBI. At which point, you are probably better off supporting those proposals instead of pushing the EITC. I do support UBI too but it seems like an extreme stretch to say that is easier to sell than EITC. Especially when you consider that EITC already exists today as a federal law, and UBI does not. https://en.wikipedia.org/wiki/Earned_income_tax_credit https://en.wikipedia.org/wiki/Earned_income_tax_credit > Personally, I'm not a fan of subsidizing low margin businesses that from a Capitalist perspective should probably be allowed to die if their workers can't afford to live on what they pay. Allowing McDonalds to hire workers at wages set by supply-and-demand, is the very opposite of a subsidy. Killing off profitable low-margin businesses, will by definition, lower the nation's GDP and tax base. Everyone, especially the workers like the one featured in the article, will be far better off in a world where profitable low-margin businesses aren't killed off by government regulation. It's far more effective to tax McDonalds, as well as every other profitable company, in order to fund the safety net that every citizen deserves.

rland 7y ago

The level of control employers exert on society essentially equivocates the two.

ShinTakuya 7y ago

Low margin businesses fundamentally operate by exploiting low paid workers. What's wrong with making the playing field even by taxing them? The prices of food will go up, but that's okay. We do it here in Australia and nobody is crying over having to pay 12 AUD for McDonald's vs 9 AUD in the US.

scarface74 7y ago
Low margin businesses are also franchise owners and mom and pop shops. Who do you think is hurt the most if prices go up on fast food and at Walmart?
- ShinTakuya 7y ago
  You think the countries with minimum wages don't have these mom and pop shops? Hint: I live in such a country, and they're doing just fine. The prices are higher across the board, including the prices they sell their products for. The margin shifts, it doesn't disappear.
  - scarface74 7y ago
    I bet your country also has universal healthcare and a better safety net.
    - ShinTakuya 7y ago
      Sure, and there's nothing stopping your country from doing the same. I mean healthcare is basically irrelevant since minimum wage workers can't afford to look after health conditions regardless of whether or not they have a job. Regardless, there's no observed correlation between minimum wage and unemployment if that's what you're getting at.
      - scarface74 7y ago
        Well, the unemployment rate in most European countries is twice that of the US....

virmundi 7y ago

If the society will carry the individuals, can it require they not reproduce? While not necessarily germane to this report, many in poverty make it worse by having children. Can require those on the government programs be temporarily sterilized? If not, we will only continue the cycle of poverty.

grrowl 7y ago

> Minimum wage laws are fundamentally a tax on low-margin businesses "For the fiscal year 2017, McDonalds reported earnings of US$5.2 billion" Why are you making this sound like a bad thing? What's with the EITC drum-beating in this thread?

scarface74 7y ago
You realize there is a difference between revenue and profit? https://www.prnewswire.com/news-releases/mcdonalds-reports-fourth-quarter-and-full-year-2017-results-and-first-quarter-2018-cash-dividend-300589866.html https://www.prnewswire.com/news-releases/mcdonalds-reports-f... Their net income was less than $700 million and it’s not corporate McDonalds that pays the employees in the stores - it’s the franchise owners. Franchise owners make less than $70K a year per store. https://work.chron.com/average-income-fast-food-franchise-owners-24587.html https://work.chron.com/average-income-fast-food-franchise-ow...
- Spooky23 7y ago
  McDonalds franchise owners make 3x that. The average is dragged down by low rent chains like Subway or Wendy’s Keep in mind that the owners make that after leasing the building from McDonalds. It’s a turnkey business and there are many, many people who have gotten pretty rich on operating these places.
  - scarface74 7y ago
    From the cited article. So after investing $1-$3 million dollars, a McDonalds franchise owner makes about the same as a software engineer in a major US city and the software engineer didn’t have to spend $1 to $3 million and has a lot less risk. Most franchise owners aren’t “starting a business” they are “buying a job”. But a 2013 report from Franchise Business Review dug down into the numbers and came up with a net profit of $66,000 per franchise. McDonald's did much better with an average of around $150,000 per restaurant. But when you consider that a McDonald's franchise costs more than $1 million and can easily run more than $2 million, even McDonald's doesn't generate excellent average returns on investment. The fast-food franchise business is tough, and success doesn't come easy.

brandonmenc 7y ago

> I find it very interesting that most people assume it should be the employer's responsibility to provide for the employee's wellbeing. Call me naive, but I think it should be society's responsibility. You're right, but then we have the employer class generally lobbying against society actually providing these things.

big_chungus 7y ago

I'm baffled that no one has suggested that an individual is responsible for himself. Corporate health insurance, for instance, started due to wage & price controls. This shielded consumers from direct price increases. Instead of increasing wages, employers silently absorbed most of the costs, as evinced by the data [0] [1] [2]. Consumers almost certainly have more elastic purchasing preferences for insurance as a group, as they are much more granular. Insurance companies love negotiating with companies, because fewer, larger customers with greater inertia and specially-negotiated deals enable greater price discrimination than a mass-market product compared directly to others. This has further enabled the rise in prices. I firmly believe that the individual is better-equipped to make his own decisions than any central planner or procurement department. We've messed things up enough with centralization; it's time to shift back to letting consumers make their own choices. Rather than taking even more choice by further centralizing from an oligopoly to a government monopoly, give people a chance to make their own decisions. I picked health insurance as it is a particularly hot topic, but this reasoning applies to many other areas. [0]: https://fm-static.cnbc.com/awsmedia/chart/2019/8/19/image%20(3).1566239610216.png https://fm-static.cnbc.com/awsmedia/chart/2019/8/19/image%20... [1]: https://www.insurancejournal.com/news/national/2018/10/08/503575.htm https://www.insurancejournal.com/news/national/2018/10/08/50... [2]: https://www.insurancejournal.com/app/uploads/2018/10/2018-ehbs-news-release-chart-final.png https://www.insurancejournal.com/app/uploads/2018/10/2018-eh...