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 d-usa wrote:

 easysauce wrote:

You keep claiming that not only can people make 12$/hr for a job that generates 8$/hr, but that determining how much an employee generates is impossible, which is just a flat out lie or total ignorance on your part.

Back in my early college days I was the "maintenance person" at the McDonalds I worked at. I didn't have to cook food anymore, instead each day I mopped the entire store, cleaned baseboards, toilets, brick sidewalks, all the windows, helped off-load the trucks, did inventory, and other crap like that.

How much money did I make the store?

You're effectively a cost center. You generate nothing except potentially avoided liability, and a better atmosphere. You're worth what he can get someone to do it for. If thats too much to be economically efficient, something else will occur.

 d-usa wrote:
So easysauce, since you are an astute businessman:

If you had the choice of making $200,000 or $300,000, would you ever choose to make $0?

You seem under the impression that its never economically viable to shut down. It definitely can be, if you've ever taken any business classes you would know that.

If my running costs get raised, especially in a business with very low profit margins like Fast Food, it is very likely it would be more profitable for me to shut down my business in one area and move to another more profitable area.

I pull out all the equity I have in my current business and use it to start a new one somewhere that will be better.


Automatically Appended Next Post:

 d-usa wrote:

 easysauce wrote:

You keep claiming that not only can people make 12$/hr for a job that generates 8$/hr, but that determining how much an employee generates is impossible, which is just a flat out lie or total ignorance on your part.

Back in my early college days I was the "maintenance person" at the McDonalds I worked at. I didn't have to cook food anymore, instead each day I mopped the entire store, cleaned baseboards, toilets, brick sidewalks, all the windows, helped off-load the trucks, did inventory, and other crap like that.

How much money did I make the store?

There are mathematical formulas which can peg an economic value on any position if you know the variables. Largely taking in the opportunity costs associated with the service, and possibly any fines if you don't do it(like getting fined or shut down by the board of health for having a filthy establishment)

I don't know what the formula would be for your example, but McDonalds knows. And that is what they determined the offered salary for that position from.

And if any particular individual won't personally work that job for that salary then someone else will.

 Grey Templar wrote:

 d-usa wrote:
So easysauce, since you are an astute businessman:

If you had the choice of making $200,000 or $300,000, would you ever choose to make $0?

You seem under the impression that its never economically viable to shut down. It definitely can be, if you've ever taken any business classes you would know that.

If my running costs get raised, especially in a business with very low profit margins like Fast Food, it is very likely it would be more profitable for me to shut down my business in one area and move to another more profitable area.

I pull out all the equity I have in my current business and use it to start a new one somewhere that will be better.

Or, perhaps he went into the business venture with certain goals in mind, made those goals and sold a running/working business to someone who didn't want to have a fresh start? This sort of thing happens a lot as well.

 Grey Templar wrote:

If my running costs get raised, especially in a business with very low profit margins like Fast Food, it is very likely it would be more profitable for me to shut down my business in one area and move to another more profitable area.

Then why would you invest in a fast food business in the first place?

I mean, you have capital, so why place it in an industry with historically low profit margins?

 Grey Templar wrote:

There are mathematical formulas which can peg an economic value on any position if you know the variables.

Such as?

 dogma wrote:

 Grey Templar wrote:

There are mathematical formulas which can peg an economic value on any position if you know the variables.

Such as?

Variables like substitutes for the position, any fine or complications which can result from not doing it, the cost of paying other employees to do it instead, etc...

They're complicated. And without knowing all the specifics I can't even begin to say what the formula might be.

 Grey Templar wrote:

They're complicated. And without knowing all the specifics I can't even begin to say what the formula might be.

Alright, then educate me. Absent any specifics: what would you suppose the basic formulaic model to be?

Ultimately, it would be a cost-benefit analysis using opportunity costs associated with NOT having the jab in question. IE: how much would it cost to not have that position which doesn't directly bring in money.

How many customers would I lose per day if my restaurant isn't cleaned regularly(average lost revenue), What fines might I incur by not following safety regulations to the fullest, what would the cost be to outsource the job instead of having my own employee to do it.

The basic structure would then be a simple addition to figure out the "lost revenue". That then becomes the "revenue" that having that employee will earn you, by not having to pay fines or lose customers for having a dirty establishment. That gives you a figure to work from to develop a salary, you can also reduce the salary depending on how easy it would be to fill the position.


"I would lose 5 customers a day if my restaurant is at a sub-par level of cleanliness at an average of $5 per customer and I might be fined by the board of health($1000 a month). That's roughly $58 a day.

So I'll hire someone to keep my restaurant clean. I'll pay them $7 an hour for them to come in at the end of each day and clean for 4 hours.

Boom, I'm effectively making $30 a day from my cleaning guy.


Very simplistic example.

 Grey Templar wrote:
I agree.

I was responding to someone saying profits(rewards) should be distributed among the lower workers who supposedly made those profits exist.

My mistake, I read your answer as a complete statement instead of simply as a response.

I was showing that they are not responsible for the success of the company, they're largely just cogs in a machine who really could only contribute to its downfall and not its ultimate success.

I'd argue everyone in the company is just a cog in the machine, CEO included.


Automatically Appended Next Post:

 Easy E wrote:
True.

My point was not everyone on minimum wage is a loser who made poor choices. I proposed it as a question like that to try and actually get people to think about the problem so they might lead themselves to an answer instead of just living in their own echo chamber.

However, you nailed it. Our economy has a structural problem with job creation that is only going to get worse due to automation and globalization. If you couple that with a moral assumption that people who work less skilled jobs are losers and idiots you can see the landscape for a very, very challenging future ahead.

I agree it's going to get worse. Though I'd argue the problem is not with robots and automation (which ultimately is just a means of producing more with less labour), but with how an economy built around work=pay deals with the reality that we are rapidly needing less and less of our working age population to produce goods.

The issue is how our culture deals with a new economic reality.

 Grey Templar wrote:

"I would lose 5 customers a day if my restaurant is at a sub-par level of cleanliness...

How would you determine this?

 Frazzled wrote:
Just because you don't like math doesn't make it stupid. If you can't win the argument go for insults. EDIT: And why the hostility here? This is a fundamental economic argument that goes on daily, globally. No reason for the hostility..DORK!

The hostility is there because we've had this debate on dakka about a dozen times now, and the same bs gets repeated every time. And when the arguments are stupid enough that they cause an eyeroll the first time around, by the 12th thread they get more than a little annoying.

Its all about the numbers. Cry blah blah all you want, but the numbers are the only thing that matters.
Less people will be employed. If you think thats ok, cool, but its a value judgement. You're ok with more unemployed people.

Well. fething. Duh.

The issue, as I've already explained in this thread and every other thread, is the balance between improving the lives of people in minimum wage jobs, against the cost of those who lose their minimum wage jobs. ie if raising the minimum wage by $1 would cost just 100,000 jobs across the country, then the juice is worth the squeeze. If it would cost 3,000,000 jobs, then it probably wouldn't be. And the way to determine that is with the best estimates made by experts, followed with a judgement call about how much of an increase the cost in jobs is worth.

 sebster wrote:

 Frazzled wrote:
Just because you don't like math doesn't make it stupid. If you can't win the argument go for insults. EDIT: And why the hostility here? This is a fundamental economic argument that goes on daily, globally. No reason for the hostility..DORK!

The hostility is there because we've had this debate on dakka about a dozen times now, and the same bs gets repeated every time. And when the arguments are stupid enough that they cause an eyeroll the first time around, by the 12th thread they get more than a little annoying.

Then maybe you should quit posting on the topic.

I think the highest min. wage in the world right now is equivalent to about $25 and hour.

 easysauce wrote:
Sorry, no, you are just wrong, im sure you are used to professing things without being challenged, but you are talking out your butt on this one...

Actually, I'm quite used to explaining basic things to people over and over again. It's pretty much what I do on dakka.

I have owned franchises, so has my GF, so have countless other peopl, and thats exactly what happens: You apply a formula for each worker, and using projected or recorded figures you determine how much you pay your janitor, cashier, pharmacists, managers and so on and so forth.

Mwahaha! Yeah, so please explain the formula you use to determine the units produced by the janitor and the economic value of each of those units. I mean, seriously, because all this time I've been working in a profession where we thought you could only do activity based costing for jobs with identifiable quantities produced and value for each quantity. You could revolutionise my profession. You could be our Newton.

But please, do keep telling me that the actual processes that I have used while owning businesses,

I really love the thing where people say they own businesses, and then just assume they know all about business. Just all of... business. Every bit. Running a Wendy's or whatever franchise it is you bought somehow means that you gain a complete knowledge of activity based costing and where it can and can't be applied.

It speaks volumes to your lack of actual experience that you keep arguing that jon can grow one apple, but eat two each day, and that its impossible to determine how many apples he grows a day.

Umm, yeah, if it's apple trees then you can track the units produced and the value of each unit produces. That's easy - a guy picks 50 apples and they're worth 50c each, the guy produces $25 (less overheads costs). But what's the value of the guy who maintains the watering system for 5,000 trees? Please tell me with your awesome formula that you totally have how you can meaningfully assess the difference between a well maintained and a perfectly maintained watering system, in both water lost and extra production, and then tell me how you assess exactly where your maintenance guy sits on that process.

It is the vast minority of jobs that cannot be assessed for how much revenue they generate for the company

Yeah, that's completely false. The only jobs where you can directly track value adding is where there's an immediately produced quantity for which they alone are responsible, when that quantity can be assessed for its value. Which is actually very jobs. Manufacturing and sales you can do it, and lots of frontline service delivery. Even all of those can get screwy when you start getting clever with overheads, but in the companies where it best applies its never anywhere near half the workforce, and those companies are only a fraction of all companies.

and not a single one of those jobs is frontline min wage workers.

The guy who takes the order at McDonalds? His productivity is dependant on customers entering the store. The guy who makes the burgers, again dependent on customers coming through the door. Track their production and all you've actually produced is a list of how many people came in the store that day. And that's one basic example, when you claimed no minimum wage jobs fit the criteria. Seriously, you have no fething clue what you're talking about.

You are also OK with firing one person at 8$/hr to pay 2 people 12$/hr instead of 8/hr... which is a judgment call, you are ok with it, thats fine.

Claiming its benificial economically, is wrong.

As I've said a few times now, it depends on the size of the increase compared to the number of jobs lost.

But please, do tell me how many franchises or businesses you have owned, and how many millions/billions of dollars of corporate assets you deal with on a regular basis.

90 million right now. My last job was 600 million, though I was one of a team of 3 there.

But claiming that meant anything would just be internet dick swinging, and as pointless as your 'I own franchises' silliness. Baseless claims of expertise are a waste of electrons, because no-one gives a gak. What actually matters is the quality of the argument you can put. How informed your posts are. And simply put, on this subject you post complete and utter nonsense.


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 Frazzled wrote:
Then maybe you should quit posting on the topic.

Or people could learn from past threads, and develop more sensible opinions on the subject.

I wonder which of our two options will happen first?

Maybe they have learned, but you haven't?

 Grey Templar wrote:
Ultimately, it would be a cost-benefit analysis using opportunity costs associated with NOT having the jab in question. IE: how much would it cost to not have that position which doesn't directly bring in money.

And that analysis would be so hopelessly mired in assumptions and guesswork that it would end up saying nothing about reality and only about the guesses made in the model. At which point you're just better going on an actual guess than building an elaborate model based guess. I mean, the examples you gave where you tried to cost the decrease in clients as a result of some amount of untidiness is farcical. It can't be done. It would just be people making up numbers.

Which is why that example you give is far removed from any real world ABC. Well, there was kind of a period of chronic over-reach in the 90s where people got really imaginative with their costings, but I wasn't in the job at the time so I've only heard about from other people. But the examples they give, that get people laughing, are nothing like as fanciful as estimating the number of reduced customers you'd expect from a store being some measure of less clean.

 sebster wrote:

 Grey Templar wrote:
Ultimately, it would be a cost-benefit analysis using opportunity costs associated with NOT having the jab in question. IE: how much would it cost to not have that position which doesn't directly bring in money.

And that analysis would be so hopelessly mired in assumptions and guesswork that it would end up saying nothing about reality and only about the guesses made in the model. At which point you're just better going on an actual guess than building an elaborate model based guess. I mean, the examples you gave where you tried to cost the decrease in clients as a result of some amount of untidiness is farcical. It can't be done. It would just be people making up numbers.

Which is why that example you give is far removed from any real world ABC. Well, there was kind of a period of chronic over-reach in the 90s where people got really imaginative with their costings, but I wasn't in the job at the time so I've only heard about from other people. But the examples they give, that get people laughing, are nothing like as fanciful as estimating the number of reduced customers you'd expect from a store being some measure of less clean.

Weather you believe it or not, it is possible to estimate how many people will not walk through your doors and make a purchase if you don't keep the store clean.

Yes its an estimate, but its a good one. Things get done based on guesswork and assumptions all the freaking time, at least in this case they are very solid guesses.

Like I said, it was only an example. I don't know the specifics of how a job like that gets it wage determined, I'm only partway through getting my business degree. But I do know that these formulas exist and the basic concept behind what goes into them.

Any part of business can have a value attached to it, you need to accept that. Its really why many businesses are successful. You can be assured that Walmart knows exactly what their janitors are worth to them per hour, they're not just paying them an arbitrary figure.

 Grey Templar wrote:

Any part of business can have a value attached to it, you need to accept that. Its really why many businesses are successful. You can be assured that Walmart knows exactly what their janitors are worth to them per hour, they're not just paying them an arbitrary figure.

They're paying them the absolute least they can, given legal restrictions and the janitor's leverage to command higher pay. Even assuming they've got some miraculous ability to peg the exact business value of a Janitor, that's isn't what they're going to pay. They're going to pay the figure closest to zero they possibly can, regardless of how that relates to the magic number.

No, they figure out his value and from that work out what his pay is, also including how little they can pay and still fill the position while also following any laws they have to figure. If that comes out to minimum wage or just a little above it that is what they pay him.

If he ends up being more, he gets paid more. Janitors aren't worth a whole lot as it turns out, largely because its not hard to fill the position. That depresses what he gets paid.

If it was very hard to get people to work as a janitor, they'd get paid more(up to the maximum the company figures they're worth)

 Grey Templar wrote:
No, they figure out his value and from that work out what his pay is, also including how little they can pay and still fill the position while also following any laws they have to figure. If that comes out to minimum wage or just a little above it that is what they pay him.

If he ends up being more, he gets paid more. Janitors aren't worth a whole lot as it turns out, largely because its not hard to fill the position. That depresses what he gets paid.

If it was very hard to get people to work as a janitor, they'd get paid more(up to the maximum the company figures they're worth)

Using this model, how oes it account for the difference in pay rates between men and women?

Gender could be simply another factor in determining the pay, an illegal one to be sure.

 sebster wrote:

I really love the thing where people say they own businesses, and then just assume they know all about business. Just all of... business. Every bit. Running a Wendy's or whatever franchise it is you bought somehow means that you gain a complete knowledge of activity based costing and where it can and can't be applied.

Speaking from personal experience: the majority of small business owners have more chutzpah than intelligence, hence the high rate of failure.

 dogma wrote:

 sebster wrote:

I really love the thing where people say they own businesses, and then just assume they know all about business. Just all of... business. Every bit. Running a Wendy's or whatever franchise it is you bought somehow means that you gain a complete knowledge of activity based costing and where it can and can't be applied.

Speaking from personal experience: the majority of small business owners have more chutzpah than intelligence, hence the high rate of failure.

At least they're taking that risk... as such, if successful... the reward should be meaningful.

 dogma wrote:

 sebster wrote:

I really love the thing where people say they own businesses, and then just assume they know all about business. Just all of... business. Every bit. Running a Wendy's or whatever franchise it is you bought somehow means that you gain a complete knowledge of activity based costing and where it can and can't be applied.

Speaking from personal experience: the majority of small business owners have more chutzpah than intelligence, hence the high rate of failure.

Often because they aren't doing the math.

They might pay workers the right amount by the math(simply by copying successful businesses) but hire too many of them. They also tend to get killed in overhead.

Market research also is a failing.

 Grey Templar wrote:

Weather you believe it or not, it is possible to estimate how many people will not walk through your doors and make a purchase if you don't keep the store clean.

But you can't do it marginally, which is what you implied by backing easysauce's "formula" concept.

While it is possible to quantify cleanliness, the cost would be absurdly high; removing it from the realm of itemized formulas small businesses can use.

 Grey Templar wrote:

Often because they aren't doing the math.

They might pay workers the right amount by the math(simply by copying successful businesses) but hire too many of them. They also tend to get killed in overhead.

Market research also is a failing.

So, stupidity. I mean, I could be polite, but that is the reality of the situation.

 whembly wrote:

At least they're taking that risk... as such, if successful... the reward should be meaningful.

Why?

 sebster wrote:

 Frazzled wrote:
Just because you don't like math doesn't make it stupid. If you can't win the argument go for insults. EDIT: And why the hostility here? This is a fundamental economic argument that goes on daily, globally. No reason for the hostility..DORK!

The hostility is there

I agree, and still is coming from you, so maybe take a break.

Being polite is not optional, seriously, you are just being insulting and aggressive at this point with a very "im right, your wrong" *repeat* attitude.

Despite your assertions that all the arguments/points you dont like are "BS", they are not.

You claim repeating simple stuff to people is not only your hobby on dakka, but most of your job.

However endlessly repeating your position does not make it correct or valid.

You already have an answer to "how do jobs that dont directly "produce" anything get factored in?" since it is econ 101, has been repeated in this thread.

If there is a job that doesnt directly generate income, its a cost of doing business. How necessary that role is to the business, the cost of turnover in workers, the scarcity of the skills, and other factors contribute to determining how much the hourly is.

No harder to calculate then your gas bill, despite you not being able to quantify how much gas benefits you, it still gets a price put on it. Qualitative factors are used to determine things as well, not just quantitative, so if you dont understand how things work and literally want a X+Y=Z formula for everything, you will be sorely disappointed as that is not how the world works.

Which is why you can have a new MC'ds janitor at min wage every few months, but a hospital janitor will usually make more and stay there for many years, despite both roles "producing" the same thing, namely a clean environment.

I really love the thing where people say they own businesses, and then just assume they know all about business. Just all of... business. Every bit. Running a Wendy's or whatever franchise it is you bought somehow means that you gain a complete knowledge of activity based costing and where it can and can't be applied.

Sorry where does your deep knowledge of business come from again?

 dogma wrote:

 sebster wrote:

I really love the thing where people say they own businesses, and then just assume they know all about business. Just all of... business. Every bit. Running a Wendy's or whatever franchise it is you bought somehow means that you gain a complete knowledge of activity based costing and where it can and can't be applied.

Speaking from personal experience: the majority of small business owners have more chutzpah than intelligence, hence the high rate of failure.

so the majority of small business owners are stupid, but brave? and generally lose all their money?

but at the same time are just raking in the dough, so they have no excuse for paying min wage?


that makes sense

 easysauce wrote:
so the majority of small business owners are stupid, but brave? and generally lose all their money?

well...

Not seeing where that link says what you think it says.

 easysauce wrote:

Being polite is not optional, seriously, you are just being insulting and aggressive at this point with a very "im right, your wrong" *repeat* attitude.

A statement which is also hostile, and aggressive, and was followed by more hostile aggression.

 easysauce wrote:

so the majority of small business owners are stupid, but brave? and generally lose all their money?

but at the same time are just raking in the dough, so they have no excuse for paying min wage?

When did I ever make the latter argument?

Anyway, yeah, that's the case; statistics bear it out.