4 ms·

https://www.aei.org/carpe-diem/the-public-thinks-the-average-company-makes-a-36-profit-margin-which-is-about-5x-too-high-part-ii/ https://www.aei.org/carpe-diem

https://www.aei.org/carpe-diem/the-public-thinks-the-average-company-makes-a-36-profit-margin-which-is-about-5x-too-high-part-ii/ https://www.aei.org/carpe-diem/the-public-thinks-the-average... "For the general retail sector, the average profit margin is only 2.3% and for the grocery and food retail industry, it’s even lower at only 1.6%."

bayesian_horse 4y ago
Which means it's a shitty career / sector to be in. There also is a cost to capital, in the form of return on investment (another way to say profit). So in those cases, to pay higher wages, the retail sector would have to raise consumer prices. If they were to decrease ROI, the capital would run away and rather invest in something else. They will only raise wages and prices if that is the only way to have enough labor to handle their business. Even then, higher prices means lower demand. No free lunch.
- carapace 4y ago
  https://rainbow.coop/ https://rainbow.coop/ https://en.wikipedia.org/wiki/Rainbow_Grocery_Cooperative https://en.wikipedia.org/wiki/Rainbow_Grocery_Cooperative Rainbow Grocery Cooperative is a worker-owned and run food cooperative located in San Francisco, California. Founded in 1975
  - bayesian_horse 4y ago
    Worker-owned just means workers are both labor and capital. Those projects often have higher prices overall.
    - carapace 4y ago
      Rainbow's prices are competitive, at least they've been in business for about a century and don't seem in any danger of closing. The point is that without investors expecting a return there's no ROI. Grocery stores can pay a living wage without gouging customers and without investors. It seemed to me that you might have been implying that without investors there couldn't be grocery stores. Another factor to consider is that wages and profit returned to the workers will tend to stay in the local economy longer, contrasted with ROI which typically would be stored in other investments?
      - bayesian_horse 4y ago
        I'm sure if you look closer you'll find that those workers do have some capital bound in the business and that is earning at best a modest return because you have to sum up wage and rent. Once somebody earns somewhat more than their subsistence wage, they want to invest it into something that brings a return. That won't be these worker-owned businesses. And the market capacity for such companies seems to be quite small.
        carapace 4y ago
        > 'm sure if you look closer you'll find that those workers do have some capital bound in the business ... Like what? You'll have to forgive me but I'm not very sophisticated when it comes to economics. > ... that is earning at best a modest return So what? Rainbow Grocery isn't an investment vehicle, it's just people coming together to make a grocery store. That's my point: not everything has to be an investment. We can have grocery stores w/o ROI, that charge reasonable prices and pay a living wage. > Once somebody earns somewhat more than their subsistence wage, they want to invest it into something that brings a return. Sure! That's the beauty of the capitalist system (I'm pro-capitalist FWIW, I just don't think it is necessarily the best economic modality for every business. The way I put it is, "Capitalism as a tool, an economic API, not an ideology.") > That won't be these worker-owned businesses. Exactly! > And the market capacity for such companies seems to be quite small. Again, so what? These kinds of businesses generally are not trying to aggressively expand (although some do, like REI, the outdoor equipment stores.) Just to reiterate, it sounded to me like you were saying that without ROI we wouldn't have grocery stores, and I just wanted to point out that we can have grocery stores with good prices and good wages and no investors or appreciable ROI.
        bayesian_horse 4y ago
        Everything you own is an investment in your portfolio. It's just that some things have shitty returns or lose value. Some don't have any value to resell. In any case, joining a coop usually means you have to buy some shares in the "company". This may be disguised in some form or another, maybe through withholding some wage initially. But in order to get a share of the profit you need to own a share in the coop. This is what "employee-owned" means. So the employees do have their own capital involved in the company with all the implications: A risk of the shares devaluing and loss of opportunity to do something else with that capital. And if the wages are higher than somewhere else, than they are part of the return on investment. If none of that is the case, it's not a coop but rather a not-for-profit.

bayesian_horse 4y ago

Which means it's a shitty career / sector to be in. There also is a cost to capital, in the form of return on investment (another way to say profit). So in those cases, to pay higher wages, the retail sector would have to raise consumer prices. If they were to decrease ROI, the capital would run away and rather invest in something else. They will only raise wages and prices if that is the only way to have enough labor to handle their business. Even then, higher prices means lower demand. No free lunch.

carapace 4y ago
https://rainbow.coop/ https://rainbow.coop/ https://en.wikipedia.org/wiki/Rainbow_Grocery_Cooperative https://en.wikipedia.org/wiki/Rainbow_Grocery_Cooperative Rainbow Grocery Cooperative is a worker-owned and run food cooperative located in San Francisco, California. Founded in 1975
- bayesian_horse 4y ago
  Worker-owned just means workers are both labor and capital. Those projects often have higher prices overall.
  - carapace 4y ago
    Rainbow's prices are competitive, at least they've been in business for about a century and don't seem in any danger of closing. The point is that without investors expecting a return there's no ROI. Grocery stores can pay a living wage without gouging customers and without investors. It seemed to me that you might have been implying that without investors there couldn't be grocery stores. Another factor to consider is that wages and profit returned to the workers will tend to stay in the local economy longer, contrasted with ROI which typically would be stored in other investments?
    - bayesian_horse 4y ago
      I'm sure if you look closer you'll find that those workers do have some capital bound in the business and that is earning at best a modest return because you have to sum up wage and rent. Once somebody earns somewhat more than their subsistence wage, they want to invest it into something that brings a return. That won't be these worker-owned businesses. And the market capacity for such companies seems to be quite small.
      - carapace 4y ago
        > 'm sure if you look closer you'll find that those workers do have some capital bound in the business ... Like what? You'll have to forgive me but I'm not very sophisticated when it comes to economics. > ... that is earning at best a modest return So what? Rainbow Grocery isn't an investment vehicle, it's just people coming together to make a grocery store. That's my point: not everything has to be an investment. We can have grocery stores w/o ROI, that charge reasonable prices and pay a living wage. > Once somebody earns somewhat more than their subsistence wage, they want to invest it into something that brings a return. Sure! That's the beauty of the capitalist system (I'm pro-capitalist FWIW, I just don't think it is necessarily the best economic modality for every business. The way I put it is, "Capitalism as a tool, an economic API, not an ideology.") > That won't be these worker-owned businesses. Exactly! > And the market capacity for such companies seems to be quite small. Again, so what? These kinds of businesses generally are not trying to aggressively expand (although some do, like REI, the outdoor equipment stores.) Just to reiterate, it sounded to me like you were saying that without ROI we wouldn't have grocery stores, and I just wanted to point out that we can have grocery stores with good prices and good wages and no investors or appreciable ROI.
        bayesian_horse 4y ago
        Everything you own is an investment in your portfolio. It's just that some things have shitty returns or lose value. Some don't have any value to resell. In any case, joining a coop usually means you have to buy some shares in the "company". This may be disguised in some form or another, maybe through withholding some wage initially. But in order to get a share of the profit you need to own a share in the coop. This is what "employee-owned" means. So the employees do have their own capital involved in the company with all the implications: A risk of the shares devaluing and loss of opportunity to do something else with that capital. And if the wages are higher than somewhere else, than they are part of the return on investment. If none of that is the case, it's not a coop but rather a not-for-profit.