9 years ago
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Dunkin' CEO: $15 min wage is 'outrageous'
Dunkin' Donuts' top executive says a $15 minimum wage for fast food workers is "absolutely outrageous." On Thursday, New York state's wage board recommended fast food workers make at least $15 per hour. The board said it should happen by the end of 2018 in New York City. Dunkin' Brand CEO Nigel Travis says the plan will do more harm than good.
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http://money.cnn.com
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+8Submitted 9 years ago by rosellem
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+2Submitted 9 years ago by spaceghoti
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Of course, I doubt he thinks a 100% increase in his wage is "outrageous."
I think there needs to be a maximum wage.
Personally I would like if wages were indexed inside a company and the maximum wage was capped in function of the lowest wage paid by the company (with some rules to prevent companies from splitting to keep all low wage employees in a separate company).
That would mean that the highest earners would then have to raise the lowest earners income if they want a raise. This is true trickle down.
Ben & Jerry had that. The top earner could not make more than 7 times the lowest earner.
Of course, that was the first thing to do when they were bought.
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IMHO every CEO should have a maximume wage. The amount of money they make compared to normal workers is simply ridiculous. I mean does a CEO really do so much for the company that he deserves a salary that is 10x or 100x or whatever compared to a normal worker. Nowdays they simply kick out the ordinary people stating that there's no money to pay for the workers while the management gets big bonuses for the improved financial situation of the company. Shame though that the people with the lowest pay also have the lowest possibility to have any impact on their salary (or anyone elses in companies).
I am Australian. At 19 years old, I earn $16.40 an hour (minimum wage) working at McDonald's. That rate will keep going up until I hit 21. The fact that adult Americans can't even get that... well it sounds unbelievable. How do you live on that? Of course, cost of living is expensive in Australia, but it's expensive in American cities like San Francisco too.
How can this CEO even comment on this and not realise how out-of-touch he sounds?
I lived in Brisbane for three years. Yes, the cost of living is high but not higher than living in Denver. In many ways it's easier to live there.
The economic elite in the US are increasingly disconnected from the rest of the world. They're so used to getting their way and being told what they want to hear that they have no concept of how wage inequality is affecting the rest of us. Nor do they care, as long as it keeps working to their advantage.
USA is extremely pro-corporate. Lobbyists everywhere, pulling the strings. And when decisions are made that goes a little bit against some industry, it's the workers that takes the hit - cut hours, less advantages, no job security.
Minimum wage hasn't followed the cost of life in North America for a long time. I'm in Quebec, we have 10,55$/h, but Americans have it worse, I think.
Where I live the minimum wage is $7.25 USD (about $9.50 CAD). Almost every entry-level fast food and retail job pays only minimum wage (with the exception of a couple of places, like Walmart, which pays $9/hr). The majority of the workers I see in these positions aren't teenagers, either, they're people who look like they're in their 30's or 40's. How you can raise a family on that kind of pay is beyond me. I don't have money management skills nearly that good.
The thing is, generally people get paid what their productivity is worth. Usually someone is getting the minimum wage because he doesn't possess higher level skills.
That doesn't mean he's less valuable as a human being, but just that he needs to acquire more skills to be paid more.
Look, if a higher minimum wage were purely a good thing, why shouldn't it be set at $1000/h? That would be super good for everyone, right? .. Except that anyone can sense that there's something wrong with that suggestion. Instead, maybe it could be something more "resonable" like.. $30/h?
But no matter where you set the minimum wage, some people will just not be worth that much. The higher you set it, the more people will be counted out. So if the minimum wage were set to $1000/h, no one would have any jobs anymore because all companies would have to cease operations because suddenly it would be just flat out impossible to continue.
Most people have never run a business, or thought in a business-oriented way. But all salaries are paid from money that comes from customers, and there are limits to how much customers can and will pay for whatever a company sells. That places certain constraints on what employees even can be paid, without having to shut the company down.
But alright.. you get the idea.
You're assuming productivity is directly correlated with the amount of work someone does. When a store installs self-checkout counters, perhaps 4 of them, that puts more than four people out of work, since the machines can work all day with no breaks. Each machine produces 2-3 times the income without having to be paid a cent. (Okay, maintenance is a thing, but that's pennies compared to a salary.)
Where does that new income go? Executives.
Minimum wage used to put a family just above the poverty line. That's the point of the minimum wage - to keep people out of poverty. If the minimum wage had been adjusted every year for inflation AND average worker productivity (which, as I just explained, does not mean what a worker is directly producing) the minimum wage would really be around $22/hr.
So no, $1000/hr would not be super good for everyone. $15-22 would.
When you say people are paid generally what they're worth, sure, I can agree with that. What you miss is that people are worth, just by virtue of being a living human being, enough to not starve to death. That's where minimum wage comes from.
I'm not assuming anything. You are, with "2 - 3 times the income", for example.
Where do the cost savings go? -Perhaps new investments? Maybe even new hires that were needed somewhere else than at the cash registers?
But really, a salary is, in principle, agreed on by the employer and employee together. But if they're legally not allowed to agree on a salary below X, then the employee will not get the job.
In other words, a higher minimum wage prices the lowest-skilled people out of jobs and prevents employers and employees agreeing on whatever salary might be appropriate if it happens to be below a limit set by some bureaucrat somewhere.
That may be, but whatever you think its point is doesn't matter. What I've described applies regardless.
You're also completely oblivious to purchasing power and how it can make it much easier (or more difficult) to get by even on the same nominal salary.
Yes, I am making a reasoned estimate with the 2-3 times income example. Don't latch onto that. I typed "for example" in there at first and deleted it because I figured that was an obvious enough hypothetical. The underlying concept holds true.
We're talking about minimum wage jobs here. That's any McDonald's or Wal-Mart job you get because you can't get anything else. You don't negotiate your wage whatsoever. You walk in, interview, and say, "Yes, please just pay me." When an employer right now says, "The minimum I can pay you is $7.25," the employee isn't going to say, "Oh, nevermind then, I'll just go continue eating out of your dumpster." That's a ludicrous assessment. The fact of the matter is, with or without a minimum wage, corporations are going to try to treat its lowest-paid employees like cattle. Minimum wage puts a hold on that. And companies do not hire fewer people due to minimum wage increases. That's another false scare tactic by the ultra-rich. As Nick Hanauer said, it's how the rich say, "I'm rich and you're poor and I'd like to keep it that way."
And how am I oblivious to purchasing power? Your tone is dismissive and insulting. At no point did I deny that purchasing power doesn't have an impact on ease of living. Here in Oklahoma, it's a lot easier to live on $15/hr than in NYC. That means if I want to move to New York, I'll be sacrificing potential upwards mobility through savings. Setting the national minimum wage at a level where you can get by paycheck-to-paycheck in NYC and sock away savings in OKC ultimately smooths out the desirability of specific cities and towns.
So it's alright for you to make assumptions (this time called an "estimate" to make the double standard less clear), but it's not alright for me?
Good thing I haven't made that assessment then, isn't it? Could you please refrain from putting words in my mouth?
But the point is that without a minimum wage set, the employer could say: "Well, since you have no skills whatsoever, I'm afraid you're not going to be productive enough for $7.25/h, but you could start by doing <X> for $5.00/h if that's alright, and after you've gained some experience we can bump you up to $9/h"
But with a minimum wage set at $7.25, that can't happen, and that's how a minimum wage prices some people out of jobs that would otherwise happen. Do you get it? Do you also understand that the higher a minimum wage is set, the more people will be priced out of potential jobs in the same way?
Seriously. Do you understand what I've explained here? I've been kind of repeating myself, hoping that it would sink in.
If this is true, why have wages stagnated, while productivity continues to increase?
Basically your complaint rests on me having used the word "productivity" as a short-hand for everything that's involved in deciding a salary. In other words, you don't really have a case.
See what he did there? Right away he sets up an image of employees "deserving" to "share in the benefits". The article is meant to get people to think that more government intervention is needed, when in reality, the exact opposite is true. As always.
I could expend a lot of effort on unpacking even the idea of "labour" becoming more "efficient and profitable", but.. I don't think it's worth it now. But for starters, if you become more efficient, does that mean you're worth more to your employer? -If so, wouldn't you get a higher salary too? Is the increase in efficiency your achievement, or did the business owner just invest in more efficient machinery or tools? Do you deserve a raise for using more efficient tools?
When manufacturing costs decrease, the products usually get cheaper. But then there's no money left over for "sharing" with employees, and besides, why would the business share the savings instead of investing them somehow, or even just the owner grabbing the money for himself? It's his business, after all.
Yes. The statement "the thing is, generally people get paid what their productivity is worth." is not true. And since that's the starting point of your argument, it makes the rest meaningless.
Dude. My specific choice of words there does not matter. As I said above, it stood for everything that's involved in deciding a salary. Feel free to connect some dots for yourself.
It's kind of sad that your comment is at +5. Lots of people are in denial. They want the economy to deteriorate further!
I disagree with the idea that people get paid what they are worth. I think they get paid what the company can get away with paying them. In some cases the employees are in enough demand that the company is forced to pay them more. But there are other cases where employees are forced to take less than what they are worth because of their situation (debt, out of job for a while, only job in area where spouse has a job, ect.). Companies do take advantage of this to increase profits for the CEOs and stock holders.
This is creating a false analogy and is commonly used as a straw man. Yes their is an upper limit on what can be used as a minimum wage and yes that is driven by complex interactions. However, stating that by allowing employers to pay less than minimum wage allows more people to join the workforce isn't always true either. Many people in minimum wage jobs are forced to work more than one. So while doubling it will remove some of those jobs it will also mean that more people will be working at the higher wage and might be able to leave their second job. Also once you factor in there are others that will just have an increase in income that they can now spend at those companies. Causing an increase in profits helping cover the additional cost due to the pay increase.
Should a grocery store owner complain about you choosing the products with the best value for your money, instead of the ones with higher margins?
Company owners do the same with employees. A salary is the price for work performed. We all want as much as possible for as little as possible. But employees are still paid what they're worth, all things considered.
For example, someone working as a cleaner can be replaced by anyone off the street, because the job requires no skills whatsoever. On the other hand, relatively few people can write software but software is sorely needed, and that's why software developers are paid a lot more than cleaners.
Dude. Seriously? Your argument for why I was "creating a false analogy" (and using it as a strawman, no less!) is to point out that what I described "isn't always true"?!
I was just trying to get people to see that a higher minimum wage has consequences. They can sense that $1000 per hour would be "too much" or "inappropriate" or whatever - they just have no clue why. The reason is that the higher you set the minimum wage, the more people will be priced out of jobs. There's simply no way around that, no matter how much it upsets you.
I disagree about the priced out of the job. There are limits that will cause people to be priced out of jobs but $15 an hour isn't it. What minimum wage is intended to do is to protect the people that don't have the power to negotiate. Yes there are negative consequences for raising the min wage but I think there are consequences that are far worse for leaving it where it is or lowering it. Such as the fact that many min wadge jobs are subsidized by the government in the form of social welfare such as food stamps. This is a major problem for me. I believe that their should be a social safety net, but I also believe that it shouldn't be needed by people working 40hrs a week minimum wage. If you think that that should be required for them to live, then we must part ways at this point for we will never agree. Because while there are negative consequences for raising it, I think the current state of affairs is worse.
Of course it is. If a kid has no skills whatsoever, he's not worth $15 per hour. But with the min. wage set at $15, he can't be hired for less, so that he could gain experience, so that he could be worth $15 later on. That's how he gets priced out of a job.
When you say that, you might be ignoring what I just described. The consequences for lowering it would be that more young, unskilled people would get hired.
I guess that's one way to think about it. But bear in mind that welfare is money that's taken from some people, and given to others. Doing that is detrimental to the economy, because the money could be used productively by those it's taken from, and high taxes demotivate doing business. Imagine a 100% tax rate - no one would want to do anything, because we'd all be outright slaves.
So, a welfare system just makes the economy worse. In fact, any government intervention makes the economy worse.
The thing is, an economy just is the way it is, at a certain time, in a certain place. For example, right now there's hyperinflation in Venezuela. Lots of people are suffering because of that, and that's not cool, but that can't be helped either because that's what the government has caused with its ever-increasing interventions. That's just the way their economy is right now. There would be no point in someone declaring that he wants the Bolivar to be worth more, and suggesting that the government make a law that says it must be worth more.
It's important to realize that problems caused by government intervention can't be fixed with more intervention. People are having a hard time getting by on minimum wage, but that's the government's fault. There are lots of factors that go into that situation, but the root cause is govts forcing us to use their fiat currencies instead of whatever sound money would otherwise be chosen. Then there's fractional reserve banking that results in a need for perpetual "growth", and the Fed and other central banks blowing bubbles and inflating the money supply, and so on. It's all connected.
So when $7.25/h isn't enough to get by, it's not because the employers are being too greedy. It's just that the government has looted people so much that the economy is bad.
Nobody is going to disagree with tying productivity to wages. It absolutely should be that way. It's expected that somebody doing strenuous, difficult labor should be paid more for their work. But, it's ridiculous to say that wages now are currently tied to productivity. The problem is that they are tied more to impact instead. For example, a CEO is going to have more impact than a ground-level employee, simply by being at the head of the company, and they will make far more based on this.
Again, being skilled labor, it should pay more to compensate the cost of education and/or stress, but not 331 times as much as your average worker. And the numbers on that article say the difference is actually 774 times as much when you compare average CEO wage income to minimum wage. There is something fundamentally wrong when a worker can pull a double-shift (16 hours in a day) doing backbreaking work in a factory and hardly make a living wage out of it (being far more productive in their role than most of us can say), while upper management gets paid far more for what seems to be far less effort.
Regarding the money having to come from somewhere (that's what businesses are for, right?), like the above poster said, this CEO in the top post clearly was making enough money from customers to give himself a 100% raise, so you can't use that sort of thing as an excuse in every case. I also agree with minimum wage being ultimately damaging to smaller companies (10 or less) where -everyone- is making a lower salary while the company gets itself off of the ground. If employees want to work at a company with growth potential and true chances for salary increases in the long run, it should be their choice.
But, good luck instead fixing either of these real issues by tying highest paid wage in a company to the lowest paid wage before just increasing minimum wage again to kick the problem down the road for the next generation.
I'm not saying everything is perfectly fine in the world.
I just presented some facts / dynamics that apply regardless of what people think about the minimum wage or what it's supposed to achieve.
Want to get paid like a CEO? -Go become a CEO. Although to be fair, it's not quite that simple considering most big company CEOs are psychopaths and we're just not all CEO-material like that.. :p
Want to get paid the minimum wage? -Don't do anything to acquire new skills that would raise your value for your employers.
I don't think you're accusing me of anything I'm actually guilty of here. But you know, if someone owns a business, he gets to decide how much of the profits he takes for himself. It's really that simple, and that's part of why people generally start companies to begin with - they want to become wealthy.
Remember, people can't have jobs at a company that was never started! (by a filthy, greedy capitalist oppressor pig, of course).
"Want to get paid like a CEO? -Go become a CEO" Except not everyone can be a CEO, even if they were qualified, because the positions are severely limited. That sort of limitation is exactly why this is an issue.
"Want to get paid the minimum wage? -Don't do anything to acquire new skills that would raise your value for your employers." And what about all of the college degree holding employees that still earn minimum wage? Disregarding those that are holding art degrees, you would think that this would raise their value, right? Apparently not.
"I don't think you're accusing me of anything I'm actually guilty of here." Let me be more direct then. I'm accusing you of saying that lower-level workers can't be paid more because that money has to come from somewhere, but ignoring when upper-level workers freely give their selves raises. If you want to say money is limited, -or- that top-level management can pay themselves what ever they want, it's fine. When you say both though, like you have, it's flatout disingenuous.
"But you know, if someone owns a business, he gets to decide how much of the profits he takes for himself." Unless the government regulates it, which is exactly what I proposed by tying the paid salary extremes to each other. Did you not read my post?
The positions are limited? -What's that supposed to mean? It's not like there's some evil capitalist limiting CEO positions so that you wouldn't get one!
But you know, scarce things are valuable. Very few people can successfully run a big company, and that's exactly why the CEOs are paid so much. In other words, there is no issue, and it's not up to you to decide how much is too much money for a CEO.
Please realize that I'm not saying everything is fine in the corporate world. For example Wall Street is a hive of psychopaths that are happily destroying economies for their own personal gain. Wall Street CEOs are paid shitloads of money, but that's also largely because raping economies is extremely lucrative. So I'm not saying they, in particular, deserve what they're getting.
But take someone like Elon Musk or Steve Jobs and there is no problem with them getting as much money as they can and want to.
Yes, apparently not. You only really learn by doing things in the real world. A degree's value has been mostly as a "signal" that someone is a capable person. Now with all these graduates around, the signal value has diminished too. Then there's the economy, which is in shambles (despite what the govt says), and so on..
It's not as simple as "these people should be paid more, just because they need more money!" .. there are a lot of factors that go into the current situation, and ultimately people are paid what they're worth (as EMPLOYEES, dammit).
Nope, there is no problem with what I said. That's because the business owners are, again, free to decide how they use the business' money, even if they do pay themselves large salaries. It's up to the business owners to decide on what terms they will want to keep running the business.
Imagine yourself running a McDonald's franchise. How much money per year would you want for yourself, in order to feel like it's a worthwhile endeavor? Whose business would your salary be? Would you accept someone else dictating the terms on which you'll continue running the franchise? Like, someone decides that you're paying yourself too much, so you'll only get half of what you wanted, but you have to keep going anyway? .. Would that be alright?
Of course not. You would not accept that for yourself, so don't suggest that any other business should be "regulated" in the same way. That's just hypocritical.
"Oh you want to stop running your business? -Well that's too bad. We have decided that you will be forced to continue, because your poor little employees need their paychecks!"
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Exchange rates are a thing.
Your $16.40 an hour is roughly $12 here in the US ($11.95 to be exact), you'd need to make over $20 an hour to be at the $15 an hour mark we're talking about.
Except that AU$1 goes as far in Brisbane, QLD as US$1 goes in Denver, CO. Exchange rates are not relevant in this context.
He's not comparing city-to-city, you are, he's comparing country-to-country where I assure you, exchange rates are most definitely relevant.
Even if it equals out to roughly $12 per hour here the minimum wage is $7.25. At that difference and with the normal hours afforded a fast food employee (usually 30 hours so they don't hit the full time mark) that still comes out to be $143 a week difference pre tax.
Except that the minimum wage in NY isn't $7.25, it's $8.75, and that's going up to $9.00 on December 31st. This proposal is talking about bumping that up to $15 an hour.
From the current rate of $8.25, that's an increase of $6.25 an hour, which works out to $9,750 per year (using your 30 hour week), per minimum wage employee... that's insane.
"You're a teenager, so you shouldn't make as much money. If you want to make more money, get a different job!"
The last part of the article is hilarious. He says that he does support a living wage, but he thinks that would $12 an hour for a worker with a family (!!!), when it would actually be $18.30. So, the minimum wage would take 3 years to increase and it would still be less than what it needs to be.
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Well hell! let him try to make it on minimum wage and let him see how hard it is! Everything costs a fortune now. Food prices have sky rocketed , for example. Medical costs, water bills everything has went up. I don't see why $15 an hour is so fought against. Well yes i do. The rich just want to keep getting richer. while riding on the backs of the poor.
It's funny, because every time a minimum wage increase is proposed, business owners warn us that they'll have to raise prices and lay off workers. Then, after the wage increase goes through...nothing happens.
Yeah, that is outrageous. Businesses have been finding more ways to squeeze out money from their products and or services and it's just crazy talk that that increase in money should go to the bottom rung employees.
The saddest thing is, as long as men like him are in charge of companies like Dunkin', wage increases won't do much as workers will receive fewer hours, get laid off more, force them to work under the limits which would let them get insurance, etc. It's happened before and will happen again, and shows that until we pull the roots out of the corruption that is the modern American corporation system, legislation alone won't do much.
They need a certain number of people to work at the business or it simply doesn't work as a business anymore. If the business is so marginal that it can't afford to pay people what it actually takes to survive then let it fold and be replaced by one that can.
Isn't it interesting that the business who complain the loudest are the one serving the most unhealthy things to the public? According to a study by researchers at the university of California-Berkeley, more than half (52 percent) of front-line fast-food workers must rely on at least one public assistance program to support their families, so these companies not only make us unhealthy but burden our social services and pocket the difference. They're parasites, plain and simple, taking away much more than they provide. Let them fail!
Fast food is not actually profitable. The money the government has to pay to their workers in various social programs is roughly equal to the money the company pockets. So with liveable wages it'd break even.
In other words, we're keeping them alive with public money, that doesn't sound the kind of investment a society wants to make.
Maybe if we force them to provide liveable wages they'll reinvent themselves.
Or they'll fold. In that case, I'm eager to see what solutions to getting food on the go will appear to replace them.
I have absolutely no qualms with mega-corporations like Wal-Mart and McDonald's going under and being replaced by small, local businesses.