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They invest their time and effort which is far more valuable in human terms
originally posted by: seasonal
a reply to: TheRedneck
...The only numbers that matters to an investor is next quarters huge gains, period.
originally posted by: TheRedneck
Here we go again. Blame the big bad investors. Ignore every law of economics.
The Law of Supply and Demand is all someone needs to know to understand what's happening here. Starbucks gave into political/social pressure and raised their wages. Once they did that, their cost of operation went up. When the marketplace slowed demand, they had to reduce the the high cost.
They can't stop buying ingredients if they intend to keep making drinks. The cost of their building and machinery is fixed; they already bought/leased it. The only thing they can do is cut payroll. That's either wages or hours. They had just raised wages in responce to social pressure, so that leaves hours.
As the price of a good increases, the demand for that good decreases.
As the price of labor increases, the demand for labor decreases.
Labor is a 'good.'
As for those big bad investors that are ruining everything... I really don't think Granny Smith living in her little house and surviving on her pension plan is the problem. You see, Granny's pension is invested in the stock market. She pooled her pitiful little savings with other Grannys to invest for their retirement. Starbucks used that money to buy buildings, machinery, ingredients, advertising, and to hire employees. The reason? Because the initial investors, the guys who did the IPO, wanted to make some money too.
Thanks to them, Granny has enough to eat in her retirement, employees have jobs, and customers have.... whatever it is that they like about Starbucks. I'm not a huge fan myself.
Now the investors are evil because they expect something in return. The corporate head office is evil for trying to keep the business running. Granny is evil for, I guess eating too much? The employees, though, are saints who should get all the profits.
Hello? Is anyone listening?
I really hope so, because this is exactly what happens every time the Federal government raises minimum wage: hours get cut, jobs are lost, and prices go up. The poor are always the ones hurt the most. And nothing in this world can change that dynamic... especially villifying those who created the jobs in the first place.