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  • CEO raises his company's minimum wage to $70,000...

    And his best workers quit...

    http://www.msn.com/en-us/money/compa...AI?ocid=SMSDHP

    "He gave raises to people who have the least skills and are the least equipped to do the job, and the ones who were taking on the most didnít get much of a bump," she told the Times. A fairer plan, she told the paper, would give newer employees smaller increases, along with the chance to earn a more substantial raise with more experience.

    Gravity's web developer, Grant Moran, 29, had similar concerns. While his own salary saw a bump ó to $50,000, up from $41,000, in the first stage of the raise ó he worried the new policy didn't reward work ethic. "Now the people who were just clocking in and out were making the same as me," he tells the Times. "It shackles high performers to less motivated team members."

  • #2
    Well child labor laws didn't destroy America and doubt that higher minimum wages would either.

    Higher minimum wage might actually encourage automation which is the obvious wave of the future. I'm sure of course that many people will mourn the lose of jobs that automation promotes just as they did the decline of cottage industries during the industrial revolution.

    On the other side of the equation perhaps we should draft those who choose not to educated themselves and find employment into minimal public service positions. There is always plenty of work picking up trash and keeping public spaces looking sharp.

    Personally I think a minimum wage of $20 an hour would produce a boom in consumer spending and revitalize the economy. If all those service jobs disappear I'm not sure I would miss them as I can make a better hamburger at home.
    We hunt the hunters

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    • #3
      I assume with 99.9% certainty that the CEO is not very smart. Not only did many of his employees quit, he also found out he couldn't afford to give the raises. He's run into financial trouble ever since.

      Comment


      • #4
        This should be fun.

        I want to start with what I see as a fundamental philosophical flaw then move on to the economics.

        The assumption that a civilization can be built on greed as the primary motivation for social cooperation is as flawed in capitalism as the communist belief that altruism can be the foundation of a society. At a fundamental biologically level altruism and greed (self interest) cannot really be separated. What is evident however is that all social animals have a degree of altruism that make social cohesion possible. Civilizations are fundamentally based on the voluntary surrender of individual freedoms in exchange for security. Altruism however is balanced by "fairness" and the concept of fairness is also seen throughout social animals. A break down in either fairness or altruism will cause social instability.

        The difference between what the CEO has done and a universal minimum wage is the lack of fair distribution. A universal minimum wage not only is fair it also places all businesses on a level playing field. Competition is them able to favor other factors besides wages into the success or failure of individual enterprises.

        The principle behind minimum wages is the assurance that everyone that works has sufficient purchasing power to meet minimum living standards. The sides effect of everyone having a minimum living standard are numerous. They include a healthy population, increases in consumer production, better housing, and the responsibility that comes with inclusion in the economy. Where there is little reward for working if a minimum living standard can't be achieved by wages alternative life styles are encouraged. Those life styles reflect high crime rates, health issues related to poverty, voluntary unemployment and irresponsible behavior.

        The idea that high minimum wages will stimulate automation is not just a side issue but resolves one of the crises we face with the exploitation of cheap foreign labor. The U.S. has been able to withstand trade imbalances with the shift to manufacturing in China an elsewhere by controlling international finance. The control of international finance market has and may continue to erode making future trade imbalances more difficult to absorb. Automation is likely to completely alter this dynamic in the future but it is being slowed by a number of factors.

        The primary factor is lack of motivation for innovation low wages keep inefficient labor arrangements profitable. Automation is also being forestalled by the exchange of derivatives for cheap foreign labor. While higher domestic minimum wages are unlikely to influence automation directly while cheap foreign labor is available they are also unlikely to effect the tech sector directly. They will tend to jumpstart automation of the service industry and increase the infrastructure need for automated production.

        High minimum wages should not be seen as social engineering. All the normal competitive forces and market freedoms remain in place. They are simply sound economic policy that stimulate the economy without direct government interference. The alternative social engineering policies such as welfare and stimulus packages and taxes have all proven to come with significant unintentional cost.
        We hunt the hunters

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        • #5
          Originally posted by T. A. Gardner View Post
          A fully predictable outcome. This approach isn't the answer, either, and if the CEO intended to prove that publicly, he succeeded admirably.


          Maybe that's what's wrong with the presidency these days: $450,000 a year isn't even noticable on the America CEO pay scales of today, and most CEO's wield more actual power than a president does.
          Quis Custodiet Ipsos Custodes? Who is watching the watchers?

          Comment


          • #6
            Originally posted by wolfhnd View Post
            This should be fun.

            I want to start with what I see as a fundamental philosophical flaw then move on to the economics.

            The assumption that a civilization can be built on greed as the primary motivation for social cooperation is as flawed in capitalism as the communist belief that altruism can be the foundation of a society. At a fundamental biologically level altruism and greed (self interest) cannot really be separated. What is evident however is that all social animals have a degree of altruism that make social cohesion possible. Civilizations are fundamentally based on the voluntary surrender of individual freedoms in exchange for security. Altruism however is balanced by "fairness" and the concept of fairness is also seen throughout social animals. A break down in either fairness or altruism will cause social instability.

            The difference between what the CEO has done and a universal minimum wage is the lack of fair distribution. A universal minimum wage not only is fair it also places all businesses on a level playing field. Competition is them able to favor other factors besides wages into the success or failure of individual enterprises.

            The principle behind minimum wages is the assurance that everyone that works has sufficient purchasing power to meet minimum living standards. The sides effect of everyone having a minimum living standard are numerous. They include a healthy population, increases in consumer production, better housing, and the responsibility that comes with inclusion in the economy. Where there is little reward for working if a minimum living standard can't be achieved by wages alternative life styles are encouraged. Those life styles reflect high crime rates, health issues related to poverty, voluntary unemployment and irresponsible behavior.

            The idea that high minimum wages will stimulate automation is not just a side issue but resolves one of the crises we face with the exploitation of cheap foreign labor. The U.S. has been able to withstand trade imbalances with the shift to manufacturing in China an elsewhere by controlling international finance. The control of international finance market has and may continue to erode making future trade imbalances more difficult to absorb. Automation is likely to completely alter this dynamic in the future but it is being slowed by a number of factors.

            The primary factor is lack of motivation for innovation low wages keep inefficient labor arrangements profitable. Automation is also being forestalled by the exchange of derivatives for cheap foreign labor. While higher domestic minimum wages are unlikely to influence automation directly while cheap foreign labor is available they are also unlikely to effect the tech sector directly. They will tend to jumpstart automation of the service industry and increase the infrastructure need for automated production.

            High minimum wages should not be seen as social engineering. All the normal competitive forces and market freedoms remain in place. They are simply sound economic policy that stimulate the economy without direct government interference. The alternative social engineering policies such as welfare and stimulus packages and taxes have all proven to come with significant unintentional cost.
            This sounds like a direct quote from an Economics text. Can you post the link?
            Quis Custodiet Ipsos Custodes? Who is watching the watchers?

            Comment


            • #7
              Funny how people want to second guess CEOs over this issue and not others.

              Edit: Is not the viewpoint espoused by some here the old Krupp/German viewpoint that an employer "must be master in his own house"? Who are we then to question Mr. Price? Is that not socialistic?
              Last edited by lakechampainer; 02 Aug 15, 10:41.

              Comment


              • #8
                Originally posted by lakechampainer View Post
                Funny how people want to second guess CEOs over this issue and not others.

                Edit: Is not the viewpoint espoused by some here the old Krupp/German viewpoint that an employer "must be master in his own house"? Who are we then to question Mr. Price? Is that not socialistic?
                Good point. Yes, it is. He tried a wage experiment and it failed predictably. Lowest common denominator has never been a useful yardstick for anything, although it currently drives much of television's programming.

                Upward mobility, be it position, title, money, perks or other rewards, is the motivational engine that powers successful companies.

                One of the problems that I stringly suspect we face in our quest for better energy and associated usuage is the negative incentive caused by corporations that own the rights to breakthrough discoveries, depriving researchers of motivation until they can leave their employment and receive the gains they feel they deserve from their achievements. Why allow your employer to reap billions in profits from your genius while you get a pittance...or nothing?

                I wouldn't, and I suspect most of them won't either. Everyone wants to be BIll Gates, not Homer Simpson.
                Quis Custodiet Ipsos Custodes? Who is watching the watchers?

                Comment


                • #9
                  Originally posted by Mountain Man View Post

                  I wouldn't, and I suspect most of them won't either. Everyone wants to be BIll Gates, not Homer Simpson.
                  I think the main problem is that whether you are Bill Gates or Homer Simpson, most of the time whatever you want does not play any part in anything. Almost all companies seem to think that working there is all the motivation you need to work.
                  Wisdom is personal

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                  • #10
                    This appears to be a kind gesture from the owner but I look past that and I smell a publicity stunt. It does appear to be working too, they picked up a few new accts.
                    "Stand for the flag ~ Kneel for the fallen"

                    "A wise man can learn more from a foolish question than a fool can learn from a wise answer." ~ Bruce Lee

                    Comment


                    • #11
                      Not sure if you guys are aware but he also offers unlimited paid vacation and sick days. All this from a small start-up company that is getting by with $2 million in revenue annually to cover 120 employees.

                      His brother and part owner of the company wants out and have filed a lawsuit to have his shares bought out.
                      "Stand for the flag ~ Kneel for the fallen"

                      "A wise man can learn more from a foolish question than a fool can learn from a wise answer." ~ Bruce Lee

                      Comment


                      • #12
                        Originally posted by Mountain Man View Post
                        This sounds like a direct quote from an Economics text. Can you post the link?
                        I just thought it would be fun to explore the subject and no I didn't copy it from anywhere.
                        We hunt the hunters

                        Comment


                        • #13
                          Originally posted by Persephone View Post
                          Not sure if you guys are aware but he also offers unlimited paid vacation and sick days. All this from a small start-up company that is getting by with $2 million in revenue annually to cover 120 employees.

                          His brother and part owner of the company wants out and have filed a lawsuit to have his shares bought out.
                          Well, at least one of them has some smarts. At a minimum wage of $70.000 and 120 employees, his minimal salary expenses are $2.1 million a year just for starters, putting him in the red just to stay open.
                          Quis Custodiet Ipsos Custodes? Who is watching the watchers?

                          Comment


                          • #14
                            Originally posted by wolfhnd View Post
                            I just thought it would be fun to explore the subject and no I didn't copy it from anywhere.
                            Really?
                            Quis Custodiet Ipsos Custodes? Who is watching the watchers?

                            Comment


                            • #15
                              Originally posted by Mountain Man View Post
                              Really?
                              Yes really now start being your normal self.
                              We hunt the hunters

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