I've just been watching a programme on UK TV.
One of these where the boss man of a company goes undercover to find out how his employees really tick.
The company runs holiday camps, caravan parks even.
One camp that he went to had a cleaning staff all on minimum wage,all dissatisfied and unmotivated with heavy supervision.
Another of his camps had a highly motivated cleaning staff earning twice the minimum wage.
The highly motivated cleaners had minimal supervision, two thirds of the supervision staff having been "let go" to enable the cleaning staff to be paid high wages. Being highly paid they did not need so much supervision.
Oh, and instead of being paid by the hour they where paid by the job.
Come on, lets hear your opinions on why this is a bad thing and the company couldn't afford to pay them more than the minimum wage!
This is my favorite method of employment.
I actually believe a wage is a contract entered in to by employer and employee. I do not think that government should involve itself with these contracts.
It also makes sense to find qualified workers and pay them a generous wage. Having the employees holding an interest in the profits of the company is even better. Turnover is a huge obstacle when dealing with low paid employees so I do not understand why an employer would not be benevolent to an employee that was basically trained on the wallet of the employer.
That was another side affect of the exercise, they realised that they weren't actually training the people for the work they were expected to do.
Job and finish used to be a fairly common way of working in the UK until everything went to pot and those in charge asked why they were paying people who had finished their work for the day. Now jobs take all day that used to be finished by lunch time.
I think the key here, if I read you right, is that the more productive people were being paid by the piece and not by the hour.
Hourly wages, while seemingly "secure," rarely excite people to produce to their greatest capacity. Straight commission, which is the equivalent of piece work, means that the better you perform or produce, the bigger your paycheck will be, on an immediate basis. you're in a position to give yourself a raise, every time you work.
Insisting that an entry level workers, who by their very nature require the most supervision and training, be paid wages contra-indicated by the realities of business competition, is suicidal for any business. To remain afloat, profitable and open for business, every employee should directly or indirectly generate at least 4 times the income they are paid in direct compensation. Paying them more than that will cause a company to quickly go bankrupt, unless it hires fewer and fewer people over time.
Fewer employees means loss of production, which means the business must necessarily become smaller as it ceases to meet the demands of competition. Eventually, that company will either be forced to borrow more capital than it can feasibly pay back, or simply go out of business.
Higher minimum wage means fewer jobs and an ever dwindling tax base.
You haven't really thought this through have you?
The only employees lost were some supervisory staff. Supervisory staff are by definition generally non productive. The money saved was used to make up the wages of the remaining staff who would of course be taxed on that extra income and that is hardly a dwindling tax base is it?
Ditto to what John said! Supervisory personnel get the bigger bucks, but do less. Fine if they've come up through the ranks of that company and know first-hand how each job should be done (and done well), but aren't worth the salary and corresponding drain on overhead if they've been hired from the outside or from a totally different field on the strength of their supervisory "skills". In which case, employees who actually know what they're doing need less supervision, not more, and left alone will actually make more money for a company than those who are micro-managed by inept supervisors.
Unfortunately, in many companies the most productive lower-rank employees are rarely praised or compensated for their skills and creativity. Instead they are seen as a threat by those above them and covertly forced to quit by the stress, or simply fired after too many "bad" performance reviews. I've seen several companies go bankrupt from hanging on to middle management deadwood while ignoring the wealth of institutional knowledge and insight of their lowest-paid employees.
Jama, what you've just expressed so eloquently is how the Free Market will allow poorly run companies to remove themselves from the competition, which is a very good thing for everyone.
Crony Capitalism and allowing the Government to decide who wins and loses based on patronage, is the mechanism which allows poorly managed, stupidly run companies like the ones you've described, to stay in business. Those hard working, knowledgeable, lesser paid employees will be snatched away by better managed companies, and given the opportunity to shine when Free Market Capitalism is allowed to work without fetters.
All very fine in theory but in practice there are plenty of badly run and poorly paying companies that are much loved by the shareholders.
Also, in response to stripeds comment, in theory, the more highly paid employee who works on a piece basis tends to be more motivated but at some point the employer is going to use that as a standard. Everyone will be expected to work at the same rate, then they'll lower the per piece wage because they're laying out too much money. The employee will need to work faster to make the same amount he was making before. It happens.
That's where the Union should step in and prevent the employee cutting wages.
As an aside to that, I had a friend who worked for the local authority patching the roads. The bonuses were terrible, almost non existent. On enquiring why they were so bad he was told that when they were tailed by a time and motion man to estimate their bonus entitlement the foreman on that gang decided that he would show him just how hard they could work!
It may be a language issue, but I cannot fathom what it is this post was supposed to communicate, John.
John, if business taxes were only based on payroll, you might be right. Unfortunately, that is hardly the case.
Because your post was titled "Minimum Wage," I briefly discussed the single example you'd mentioned, then addressed the larger issue which has billions of examples all over the free world. My apologies for expanding the discussion based on the title you'd given it.
Your argument in response to my post is an excellent argument against Unions, BTW: Unions insist that Productivity has little to do with Seniority, and pay far more for the latter than they do the former.
Unions also fight tooth and nail to keep non-productive employees on a company's payroll, because every union employee working mean union dues getting paid. Are you sure you're not a conservative mole, fighting liberalism from the inside out?
I had a fairly long discussion about unions with somebody else here and came to the conclusion that there is not much in common between US and UK unions.
If you think unions are at fault for fighting for the rights of non-productive workers, I would ask you how the non-productive workers came to be employed by the company in the first place?
Unions have little or no say in the hiring of employees!
There is no problem with extending the range of the discussion, it's just that you jumped to a lot of false assumptions.
So, how do I know you're a non-productive employee before I hire you? Is there some particular look I should be aware of?
If you can spot the little bastards before I hire them, I've got entire industries you can come consult, John. Or are you one of those evil, judgmental types who will look at the length of unemployment someone has experienced, or if they were Welfare recipients prior to applying for the job. Because THAT would be Profiling, you big meanie!
Still, if I hire you and you turn out to be a dud, and you're a Union member, I am not allowed to remove you from the payroll and hire someone more qualified. OH no.
And those loser companies whose shareholders still love them? Give it a minute. When they start tanking due to poor business practices, Managerial Heads will begin to roll.
UNLESS their Government comes in and offers those poorly run, upside down, overly burdened by Union entitlements Corporate entities a BAIL OUT. In which case, they continue down the road to ruin, only they get to take millions in tax moneys with them, as they go.
For a Lefty, you sure use a lot of Right sided arguments to make your case.
Don't you have to supply references for a job in the US?
I'm waiting to see some of these loser companies start to tank. Invariably they don't. Sure they are bailed out by government giving them handouts in the form of income support for their under paid work force but very few of them actually continue down the road to ruin.
Solyndra, Tesla, Beacon Power Corp., Ener1, Range Fuels...
ALL Government backed companies that have declared bankruptcy, and are Out Of Business.
You're a great guy, John. Sorry the facts keep shooting your arguments down.
No facts there to shoot my argument down which was neatly summed up by Charles several posts ago - you pay peanuts, you get monkeys.
John Holden posted 97 minutes ago:
"I'm waiting to see some of these loser companies start to tank. Invariably they don't."
I refuted your statement, with easily verifiable facts.
Can we keep the conversation based in reality, please?
Sure,off the top of my head, MacDonalds are hardly high payers are they and yet they go from strength to strength.
All your examples were from fairly high risk new technology, I'm not too well up on American companies but I seem to recall hearing that those companies were a bit, how should we say, dodgy to start with.
~chuckles~ Dodgy indeed.
Those are all failed Green Energy companies, which Obama often SWORE were the very heart of the new Green Economy. They are also, every one of them, cautionary tales of the dangers of Crony Capitalism. Each was managed or helmed by Democrat donators of substantially deep pockets.
I might as well have listed Fanny Mae and Freddy Mac. Two Government Run Enterprises who famously crippled the U.S. economy by cooking their books. Both defended by their high-ranking Democrat patrons as "Sound as a Pound" before the ship hit the sand. THEN of course it became BUSH'S fault! Even though he was on record, repeatedly, telling those very same defenders that those GRE's would bankrupt the country.
None of which has squat to do with Minimum Wage, but all of which argues strenuously for FREE Market Capitalism. ;-)
As you say,nothing to do with the minimum wage.
If you think though that it argues for free market capitalism then we obviously have a different definition of that phrase.
I have worked in a couple of places in my youth where the employees truly hated the supervisors and the bussiness why? because they were paid little, people paid little don't worj their a** off why would they? So the company decided that strict supervisors would work, you know the kind who yell and breathe down your neck and insult the workers as a result and without any real coordination a process of sabotage began, the bussiness was a fruit orchard and the wor we were in was sorting the fruit through first second and third grade thirds go to the pigs so as soon as a supervisor looked away all down the line people would be bashing the trays thus destroying the fruit and making it worthless pig feed, it must have cost the company hundreds of thousands if not millions, certainly more than a decent wage, false economy not to mention the costs of all those highly paid supervisors.
Prove cause and effect, and you've got an argument!
Evan, I have already proved cause and effect.
No, you've shown "a possible correlation".
If you say so Evan.
The workers on double the minimum wage seemed pretty clear about it.
Number of possible variables: thousands, millions, maybe even trillions.
The few you're looking at: Wage, production and happiness.
Economics isn't a science.
Why which is a bad thing? Had a similar show here in the US. CEO five or six jobs undercover, picking fruit, driving a fork lift, sorting on the line, working in the office. These workers were all highly motivated mostly immigrant. There was not a single job he could do. He couldn't keep up with anything and just slowed down the truckers who were waiting for
their goods to deliver. Think is was a more promo for the corporation. Ought to be a law that all CEOs should have to do the jobs they expect their workers to do. But that's why we have elitism. They are too important for lowly work.
In all fairness to the guy he was doing it so that he would get an insight that wouldn't have been available to him if he'd gone in as MD.
It certainly did change his attitude to the guys doing the job.
Also, the CEO at one time probably did his share of menial work when he was younger. Then he went to college and worked his way up to CEO. Rarely does anyone start at the top.
But I can agree with you about executives needing to be in the ranks as part of their learning the ropes of that particular new company they're being hired to. Learning the numbers isn't always enough to run a company.
I paid my employees hourly when I ran my business, but I always offered performance bonuses. I figured if I made more money so should they. I must admit that I wasn't prepared for the down turn in the economy, and the housing market crash, and the crazy high gas prices, but I treated my workers fair and they always repaid me with good quality work. I still get calls for work from time to time because we were among the best in our field, but I just can't compete with other businesses that do the job for less, because they aren't paying fair wages, and do as high of quality of work. I refuse to take advantage of those who give me all they got to get the job done, just to make a profit; I'd rather not be in business at all.
That's one of the problems our system creates isn't it the people who provide a fair wage to their employees and good quality workmanship to the clients are allmost allways put out of bussiness by those who do neither and as a result everyone loses.
Just a couple of comments on points I picked up here.
1. You cannot pay a factory worker, or the person at the local fast food place or other employees like that on a commission basis, i.e. for each piece of product sold. If a piece of equipment breaks down, the factory worker cannot make the product and he does not get paid. The hamburger flipper makes less on a rainy week night than the guy working on a clear weekend. When you sell cars, insurance or anything like that, where your job is only to make the sale and see that the product is delivered, commission will work. Otherwise an hourly wage or salary is needed.
Someone said the CEO of a company should know how to do every job in the company. Most CEOs of say oil companies, do not know how to drill a well, or check pressure values. They do not know how to run a refinery and they probably do not know how to drive a tank truck filled with gasoline.
In my old job I was paid a salary. I was expected to work a minimum hours per week, usually work more and was expected to complete assignments.
A minimum wage system is needed. The big problem is that employers will hire twice the minimum wage people they need, split them into shifts and thus can avoid paying for any benefits including health insurance.
I do not have the golden answer. Having a minimum wage is better than not having a minimum wage and I suspect there is a better system, but no one has shown it to me yet.
Larry, rather than being paid on a commission basis the staff in this instance were paid for four hours for cleaning a caravan, if they finished in three and a half they still got four hours pay.
Of course that wouldn't work for burger flippers or factory workers but the underlying principle that if you pay your workers decent wages both sides win still remains.
The worker is more motivated to work and less keen to change employment. The employer wins with a much lower turn over of staff.
It works in that particular scenario. But how about auto techs and mechanics? The client is charged by the hour. The job is listed as taking an average of 4 hours to complete. A good mechanic can do it in three but the client is still charged for 4 hours.
Now the next client in line is charged for a 4 hour job. That same mechanic can do it in three but he's already been paid for my extra hour, which he now has as free time, and applies that time to the next job. So he's working two hours on that next job, still being paid for 4 hours, and got the extra hour, like double dipping, from my job.
The garage charges you for four hours of the workers time at their charge out rate, which is often six times what the mechanic earns. Why do you not criticise the management?
You have to look at it from the other angle as well> They charge you four hours for the job even if it only takes three, but they also charge you four hours for the job if it takes five hours.
I am all for workers getting a decent wage. I worked at minimum wage jobs in High School and College. My father worked at a local chemical plant and was a member of the union that spent more time fighting for health benefits than money.
Minimum wage jobs are hard to find--especially when you are older--over qualified.
I do not have a perfect solution that will guarantee everyone a fair wage, keep the employer overhead down and still allow a profit for the employer and hopefully provide health benefits to the employee. Some companies can handle that. Some cannot.
We have an expression in England "If you pay peanuts you get monkeys".
In one job I had, a new owner came through to see what was going on. He told me I was doing MY job wrong without knowing what I was doing. I simply put my tools down and told him to show me how he wanted the job done and I would do it his way. His response was that he didn't know the machine. My supervisor then told him the reason I was the only one on my shift doing my job was that I was the best they had for it. Fast and accurate. My team of four put out as much or more than the other shifts with less defects. My point is this, if you don't know the jobs you don't have the right to criticize the job being done.
Of course unions fight even for not very great workers, they are professional worker advocates--that's what they do.
No, they are not judges of men. They can not decide that this worker is good and therefore we'll support him but that worker is bad so he's on his own.
It just wouldn't work.
One for all and all for one.
A Workers Advocate, in a logical world, would, as a byproduct of looking out for the worker, do all they could to ensure that the companies for which their workers worked, stayed in business. Businesses that go bankrupt cannot employ a soul.
They would NOT burden those employers with outrageous entitlements, guaranteed to put said employer into receivership. Yet, that is exactly what they do. Particularly in Public Employee Unions.
I believe that employers and employees are often the happiest when employee wages are not mandated by time but by the actual high quality of work completed. However, the work environment also has great importance in not only employee satisfaction but also decreasing turnover. People can become non-productive at any point just as non-productive people can turn over a new leaf if they have the motivation. Hourly wages are often not much motivation for someone to be very productive and efficient. Higher pay for accomplishments and tangible contributions or savings to the company makes for powerful motivation for many employees and independent contractors. If given the choice at higher pay for busting your rear end or an hourly wage, smart and non-lazy people choose the former.
In most cases in a mechanic, plumber, etc says a job will take four hours--that is an estimate--you are going to pay for the hours he works.
If an air conditioner is being installed, or a roof replaced, then you know the cost in advance, no matter how long it takes.
Sometimes, some craftsman will give you a definite amount of time, but they are usually building in some extra time for which you are paying.
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