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This is quite common. Corporations know the long game and are willing to pay in the short term to get it. Another example is those grocery stores that closed la
by ahelwer 5y ago
This is quite common. Corporations know the long game and are willing to pay in the short term to get it. Another example is those grocery stores that closed last year after hazard pay was mandated at the height of the pandemic, citing unprofitability. Unprofitability! Of a grocery store, one of like three places where people were spending money in 2020!
- mdorazio 5y agoVolume doesn’t matter if your margins are negative. Grocery stores typically run on very slim margins (3% or less) so it’s pretty reasonable to think that raising employee pay significantly would make them lose money.
- DangitBobby 5y agoMaybe I'm not thinking about this right, but if they are getting way more business because of the pandemic and their costs have more or less stayed put, it's practically impossible that their revenue hasn't gone up considerably. Despite thin margins on their product, if they sell more of it they should be making more money (eliding some growing pains which should be surmountable). In that light, I have to say I kind of doubt their margins would be negative if they offered more pay during the pandemic.
- renewiltord 5y agoSurely, it’s easier to believe that than that some non-chain grocer is protesting paying more by shutting down entirely.
- DangitBobby 5y agoWould it be fair to say that the ones shutting down are not the ones receiving more business during the pandemic? Or are you saying that their new found success has actually killed them? Because the claim by the original comment here is that volume doesn't matter.
- renewiltord 5y agoWell, I suspect they're saying volume increases are coupled with margin decreases to zero. Certainly I find it more believable that people are closing honestly because they can't make money rather than people are closing to protest hazard pay. The latter seems unlikely. If the business is viable, the business owner is going to want to run it. It's his baby and his life, he won't kill it just because he disagrees politically.
- ummonk 5y agoThey didn't close all locations with the hazard pay increase. They closed a few locations that were already struggling to be profitable, and had now become even more unprofitable.
- ahelwer 5y agoYes, that's what they said. There is no way to verify that. Punishing certain communities by withdrawing service to scare off future such wage increases is another explanation.
- ummonk 5y agoWhat are you arguing happened instead? That they closed still-profitable stores just to send a message?
- ahelwer 5y agoAbsolutely. Corporations do things like this all the time. Amazon orders a crash-halt to office building construction projects whenever Seattle threatens to tax them, for example. As I said in my original comment - corporations can afford to play the long game and take the hit.
- ummonk 5y agoWhy would they close profitable stores instead of unprofitable stores?