PBS minimum wage documentary with Tavis Smiley

[Mr Nice]

Quote:
Getting Ahead focuses on the reality being faced by both small business owners and employees. Small business owners such as Sal Bednarz, owner of Actual Café, who is an outspoken supporter of increasing the minimum wage but now worries that his very slim profit margin may not be sustainable; Asiya Jabaar, director of a small state accredited day care center, who is reducing her full time staff to one part-time worker and is concerned that as a teacher she is being priced out of keeping her day care center open; Oakland’s Chinatown merchants who express concern that they cannot raise their prices to keep pace with paying mandated salary increases; Nina Cooper of Nina Cooper Designs who is convinced that a possible $19 an hour minimum wage in Berkeley will destroy small businesses; and Sam Mogannan, who owns Bi-Rite Markets and Catering and has over 300 employees who knows that he can only raise his prices so high before he looses customers.

http://www.pbs.org/wnet/chasing-the-dream/uncategorized/about-getting-ahead/


I just watched this show about the minimum wage and the cafe owner only has a 3.5% profit margin and had to let go of his bookkeeper at cafe and the cleaning crew he contracted to clean his cafe, now the staff does all the cleaning.

I understand low skilled workers wanting (needing) higher wages to live in California.
What I don't understand is way take on so much risk and financial liabilities for such a small profit margin ?

Watch the segment if you get a chance, even in Chinatown some stores are closing due to the costs to keep a business open and make a profit. Easy for some non business owners to want $15+ an hour minimum wage but don't realize what's necessary to keep a business running.

 

[hatt]

Unemployed people are good for business, if your business is .gov.

 

[Andy636]

Originally Posted By: Mr Nice
even in Chinatown some stores are closing due to the costs to keep a business open and make a profit. Easy for some non business owners to want $15+ an hour minimum wage but don't realize what's necessary to keep a business running.





Why are only "some" stores about to close? Isn't the minimum wage the same for every store?

If you want to cut back on operating costs why doesn't the owner do the cleaning?

If you ask me both parties (the employers and employees) are screwed in the head these days;

Many of the employees have no more work ethnics and all they want to do is punch in for 8h/day and do effall except texting/snapchat and sit on their [censored] with the occasional blaming someone else for their screw-ups.

Many of the employers on the other hand are borderline incapable of distinguish between good loyal hard working employees and the ones mentioned earlier. I've seen a lot of folks getting fired after working 5-10 years at the same place, just so that the owner can save some money by hiring a guy incapable of using a pencil sharpener

 

[goodtimes]

So what is your solution in CA, rent control? There is something wrong where people have to pay more in rent than they can make. Not the way people should have to live. I wouldn't want to.

 

[dishdude]

The minimum wage is something that should be set locally as the COL varies greatly across the country. If the viability of a business relies on slave labor, something is wrong.

 

[daves87rs]

This one is tough because there are a lot of factors here...


It depends on the COL where you live, and the size of the company. Small businesses should not have to pay the same as larger companies do. If you're listed on the DOW, my thought is you can afford some increases. If you have three people, then high "jumps" would be dumb.

The biggest issue here overall is that more jobs are needed (not like the cuts going now) so that we don't have to worry about those in lower paying "starter" jobs. So either we need to be like China so you can be approved to have a kid, or we need to find a balance where profit and jobs can meet. One where people can actually afford to buy these products being made. We need to reteach the line where we can make money as a company, but be responsible for positive actions for our country as well. We were able to strike that balance years ago, and the only way the US will survive is if it happens again. Or the extreme rich and poor will simply soon battle it out......

 

[daves87rs]

Originally Posted By: hatt
Unemployed people are good for business, if your business is .gov.


And controlled....

 

[PandaBear]

It really depends.

There are a lot of jobs paying higher than minimum wage, even the unskilled ones. There are lots of cost that can force the cafe owner here to fire employee because the profit becomes loss, like rent, utility, insurance, weather, coffee cost, etc.

Will you blame the insurance company or PG&E if they raise the price? As a business owner he or she is responsible for forecasting and managing the budget. Not every business can make money and you have to cover your own.

That's why full service restaurants disappear and fast-casual chains pops up, or the restaurants owners serve their own table and hire people to cook.

When people need to make $60k to survive at near poverty level and $160k to buy a home in an area, I don't get all the whining about $19 minimum wage, from people outside the area.

 

[PandaBear]

Background info:

My daughter's daycare had 2/3 of the entire faculty quit and moved into other states in 2 years because it is expensive to live in the area, and they are paid above minimum wage.

At my new job, 1/2 of my remote teammates were originally from this area, making 6 figure, but cannot afford to rent a 2 bedroom apartment with only 1 income in the household and 2 young children. It is only obvious that the high housing cost is the problem, not the minimum wage.

 

[02SE]

Originally Posted By: Mr Nice

What I don't understand is way take on so much risk and financial liabilities for such a small profit margin ?


I'd say it's obviously because the Owner has determined that his small profit margin is still better than his present alternatives.

 

[Pop_Rivit]

Originally Posted By: Mr Nice

What I don't understand is way take on so much risk and financial liabilities for such a small profit margin ?


There are a lot of people who start or buy a business that don't have any idea what it takes to actually run a business, and they don't understand that some businesses such as corner grocery stores or mom and pop restaurants rarely generate enough revenue to make a large net profit. There are also a lot of business owners who don't understand how to manage costs, nor do they understand how to generate new revenue in a manner that actually increases net profits as well as gross profits.

Some business owners are content with a business that isn't much more than a minimum wage job; there are quite a few small retail specialty shops, restaurants and bars that will never be more than marginally profitable. But then there are also plenty of business owners who understand that a business has to be actively managed, and know how to grow a business in a sustained manner, as well as have the proper systems in place to control costs. When done right it can be a very profitable business.

Personally I think the local economy should drive the minimum wage, not government. I also think the minimum wage should be viewed as an entry level wage or an extra income wage, not as a wage to make a living on. Everyone has the ability to better themselves and find better paying jobs; some simply choose not to do so and prefer to rely upon someone else to give them a raise.

 

[Shannow]

I think that the words that you were looking for are "sustainable" (vs sustained), and "performed correctly" (vs "done right").

but you are right, you can always better your grammar

 

[dlundblad]

Originally Posted By: Mr Nice
What I don't understand is way take on so much risk and financial liabilities for such a small profit margin ?


Good question. A trip to the local mall makes me really scratch my head.

I have mixed emotions about this sort of thing. Good for them starting a business and you really want to see them prosper, but if the store sells a low demand good or service, what were they thinking? There's lots of risk involved in starting a business.

 

[eljefino]

What "they" are trying to do is to raise the floor of the amount of money the minimum wage earner has to spend. Instead of subsidizing them with the Earned Income Tax Credit or free government health care they're angling to have low level employees actually get the money they need to live from their employer instead of "the rest of us".

The employers complaining about paying an extra couple bucks aren't looking at the big picture of their customers having more money to spend as well. We need to narrow the delta between the top 1% and bottom 20% before the pitchforks come out, and taxing the top 1% any more isn't feasible.

 

[DoubleWasp]

The situation is simple: Money flies into the real estate market, it does not fly into the local economy, and it does not create new jobs.

Businesses are suddenly confronted by rising costs, people are suddenly confronted by rising housing costs, and snatching food out out of the mouth of the struggling businesses to give to the struggling people does not work.

It's a completely degenerative condition.

Raising the minimum wage does nothing to get money out of those who are not employers and have no interest in participating in the local economy. It also places the less profitable employers at serious risk.

So the money that flies in and drives up everyone's costs does nothing but sit up on a high shelf, or go laterally from place to place. But rarely down.

 

[DoubleWasp]

Originally Posted By: eljefino
What "they" are trying to do is to raise the floor of the amount of money the minimum wage earner has to spend. Instead of subsidizing them with the Earned Income Tax Credit or free government health care they're angling to have low level employees actually get the money they need to live from their employer instead of "the rest of us".

The employers complaining about paying an extra couple bucks aren't looking at the big picture of their customers having more money to spend as well. We need to narrow the delta between the top 1% and bottom 20% before the pitchforks come out, and taxing the top 1% any more isn't feasible.


Agreed.

Somehow, that money needs to come from the people who are driving the costs up.

 

[OneEyeJack]

The more that jobs go offshore the more contentious the minimum wage debate becomes.

In California minimum wage workers are often times on limited schedules so that employers can avoid paying benefits. This is evidently one of the intended consequences of Obamacare. People stay on welfare because they can't risk hourly cutbacks or taking a pay cut.

A landscaper here started paying piece work, that is pay for tasks instead of by the hour. Withing the year he was doing two to three times the jobs and his employees are earning at least double the minimum wage they were earning before and now he pays their health insurance which he never did, before. He also pays a cash bonus for jobs well done. He did have to hire a lawyer to write contracts for all this and fend off the government trying to interfere because a few employees quit and a couple of them filed complaints with the labor board. One employee complained that others made more money just because they produced more work and accepted overtime work. His claim was that everyone should be paid the same no matter what. The rest of the employees really like the new system and the employer is now able to expand because he has people waiting in line for jobs. Employees have formed teams of 5 to 10 people and take care of specific jobs. The team has a lead man that deals directly with the customer and coordinates work with their boss. Team leaders are being trained in management skills and get paid a fee over the piece work and a commission for new work which they share with team members. There is even a maintenance and repair guy now and they are looking for a shop location other then the landscaper's garage.

The landscaper told me his focus is on maximum wages, not minimum wages. Another benefit of this is that employees that just want to get along and maybe sandbag don't hang around. It eliminates all the hassle of terminating someone with all the trouble that can follow.

This landscaper might be smarter than some of our politicians.

 

[fdcg27]

Originally Posted By: eljefino
What "they" are trying to do is to raise the floor of the amount of money the minimum wage earner has to spend. Instead of subsidizing them with the Earned Income Tax Credit or free government health care they're angling to have low level employees actually get the money they need to live from their employer instead of "the rest of us".

The employers complaining about paying an extra couple bucks aren't looking at the big picture of their customers having more money to spend as well. We need to narrow the delta between the top 1% and bottom 20% before the pitchforks come out, and taxing the top 1% any more isn't feasible.


We are living in an era of extraordinary concentration of net worth and share of national income in the top 2-3% of the distribution.
This is neither politically nor economically sustainable and played a major role in the depth, breadth and duration of the last recession as well as the slow recovery from it.
There are no easy answers but the economic costs of supporting the working poor are borne by all of us, not just the small businesses that offer below survival level wages.