Both entrepreneurs started their companies in the 1980s. Both small businesses employ roughly the same number of people, around 75. Both owners are considered wealthy in their community. One, let's call hm Mr. T, starts his employees at minimum wage, $7.25/hour. His highest paid employee, who is second in command to the owner, makes $18.50/hour and has been with him for almost 10 years. His employees do not receive health care, paid vacation or sick leave. Mr. T is well known in the community for his philanthropic activities, donating large sums of money to multiple organizations. He also serves on the board for many of these charitable organizations.
The second entrepreneur, let's call hm Mr. H., starts his employees at $11/hour. His highest paid employee, who is his second in command to the owner, makes $26/hour and has been with the company for 12 years. His employees receive 2 weeks paid vacation and partially paid health care after one year of employment. He does not dock them for being sick and even continued to pay full salary to one employee for six months while she underwent chemo. Mr. H is not well known in the community for his philanthropic activities. He doesn't serve on any boards of charities and is not known for contributing money toward local charities. He is known for his excellent pay and benefits and demanding work ethic. He expects a lot from his employees and pays them well for it.
This community is a small town of about 12,000 people in an impoverished rural area. Which entrepreneur do you think is most beneficial for the community as a whole and why?
Far be it from me to presume to know the right answer, especially with the somewhat limited info here... but it could be said that what the latter employer does *not give to the community in donations, he makes up for by providing health ins. and higher pay to his employees. It creates less of a tax (in every sense of the word) on the community, however it may depend on the size of the company. Being a very hard worker, I can tell you which one I'd rather work for. I am impressed with a company/individual who makes donations to the needy, however it would be far and away more impressive if they did it anonymously.
I don't think there is a "right" answer and of course there are many variables that are not mentioned. I'm just curious what people think is philosophically better: using your wealth to reward people for their work, or using it to donate to charity. Again, I know it isn't a black & white, either/or proposition.
Philosophy can only really apply to the charity aspect. What you pay your workers is purely down to economics - you can only pay them what they are worth to the firm. Economics is a science, not a philosophy.
However, both of the entrepreneurs are beneficial to the community, in different ways.
Yes, economics is a science, but one can have an overriding philosophy that guides decisions, even economic ones, including how much to pay your employees. Of course, there will be economic parameters (limits) within which one must stay in order to be profitable.
Hello PrettyPanther. I was on my way to post a similar question and saw this. I offer I have not the answer, yet maybe a means of solution. Stated is information as a perspective.
Mr. T is philanthropic, a businessman, a community leader, and an activist as a philanthropist
Mr. H is a businessman, charitable
Compare and contrast offers a question to seek pondering.
Is an active philanthropic community leader more beneficial to an impoverished community than a charitable person.
I really cannot tell with that other than in appearances Mr. T is more beneficial, yet not enough information to be accurate. Only time Will Tell, as Will Tell, well, Will Tell shot an apple off his son's head.
Ponder opportune opportunity and the what the former employees now do of both Mr. T and Mr. H
I'm glad you mentioned that, as I was going to follow up to this post with just that sort of information. Two of Mr. H's employees have gone on to form their own businesses. One of them is a nonprofit organization that employs disabled veterans and autistic adults. The other is a brewery. The brewery is just getting started and the nonprofit now employs 28 people and is growing. Mr. H. is acting as a mentor to both of them.
I would have to go with the first one...he spreads the wealth so to speak , whereas the second one seems to only give benefit to a smaller group of people -his employees.
I believe entrepreneur Mr. H is the better person for the community, he treat those close to him right and then those close to him will be able to spread it around the community themselves by helping their family and friends. A person cannot help everyone so why not help a few very well and let them be-able to do more in the community themselves. Mr. T does not even help those close to him well so how is he able to help the community well, he is a person trying to do TOO MUCH TOO LITTLE.
An employee who is working for Mr. T for a year has received a raise and is now making $8.25/hour. He works 40 hours per week.
Mr. T contributed approximately $250,000 to various charitable organizations last year. The $8.25/hour employee used some of those very same charitable organizations, including one that provided money to repair his furnace during the dead of winter. What if Mr. T had used that $250,000 to pay 30 of his lowest paid, full-time employees $3 more per hour? Would that be better than funneling the money through charitable organizations?
I'm curious about what you all think.
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