Pizza hut lays off all its drivers just because minimum wage was increased.

[Stevicus]

Yes. If you can't afford the basic requirements, you shouldn't go into business at all. Now care to answer my question?

Your question was: "How about if you are neither rich nor greedy and can't afford to pay someone $18/hour? Should you not hire at all?"

The answer to that question would also be yes. I just find it interesting that there's often a disconnect between different kinds of expenses. For example, if a business goes out of business because of high utilities, high rents, or high gas prices, you hardly ever hear any complaints from the capitalists. They'll usually just make some vague reference to "the economy" being the blame for their failure. This is far different from the hue and cry they make over the minimum wage or taxes, when they virulently blame those things for a business' failure.

This makes me think that their complaint about not being able to afford wages has nothing to do with business expenses and more to do with outright malice towards the people - and possibly towards the country as a whole.

 

[9-10ths_Penguin]

How about if you are neither rich nor greedy and can't afford to pay someone $18/hour? Should you not hire at all?

If you can't treat you employees ethically, you shouldn't hire them, no.

 

[Revoltingest]

Yes. If you can't afford the basic requirements, you shouldn't go into business at all. Now care to answer my question?

There are differences of what "basic" is.
If I offer jobs that people take because the
pay is better than all their alternatives, then
this is OK by me.

 

[Heyo]

Your question was: "How about if you are neither rich nor greedy and can't afford to pay someone $18/hour? Should you not hire at all?"

The answer to that question would also be yes. I just find it interesting that there's often a disconnect between different kinds of expenses. For example, if a business goes out of business because of high utilities, high rents, or high gas prices, you hardly ever hear any complaints from the capitalists. They'll usually just make some vague reference to "the economy" being the blame for their failure. This is far different from the hue and cry they make over the minimum wage or taxes, when they virulently blame those things for a business' failure.

This makes me think that their complaint about not being able to afford wages has nothing to do with business expenses and more to do with outright malice towards the people - and possibly towards the country as a whole.

There is a second thing they don't like, regulation, especially environmental regulations. But on an abstract level it is the same, exploitation. They think they are entitled to exploit what is available, natural or human "resources". Revenue has to come from somewhere.

 

[Shadow Wolf]

Let’s do a little math. The average McDonalds owner makes $150,000 per year working at least 55 hrs per week.

How Much McDonald's Franchise Owners Really Make Per Year - Mashed

McDonald's is the most successful restaurant in the history of the world. How much does a McDonald's franchise owner really make each year?

www.mashed.com

If we assume he has 20 employees who work on average 30 hours per week, that means he pays approx 600 labor hours per week. In order to give each of his employees a $3 per hr raise, this would cost him an additional $1,800 per week or $93,600 per year which would have to come out of his $150,000 salary. That means he’s working 55 hrs per week for $56,400 per year or approx $19 per hr for his 55 hrs per week that he works.

Business profits isn't what the owner makes as personal income. I worked for a guy who thought it all came from his own personal pocket, and he couldn't keeo help, he was always late paying amd he eventually got in a lot of trouble over it.

 

[Revoltingest]

Business profits isn't what the owner makes as personal income. I worked for a guy who thought it all came from his own personal pocket, and he couldn't keeo help, he was always late paying amd he eventually got in a lot of trouble over it.

On top of time running the business,
the owner has a sizeable investment.

 

[9-10ths_Penguin]

Let’s do a little math. The average McDonalds owner makes $150,000 per year working at least 55 hrs per week.

How Much McDonald's Franchise Owners Really Make Per Year - Mashed

McDonald's is the most successful restaurant in the history of the world. How much does a McDonald's franchise owner really make each year?

www.mashed.com

If we assume he has 20 employees who work on average 30 hours per week, that means he pays approx 600 labor hours per week. In order to give each of his employees a $3 per hr raise, this would cost him an additional $1,800 per week or $93,600 per year which would have to come out of his $150,000 salary. That means he’s working 55 hrs per week for $56,400 per year or approx $19 per hr for his 55 hrs per week that he works.

I think you'll find that the franchisee's profits in that case don't include salary. If a franchisee were to work as the store manager, they would get manager salary on top of that.

Edit: and along with this, the franchisee gets special treatment that makes the $150,000 go further than a $150,000 salary from an employer:

• Capital gains get very favourable tax treatment. Here in Canada, only 50% of capital gains are taxable (i.e. $150,000 gets taxed as if it's $75,000); in the US, capital gains tax tops out at 15% (employment income can be taxed at up to 37%). Also, capital losses in one year can be used to offset capital gains in future years.
• A business owner can expense a lot of stuff that a typical employee can't, lowering their tax rate further. For instance, a business owner might expense part of their automobile costs to reduce the business's taxable net income.

... so a franchisee with a declared income of, say, $55,600/y (to use your number) is taking home quite a bit more than a typical employee grossing $55,600/y.

 

[Shadow Wolf]

On top of time running the business,
the owner has a sizeable investment.

Monetary investment, but let's not forget the employees are also investing their time and life into it.
And I'm surprised you didn't pick out that blunder of assuming business profits are the owner's personal income and that business expenses inherently detract the full amount from the owner's personal income.

 

[Revoltingest]

Monetary investment, but let's not forget the employees are also investing their time and life into it.

The owner puts in money & effort.
Employees risk no money, & are paid wages for their labor.
That is not accepting any real risk.

And I'm surprised you didn't pick out that blunder of assuming business profits are the owner's personal income and that business expenses inherently detract the full amount from the owner's personal income.

That's unclear.
"Detract" isn't an accounting term.
"Personal income" is undefined.
Calculating taxes depends upon the form of ownership.

 

[Kfox]

Why would it come out of his salary? Why not, because of all the business, it can’t come out of additional profits?

Actually "salary" was perhaps the wrong word to use. The $150,000 is the amount of profit the store makes, and the $3 per hour would have to come out of the store profits, which is the only payments the store owner gets.,

 

[Kfox]

Your question was: "How about if you are neither rich nor greedy and can't afford to pay someone $18/hour? Should you not hire at all?"

The answer to that question would also be yes. I just find it interesting that there's often a disconnect between different kinds of expenses. For example, if a business goes out of business because of high utilities, high rents, or high gas prices, you hardly ever hear any complaints from the capitalists. They'll usually just make some vague reference to "the economy" being the blame for their failure. This is far different from the hue and cry they make over the minimum wage or taxes, when they virulently blame those things for a business' failure.

$18 per hour is not minimum wage! That is the amount the owner chooses to pay; and if the business cannot afford to pay it, there is no obligation to do so. So if he goes out of business because of this decision he made, it is his fault unlike things outside of his control like high rents, or high gas prices.

 

[Kfox]

If you can't treat you employees ethically, you shouldn't hire them, no.

Paying them $18 per hour has nothing to do with treating them ethically

 

[9-10ths_Penguin]

Paying them $18 per hour has nothing to do with treating them ethically

Paying wages that are so low as to be exploitative are most definitely a matter of ethics.

 

[Kfox]

There are differences of what "basic" is.
If I offer jobs that people take because the
pay is better than all their alternatives, then
this is OK by me.

I was defining basic as what is legal

 

[Kfox]

Business profits isn't what the owner makes as personal income. I worked for a guy who thought it all came from his own personal pocket, and he couldn't keeo help, he was always late paying amd he eventually got in a lot of trouble over it.

Then whose pocket does the business profit go into?

 

[Kfox]

Paying wages that are so low as to be exploitative are most definitely a matter of ethics.

You speak of "exploit" as if it were a bad thing. There is a big difference between mistreat vs exploit. To exploit means to make full use of. It would be foolish to hire someone to do a job without making full use of their labor. What do you find wrong with a manager making full use of the employee's labor?

 

[Kfox]

I think you'll find that the franchisee's profits in that case don't include salary. If a franchisee were to work as the store manager, they would get manager salary on top of that.

So where does the rest of the money go?

 

[9-10ths_Penguin]

So where does the rest of the money go?

Which money? The store revenue?

 

[Revoltingest]

I was defining basic as what is legal

Oh, I pay far above min wage.

 

[Kfox]

Which money? The store revenue?

No; The store profit.