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

[Heyo]

What sort of time frame do you mean by relatively new?

About 70 years ago. The Chicago school of economics had a hand in this.

 

[Heyo]

Evidence for the claim?
I've some familiarity with industrial history,
& have found that profit has always been at
the forefront. Lack of focus on it, & planning
for it has relegated companies to the dustbin.

Like Ford, who's CEO and primary stock owner insisted on paying his workers enough so that they could afford to buy a Ford?

 

[Revoltingest]

Like Ford, who's CEO and primary stock owner insisted on paying his workers enough so that they could afford to buy a Ford?

Ford was all about profit. The strategy you mention
was necessary to attract enuf workers in a rapidly
expanding company & industry. And selling one's
product to employees enhanced profit.
Ford also pursued profit in brutal ways. Ever hear
of his henchman, Harry Bennet?

 

[Heyo]

Ford was all about profit. The strategy you mention
was necessary to attract enuf workers in a rapidly
expanding company & industry. And selling one's
product to employees enhanced profit.
Ford also pursued profit in brutal ways. Ever hear
of his henchman, Harry Bennet?

Yes, Ford was also a fascist or at least had sympathies. But he was an owner-CEO, a thing that was usual then but has come out of fashion now. There are a few and very well noted exceptions, mainly in the tech industries, but they are exceptions.

 

[Firenze]

Pizza Hut Revenue: Annual, Quarterly, and Historic - Zippia

Pizza Hut's revenue is $6.8 Billion - Learn more about Pizza Hut's revenue by exploring their annual revenue, historical revenue, quarterly revenue, and revenue per employee.

www.zippia.com

Yea sure like the chain can't afford to keep its workers. They are barely scraping by!

Your ignorance of how a franchise business works and your amazement with large numbers is why you can't comprehend your error. How much does it cost for someone to buy a Pizza Hut franchise? It's as much as $2 million. That's the investment an individual or family has to make to have the opportunity to make enough money to achieve the financial success they are willing to work for. What Pizza Hut corporate makes has nothing to do with the costs incurred by that franchise owner - and it's the franchise owner who suffers when the minimum wage goes up and their monthly income does not. You think that franchisee is making billions? They're not. So stop pretending that 'Pizza Hut' is just a fat cat CEO. It's also 19,000 hard working franchisees with families they struggle to feed because some cities think a high school dropout needs $20 an hour to deliver pizza and feed their Xbox addiction. Go ahead and whine about the actual fat cats. That's a legitimate issue. But don't tell my daughter that she has to lower her net income for this nonsense.

 

[Revoltingest]

Yes, Ford was also a fascist or at least had sympathies. But he was an owner-CEO, a thing that was usual then but has come out of fashion now. There are a few and very well noted exceptions, mainly in the tech industries, but they are exceptions.

It isn't out of fashion. It's just unusual
because it typically happens when an
ambitious individual forges a large
company into existence.
Did you know of Bennet before I
mentioned him?

 

[Heyo]

Did you know of Bennet before I
mentioned him?

I think I should have, but the name didn't ring a bell. I knew that Ford himself wasn't a friend of unions.
I watched a documentary about the Ford Motor Company some time ago, and the history wasn't roses and sunshine, but it also wasn't a story of only profit motives. Ford actually had other values - the wrong ones, but none-the-less.

 

[Revoltingest]

I think I should have, but the name didn't ring a bell. I knew that Ford himself wasn't a friend of unions.
I watched a documentary about the Ford Motor Company some time ago, and the history wasn't roses and sunshine, but it also wasn't a story of only profit motives. Ford actually had other values - the wrong ones, but none-the-less.

Trivia...
Harry Bennet was such a nasty person that
he feared assault. So his home (about 20 mi
from mine) had features like secret staircases,
with missing steps to trip up would be assailants.

So if one becomes familiar with the history of
commerce, one discovers that there was no
golden age of benevolent CEOs. I argue that
things are actually much improved.

 

[Shadow Wolf]

s also 19,000 hard working franchisees with families they struggle to feed because some cities think a high school dropout needs $20 an hour to deliver pizza and feed their Xbox addiction.

Hate on the poor much?

 

[Valjean]

Stuff like this almost always happens around Christmas and New Years.

These Executives and CEOs certainly love and enjoy pouring salt into people's wounds this time of year.

Stuff like this almost always follows legislation supporting wages and working conditions.
Companies wring their hands and claim "big government" oppression; that they'll be driven to bankruptcy.
They cut back services and/or lay off workers for a couple of years, then adjust to the new reality.

 

[Shadow Wolf]

Trivia...
Harry Bennet was such a nasty person that
he feared assault. So his home (about 20 mi
from mine) had features like secret staircases,
with missing steps to trip up would be assailants.

So if one becomes familiar with the history of
commerce, one discovers that there was no
golden age of benevolent CEOs. I argue that
things are actually much improved.

Yeah. It is a funny myth, isn't it? There were literally shootings between the boss' hired goons and striking workers back in the day. But that some were generous and provided good pay and benefits the entire class became a benevolent savior elevating a group of people to carve out the middle class.
We might as well also believe Bill Gates is a rags to riches story.

 

[Shadow Wolf]

I think I should have, but the name didn't ring a bell. I knew that Ford himself wasn't a friend of unions.
I watched a documentary about the Ford Motor Company some time ago, and the history wasn't roses and sunshine, but it also wasn't a story of only profit motives. Ford actually had other values - the wrong ones, but none-the-less.

I don't know much if Ford, but saying he was a control freak seems that may be a bit mild of a description for him.

 

[Heyo]

I don't know much if Ford, but saying he was a control freak seems that may be a bit mild of a description for him.

I had a boss once who was a cold-blooded capitalist. I liked him very much. He never told me how or when to do my work. He was happy as long as he got his share.

 

[Revoltingest]

Yeah. It is a funny myth, isn't it? There were literally shootings between the boss' hired goons and striking workers back in the day. But that some were generous and provided good pay and benefits the entire class became a benevolent savior elevating a group of people to carve out the middle class.
We might as well also believe Bill Gates is a rags to riches story.

"Rags" can simply mean building from
scratch, as opposed to silver spoon
billionaires like Trump.

 

[9-10ths_Penguin]

Your ignorance of how a franchise business works and your amazement with large numbers is why you can't comprehend your error. How much does it cost for someone to buy a Pizza Hut franchise? It's as much as $2 million.

Technically true, apparently, but misleading if the article @Kenny posted a few pages back is accurate: it gave the range as $350,000 to $2,000,000, depending on the store format and market, with ~$700,000 being the average.

That's the investment an individual or family has to make to have the opportunity to make enough money to achieve the financial success they are willing to work for. What Pizza Hut corporate makes has nothing to do with the costs incurred by that franchise owner - and it's the franchise owner who suffers when the minimum wage goes up and their monthly income does not. You think that franchisee is making billions? They're not. So stop pretending that 'Pizza Hut' is just a fat cat CEO.

Of course.

It's also 19,000 hard working franchisees with families they struggle to feed because some cities think a high school dropout needs $20 an hour to deliver pizza and feed their Xbox addiction. Go ahead and whine about the actual fat cats. That's a legitimate issue. But don't tell my daughter that she has to lower her net income for this nonsense.

Over the past decade, the S&P 500's annual average return has been 12%. Someone with the $2 million you mentioned could have dropped it into an index fund and made $240,000/year doing no work at all.

If someone has that kind of money to invest and works full time running a franchise but "struggles to feed" their family, what the heck are they doing?!

What you're describing is incompetence. If Pizza Hut's franchise model is unaffordable, this is something that they should have recognized ahead of time when doing their due diligence. This is why responsible franchisees hire lawyers and accountants.

And as for delivery drivers and other minimum wage workers, regardless of your low opinion of him as a person, the poverty line is where it is, and somebody working a full-time job but receiving social assistance amounts to a government subsidy of their employer. I'm fine with making sure the franchisee's business doesn't impose undue costs on society.

 

[ImmortalFlame]

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.

Just a few curiosities, here.

Firstly, if profit projections aren't met, surely that's the fault of the projections and the people whose job it is to make them. Certainly not the fault of the employees at ground level. If anyone is out to lose their jobs for such projections not being met, it should be the people who make the decisions that a) lead to those inaccurate projections being made and, b) the management and ownership who made the decisions that lead to failing to meet those projections. And yet, routinely, the bulk of the consequences for these decisions fall on people who aren't even remotely responsible for them. Mass layoffs in instances like this is not a failure of the employees - it's a failure of management and ownership.

Secondly, while this is true, it is also true that companies can meet and exceed profit projections and still lay off hundreds or thousands of staff purely to further inflate the value of the company. We've seen this carried out by quite a number of companies recently, where they will boast about record profits and then lay off thousands of low-level employees anyway while increasing the salary of the upper management and dividends to shareholders. So this is less about whether or not projections are being met, and more simply a case of companies putting profits ahead of its employees.

Thirdly, why can these cost-cutting measures almost never come from, say, slightly reducing dividends or upper management salaries? Why is it easier to terminate thousands of contracts of low-wage employees than it is to, say, remove a zero from a shareholder's pay packet?

The idea that sacking hundreds or thousands of low-level employees is just "a financial reality of corporations" is a fantasy. They can almost always find ways to remain profitable without letting the overwhelming burden of negative consequences of upper management's failures fall on the heads of their workers. They CHOOSE not to.

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.

You're right. They're charities that exist for the sole purpose of ensuring their shareholders continue to rake in exorbitant fees without the threat of any consequence for their own incompetence or mismanagement, and sacking hundreds of low-level employees who now can't feed their families is worth if if it can keep even a single shareholder from ever considering the remotest possibility of simply making a VAST sum of money rather than a RIDICULOUSLY VAST sum of money.

 

[9-10ths_Penguin]

Secondly, while this is true, it is also true that companies can meet and exceed profit projections and still lay off hundreds or thousands of staff purely to further inflate the value of the company. We've seen this carried out by quite a number of companies recently, where they will boast about record profits and then lay off thousands of low-level employees anyway while increasing the salary of the upper management and dividends to shareholders. So this is less about whether or not projections are being met, and more simply a case of companies putting profits ahead of its employees.

And I'd say that this is what's happening here. These large franchisees outsourcing their deliveries to "gig economy" delivery services isn't because of the increase in minimum wage; it's because California exempted these app-based delivery services from normal minimum wage laws.

California set up a separate formula for minimum payments to the drivers of these services, but apparently, the formula allows companies to game the system.

It isn't so much about the hourly rate - the minimum wage for app-based drivers is actually 120% of the general minimum wage for the time that they're driving - but because this outsourcing allows unfair labour practices, such as not paying a driver for the time they're on call and ready to work, but not actually driving.

 

[Kfox]

Because the average driver doesn't actually make that much after expenses.

Everybody I know who does this do it as a second job. If you're doing this as your main job, get another job.

 

[Revoltingest]

Because the average driver doesn't actually make that much after expenses.

And yet....they still choose to do
this instead of other jobs available.
It raises a question...
Why is no other business willing to
offer them something better?

 

[Kenny]

Over the past decade, the S&P 500's annual average return has been 12%. Someone with the $2 million you mentioned could have dropped it into an index fund and made $240,000/year doing no work at all.

If someone has that kind of money to invest and works full time running a franchise but "struggles to feed" their family, what the heck are they doing?!

What you're describing is incompetence. If Pizza Hut's franchise model is unaffordable, this is something that they should have recognized ahead of time when doing their due diligence. This is why responsible franchisees hire lawyers and accountants.

And as for delivery drivers and other minimum wage workers, regardless of your low opinion of him as a person, the poverty line is where it is, and somebody working a full-time job but receiving social assistance amounts to a government subsidy of their employer. I'm fine with making sure the franchisee's business doesn't impose undue costs on society.

This is quite short-sighted - and, IMV

• How many people can now make a living because of someone who worked hard enough to have 700,000 to invest?
• If, like in some cities, things change and they have to close, who looses the $700,000?
• Should the employees of that franchise reap all the benefits and not suffer in the potential losses?
• Should the employee that did not sacrifice anything to make the business run and knows that most likely won’t make it his/her career, is only there to make money until a better opportunity arrises or completes their education to go into that field, somehow be recompensed in such a degree that the investor has to bear all the brunt of the employees desires? (most pizza-hut employees move on to better pastures in under 3 years. It is the employer that assumes all the cost of training.
• Like Chick-fil-A, most workers are young people in transition (a common occurrence for fast foods) - live at the parents home and is trying to make extra money - they are part-time employees
• Full-time, corporate, and management roles are eligible for comprehensive health, dental, and vision insurance packages, as well as 401(k) retirement plans and access to a health savings account or flexible spending account.
• Pizza hut offers educational benefits and a pathway to success.

I couldn’t find the median age.

To me, it doesn’t sound like money hungry capitalists but rather capitalists with a heart rewarding those who want a future in that business and helping those who know they will be only there for a short time.