Seattle CEO who set firm's minimum wage to $70G says he has hit hard times

it's not just dealing with the govt as a customer which has A/R problems. Most places which provide terms to their customers have become quasi-banks as customers slow-roll payments for the same reason that many other businesses are struggling; it's called cash-flow.

 

No, the problem is you take one example and then apply it as the norm. Raising people's salaries to $70k per year is approx. $33.65 an hour which NOONE is advocating for as a majority.

The simple fact is that min wage has NOT risen with inflation costs, but the majority of people do not want to see everyone get raised to $33.65 an hour.

While I agree it was a very poor decision on the part of THIS company it is not the norm for any other company raising their min wage standards. The issue comes with not raising the min wage but raising the min wage too fast. In most cases small increases ($1 or $2 and hour) is not going to be catastrophic to a company and throughout years most are capable of absorbing those losses either through raising their products slightly or just absorbing the cost altogether.

The CEO of this company played on a PR campaign and lost which is no different than an ad campaign floundering for some other company. You win some, you lose some.

 

I would never support that.

I'm all for paying employees based upon the value they bring to the business

Why should I pay more money to a salesperson with 20 years experience than a salesperson with 10 years experience who sells 50% more???

Why should I pay more money to a developer with 20 years experience than a developer with 5 years experience but releases new updates and code in half the time?

Do you believe that the person who greets me at the Drs. office should be paid the same as the person who is reading my X rays?

 

dilution and fiduciary obligation are terms not even worth discussing in this forum. The words fall upon deaf ears

 

This is how liberals argue - by making absurd analogies. Pathetic.

 

He took it to a ridiculous extreme. If he wanted to pay more he had that ability but rewarding slackers and paying his best people the same as the slackers, was destined to become a failure. He would have done much better if he offered better salaries for those who deserve it. Many of the slackers might have become better employees if he had taken that approach.

What ticked off the average corporate crony-capitalist, was the idea that people were getting paid more than their actual worth or what you could screw them out of. After all maximizing profits is the sign of a good businessman these days at all costs. The more you can screw your employees, your consumers, and especially the government (with the help of crooked politicians) is the metric for basing how good a businessman you are in this day and age.

Gone are the days when paying good wages, providing competitive products/services, and being a productive member of society for the good of the nation as a whole, and doesn't get you much respect from the country club crowd any more.

 

The cost of living in Seattle, WA is about 24% above the national average, factoring in groceries, housing, transportation and healthcare.

$70K there, will not get you as far as many other cities in the U.S.

 

Agree. One correction though, according to the BLS, 4.6% of hourly jobs pay minimum wage or below.

 

Business 101 they can afford it unless they overpay for it.

 

How so? And you confuse wealth and income. I have a lot more wealth than some people who make more income than myself.

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Can you cite me the successful companies in which you invest that overpay for their labor because it's a nice thing to do?

 

So what? Workers need to improve their individual skill sets so that employers are willing to pay $70K or whatever the market will dictate for said skill set......or move to a city with a lower cost of living.

Pretty simple.

 

Good luck with that. The challenge for you would be that your fellow politicians (and the special interests that support them) would be the ones who worked to create the imbalance of which you speak. They will not be willing to give up that power so easily.

 

My point was, that someone arguing against paying someone $70K as annual salary may consider that a higher wage than it actually is dependent upon where they reside.

Fast food places in more expensive cities typically pay $15 per hour, however factoring in the cost of living this is still a very low wage while in other areas $15 per hour would be a decent wage.

$70K in Seattle is a good wage, but it is certainly not extravagant.

 

Workers need to survive without having to depend on the government to subsidize the insufficient wages modern bosses jokingly call a livable wage. If you place it in the proper perspective, which I'm sure you would rather just berate low income workers instead to devalue their effort, $14 today is worth close to the equivalent of about $.50, 40 years ago. Not even worth a dollar.

Is it any wonder they don't work harder? Pays the same if you bust ass as if you just get by/do what is absolutely necessary. kind of amazing how so many people think that people who have to work for a living are so undeserving and such terrible employees, because if they were so bad, you could easily get rid of them and find somebody else, or could you? Nope probably not, because a good employee would be a valued employee, and anyone stupid enough to work for a living these days, isn't worth much, just ask their employer.

I never worked for minimum wage myself, except for one job when I was a teenager. Within a week I got a 35% increase in pay, and within a month another 50%. Got a $.35 raise at the 6 month mark and would have gotten another $.30-$.50 raise by the end of the year but I started working on a construction crew as a helper making about 4 times what the minimum wage was. It is truly pathetic how workers are treated these days. Somebody working 4-5 years for food joint and still making minimum wage with no benefits? Disgusting.

 

More likely out of fear of coming to work in the morning and opening your store only to find out that your credit card machines aren't working because the company that was handling the transactions closed doors the night before.

 

I don't think many realize, that pensions are basically a thing of the past for the majority of private sector workers. The private sector relies upon matching 401K to basically self-retire.

Say you're married with two children, two cars, a mortgage, education debt, credit card debt. Not only do you have to live, but you also need to put aside a decent amount for your children's education and for retirement. The government takes up the slack where the private company skimps. The taxpayer foots the bill for Medicare and Social Security. Once a company cuts you loose, even after investing 30 - 35 years with them... you're on your own for healthcare and retirement and you become basically dependent upon the kindness of government. Those making enough wages now to save a good percentage, will be able to fund their own retirement...most however, have no savings, they live paycheck to paycheck. After the bills are met and some debt is paid down, there isn't much left to invest for retirement.

I'm not saying it's the private sector's responsibility to fund retirements and healthcare for life, but the fact is the burden is indeed shifted to the taxpayers in fhe form of government entitlement. A stingy employer ulitimately takes money out of your pocket. This is the economic reality of what is going on.

 

No, you were wrong. Nobody is taking a pay cut.

But some people are, as I understood it, making 60K and were unhappy because they only get a 10K raise, while people making 30K were getting a 40K raise. So some of them were quitting because others were getting larger raises.

 

Lucas Price, who owns 30 percent of the company, accuses his brother of taking millions of dollars out of the company while denying him the benefits of his minority ownership.


Seems ones person pay was cut outside of the majority owner...

 

But those doors would not be in danger of closing because he raised his compensation rates, they are in danger of closing for the same reasons that any business would be in danger of closing. Loss of revenue. And it's important to note that the experiment isn't done yet, the company hasn't folded, and the article linked says that they are adding new customers. He'll replace the butthurt workers he lost easily enough as well.

Do you want him to fail? Is it scary to you if he does not?

 

The article said that it takes a year before new clients start becoming profitable. I don't know why, because I'm not in that business and the article didn't go into detail. Apparently there are some startup expenses with new clients.

Also, I got the impression that his operating costs were no higher as a result of this policy. He himself was taking a pay cut (didn't say how much) from a salary of over a million a year. If he's cutting back to, say, 100K and his average employee is getting a $20K raise, then his pay cut can subsidize about 40 employees. I don't think he had that many employees.

 

...and it is it's own worse enemy. This means there are less companies competing because of the taxes excised to support the low and inadequate wages and salaries the few remaining pay. This makes a very unfriendly environment for small businesses to survive or new businesses from establishing themselves. More people are dependent on an already stagnating job market and that means the market is already flooded. This equates to low wages and (*)(*)(*)(*) poor benefits being offered since workers cannot negotiate for wages or benefits realistically in line with the cost of living.

Criminal politicians who participated in decades of crony capitalism has made this mess possible. And nothing is able to stop it since both of the major parties are active participants in the corporatism/crony capitalism that feeds the plutocracy and keeps it alive.

What we are lacking is good common sense leadership, because what we are afflicted with is a sock puppet government tending to the needs of the rich/elites, and a population of ignorant, incompetent, scared voter base afraid to cut the ties between a corrupt government who continues to give the crony capitalists carte blanche.

 

Exactly, and they have every right to be upset. Somebody making $60k has been valued by the company at double what somebody making $30k is. There was probably a very good reason for that. The $60k person was probably more skilled, more experienced, and as a result, much harder to replace....hence the higher value. Now all of the sudden the formerly $30k person is on par with the formerly $60k person. That's not right and will cause turmoil at virtually any company. You typically earn what you're worth and that's the way it should be.

There's a reason highly skilled and highly educated people make more than those with no skills and no education....and rightfully so.

 

Some are simply better at learning and preparing for the future than others. Not everyone is going to be a mechanical engineer, a lawyer or a dentist. We will have waitresses, janitors and fast food workers also. Nothing against any of those occupations by the way, I'm saying it is very difficult for them to set aside money for a rainy day. They live, almost literally day to day.

Imagine a catastrophic medical expense, or they lose their job, or they have a child. Who foots the bill? We do, the taxpayer.

Why on Earth are we defending corporations? Yes, we can invest in them and our money may go up in value, but if you don't make enough to invest...very few actually do...who cares what a stock price is, you have no skin in the Wall Street game. The burden is shifted squarely upon the shoulders of the taxpayer as the government assumes the responsibility through entitlements. Supplemental food benefits, Medicaid....we pay for it. Where the corporation skrimps, the burden is shifted somewhere else.

So I don't know what the solution is, but cheerleading for corporate America, unless you have skin in the game and are part of Wall Street / investments...you get screwed by them ulitmately as they shift the burden of providing the bare necessities of living to you..the taxpayer.

 

Oh, that's an easy one.
They pay politicians to write regulations to eliminate competition.

 

Because it is patently a liberal stance that evil, greedy corporations should be divvying up its money to everyone because they are entitled to it. You know, all the belly aching about "income inequality".

What's typical is the liberal mindset that they deserve thousands of dollars per year just because they exist.