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> If labor is 30% of your costs then you could pay 20% more by charging 6% more for your finished goods or services. right, businesses are all malign and evil,

> If labor is 30% of your costs then you could pay 20% more by charging 6% more for your finished goods or services. right, businesses are all malign and evil, and they could raise their prices by 6% (without losing any business), but they just haven't, because they prefer to... have an excuse to pay less? > But you say Susan doesn't want to work full time she has other responsibilities, other jobs for example! any of my staff who didn't want to work full-time usually wanted to spend more time with their kids. or take classes.

AnIdiotOnTheNet 5y ago
> right, businesses are all malign and evil, and they could raise their prices by 6% (without losing any business), but they just haven't, because they prefer to... have an excuse to pay less? Let's assume that the reason you'd supposedly lose business with higher prices is due to competition not raising their prices. If you're struggling to find workers such that you have to raise prices to cover better wages, then it stands to reason your competitors are in the same boat, so either they keep struggling due to lack of labor or they raise their prices to match. Alternatively, they have a much more efficient business than you and you should go under anyway. Nobody owes you a successful business. Now let's assume that the reason you'd supposedly lose business with higher prices is due to people not being willing to pay that much for your product. Well, if your business revenue can't even afford to pay the labor that keeps it running than your business is a failure and should go under. Nobody owes you a successful business. I absolutely do not subscribe to the idea that the purpose of society should be to ensure there are enough desperate people to fill labor positions for untenable businesses.
- jollybean 5y ago
  "I absolutely do not subscribe to the idea that the purpose of society" Your moral impetus isn't an important factor in trying to understand underlying dynamic of the situation. There's a basic operating competitive dynamic going in small business & services that is almost as old as time, or at least it goes back to even before antiquity before we even had the language to describe the economics of it all. Huge swaths of the economy operate on this basis. Most small business owners are not particularly rich, and if you add up the risk premium they take on, they're probably not that far ahead at all, if at all. Wages are what they are due to input costs (including labour) beyond their control. They have no market power and they are 'price takers' not 'price setters'. There's generally no situation in which they can magically raise wages and give longer hours as the OP fantasized. The only thing they can do is hope to be especially prudent, intelligent, conscientious and of course lucky. Larger entities & chains (i.e. Starbucks) probably could raise wages a bit. Regulations such as minimum wage will obviously have an affect but have side effects. And of course large pools of illegal migrants who's presence hugely skews the above board market for labour (this is major factor in Texas and Cali).
  - AnIdiotOnTheNet 5y ago
    > Your moral impetus isn't an important factor in trying to understand underlying dynamic of the situation. No, but I read the implication of all this whining about business having small margins and not being able to find workers as a call to action to, well, intentionally make people's situation more desperate so they'll work shitty jobs for shitty pay so these business owners can make more money. > Most small business owners are not particularly rich, and if you add up the risk premium they take on, they're probably not that far ahead at all, if at all. How is this my problem? They started a business, they accepted the risk, it's their problem.
michaelmrose 5y ago
They are in a local equilibrium where changing it even in a fashion that would be beneficial to all would risk of loss. Some will avoid risk even when increasing loss for doing nothing is all but sure. People will continue to pay too little to obtain workers losing more money as their number and quality of workers declines while demanding cuts to benefits like food, childcare, and health which are often the only way most of their workers can possibly afford to work there AND eat and live indoors. If allowed they will continue to do this until they go out of business then insist that the government destroyed their business. Then the banks will lend more money to the next round of idiots who will happily do the same.

AnIdiotOnTheNet 5y ago

> right, businesses are all malign and evil, and they could raise their prices by 6% (without losing any business), but they just haven't, because they prefer to... have an excuse to pay less? Let's assume that the reason you'd supposedly lose business with higher prices is due to competition not raising their prices. If you're struggling to find workers such that you have to raise prices to cover better wages, then it stands to reason your competitors are in the same boat, so either they keep struggling due to lack of labor or they raise their prices to match. Alternatively, they have a much more efficient business than you and you should go under anyway. Nobody owes you a successful business. Now let's assume that the reason you'd supposedly lose business with higher prices is due to people not being willing to pay that much for your product. Well, if your business revenue can't even afford to pay the labor that keeps it running than your business is a failure and should go under. Nobody owes you a successful business. I absolutely do not subscribe to the idea that the purpose of society should be to ensure there are enough desperate people to fill labor positions for untenable businesses.

jollybean 5y ago
"I absolutely do not subscribe to the idea that the purpose of society" Your moral impetus isn't an important factor in trying to understand underlying dynamic of the situation. There's a basic operating competitive dynamic going in small business & services that is almost as old as time, or at least it goes back to even before antiquity before we even had the language to describe the economics of it all. Huge swaths of the economy operate on this basis. Most small business owners are not particularly rich, and if you add up the risk premium they take on, they're probably not that far ahead at all, if at all. Wages are what they are due to input costs (including labour) beyond their control. They have no market power and they are 'price takers' not 'price setters'. There's generally no situation in which they can magically raise wages and give longer hours as the OP fantasized. The only thing they can do is hope to be especially prudent, intelligent, conscientious and of course lucky. Larger entities & chains (i.e. Starbucks) probably could raise wages a bit. Regulations such as minimum wage will obviously have an affect but have side effects. And of course large pools of illegal migrants who's presence hugely skews the above board market for labour (this is major factor in Texas and Cali).
- AnIdiotOnTheNet 5y ago
  > Your moral impetus isn't an important factor in trying to understand underlying dynamic of the situation. No, but I read the implication of all this whining about business having small margins and not being able to find workers as a call to action to, well, intentionally make people's situation more desperate so they'll work shitty jobs for shitty pay so these business owners can make more money. > Most small business owners are not particularly rich, and if you add up the risk premium they take on, they're probably not that far ahead at all, if at all. How is this my problem? They started a business, they accepted the risk, it's their problem.

michaelmrose 5y ago

They are in a local equilibrium where changing it even in a fashion that would be beneficial to all would risk of loss. Some will avoid risk even when increasing loss for doing nothing is all but sure. People will continue to pay too little to obtain workers losing more money as their number and quality of workers declines while demanding cuts to benefits like food, childcare, and health which are often the only way most of their workers can possibly afford to work there AND eat and live indoors. If allowed they will continue to do this until they go out of business then insist that the government destroyed their business. Then the banks will lend more money to the next round of idiots who will happily do the same.