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I seem to recall that the wages paid to UAW workers that were making crap cars in AMC, Oldsmobile, Plymouth and such dead brands were pretty much the same as the other US carmakers and probably higher than the wages going to non-union workers in US plants building VWs, Hondas, Toyotas and other vehicles that have been a lot more successful...
Got any other hare brained ideas for me to shoot down?
Actually you need to blame the manufacturers for the "crap cars". A worker will preform to the standards set by management. A higher wage and better benefits will allow management to set higher standards of both quality and production because the worker could not go someplace else and make at the level they were currently making. The problem with the auto manufacturers was they were paying more than what was really required plus they coupled this with very low expectations, the result a crap product.
But go ahead, live in your delusional fantasy world in which treating workers like readily replaceable garbage
and paying them crap doesn't cause them to quit or do a crummier job.
Hyperbole aside... the point is that there are two basic types of MW (fast food or otherwise) employee.
1) the type who is able to do more and will be doing so just as quickly as they can and
2) the type who are pretty much topped out at that MW (fast food or otherwise) job.
With rather few exceptions there are rather limited returns to be had for the employer by paying those
who stick (the longer term, mature, etc) much more than a modest increment above those who don't
(or won't or just can't) stick. Which brings the discussion back to the basic argument: as those who are
worth more are (mostly) getting it where is the business profit/loss supply/demand rationale for paying
appreciably more than this increment above MW most are already getting?
$15/hr and that's in Detroit ...where you can buy some houses for $15!
Buy a house an hour..
It would be nice to see them succeed. I believe people it's nice to pay people a decent living wage, but I also realize all the costs that go into running a business. It's more than just food, rent and wages.
I think it's great if they can do this successfully.
While I am impressed with this and believe that this restaurant will see positive results, it has to be pointed out that wages are relative.
Yes, $15/hr at a fast food joint is great, but only because its roughly double the wages of other jobs at this technical level. If every burger joint in the country paid $15/hr then we'd be paying $8 for a value meal at McDonalds and suddenly people will be picketing for $30/hr wages for flipping burgers.
Parker believes higher wages lead to better results. "We've had very low turnover," said Parker. "Of the people that are working for us, we don’t have anybody disgruntled." Over the weekend, three customers came up to Parker, without prompting, and thanked him for the quality of the customer service. Paying people more means you spend less time firing, hiring, and training...
They just might pull it off.
No, they won't.
Money doesn't grow on trees.
They might be able to carry off being overpriced for a while, but eventually, they'll either go bust... or they'll have to pay the people what their job is actually worth, which isn't much.
They will realize that they won't be able to compete paying those wages. If they are able to, something will need to be cut, such as portion sizes, etc.
They will realize that they won't be able to compete paying those wages. If they are able to, something will need to be cut, such as portion sizes, etc.
Everyone in the world has to learn the following.
TANSTAAFL.
There Aint No Such Thing As A Free Lunch.
I find it extremely unlikely they're operating at such margins they can raise their labor costs by 10, 20, 30 percent or more, and not move from having black on the bottom of the balance sheet to red. Businesses like that typically have net profit margins in the single digits.. .or, if they're real good, low double digits. Rule of thumb in food, that labor is 1/3 of your costs, then a 20 percent change in labor costs is 7 percent on your bottom line. That is usually enough to cut your profit (the stuff you use to improve your business, facilities, repair things, update things, etc) by anywhere from 1/3 loss to actually going broke.
You can pay more, but you have to sell more expensive and better things to people with more money to buy them. That's a difficult proposition to carry off.
You can do with less people, but make them work harder.
You can cut budgets for capital investments and "expenses".
Likely a combination of all of those things will happen - I'm betting on the "fewer people working harder" bearing the biggest brunt of it all.
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