Henry Blodget asks why pay people so little?

[dmcowen674]

I didn't know Henry was still alive. He's been around a long time.

Anyway, the answer is why would the rich let any more out of their pocket than they absolutely have to.

It's all about the greed, nothing else matters.

Poor Henry doesn't get that but the Rich Righties in here sure do.

2-17-2012

http://finance.yahoo.com/blogs/dail...s-feel-paying-employees-little-124603023.html

Dear Walmart, McDonald’s, Starbucks: How Do You Feel About Paying Your Employees So Little That Most Of Them Are Poor?


By Henry Blodget

The disappearance of America's middle-class is generally attributed to the "loss of manufacturing jobs," as technology replaces people and companies move jobs overseas.

Yes, a lot of the manufacturing jobs that America has lost paid good middle-class wages. And, yes, many of the folks who lost manufacturing jobs have not been able to find comparably compensated other jobs.


But the real problem is the loss of good-paying jobs, not the loss of manufacturing jobs.

A century or two ago, many of the manufacturing jobs in the economy paid extremely low wages, and the work was done in dangerous, unhealthy environments. Then workers began negotiating collectively, and wages and working conditions improved.


Importantly, some companies also realized that paying their workers more would actually help their own sales, because their workers would be able to buy their products.



Henry Ford famously decided to pay his workers well enough that they could afford to buy his cars. This was not just altruistic. It helped Ford sell more cars. But it also helped America build a robust middle-class and middle-class manufacturing jobs.



Struggling companies don't have the option of paying their workers more, because they operate on razor-thin margins. But this is not the case for Walmart, McDonalds, Starbucks, and other robustly healthy companies that employ millions of Americans in low-wage service jobs.


Corporate profit margins, in fact, are close to an all-time high, while wages as a percent of the economy are at an all-time low.


So companies have plenty of room to pay their employees more, if only they choose to do so.


Right now, these companies are not choosing to do so. They're choosing to pay their employees nearly as little as possible--wages that, in many case, leave the employees below the poverty line.

 

[Londo_Jowo]

So non-skilled workers should be paid the same wages as skilled workers???

Using this logic, one shouldn't get an engineering degree and just become a burger flipper at McD's or barista at Starbucks after they graduate from high school instead

 

[MovingTarget]

So non-skilled workers should be paid the same wages as skilled workers???

Using this logic, one shouldn't get an engineering degree and just become a burger flipper at McD's or barista at Starbucks after they graduate from high school instead

That isn't what the article states AT ALL. It merely states that unskilled workers should be able to make above-poverty wages. There's no excuse that working a full time job would land you below the poverty line. It does not state that they should be making the kind of wages that a highly skilled worker, such as an engineer, should make.

 

[QuantumPion]

There's no excuse that working a full time job would land you below the poverty line.

The problem is your entire premise lies on what the definition of poverty is. Just because you can't afford your own house, 2 cars, new iphones, high speed internet & cable, big screen tv's, etc doesn't mean you are below the poverty line.

 

[MovingTarget]

The problem is your entire premise lies on what the definition of poverty is. Just because you can't afford your own house, 2 cars, new iphones, high speed internet & cable, big screen tv's, etc doesn't mean you are below the poverty line.

That is a problem with my argument. However, no reasonable person would expect any definition of poverty to include having those things. I'll stick with the federal definitions for the sake of argument.

 

[cybrsage]

Poverty line, or poverty threshold, is used to mark the minimum income needed to achieve a satisfactory standard of living. While this may mean different thing in different parts of the world, in the US being above the poverty line means having access to water, food, shelter, education, medical care, and adequate clothing.

Individuals who fall below the poverty line often lack basic things like microwaves, clothes dryers, and computers. However, 91 percent of the families under the poverty line own a color TV, and 52 percent own a stereo.

http://www.wisegeek.com/in-the-united-states-how-is-the-poverty-line-determined.htm

We have an inflated view of poverty.

 

[QuantumPion]

That is a problem with my argument. However, no reasonable person would expect any definition of poverty to include having those things. I'll stick with the federal definitions for the sake of argument.

Que that picture of the welfare queen holding up her electric bill demanding who would pay for it with the big screen TV and xbox in the background, lol.

 

[PokerGuy]

I guess some people are simply too dumb to understand the concept of a free market economy. Companies will pay however much it takes to get the talent they need to maximize their profit. The idea of just paying more for something (labor) for no particularly logical reason is just stupid. Other than a tip (which is a voluntary reward for doing good work), do you just pay more for goods and services than what is charged? No? I didn't think so.

 

[MovingTarget]

I guess some people are simply too dumb to understand the concept of a free market economy. Companies will pay however much it takes to get the talent they need to maximize their profit. The idea of just paying more for something (labor) for no particularly logical reason is just stupid. Other than a tip (which is a voluntary reward for doing good work), do you just pay more for goods and services than what is charged? No? I didn't think so.

Society demands that the human condition be taken into account. Allowing policy to be set by purely market forces is what is stupid. We are not Ferengi.

 

[cybrsage]

Society demands that the human condition be taken into account. Allowing policy to be set by purely market forces is what is stupid. We are not Ferengi.

Actually, our society allows people to be paid what they are both willing to accept and what companies are willing to pay.

Why do women make less than men? Companies know women will accept less so they offer less. Women expect to be paid less so they accept less. If women negotiated for more money (like men do) during the initial salary discussions, they would be paid equal to men.

 

[Veliko]

Actually, our society allows people to be paid what they are both willing to accept and what companies are willing to pay.

Why do women make less than men? Companies know women will accept less so they offer less. Women expect to be paid less so they accept less. If women negotiated for more money (like men do) during the initial salary discussions, they would be paid equal to men.

Well, not quite. Individual people have far less bargaining power than the big employers do.

 

[QuantumPion]

Society demands that the human condition be taken into account. Allowing policy to be set by purely market forces is what is stupid. We are not Ferengi.

No it doesn't. Rich liberals who are guilty about being rich (because they didn't earn their money), ivory tower academics, and college kids supported by their parents demand it. Unions also demand it, but only because it puts their competition out of business and lets them make more money (i.e. corruption). Furthermore, it is your policies (socialism) which is responsible for more human misery and suffering than any other political force the human race has ever seen. Just because you have good intentions does not mean you get good results. Your desire to make everything fair leads to everyone being poor.

 

[Jaskalas]

Henry Blodget asks why pay people so little?

1: Competition
​

If anyone undercut your wages and thus the price of your product, you're out of business and your workers have no job.

2: Inflation
​

If everyone had a million dollars the price of goods would rise as to erase the difference. A person making one million a year would be put into poverty and your efforts would be for not.

I implore some Leftist economy to try it and see what happens. Let us see CA raise the minimum wage $1 every year until poverty is erased. By the end of a decade there would be no CA and MANY would have died from violent upheaval.

 

[Atreus21]

You can either let the market decide prices of labor, or you can mandate it.

Which is it?

 

[Hugo Drax]

American companies can pay below poverty level for unskilled labor because the Taxpayer picks up the tab on everything else.

ie: we tax payers pay for food stamps, medicaid,welfare,etc.. so that they can pay shit wages and the difference is picked up by the taxpayer.

more Lemon Socialist policies of the US.

 

[lord_emperor]

WTF?

In the US, the poverty line rises or falls every year according to the Consumer Price Index and other factors. In 2006, a single person needed to earn a minimum of $9,800

Even if you live in the most run down dump in a dangerous part of town rent alone is going to take 2/3 of that. Never mind if you want luxuries like electricity, running water or food.

 

[Throckmorton]

http://www.wisegeek.com/in-the-united-states-how-is-the-poverty-line-determined.htm

We have an inflated view of poverty.

A color TV? Are you being serious?

 

[Throckmorton]

1: Competition
​

If anyone undercut your wages and thus the price of your product, you're out of business and your workers have no job.

2: Inflation
​

If everyone had a million dollars the price of goods would rise as to erase the difference. A person making one million a year would be put into poverty and your efforts would be for not.

I implore some Leftist economy to try it and see what happens. Let us see CA raise the minimum wage $1 every year until poverty is erased. By the end of a decade there would be no CA and MANY would have died from violent upheaval.

The "if everyone made a million dollars" argument is ridiculous. If those menial jobs paid twice as much, the prices of everything wouldn't double... Because that's not what controls prices. The economy isn't based on McDonald's and Wal Mart.

Inflation depends on the total amount of money in the economy. If it stays the same, inflation stays the same. Paying people on the bottom more just means paying people at the top less. Interesting how you never hear the argument that insane CEO salaries cause inflation... Nope, only low wage workers can cause inflation, and of course that warrants paying them below a living wage!

 

[MovingTarget]

No it doesn't. Rich liberals who are guilty about being rich (because they didn't earn their money), ivory tower academics, and college kids supported by their parents demand it. Unions also demand it, but only because it puts their competition out of business and lets them make more money (i.e. corruption). Furthermore, it is your policies (socialism) which is responsible for more human misery and suffering than any other political force the human race has ever seen. Just because you have good intentions does not mean you get good results. Your desire to make everything fair leads to everyone being poor.

Where do I advocate socialism? Thats right, I don't. If you can't see the difference between taking the human condition into account to prevent exploitation - and socialism, then you have truly gone off the deep end.

 

[Throckmorton]

Actually, our society allows people to be paid what they are both willing to accept and what companies are willing to pay.

Why do women make less than men? Companies know women will accept less so they offer less. Women expect to be paid less so they accept less. If women negotiated for more money (like men do) during the initial salary discussions, they would be paid equal to men.

A worker has virtually no negotiating power, unless there is a serious shortage of workers.

Try negotiating with the cashier the next time you shop at a big box store. It's like that. The only way to actually negotiate is collectively.

 

[Jaskalas]

The "if everyone made a million dollars" argument is ridiculous. If those menial jobs paid twice as much, the prices of everything wouldn't double... Because that's not what controls prices. The economy isn't based on McDonald's and Wal Mart.

Inflation depends on the total amount of money in the economy. If it stays the same, inflation stays the same. Paying people on the bottom more just means paying people at the top less. Interesting how you never hear the argument that insane CEO salaries cause inflation...

A few millionaires changes nothing, a drop in the bucket. That's a few million dollars. Giving each and every person that amount would require $315 trillion. Surely you must appreciate the difference.

Does not matter if it's a million or a few thousand, or a hundred bucks. When the floor is raised so are prices. The basic cost of labor changes everything.

I implore you, go ahead and change it in your state. Give them a $1/year increase in minimum wage until poverty is gone. I want to you learn your lesson.

 

[Jaskalas]

A worker has virtually no negotiating power, unless there is a serious shortage of workers.

Which there would be if you simply kept the illegals out.

 

[MovingTarget]

American companies can pay below poverty level for unskilled labor because the Taxpayer picks up the tab on everything else.

ie: we tax payers pay for food stamps, medicaid,welfare,etc.. so that they can pay shit wages and the difference is picked up by the taxpayer.

more Lemon Socialist policies of the US.

There's some truth to this. Companies like walmart and McDonalds do get away with paying such low wages because of the safety net. That does not mean that the safety net should be removed though. It means that a union is needed to bargain for non-poverty wages.

 

[MovingTarget]

Which there would be if you simply kept the illegals out.

Yes and no. It depends on the particular field/job being discussed. Illegal immigration does not have an equal effect on every sector of the job market.

 

[Veliko]

A few millionaires changes nothing, a drop in the bucket. That's a few million dollars. Giving each and every person that amount would require $315 trillion. Surely you must appreciate the difference.

Does not matter if it's a million or a few thousand, or a hundred bucks. When the floor is raised so are prices. The basic cost of labor changes everything.

I implore you, go ahead and change it in your state. Give them a $1/year increase in minimum wage until poverty is gone. I want to you learn your lesson.

Of course a few millionaires changes things, it is those top few people that have got the majority of the money.

Having such a large gap between the rich and the poor is not a good thing. It is in the rich people's interest to close that gap.