Quote (Thor123422 @ 2 Feb 2021 23:25)
So the first thing is that workers are less than 20% of the business cost even in high-labor businesses like fast food. So the whole "pay them $0.25 more an hour would bankrupt you" is not really how these things would go. Amazon for example made 11.59 billion profit in 2019 and has about 800k workers. That means they could afford to pay every worker an addition $7 an hour and still break even, assuming all workers are full time. Walmart could afford an additional ~$60,000 a year per worker. These are just examples to show that even in worker-heavy businesses the companies are not operating on razor thin margins as far as employee pay is concerned. Now consider that labor cost is < 20% of the total cost of these businesses, and you see that they could make up the cost by a less than 20% increase in prices.
The second thing is that increasing minimum wage increases the income of the lowest class of people, who have the greatest propensity to spend. When a Walmart worker gets a raise, most of that raise is spent buying things at Walmart. Increasing pay for the group that is most likely to spend drives demand, which allows more profit from those same companies. So even though they could raise prices to compensate, they don't actually have to because the economy as a whole is doing more business which drives prices down and profits up.
The third thing is that companies already operate with the fewest number of people they can. They don't make a habit of hiring extra people out of the goodness of their hearts, and they don't pay more than they have to. So as long as the person is making you more money than they cost, they will be retained, and in order for that to happen even at some place like McDonalds you would need to raise the minimum wage to probably $30 or more.
Regarding business cost, it doesn't matter what percentage of the business cost workers are. Hence my phrasing of post-overhead less wages. I made it clear I was attempting to make the most simplified example possible. We both understand that business is far FAR more complicated than my oversimplified example. We both understand the impact say the stock exchange would play, globalism, etc. There's far more to unpack in running a massive corporation than a small business.
My point had nothing to do with the corporations. It was a comparison IF the corporation operated the same way as the small business. You keep talking about fast food (corporations) and walmart (corporation) and amazon (corporation). There's nothing in your entire post that really addresses the small business. I gave a prime example of how a massive corporation can afford to pay more, at a lower profit margin, with the... Owner... Raking it in big time AND the company affording to expand massively, as compared to the small business.
The basic problem I had with your prior post wasn't that it "abuses corporations". I think we can both agree that if business up to and including the massive corporations worked as in my example, things would be "better". Instead, the problem comes along when you start talking about the small business specifically. The 20-40-50 employee business can't handle the legitimately slim profit margins they need to work under to compete with the corporations. Why is it when in small towns, 50 year old successful restaurants tend to go out of business within a year of Applebees moving in? I mean, ffs, Applebees? It's not just a better business model, it's a build, tested, tried and true supply chain. Lower operating costs across the board, and product that is, mostly, simply better. The problem is, there are still plenty of small businesses that are the best at what they do, but why would you want to pay $1600 for a leather motorcycle jacket when you can get something warmer and kevlar plated for like $400 from China? The labor intensity of a lot of American work is huge, for not necessarily a "better" product.
And that's where we sit. Pay a Chinaman (or their Muslim Slaves) $.02 a day to produce our shit, or pay us $20/hour minimum wage. Okay, the Corporation will pay the $.02/day. The small business will pay $20/hour. And for that $0.02/day labor charge, 20% labor cost goes down to 2%, and suddenly better processes can be afforded, more automation, and a better product. How long before the best offering your small business can make costs 3x, is half as good, and they all get fired? How long before it doesn't matter what Walmart or Amazon pay, they're the only options, because they're the only companies that truly innovated out from under the environmentalist humanist thumb of the US government?
The corporations aren't necessarily evil. But they'll do business with evil. Remember, it took Presidential edict to stop US companies from doing business with the Nazis, and that edict required a bombing attack on US soil by an enemy navy.
So, your solutions of higher minimum wage and whatnot? Bleed off a bit of the profit from corporations that are abusing foreign slaves. Meanwhile, break the backs of local small business. Meanwhile, you haven't resolved the issue, because in the end, everyone works for either the corporation or the government. Small business is gone, and the corporation has no competition or reason to pay you anything beyond what the government minimally requires. Sound familiar? It's happened before.