8 ms·

If it is difficult, then it's not a very good business. Serious question: Why would you want to run a business that can only survive by paying people poverty w

If it is difficult, then it's not a very good business. Serious question: Why would you want to run a business that can only survive by paying people poverty wages?

gl00pp 7y ago
This is America.
- Romanulus 7y ago
  Amen. Imagine having to pay people to answer phones _more_ money.
throwaway5752 7y ago
Every business tries to pay people as little as possible. They are essentially obligated to do so by corporate structure, but just from competing in a free market this is usually the outcome outside of regulation (minimum wage) or collective bargaining. Right now there is a high demand for top end tech talent, but that too will pass, and we'll all see how our employers view us in a lower returns world. Stock options and grant comp is just a question of best outcomes and alignment.
tyri_kai_psomi 7y ago
I don't mean this offensively, but I had to roll my eyes at this one. This is the exact type of question I would expect from a tech startup focused board.
- cosmodisk 7y ago
  It's not a bad question per se. I've met so many people who complain how bad it is for their business because of low margins and etc. For instance, I'd never even consider starting a retail business,as unless you have economies of scale or sell water in the middle of a desert, you'd have to count every penny. However, having said that,I'm more than happy that people start all sorts of businesses,as otherwise we'd all end up selling CDOs to each other...
ryan_j_naughton 7y ago
This is a very naive view of economics. Ideally everyone's income should be derived from the value they generate. So ideally wages continue to rise because productivity continues to rise. But there are many cases where it make more sense to pay 4 low skilled workers to do a job instead of paying the costs of automation plus the cost of the higher skilled worker to use the automated solution. It's why so many jobs in India are still entirely manual labor -- it is simply more cost effective than a more technical, automated solution. My wife works in international developmental economics, and providing jobs to the wide swaths of unskilled labor of the world to incrementally lift them out of poverty is an essential part of economic development. Sure, it would be nice if those people could just leapfrog in their education and consequently their levels of development, but that just isn't realistic. Your comment indicates you are only looking at a very small subsector of the labor market and economy. Not everyone can be software engineers and highly skilled labor in the present.
- TheOperator 7y ago
  Generally I'm keen to believe the externalities of automation are not being passed onto its users. I.E. creating efficiency by taking away people's source of income & turning them into a tax burden. With the minimum wage I suspect a similar effect. The effects increasing wages have on employers red ink doesn't wholly comprehend the positive effect more money in people's pockets has on black ink & overall productivity. A well invested grand in the hands of the poor is DRAMATICALLY more impactful than in a well invested grand in the hands of the rich due to diminishing returns. A company making a new product can deliver more value for society making some wonderful new invention the poor and middle class can spend their income on rather than some out of reach luxury good. This logic by the way underpins the very unpopular around these parts notion of affirmative action.
- AlexandrB 7y ago
  > Ideally everyone's income should be derived from the value they generate. This utterly breaks down at the upper end of income, so why is everyone gnashing their teeth about keeping it intact at the bottom end?
- Sohcahtoa82 7y ago
pbhjpbhj 7y ago
Serious answer: to achieve a particular lifestyle that's not available to you any other way. We ran a pottery studio for 15 years whilst we raised our kids; very low wages, below minimum wage but paid our workers minimum wage (despite not needing to, because of age [in UK]). The market we wanted to serve, a relatively poor UK city, couldn't take higher costs. So to provide that service - which brought us and many others much joy - we could only do it by accepting poverty wages. More money would have been good, but money isn't everything.
- pstuart 7y ago
  Thank you.

If it is difficult, then it's not a very good business. Serious question: Why would you want to run a business that can only survive by paying people poverty wages?

gl00pp 7y ago

This is America.

Romanulus 7y ago
Amen. Imagine having to pay people to answer phones _more_ money.

throwaway5752 7y ago

Every business tries to pay people as little as possible. They are essentially obligated to do so by corporate structure, but just from competing in a free market this is usually the outcome outside of regulation (minimum wage) or collective bargaining. Right now there is a high demand for top end tech talent, but that too will pass, and we'll all see how our employers view us in a lower returns world. Stock options and grant comp is just a question of best outcomes and alignment.

tyri_kai_psomi 7y ago

I don't mean this offensively, but I had to roll my eyes at this one. This is the exact type of question I would expect from a tech startup focused board.

cosmodisk 7y ago
It's not a bad question per se. I've met so many people who complain how bad it is for their business because of low margins and etc. For instance, I'd never even consider starting a retail business,as unless you have economies of scale or sell water in the middle of a desert, you'd have to count every penny. However, having said that,I'm more than happy that people start all sorts of businesses,as otherwise we'd all end up selling CDOs to each other...

ryan_j_naughton 7y ago

This is a very naive view of economics. Ideally everyone's income should be derived from the value they generate. So ideally wages continue to rise because productivity continues to rise. But there are many cases where it make more sense to pay 4 low skilled workers to do a job instead of paying the costs of automation plus the cost of the higher skilled worker to use the automated solution. It's why so many jobs in India are still entirely manual labor -- it is simply more cost effective than a more technical, automated solution. My wife works in international developmental economics, and providing jobs to the wide swaths of unskilled labor of the world to incrementally lift them out of poverty is an essential part of economic development. Sure, it would be nice if those people could just leapfrog in their education and consequently their levels of development, but that just isn't realistic. Your comment indicates you are only looking at a very small subsector of the labor market and economy. Not everyone can be software engineers and highly skilled labor in the present.

TheOperator 7y ago
Generally I'm keen to believe the externalities of automation are not being passed onto its users. I.E. creating efficiency by taking away people's source of income & turning them into a tax burden. With the minimum wage I suspect a similar effect. The effects increasing wages have on employers red ink doesn't wholly comprehend the positive effect more money in people's pockets has on black ink & overall productivity. A well invested grand in the hands of the poor is DRAMATICALLY more impactful than in a well invested grand in the hands of the rich due to diminishing returns. A company making a new product can deliver more value for society making some wonderful new invention the poor and middle class can spend their income on rather than some out of reach luxury good. This logic by the way underpins the very unpopular around these parts notion of affirmative action.
AlexandrB 7y ago
> Ideally everyone's income should be derived from the value they generate. This utterly breaks down at the upper end of income, so why is everyone gnashing their teeth about keeping it intact at the bottom end?
Sohcahtoa82 7y ago

pbhjpbhj 7y ago

Serious answer: to achieve a particular lifestyle that's not available to you any other way. We ran a pottery studio for 15 years whilst we raised our kids; very low wages, below minimum wage but paid our workers minimum wage (despite not needing to, because of age [in UK]). The market we wanted to serve, a relatively poor UK city, couldn't take higher costs. So to provide that service - which brought us and many others much joy - we could only do it by accepting poverty wages. More money would have been good, but money isn't everything.

pstuart 7y ago
Thank you.