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

[Koldo]

I was speaking as a general rule.

Why would a company's stock prices go down due to paying better wages?

Because it makes the company less profitable.

 

[Stevicus]

You know you're free to start your own company and employ your own workers, yes?

People can be outraged and whine all day on an Internet forum about how uncaring and mean shareholders and big businesses are, but how many of you are actually doing anything about it?

A fair question, although my observation has been that, when people or governments do try to "do something about it," it then becomes the big businesses and shareholders who are outraged and whine all day on the internet. The end result is that there's no room for compromise or negotiation, which may be acceptable in the economic and business sphere, but in the political sphere, it can lead to disorder and chaos.

 

[SalixIncendium]

Because it makes the company less profitable.

And a less profitable company reflects suffering financial health and reduced stock prices. This impacts the company's ability to acquire loans for maintaining and expanding their operation, and can lead to the need to close less profitable locations resulting in job loss.

 

[Koldo]

And a less profitable company reflects suffering financial health and reduced stock prices. This impacts the company's ability to acquire loans for maintaining and expanding their operation, and can lead to the need to close less profitable locations resulting in job loss.

A less profitable company with reduced stock prices doesn't necessary entail suffering financial health. Not being able to expand has little impact on the current existing jobs. A need for new loans to maintain operation though is a red flag.

 

[Koldo]

A fair question, although my observation has been that, when people or governments do try to "do something about it," it then becomes the big businesses and shareholders who are outraged and whine all day on the internet. The end result is that there's no room for compromise or negotiation, which may be acceptable in the economic and business sphere, but in the political sphere, it can lead to disorder and chaos.

What they don't realize is that it is exactly the compromise that keeps communism at bay.

 

[Revoltingest]

If they can't pay their workers a decent wage they deserve to go under.

If workers are there because it's the best
job for them, do they also deserve the
company's shut-down, & loss of job?

 

[Twilight Hue]

---

A less profitable company with reduced stock prices doesn't necessary entail suffering financial health. Not being able to expand has little impact on the current existing jobs. A need for new loans to maintain operation though is a red flag.

It definitely is. Excessive loans means the company is over expanding and some CEOs are actually in the business of making profits at any and all costs. Then they run the company right into the ground after making a mint for shareholders and themselves, and then run away with the golden parachute to go and do the same exact things to another company.

 

[Estro Felino]

With all due respect...but in my country...I can't even imagine how many €€€€€€€ these restaurants would have had to pay as compensations...
keeping them would have been less expensive.

and by the way are we sure isn't it just a pretext?
Most employees would have accepted the company's old contract terms.

 

[Stevicus]

A less profitable company with reduced stock prices doesn't necessary entail suffering financial health. Not being able to expand has little impact on the current existing jobs. A need for new loans to maintain operation though is a red flag.

I think of corporations as mini-democracies, comprised of shareholders electing the board of directors who hire the executives to run the company. They have their own "government" and chain of command. Therefore, we are essentially looking at a political process at work. Some people try to paint it as if it's objectively (albeit coldly and heartlessly) rational and simply a matter of "doing the math." However, economics is a social science, which puts it more in the realm of politics than in the realm of mathematics or any of the hard sciences.

Stock prices fluctuate based on people's varying beliefs as to whether a stock is going to increase or decrease in value. I've heard it said that, if there's more greed than fear, stock prices go up, and if there's more fear than greed, stock prices go down.

Another example I find personally amusing is, every so often, I see a news story about some vintage bottle of wine being auctioned and sold for millions of dollars. Nobody is going to drink this wine, and yet it's passed around, sold and resold, each time with the seller making a profit. I could go down to the store and get a bottle of wine for $5 or $10, but there are people paying millions of dollars for a bottle of wine they will never drink. That's..."economics."

 

[Twilight Hue]

Another thing that I'm not sure everyone here understands...

Revenue is not profit. Revenue is gross sales, from which every business expense comes out of...COGS: product cost, labor, marketing, rent, etc. are taken from this.

So 6.8 billion dollars in revenue means nothing without understanding a company's expenses.

Yeah for expenses like CEOs who aren't already making enough money for their take to the point where it's equivalent to winning the multi million doller lottery each and every year while the gap between worker pay and management pay gets worse year after year.

The CEO of General Moters grabs 40% increase in his pay for himself and the workers say no no not this time, and resulted in the United Auto Workers striking, sending the stark message that blue collar workers are not commodities and "units of labor" and without them there, he's absolutely nothing.

I think that sends the message to business to expect more of that and in fact they are already planning for the next strike.

https://edition.cnn.com/2023/11/04/business/uaw-next-auto-strike/index.html

 

[Estro Felino]

If workers are there because it's the best
job for them, do they also deserve the
company's shut-down, & loss of job?

The mysteries of this religion called Unbridled Capitalism.

That is, a Capitalist invests 100,000 euros in a business, and thanks to the work of 4 employees who cost him 100, 000 euros a year, he gets a 2 million euros revenue a year.

But he gets the 2 million. The employees just 25,000 each.

Very nice
Mystery of Faith. Amen.

 

[It Aint Necessarily So]

if it wasn't for the workers, the company wouldn't even be able to function. I think it's high time to show some respect that the success isn't from the upper echelon tier alone and they are not the only ones that make a company functional and profitable. It's also a time for a trickle up economy because I found out why a trickle down economy doesn't work.

In the past, you've complained repeatedly about oppressive government mandates, socialism, Communism, and Marxism. Now, you're declaiming a business for its profit-motivated decisions and seem to support a significant minimum wage increase undoubtedly the work of Democrats, taking the worker's side against management, and rejecting trickle-down economics. That's fascinating. How do you account for these two sets of opinions? Have you changed your position and moved left? Were you always that empathetic but were repeating conservative memes anyway?

Whatever the answer, welcome aboard.

 

[Twilight Hue]

In the past, you've complained repeatedly about oppressive government mandates, socialism, Communism, and Marxism. Now, you're declaiming a business for its profit-motivated decisions and seem to support a significant minimum wage increase undoubtedly the work of Democrats, taking the worker's side against management, and rejecting trickle-down economics. That's fascinating. How do you account for these two sets of opinions? Have you changed your position and moved left? Were you always that empathetic but were repeating conservative memes anyway?

Whatever the answer, welcome aboard.

Oh that's easy. it's because it's gone into extremes now and I only turn 'socialist' when things go too far into the extreme to bring it back into balance. Then I go back into being a capitalist when things are back to a proper equilibrium.

Same is true when things go in the opposite direction where I'm a stout right wing capitalist standing up for the corporations.

 

[9-10ths_Penguin]

So no qualifications. Got it.

Companies are expected to make a profit and have sales and profit projections that are reflected in P&L statements are presented to stockholders. Failure to make those projections result in loss of jobs, and more importantly drops in stock prices which may lead to failure of companies.

As much of a shock it may be to you, companies aren't charities that are in business for the sole purpose to keep people working.

But Pizza Hut is going to continue to offer delivery service, only through third-party services.

In California, "gig economy" delivery services have their own minimum wage law: they have to pay drivers 120% of the normal minimum wage, but only for time spent driving.

If they can make more profit by switching from in-house delivery to services like Door Dash and Uber Eats, this suggests to me that either:

- the state government got the balance wrong between the general minimum wage and the delivery driver minimum wage, or

- the change is happening for other reasons and minimum wage is just the excuse. Maybe outsourcing delivery drivers is to mitigate some of the risk and expense from restaurants unionizing, for instance.

 

[It Aint Necessarily So]

Oh that's easy. it's because it's gone into extremes now and I only turn 'socialist' when things go too far into the extreme to bring it back into balance. Then I go back into being a capitalist when things are back to a proper equilibrium.

Same is true when things go in the opposite direction where I'm a stout right wing capitalist standing up for the corporations.

OK. Interesting answer. So you consider Pizza Hut's response extreme? Pizza Hut's response is basic capitalism - to make changes to improve the bottom line without regard for the community or workers. Businesses that do more than that for their customers or employees do so for other reasons, and those are generally going to be smaller businesses - the kind where owners have to look such people in the face, or where they take pride in the product and service they offer.

 

[libre]

If workers are there because it's the best
job for them, do they also deserve the
company's shut-down, & loss of job?

I mean you could make the same argument against any minimum wage laws. Are you against such?

 

[Shadow Wolf]

Those businesses which genuinely care about their customers and their employees can be expected to offer a better service and a better product, than their rush-to-the-bottom competitors.

Crap products often to better. I've been several places that are basically permanently always hiring. Rush to the bottom hasn't prevented one of them from their plan of rapid expansion. They're still around a top company.
Or we can look at Tesla, where Musk abused his workers and well demonstrated he's an incompetent and crappy manager, and he made many unethical and dangerous decisions that have endangered the public (and hence the lawsuits) but it's the most popular electric car.

 

[Shadow Wolf]

You know you're free to start your own company and employ your own workers, yes?

People can be outraged and whine all day on an Internet forum about how uncaring and mean shareholders and big businesses are, but how many of you are actually doing anything about it?

I'm a shareholder who shouldn't actually get a vote, as isbthe case with most, because I don't know anything about running a company like Microsoft. It should be Microsoft charged with running Microsoft and making Microsoft into a good company. It shouldn't ever be like Dollar Tree where shareholders pressured the company into raising prices. They don't work there, they don't run it, they can shut the **** up and let those who do decide those things because it's not their business. Shareholders aren't gods.
Amd what do I do? Well for one I'm in the process of getting my own business going, so shutting down that "you're free to" thing.

 

[Shadow Wolf]

If workers are there because it's the best
job for them, do they also deserve the
company's shut-down, & loss of job?

Lots of them it's probably not the best for them but what they can get.

 

[SalixIncendium]

I'm a shareholder who shouldn't actually get a vote, as isbthe case with most, because I don't know anything about running a company like Microsoft. It should be Microsoft charged with running Microsoft and making Microsoft into a good company. It shouldn't ever be like Dollar Tree where shareholders pressured the company into raising prices. They don't work there, they don't run it, they can shut the **** up and let those who do decide those things because it's not their business. Shareholders aren't gods.

That's not how businesses work. You may be confusing shareholders with the board of directors. The only voice shareholders really have is buying or selling their stock. The are not active in making company decisions. That's the job of the board of directors.

Amd what do I do? Well for one I'm in the process of getting my own business going, so shutting down that "you're free to" thing.

Good for you! I hope it's a success. Not a topic for this thread, but I'd like to know more about it whenever you feel like sharing.