Company Raises It's Minimum Wage to $70,000 and All Hell Breaks Loose

Shonuff · Aug 1, 2015

Shonuff · Aug 1, 2015

So, he's shifted all of his profits to salaries in the short term, and has a huge lawsuit that may end the company? You've got to put money away to weather the storms. Maybe 70k was a bit much for minimum wage.

Also, he's given raises and ignored seniority, skills and merit. What about the people that were making 60k? Why should a newbie come in and make equal to the people that have been there awhile?

I guess he's had Harvard Business School come out and do a case study on the business. My thoughts is that too big of a raise too soon, while not rewarding your strongest contributors has not been a good thing. Maybe someone can find the case study?

Palum · Aug 1, 2015

lol, this is the most basic issue with the $15 minimum wage bullshit.

Two of Mr. Price?s most valued employees quit, spurred in part by their view that it was unfair to double the pay of some new hires while the longest-serving staff members got small or no raises.

?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 didn?t get much of a bump,? she said. To her, a fairer proposal would have been to give smaller increases with the opportunity to earn a future raise with more experience.

Well, no shit. If you work your ass off for $15 now, why would you continue to do so when you could go get a less stressful job at a fast food or big box retail chain?

Shonuff · Aug 1, 2015

New York Times_sl said:
More troubling, a few customers, dismayed by what they viewed as a political statement, withdrew their business. Others, anticipating a fee increase - despite repeated assurances to the contrary - also left. While dozens of new clients, inspired by Mr. Price's announcement, were signing up, those accounts will not start paying off for at least another year. To handle the flood, he has already had to hire a dozen additional employees - now at a significantly higher cost - and is struggling to figure out whether more are needed without knowing for certain how long the bonanza will last.

So, the company lost larger clients. I wonder what a PR nightmare it is to say your minimum wage is $70,000. The businesses you serve now know you have more money than sense, and they start to think they are paying you too much. So they bail on you.

When I go see a client, it's in a Toyota and not my nicer cars. The reality is that in a service business (like this one is) clients don't want to know you are doing well. I learned my lesson from a businessman I know. He told me don't show people you do business with that you are doing well. He's extremely successful (he nets about $500k a month, and that's after he hides income) and has over 100 employees. One day, he drove his exotic sports car to his place of business. He didn't get any actual work done that day, as his 100+ employees stood out side of his office door, in line and asking/demanding a raise. 20 years later, he drives the same pickup truck to work.

If you have enough income to raise your employees' wages that much, do it quietly. I know it's not fair, but in America, while we love people that have raised themselves up by their bootstraps, we act weird once they've arrived.

Abefroman · Aug 1, 2015

Workers fucking cry no matter what you do.

Abefroman · Aug 1, 2015

Palum_sl said:
lol, this is the most basic issue with the $15 minimum wage bullshit.

Well, no shit. If you work your ass off for $15 now, why would you continue to do so when you could go get a less stressful job at a fast food or big box retail chain?

People making $15 an hour aren't sniffing 70k a year.

Cad · Aug 1, 2015

Abefroman_sl said:
People making $15 an hour aren't sniffing 70k a year.

If they work 90 hour weeks, maybe? Lol.

Palum · Aug 1, 2015

Of course not, but it's the same minimum wage problem just taken to the extreme. It's the exact same issue with the $15 minimum wage people. I think there's plenty of jobs that are underpaid but the solution is not to fuck the economy causing unemployment as all the weak employees suddenly find more work and more competition for minimum wage jobs.

The article goes into the parallels.

Big Phoenix · Aug 2, 2015

Lyrical_sl said:
So, the company lost larger clients. I wonder what a PR nightmare it is to say your minimum wage is $70,000. The businesses you serve now know you have more money than sense, and they start to think they are paying you too much. So they bail on you.

When I go see a client, it's in a Toyota and not my nicer cars. The reality is that in a service business (like this one is) clients don't want to know you are doing well. I learned my lesson from a businessman I know. He told me don't show people you do business with that you are doing well. He's extremely successful (he nets about $500k a month, and that's after he hides income) and has over 100 employees. One day, he drove his exotic sports car to his place of business. He didn't get any actual work done that day, as his 100+ employees stood out side of his office door, in line and asking/demanding a raise. 20 years later, he drives the same pickup truck to work.

If you have enough income to raise your employees' wages that much, do it quietly. I know it's not fair, but in America, while we love people that have raised themselves up by their bootstraps, we act weird once they've arrived.

Lol human psychology.

Xequecal · Aug 2, 2015

Palum_sl said:
lol, this is the most basic issue with the $15 minimum wage bullshit.

Well, no shit. If you work your ass off for $15 now, why would you continue to do so when you could go get a less stressful job at a fast food or big box retail chain?

Tell me, what is your opinion of CEO pay? The typical conservative position on these two issues is hilarious.

"You know, you really shouldn't concern yourself with what your CEO makes. You need to worry about yourself, and stop obsessing over what other people make for a living. Seriously, it doesn't affect you at all and it just makes you look selfish and petty, if you adopt a better attitude you'll have far more succ-what's this? They want to raise the minimum wage? What the fuck? I workedhardto get to $17/hour and now they just want to give everyone almost as much money for doing fucking nothing? This is bullshit, there's no fucking excuse for giving those damn McDonalds register biscuits $15/hour. This is an utter travesty, it'll happen over my dead body. Thanks Obama, now I have to go buy another 27 guns."

Shonuff · Aug 2, 2015

Xequecal_sl said:
Tell me, what is your opinion of CEO pay? The typical conservative position on these two issues is hilarious.

"You know, you really shouldn't concern yourself with what your CEO makes. You need to worry about yourself, and stop obsessing over what other people make for a living. Seriously, it doesn't affect you at all and it just makes you look selfish and petty, if you adopt a better attitude you'll have far more succ-what's this? They want to raise the minimum wage? What the fuck? I workedhardto get to $17/hour and now they just want to give everyone almost as much money for doing fucking nothing? This is bullshit, there's no fucking excuse for giving those damn McDonalds register biscuits $15/hour. This is an utter travesty, it'll happen over my dead body. Thanks Obama, now I have to go buy another 27 guns."

This post made literally zero sense. We've had a rule, there's no politics in the business forum, but I guess this post will be a lightning rod for the retards. Sorry for that.

Borzak · Aug 2, 2015

I can see it causing issues. I have never asked what someone else makes. But new hires in our shop in the past make about $15/hour and they work their ass off in the heat etc...doing what I call "real" work compared to me sitting at a desk etc...

If they raised minimum wage to $15/hour I can see for a period those guys saying why should I sweat my ass off when I could flip burgers for the same pay. Now guys with a little more between the ears move up in pay pretty quick but still.

I can imagine the same thing happens at more pay. Suddenly you worked to get from $52k to $70k at a company and all the people below you with less skills etc..now make the same as you do. When it's national news in this case you really can't avoid it. Suddenly you know that everyone now makes at least what you make and it took you X amount of time to get there.

wormie · Aug 2, 2015

I do not see anyone talking about what will happen to current 15 an hour jobs if min wage is raised to 15. Companies will have to start paying more money than now since people wont be willing to get paid the same as burger flippers for complex jobs.

k^M · Aug 2, 2015

wormie_sl said:
I do not see anyone talking about what will happen to current 15 an hour jobs if min wage is raised to 15. Companies will have to start paying more money than now since people wont be willing to get paid the same as burger flippers for complex jobs.

I get this perception, but truth be told even if someone was promoted to be a burger flipper at the same wage as me I'd still do my job over that. Does it take less skill to work at Wendy's? Undoubtedly, but in terms of enjoyment it wouldn't be there and I think they'd still have ridiculous turnover.

wormie · Aug 2, 2015

k^M_sl said:
I get this perception, but truth be told even if someone was promoted to be a burger flipper at the same wage as me I'd still do my job over that. Does it take less skill to work at Wendy's? Undoubtedly, but in terms of enjoyment it wouldn't be there and I think they'd still have ridiculous turnover.

Its not so much that current employees will be quitting, its more than new employees will be much harder to hire at min wage rates for non min wage jobs.

ili_sl · Aug 2, 2015

Good for him.
Hope he does well with the dozens of new clients and the people lining up around to block to work for him.
He just made every job at his company a competitive one.

Shonuff · Aug 2, 2015

wormie_sl said:
Companies will have to start paying more money than now since people wont be willing to get paid the same as burger flippers for complex jobs.

I guess it's going to get political. If you have ever really examined statements that Obama's Economists have made about raising the minimum, they have said that they know it will be inflationary to the consumer, and not the company. Maybe someone can find the statements, I'm busy.

Shonuff · Aug 2, 2015

Borzak_sl said:
Suddenly you worked to get from $52k to $70k at a company and all the people below you with less skills etc..now make the same as you do. When it's national news in this case you really can't avoid it. Suddenly you know that everyone now makes at least what you make and it took you X amount of time to get there.

It doesn't need to be national news. Employees talk about what they make. At one company I worked at (Fortune 100 btw), if you talked about your paycheck with another employee, you were terminated. It was in the policies and procedures manual everyone signed.

Implicit in this is that they taken away the carrot for hustling.

Since he's increased payroll so much, and is in financial turmoil, maybe he should have structured this differently. Maybe he should have bumped wages 10%, and then paid out a percentage of profits. Times are tougher now, and his wages are a lot higher. He's not protected the company with this decision. And the sad thing is, the company goes under, and his employees will go work somewhere else without so much as a thank you.

In some respect, I'm proud that he's sharing with his employees. But he should have structured this thing with a parachute for the slower times. If it gets slow, it's almost impossible to cut someone's pay by 50%. They quit.

Abefroman · Aug 2, 2015

Lyrical_sl said:
This post made literally zero sense. We've had a rule, there's no politics in the business forum, but I guess this post will be a lightning rod for the retards. Sorry for that.

It got political as soon as the $15 min wage got shoehorned into this when it has nothing to do with it. You didn't say anything then about the politics because you agreed with the poster. Now suddenly you have a problem with politics.

The Ancient_sl · Aug 2, 2015

Lyrical_sl said:
I guess it's going to get political. If you have ever really examined statements that Obama's Economists have made about raising the minimum, they have said that they know it will be inflationary to the consumer, and not the company. Maybe someone can find the statements, I'm busy.

You didn't have a problem with the very first response to your post being "political". Hypocrite.

Company Raises It's Minimum Wage to $70,000 and All Hell Breaks Loose

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