Almalieque wrote:
No, you're simply arguing in circles. My point is that everyone is greedy.
Actually, that was my point. What's interesting is that you agree with this, but then disagree with the result that this causes. If everyone is greedy, then the forces of their greed will result in an agreed upon price for goods, and wage levels. Stepping in from the side and insisting that someone's pay is unfair when those working the job are perfectly willing to accept that pay is meaningless. Which is what I've been saying all along.
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So therefore, Mc Donald's employers will never pay their employees 100k as you stated.
If they knew they could always pass the cost on to consumers without affecting sales volume? Of course they would. Because... wait for it..
the employees are greedy too. Thus, the employees will demand higher salaries, or they'll go across the street to their competition and work there. You can't sell big macs for infinite amounts of dollars if you have no employees to make them for you. Thus, as the cost people are willing to pay for the big mac increases, the pressure to raise wages in proportion increases as well.
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Likewise, employers will not pay their waiters more than a few dollars and cents if they know that their employees will be satisfied with tips.
That's the key point though. What's strange is that you have no problem assuming that the employer will never be satisfied with a given amount of profit if he believes he can make more, but you can't seem to grasp that this applies to the employee as well. The employee will not be satisfied with a small wage if he believes he can make more. That's the factor that will drive wages up if there's potential for them to increase. This is why wages are driven by profits, which in turn are driven by price (that whole supply/demand thing I talked about earlier).
In the case of a waiter earning tips, their wage is based directly on the cost of the goods sold (cause it's a percentage of the cost of a meal). Thus, instead of him having to constantly assess whether his employer is making enough money off his labor that he can justify asking for a raise, his wage automatically goes up based on the "value" of the goods/services he's providing. That's why he's less likely to care about the base wage level, and why it's ok to have that base wage level lower than the standard minimum wage.
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The problem that you seem to be overlooking is that employers shouldn't be allowed to pay ANYONE below the national min wage.
I get that you keep saying this, but you've yet to give a good argument for why that is the case. If waiters are satisfied with their total wages, then that's a fair wage. Passing arbitrary rules to force them to be higher is unnecessary.
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Tips are EXTRA and are not necessary, guaranteed or consistent.
Again, you keep saying this, but haven't supported your claim. Tips are part of the total cost of a meal at a restaurant. The fact that customers are expected to tip absolutely affects the amount that the employer can charge for the meal. People don't just throw away money. Once again, you start out agreeing that everyone is greedy, but then refuse to apply that fact to any situation other than employers. The customer is
also greedy. Thus, he's going to want to get the best meal for the lowest price. The cost of a tip absolutely plays into that calculation. Why would you assume it doesn't?
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Gbaji wrote:
And it's doubly silly because all of these things interact in the market. As long as you want to buy things for as little as possible, you help drive the need for producers of those goods to find the cheapest way to do so possible. As I said earlier, the correct answer isn't to "blame greed", but to find ways to make greed work. Make it attractive to businesses to do business in the US, and they will. And btw, this is a bit off topic because I can tell you that the idea that businesses do this for labor reasons alone is a fallacy. There are a host of reasons for businesses to move their operations. Cost is a factor, but labor costs are rarely the biggest ones. It's usually regulations and/or taxes (or other costs/benefits) on the businesses that drive this, not labor costs.
Nope. It's all about the money. You can't have it both ways. You can't say everyone is greedy and operate off of greed and then turn around and say that CEO's don't move their operations overseas because of money.
Where the hell did I say that? Of course it's about money. My point is that labor costs alone are not always the biggest factor (I would argue they are rarely the biggest factor). Regulations and taxes affect the amount of money you can make. Other cost factors (like infrastructure, construction, power, etc) all affect the bottom line as well. All of those are about money. You're not paying attention to what I'm writing. Nothing in the paragraph you quoted suggested that money isn't the biggest factor.
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No matter how you cut it, it boils down to money. Customer satisfaction? More efficiency? Unless you're giving it away for free, it boils down to money.
Yes. But do you get that many things affect how much money you can make. Customer satisfaction affects how much money you make. Efficiency of your operations affects how much money you make. Electricity costs and downtime percentage affect how much money you make. Transportation and shipping costs affect how much money you make. Licensing costs affect how much money you make. Tax rates and tariffs affect how much money you make.
Trying to simplify this whole thing down to employers always attempting to decrease labor costs no matter what ignores a whole host of factors, many of which can (and often are) much larger than those labor costs. As I explained to Smash, if all other factors are the same, then decreasing labor costs will always increase profits. But in the real world, those other factors are never the same. There's a reason why it costs less for labor in some countries than others, and those reasons often (almost always in fact) result in higher costs for other factors involved in your bottom line.
If you are the CEO of a company and you have the following two choices, which would you make? Keep in mind that your objective is to maximize profits:
1. Operate your plant in Country A, where your 500 employees will earn an average of $50k/year, and total other operating costs (shipping to/from, power, amortized construction/leasing, raw materials, etc) runs you $20M/year.
2. Operate your plant in Country B, where your 500 employees will earn an average of $10k/year, and total other operating costs runs you $50M/year.
Guess what? Total cost including labor will be $45M/year in Country A, and $55M/year in Country B. You should build your plant in Country B. Doing anything else will violate the rule we all agree on that the employer is greedy and will always attempt to maximize profits. Obviously, I contrived this scenario, but the point is to try to get you to realize that labor costs alone are not the only factor. The one and only means to maximize profits is not just to minimize pay. There are a host of other factors to consider.