4 ms·
> as for the argumentation - it is again the same thing! instead of "whole company", you moved to topic into "individual branches", but it is still the same - a
by waps 12y ago
> as for the argumentation - it is again the same thing! instead of "whole company", you moved to topic into "individual branches", but it is still the same - apparently, a huge number of workers is employed in places with zero profit, be it whole companies or just branches. this is an incredible claim. why would we accept that workers in highly successful branches should get underpaid, just so that a couple of barely profitable branches could remain open?
Let's do some maths then :
McDonalds 2012 profit : $5.5 billion
Revenue : $27.56 billion
Employees : 1.8 million
Revenue per employee : $15311
Profit per employee : $3055
So costs per employee : $12256
Let's say McDonalds locations vary in revenue by 25% (95%) and that the main cause is employee_cost/customer. That seems to me a very reasonable claim.
That means employees make McDonalds between $11483 and $19138 in revenue, -772 to 6682 in profit. Let's assume uniform distribution. The amount of net-negative employees would be about 10%.
Since most companies are much less profitable than McDonalds, the idea that a lot of people are effectively employed with zero or negative gain seems quite plausible to me. In the US and Europe both you could defend the idea that most people have a net-negative utility to the US and European nations (taken as a whole), a gap that gets filled by the sale of treasury notes to foreignors.
But there are whole classes of employees that will have net-negative utility :
1) government employees (government does not produce goods or services. And where it does it's financed by taxes, negating the benefit)
2) management (they don't contribute directly to work getting done)
Ideally, neither function would exist (and police and roads would simply be organised directly by the people who want to use them). I'm not saying that's realistic, but it would be better from an economic perspective.
In my opinion people often overestimate how inefficient capitalism is. There was a huge fuss about oil profits a few years back, when oil first went to $100/barrel. When you calculate how much per gallon oil company profits were (and thus how much they could be theoretically maximally lowered by nationalizing the oil companies) you'd get something like 2-3% depending on the company. This was the populist solution to bring oil back from $105 or so to $60 ...
Of course if you're living in San Francisco and see Goldman Sachs organise a bankers' convention in the most expensive hotel in the city it seems excessive, but all their costs only amount to at most the low double digits of their revenues. For the vast majority of firms, it is the low single digits.
That doesn't mean improving the "common man"'s life is not worth it, of course.
- bakhy 12y agooversimplification. you are implying that employees are the complete source of expenses in running a business. this is, of course, not true. put most simply, if your hypothetical McDonalds (at the numbers before you introduced the arbitrary variation, for which BTW an application of the Zipf law would probably be more appropriate) fired one employee, they would not suddenly have $12256 more in revenue. they would be wise to determine the exact costs of keeping an employee when making these decisions. --- another important argument which is often overlooked - the extra money that people at lower incomes will receive through this will almost entirely and certainly be spent back in the economy where they live! i have a strong hunch that under certain circumstances, although they might, when thoroughly estimated, turn out to be extreme, hiking up minimum wage might produce increased employment in the mid-term.