Workers Win Fight For Living Wage, Then Lose Jobs

reply to post by nenothtu

That explains it.

It was your first reply to me, after I had said something about the comment that was made.

Saying absolutes are illogical but having no problem making sweeping generalizations, that's how.

Just so you know, the story in the OP is spun to make it look like the pay raise caused the shutdown of the business. That wasn't the case.

daskakik

Saying absolutes are illogical but having no problem making sweeping generalizations, that's how.

"Sweeping generalizations" are born because they "generally" fit the case. Exceptions to the rule are inconsequential and infrequent enough (this is why they are "exceptions") that they do not make the rule, hence the employment of generalizations, which do. "Generalizations" are not "absolutes", and I know of no one who is confused enough to think they are.

Just so you know, the story in the OP is spun to make it look like the pay raise caused the shutdown of the business. That wasn't the case.

Inform me as to the "spin". How does a 35k a week increase in outlay NOT affect running a business? One of the places I work now is a 6 million dollar a year business. We have weekly payroll of 6K. Just doubling that would shut us down cold, much less increasing it by nearly a factor of 6. There are more factors to running a business than simply the payroll, but payroll can cut into those far enough to force a shutdown if taken to excess.

reply to post by nenothtu

The casino didn't close, they just discontinued the buffet service and they said that it wasn't because of the raise. Their own words.

The buffet staff was only about 10% of the employees. The rest are still working, with the increased salary. The casino has had revenues that average out to around $35 million a month since it opened.

The Aqueduct Buffet opened with the casino in October 2011, but casino officials say it had never been a profitable enterprise, though the casino has garnered nearly $1 billion in revenue since it opened. It was located on the casino’s main floor — the Times Square Casino floor — and overlooked the racetrack.

Resorts world buffet shut down

ETA: ""Generalizations" are not "absolutes""
But their use is equally fallacious.

reply to post by daskakik


I used to own laundry mats. I expanded that to include dry cleaning attached to most of my laundry mats. In any location where the dry cleaning would not have either paid for itself or made a profit I would not have used what was profitable to support what was loosing money.

It's just not good business sense.

There is a casino here reasonably near to where I live. There is a buffet there. That buffet now charges 25 dollars a head for the buffet.

That is too expensive for me to eat at, I used to eat there occasionally when it was 15 dollars a head because the food was good. Now that they raised their prices to 25 I will go to different buffet's in town where TWO people can eat and drink for the same 25 dollars. The food is just as good, and the casino priced themselves out of some measure of business.

If it ever went up to 38 dollars a head, I would venture that very very few would eat there because of the cost, for that amount of money you can go to some excellent restaurants in town... not buffet's...

In order for this casino in the OP to continue to make any money, it had to raise its prices. After that there was just not enough business, and unless you are into money laundering your not going to keep a business that is loosing you money. If it cant at least pay for itself, its just not worth it.

This is basic economics. NO ONE is going to keep a non-profitable business, they aren't worth it... no matter how much you make with your other businesses.

Think of it like this, if your leg dies, your going to cut it off. Your not going to drag around a leg that is dead and risk infecting the rest of your body which is good because of that dead leg. Its the same with business.

PS before the raise the casino was willing to keep open the buffet. AFTER the raise and the loss of business, they were loosing TOO much money and decided to close it. They never made great money there, but were willing to keep it open until it started loosing too much. ie: the employees priced themselves out of a job.

“I’m guessing it was somewhat more profitable at $20 a plate than $40 a plate,” Addabbo said. “I understand the overhead may have increased because of [the pay raise]

reply to post by daskakik


Clearly this issue is too complex for my simple mind, because it involves a restaurant, and they apparently obey no known laws of economics.

I defer to your expertise on restaurants.

Carry on, then.

reply to post by OpinionatedB

I don't see what your point is. The buffet was just part of the business as a whole. They decided that it was not profitable enough and discontinued it.

There is nothing wrong with that and given that that particular casino is "the most lucrative slot floor in the US", it doesn't seem likely that the business as a whole was not turning a healthy profit and since they said it themselves, "the pay raise was not the reason for closing the buffet".

daskakik
reply to post by OpinionatedB

 

I don't see what your point is. The buffet was just part of the business as a whole. They decided that it was not profitable enough and discontinued it.

Indeed... "not profitable enough"... which I guess is what he meant by the exact wording of "has consistently lost money”. I suppose it COULD be fairly said that a consistent loss isn't much of a profit, definitely "not profitable enough".

There is nothing wrong with that and given that that particular casino is "the most lucrative slot floor in the US", it doesn't seem likely that the business as a whole was not turning a healthy profit and since they said it themselves, "the pay raise was not the reason for closing the buffet".

I couldn't find that statement in the article you linked to, but did find one made by the opposition, the union, which said “This obviously isn’t the first food vendor to close because it wasn’t making money”. I find it odd that the closure followed so closely on the heels of the raise, yet "the pay raise was not the reason". I would be curious to find out what the reason was, since operating at a loss was apparently nothing new, and the increased loss due to the raise wasn't apparently the reason.

So then - have you been able to uncover any other statement indicating what the sudden reason (beyond the increased loss attendant upon the payroll increase) WAS?

nenothtu
So then - have you been able to uncover any other statement indicating what the sudden reason (beyond the increased loss attendant upon the payroll increase) WAS?

No and I honestly don't care.

They gave their reason. Their numbers and the decision to keep 90% of the staff working seems to indicate that although the raise would obviously affect profits, it was not by any significant amount and surely not even close to driving them out of business.

bigfatfurrytexanSince you are so well versed in how a business is run, then please enlighten us. I would LOVE to see a business model for any service business where you can have all employees paid "a living wage" (which is, I believe, variable by region). ill eagerly await it.

It's not a function of the business model but rather the economic model. However for many years in the US we did have a system where even the lowest paid could afford a decent lifestyle, roughly equal to that of someone earning the median wage today. Wages have significantly stagnated over the past couple decades.

bigfatfurrytexanPlease name these multiple better systems that our arrogant ignorance prevents us from seeing.

I made an attempt, I don't have an answer to everything though
www.abovetopsecret.com...

nenothtu
reply to post by daskakik

 

The whole point, it appears, is that if you have no skills, you can't get a skilled job, and so must settle for the dregs. The obvious remedy for that is to get some skills.

I have skills, however they don't get me a good job. There's no demand for that type of thing in my area. My job requires 2 college degrees and pays minimum wage, that's just the way things are. What are my options? Refuse to work it? Then an important job goes unfilled and I have no income at all, everyone loses from my employer, to me, to the people I work with, to the community impacted by those I work with.

Sly1one
For those struggling with the concept of wealth I recommend a simple book called "Rich Dad Poor Dad" By: Robert Kiyosaki

Another great book if you like long reads is "Atlas Shrugged"....

I don't expect people to actually read these books though...their dead set on their opinion and point of view on the subject because they already ARENT reading books like these.

I've read both of them. I disagree with Ayn Rand and I find that Kiyosaki simply lays out how things are rather than offering up suggestions as to how things could be.

Xtrozero
So what should be a living wage in America, and should flipping burgers actually be a solo living wage? Should we base the lowest living wage on one person providing even just for himself, much less a family. Has there ever been a time in the last 100 years that a person could flip burgers and live on that wage?

From 1950 until the late 1970's you could own a small home, afford college, and have a little bit left over on just a full time minimum wage job. A minimum wage job in 1980 in terms of purchasing power translates to 50k today, which just so happens to be our median wage. So yes, it's quite possible. Incidentally, if you took our poverty rate in 1955 and applied it to the real inflation rate today it would be 35k/year.

Hoosierdaddy71
I can tell you that as a business owner (5 employees) if I had to double their wages they would be unemployed. Simple as that.
The idea of a living wage crazy also. Prices are based off the minimum wage. If mcdonalds has to pay workers $12 an hour, they will compensate by making Big Macs $9. Then your living wage will still not be enough because of price increases. Every action has a reaction.

Take a look at Australia, their minimum wage is equal to about $16/hour here in the US, they have a social safety net in place, and the prices of their goods are only about 10% higher.

NavyDoc
You think such a successful person is going to be content to flip burgers if they lose one well paid job or do you think they are going to become the manager of the McDonalds after working their ass off and learning the business? Those screaming for a "living wage" for unskilled minimum wage jobs are not the riches to rags types...they are the ones who never aspired to more than flipping burgers. A successful person like you described above will raise themselves up without the government's help.

Not everyone can be a manager and it has nothing to do with ability. If there's 1 manager for every 5 employees that means only 20% of your workforce can actually promote. The other 80% will be burger flippers no matter what. When well over half of the jobs that exist today are entry level or otherwise no skill jobs well... you start to see the problem, there's just no where to actually move up which leaves people in the low level jobs as a career.

NavyDocAnd those jobs are designed for kids. Expecting to support a family on a kid's job is an absolute piss take.

If a job is worth doing, someone should be able to make a living doing it. Using labor that doesn't actually pay enough for one to sustain themselves (offloading it to someone else) is exploitative at best, and slavery at worst.

reply to post by Aazadan


Australia has a higher GDP per capita than the US, therefore it stands to reason all things in consideration that their employers can pay more.

daskakik

No and I honestly don't care.

Of course you don't. I wouldn't expect you to, really. Digging too deeply might damage the narrative you prefer to believe. understandable. It's a common human trait.

They gave their reason.

They did. it was operating at a consistent loss. The timing is suspect, since I only know of one thing that would have deepened that loss, but again digging too deeply could be narrative damaging, so lets not do that.

Their numbers and the decision to keep 90% of the staff working seems to indicate that although the raise would obviously affect profits, it was not by any significant amount and surely not even close to driving them out of business.

Significantly, perhaps, the did not close the casino, which is operating at a profit, and can thus sustain itself. One would not expect them to close a profitable venture. I've not found anything to indicate the raise was across the board for casino staff, but that obviously doesn't mean that it wasn't - just that I've not found anything to indicate that it was. Still, it was operating at enough profit to take the hit from a raise, so one would not expect it to close even if the raise were across the board.

The buffet appears to have been a different story.

If I'm operating a car wash that makes a profit, and a movie theater at a loss, I'm not going to rob from the car wash to pay for the losses of the theater, especially if the theater suddenly becomes even more of a liability. One of them will get closed. Can you guess which?

nenothtu
Of course you don't. I wouldn't expect you to, really. Digging too deeply might damage the narrative you prefer to believe. understandable. It's a common human trait.

Actually I have dug deep enough and have posted it in other parts of the thread. At this point I don't think I will find anything else.

They did. it was operating at a consistent loss. The timing is suspect, since I only know of one thing that would have deepened that loss, but again digging too deeply could be narrative damaging, so lets not do that.

Already, answered above.

Significantly, perhaps, the did not close the casino, which is operating at a profit, and can thus sustain itself. One would not expect them to close a profitable venture. I've not found anything to indicate the raise was across the board for casino staff, but that obviously doesn't mean that it wasn't - just that I've not found anything to indicate that it was. Still, it was operating at enough profit to take the hit from a raise, so one would not expect it to close even if the raise were across the board.

The buffet appears to have been a different story.

If I'm operating a car wash that makes a profit, and a movie theater at a loss, I'm not going to rob from the car wash to pay for the losses of the theater, especially if the theater suddenly becomes even more of a liability. One of them will get closed. Can you guess which?

The buffet was one eatery in the casino food court and they claim it never made money.

The casino recently raised prices at the buffet, where weekend favorites were crab legs and steak. Kerri Lyon, a Genting Group spokeswoman, said that there was no connection between the new contracts and the price increase, and that the restaurant had lost money since it opened. There are several other restaurants in the casino complex.

175 casino workers in queens lose their jobs

The raise included 1,400 workers.
Union strikes a deal

Under the new agreement with the Hotel Trades Council, Resorts World Casino New York City will increase the salaries of 1,400 of its 1,750 employees to more than $60,000 per year — doubling the take for some of those workers, officials said.

Aazadan

I have skills, however they don't get me a good job. There's no demand for that type of thing in my area. My job requires 2 college degrees and pays minimum wage, that's just the way things are. What are my options? Refuse to work it? Then an important job goes unfilled and I have no income at all, everyone loses from my employer, to me, to the people I work with, to the community impacted by those I work with.

Correct. Skills alone will not get you that job - you have to go get IT, which is where the skills come in handy. If there is no demand in your area, then you change areas. It's been done for thousands of years with great success. Just out of curiosity, what sort of job requires 2 college degrees just to achieve minimum wage? I've had a lot of different jobs in my days, but NONE of the skilled jobs payed minimum wage, even as a start, and none of the minimum wage jobs required any education at all, much less collegiate, so I've never run across your line of work, and am genuinely curious.

If "an important job goes unfilled", that isn't your problem if you're in it for the money, and they aren't willing to get up off the money to snag you. If you're NOT in it for the money, then the point is moot. You'll do it for nothing or next to it, and not complain. Other people's losses are not your problem, either, if they are unwilling to pay the rate you want. Only your own losses matter, and those can be eliminated by a move - either to another area, or to another profession, or both.

If "the community impacted" is not willing to look after you, then why should you worry about IT?

From 1950 until the late 1970's you could own a small home, afford college, and have a little bit left over on just a full time minimum wage job. A minimum wage job in 1980 in terms of purchasing power translates to 50k today, which just so happens to be our median wage. So yes, it's quite possible. Incidentally, if you took our poverty rate in 1955 and applied it to the real inflation rate today it would be 35k/year.

Statistics are cute. I had a minimum wage job for a while in 1980, and had nowhere near the purchasing power of 50k today, regardless of what the statistics say. I lived it. I saved most of the money from the minimum wage job, and fed, clothed, and housed myself by other means, since that job would not even begin to cover those expenses. It was 3.10 an hour, as I recall, and I supplemented that wage by various nefarious means to get by until I decided that was for the birds and engaged full time in other, more profitable enterprises. We had "recessions" and double-digit inflation and whatnot that made the minimum wage job not worth crossing the threshold of the door to get to.

I always had money, sure, but it was in spite of the job, rather than because of it. It was because of the way I managed my finances, rather than the money I made on that job having such massive purchasing power. 3.10 in 1980 was equivalent to about 5.90 today, meaning that over a 40 hour week for 52 weeks a year it would come out to about 12,272 today, a tad short of 50k.

Murgatroid

Destinyone
No one won in this debacle.

The employer (Genting Group) has billions in assets and employs over 58,000 people globally.

Somehow I suspect that they could care less about the employees or the loss in income.

Wrong, if they can't make money, their is no reason to run the business. The wealth of the owners has nothing to do with making wise business decisions.

There is hassle and liability in running any business, no one will put up with that for no gain, which is also why there is a limit to the tax rate you can charge, if there is not enough gain for the owner they will simply shut the business down.

nenothtu
Correct. Skills alone will not get you that job - you have to go get IT, which is where the skills come in handy. If there is no demand in your area, then you change areas. Just out of curiosity, what sort of job requires 2 college degrees just to achieve minimum wage?

If "an important job goes unfilled", that isn't your problem if you're in it for the money, and they aren't willing to get up off the money to snag you. If you're NOT in it for the money, then the point is moot. You'll do it for nothing or next to it, and not complain. Other people's losses are not your problem, either, if they are unwilling to pay the rate you want. Only your own losses matter, and those can be eliminated by a move - either to another area, or to another profession, or both.

I tutor Computer Science and Game Design at a college, being a graduate is a requirement, I tutor multiple programs to get enough hours (I also hold degrees in Digital Graphics which is what it sounds like and Interactive Media which is essentially web design but don't tutor those usually). I'm not in it for the money instead I work it because I have enough of a work ethic to want to be employed despite the fact that my skills don't qualify me for anything worthwhile in my area. I do however expect a living wage from a job which I think is completely reasonable. Moving isn't an option as that requires having money in the first place.

Statistics are cute. I had a minimum wage job for a while in 1980, and had nowhere near the purchasing power of 50k today, regardless of what the statistics say. I lived it.

Sorry, I meant to write 1950 there. I'm just going to copy/paste a previous writing of mine here rather than type it all out again:

1956 - The minimum wage just rose to $1.00/hour. We'll use the same scenario. A low end house at this time cost $7000 ($60,000 house today going by CPI... closer to $120k in reality) and the work week fell to 40 hours/week. We'll take the same idea that someone worked part time (20 hours/week) for 2 years in high school and put half of those earnings into savings. That's $416 into savings per year after taxes. If those savings went to a down payment on that same house that's $832 down (12%), a 4.75% interest rate, and a 25 year loan, which was standard back then the mortgage payment would be $42.46 or $509.52 in a year
Because University of Pennsylvania has these stats published I'll continue to use them, although their tuition is above average. I'm also going to stick with the 6 year college plan because full time school+full time job is a lot. Particularly at a time when classes were tougher and education wasn't corrupt. In 1956 tuition cost 835 per year which comes to $559.45 at a reduced schedule.
Now comes food costs. While the USDA claims people spent about $24/month on food, that's because they were eating higher quality foods and had an abundance of cash. If you eat a more budget diet of things like sandwiches, condensed soup, beans, and rice while ignoring things like eating a steak every night, you could eat fairly inexpensively. Here's a sample grocery list for a month using a historical list of food prices from the 50's:
3 pounds cheese $1.35
3 pounds turkey $1.47
3 loaves of bread $.36
1 jar peanut butter $.29
1 jar jelly $.19
8 cans of soup $.80
12 eggs .49
6 cans pork & beans $.50
6 frozen chicken pie $1.14
5 pounds potatoes $.35
1 box of crackers $.32
1 pound pork roast $.39
1 pound frozen vegetables $.48
That's fairly similar to my current groceries for a month, though I do eat out every now and then. So lets take this grocery list which comes to $7.33 and then double it. That's 14.66 on groceries. Also, we'll add 8% because these food prices are from all over the decade.

Just to be sure it's 1956 prices we'll assume it's 1950's prices and just inflate to 1956 values. That brings us to $15.83 per month in groceries or $189.96 per year.

And we can add in utility prices like water and electric. Unfortunately there's no records I could find of water/electric prices, so we'll just take todays prices and scale them down. Water+electric in a small home comes to about $90 today which is $10.48 in 1956 dollars which is $125.76 per year.

Last we have taxes. The income tax rate was 20% at this income level, and about another 4% for state and local taxes. That comes to $499.20 taken in taxes.
So add everything up we have
$499.20 in taxes
$125.76 in utilities
$189.96 in food
$559.45 in tuition
$509.52 in housing

That comes to $1883.89 in expenses. Since annual income comes to $2080 there's still $196.11 in the budget for fun. That money could be spent on several things such as a car and gas or movies, or my favorite... health insurance. I can't find the source now to link but I found it a few days ago it listed 1956 health insurance costs as being around $8/month. It was also less popular as hospital costs were less extreme. Regardless, at $96 for a year that still leaves $100 in the budget. Which at the time is a perfectly reasonable extra amount.
There wouldn't be enough money left to afford a car, gas, and insurance unless you dropped the health coverage, but you can't have everything.

1967 - 11 years later and not much had changed. Minimum wage became $1.40/hour which is $2912 in income. If we assume the person had some savings from working part time that's $1150.24 in savings. Taxes when working full time come to $611.52
We'll start with the housing prices. Homes at lower prices were a little bit harder to find because the craze was new homes at the time, but if you bought a prebuilt home you could get one for around $8200. The exact one I'm looking at is defined as "6 large rooms, brick, 4 acre lot with stream". By CPI this is a $60,000 home today, by actual prices this is much more. The mortgage on this home with $1150.24 down comes to $50.34/month or $604.08 per year.
Next we'll look at tuition. College started rising faster than the rate of inflation however it was still affordable. UPenn was $1870 at this point. Using the 6 year plan that's $1247 per year.
Groceries went up in cost, but went down as a percent of income. The same grocery list in 1956 would now cost $17.81 per month or $213.72 per year.
Utilities went up a little bit to $12.88/month
Add everything up and that's
$604.88 housing
$1247 tuition
$213.72 food
$154.56 utilities
$611.52 taxes
$2831.68 total

It's a bit harder to run this lifestyle in 1967 however still possible. There would be $80.32 leftover in the budget. That's less than 11 years prior and the money doesn't go as far but it's still enough for a little bit or recreation or some savings. Alternatively, to get some extra income one could rent out a room in their giant house but that goes above minimum wage.

As you can see, this was the reality for quite awhile, and last I checked the era where it wasn't the case wasn't exactly known as having a dearth of economic activity.

I always had money, sure, but it was in spite of the job, rather than because of it. It was because of the way I managed my finances, rather than the money I made on that job having such massive purchasing power. 3.10 in 1980 was equivalent to about 5.90 today

That's only if you go by the CPI inflation rate which isn't correct, it has been manipulated for years to show a low inflation rate. Actual purchasing power in terms of how many hours you have to work to buy something for not just those at minimum wage but even the middle class has been getting worse and worse.

reply to post by Grimpachi


Have u never heard of Vegas Casinos going out of business? Running a business is difficult sometimes u operate in the red zone and paycheck away from shutting your doors. I ran a business before it's not easy. Especially for small and new business.

reply to post by Kangaruex4Ewe


BRAVO!!

I've always wondered why (mostly liberals) have the "Robin Hood" mentality. And as youstated, thye always, ALWAYS seem to only look at things from a poor person's perspective, to the point that they could never see themselves as a rich person.

They never consider that they may and could have wealth.

So they continue to sympathize with the poor, and look at anyone who is not as EVIL.

QueenofSpades
reply to post by Kangaruex4Ewe

 

BRAVO!!

I've always wondered why (mostly liberals) have the "Robin Hood" mentality. And as youstated, thye always, ALWAYS seem to only look at things from a poor person's perspective, to the point that they could never see themselves as a rich person.

They never consider that they may and could have wealth.

So they continue to sympathize with the poor, and look at anyone who is not as EVIL.

It's always easy to want someone else to share if you aren't the one being asked to give up something, but are the one getting ready to receive it. While my husband and I live paycheck to paycheck most of the time, I can honestly say that I want nothing that we haven't worked for and if we ever get more comfortable, I don't want to be forced to prop up more people who do not even want to attempt to help themselves.

People lack the ability to put themselves in another person's shoes. They want something if it benefits them and don't spare a thought for the person giving it up. It's a selfish mentality to hold IMO.

No one is entitled to money they did not work for, but it seems to be all the rage lately.