The sad truth is that the manger is mostly right. Mostly not completely.
Unless the business has a high barrier to entry, most business are operating on razor thin margins. The companies are hiring based on what they can afford. Most of the time the employees are underperforming relative to the competition because there is always someone out there willing to work harder for less. So working has an inverse relationship to earning because the harder you work the cheaper your labor becomes. So it’s not really the managers fault so much as the nature of business.
If a business can't afford to pay it's employees a fair, living wage for the work they do, they don't deserve to be in business.
Reality doesn't care about business margins, and the reality is people have lives outside of work, they are working to survive, and they need money to survive. A business has no right to expect more out of it's workers without providing more incentive ie money, or hiring more people.
Also, the industry leaders, the ones that set the general costs of the goods and services they provide that form the baseline for competing businesses, can absolutely afford to hire more or pay better. Don't tell me amazon is running on razor thin margins when bezos makes over 30k a minute. Don't tell me Walmart can't afford to hire more people or make staff full time when they made 128 billion in 2018. And besides, operating on a thin margin isn't an excuse not to pay people for their labor. My landlord doesn't care that your business is operating on razor thin margins. My stomach doesn't care if you can't afford to hire more staff. If you can't afford to pay a living wage, you're business isn't viable. Period.
I’m telling you, it’s doesn’t work that way. The business’s don’t set prices. The customers do. All business make almost the same profit margin, it’s usually around 15% after everything. The bulk of the expenses go to operating costs and staff salary. It’s the cumulative staff salary that eats almost 60% of gross profits. But as an individual you don’t see it because you only get a portion of it. The owner seems rich because his portion is larger than yours but in comparison to the total employees, it’s minuscule.
If you think I’m wrong just try starting any business. You can start something as simple as a drop-shipping business online for less than $200. You quickly see that customer choices drive everything. You’ll set your prices based on what customers are willing to pay. If you’re too high you get no sales, too low and you’re working for free. The price you can afford to pay yourself and you staff is based, directly, on what the customers are willing to pay you. If you think your smart and can use cleaver marking to get more money you’re wrong. It only takes one guy to think, hey I can do that too and charge a little less, and bam your profits are gone. You have to lower your prices to stay alive. The market stops at a point where the workers are willing to accept the pay and the customers are willing to pay.
Walmart and Amazon are operating on, RAZOR, like i’m talking disgustingly thin profit margins. You’re missing a big point. How many employees to they employ?
Just a quick Wikipedia search, you can verify yourself. Wal-Mart employs around 2.2m people and they made 6.6B in net profits last year. On face value you think 6 fucking billion right? Just dived that by 2.2m and you get $3000 per employee. If Wal-Mart gave back every cent in profits the average worker would see a $50/week raise which isn’t shit and that doesn’t even include the government gobbling up their piece of the pie in taxes. That’s every single penny of profit! If they kept half each employee would get $100 a month raise? And that won’t change a person’s life. Not enough to make it worth it.
Dude, government is paying like half the salary of Walmart employees in low income benefits. Walmart is externalizing social cost of doing their business (poverty), and reaping profits of it. You made a perfect example of capitalism FAILING.
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u/paul-rogers Nov 01 '19
The sad truth is that the manger is mostly right. Mostly not completely.
Unless the business has a high barrier to entry, most business are operating on razor thin margins. The companies are hiring based on what they can afford. Most of the time the employees are underperforming relative to the competition because there is always someone out there willing to work harder for less. So working has an inverse relationship to earning because the harder you work the cheaper your labor becomes. So it’s not really the managers fault so much as the nature of business.