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Something that is missing from comments in this thread is that companied do not necessarily have the freedom to pay whatever they want. The equation for any bu
by robomartin 3y ago
Something that is missing from comments in this thread is that companied do not necessarily have the freedom to pay whatever they want.
The equation for any business offering goods and services starts with what their customers are willing to pay for their offering.
If the product is unique (Armani, Gucci, etc.) and with less competition (or brand differentiation/loyalty), prices can be higher than commoditized goods and services.
If the good or service is commoditized and has lots of competition, prices have a real ceiling. For example, nobody is going to go to McDonalds and pay $50 for a cheeseburger. They might pay half that much at a celebrity high-end restaurant, yet, at McDonalds, the limit is somewhere around $5, or 1/10.
That, in turn, dictates how much the business can spend on the rest of the cost structure, fixed and variable costs.
Some seem to think that just because employees ask for a certain number a company should magically be able to do it.
Right now United Auto Workers is asking for a 45% pay increase and working 32 hour weeks while getting paid for 40 hours (which is an additional 25% boost (they are certainly not going to produce 40 hours of work in 32 hours). And more.
This represents a complete disconnect from reality. This kind of thing leads to outsourcing, automation and job loss. Entire industries have already been decimated by this kind of thing.
Trucking is no different. Buyers of transportation services can't pay double rates. This (worse than this) already happened during the pandemic and it brought things down to a grinding halt.
We were paying $30K to move a container that used to cost $2K. You can bet that cost had to be passed on to customers. And the result? Less orders. Less work. We had to let people go.
There's a utopia being taught out there that vilifies all business. If one digs, this always come from people who have never run anything even resembling a non-trivial business. Of course, from a frame of reference rooted in pure ignorance, anything is possible.
If you want people at McDonalds to make $50 hour, go pay $25 for a burger. Heck, if you are passionate about this, lets pass legislation that allows restaurants to charge a variable rate. They post the minimum they want for their product and the customer is allowed to pay more. Brilliant. We can align cost and wages with ideology.
How many people are going to go into McDonalds and offer to pay $25 to $50 for a burger. Yeah. The number is zero. Of course. So much for ideology vs. reality.
This is no different from people pushing for higher taxes. In the history of humanity (I think I can say this) nobody has voluntarily chosen to send the government more than what they are required to pay and lead by example in support of their ideology. The world is funny that way. Talk, talk, talk. And 100% of is is hypocritical.
- lotsofpulp 3y ago> Heck, if you are passionate about this, lets pass legislation that allows restaurants to charge a variable rate. Why would legislation be needed for this? Hotels/airlines/rental car prices change all day every day, most probably via computer programs by now. There are already “market” price menus at restaurants and differing prices for lunch and dinner menus.
- Spoom 3y agoCan you cite anything about UAW asking for a 45% pay increase / 32 hour work week? It sounds like either hyperbole or not the entire story.
- cogman10 3y agoNot hyperbole, but the 45% increase is over a 4 year period (so 10% increase each year).
- jonathankoren 3y agohttps://abcnews.go.com/Business/day-workweek-46-raise-uaw-makes-audacious-demands/story?id=102926195 https://abcnews.go.com/Business/day-workweek-46-raise-uaw-ma... The truth of course is somewhat less than the headline. It's +47% over four years, and more importantly, starting pay today is effectively $10/hr less than what it was in 2007. This isn't so much a raise, as it is 20 year past due cost of living adjustment. As far as the 32 hour per week, why not? Worker productivity has risen, it's about time we start getting that John Maynard Keynes promised 15 hours week.
- Jochim 3y agoThey're asking for 20% to offset recent inflation and then 5% per year until 2027[0]. Misrepresenting a cumulative 4 year increase as a single upfront one is honestly disgusting behaviour. I can only hope that GP shares the same level of disdain for the CEOs of these companies who actually received a 40% increase in their compensation over the last 4 years[0]. [0] https://eu.detroitnews.com/story/business/autos/2023/08/03/uaw-demands-46-percent-pay-hike-in-talks-with-detroit-three-automakers/70525605007/ https://eu.detroitnews.com/story/business/autos/2023/08/03/u...