The standard response when the minimum wage increase is raised is either cutting the payroll, by way of layoffs, less hiring, or significantly raising the price of the product or service they sell.
In the start up phase, you can lose the business simply through turn over, the cost of hiring is so large.
And in most businesses today, payroll is the largest single cost and detriment to profit. No other cost, interest rates, supplies, security contributes even half as much
The greater the 'support' or non-productive staff [those not directly involved with the product/service set] the greater the profit decline. In some cases, one lazy worker can make the difference if everyone has jobs next week or not
You can halt Amerikan liberals in their tracks my making them define "rich". Every idol they have will fall well within their definition. They hate easily and blindly
It depends how large the increase in the minimum wage is. I have seen the minimum wage go from $1.25/hr. back in the 60's (I worked in a gas station for $1.00 / hr back then), up to todays $7.25/hr. I have never heard of significant layoffs, significantly reduced hiring plans, or significantly higher product prices due to a modest increase in the minimum wage. As long as the increases in the minimum wage are modest and spaced out over time, they are accommodated by business. The price of most products rise over time because there is a general inflation process in the country anyhow. A barrel of oil has gone from $10 in the 60's to $55 today (but its been as high as 147 and spent significant time over 100 a barrel), a dr. visit from $15 to $75, a 2000 sq. ft house from 35K to 135K, and a Whopper from $1 to $4.
What bothers me is any attempt to raise the min. wage too far too fast, to catch up for failing to raise it for long periods of time in the recent past. Going from 7.25 to 10.10 in a year is unreasonable, because it is so far outside the standard rate of inflation that it would disrupt the system. That type of increase should probably be spaced in annually over 5 years. As far as going to $15 per hour, I don't see that as reasonable at all in the foreseeable future. That would be too big a shock to the system IMO.
I was especially amused by his suggestion that employers do not put profits back into the business. Where does he think the cash flow for payroll and operating funds comes from?
I was especially amused by his suggestion that employers do not put profits back into the business. Where does he think the cash flow for payroll and operating funds comes from?
I was especially amused by his suggestion that employers do not put profits back into the business. Where does he think the cash flow for payroll and operating funds comes from?
Replacement for that desk you just ruined. The pens and note pads your staff uses, the coffee you provide....?
And how about paying for the materials you need in advance of a sale? The investment in training new employees...
Nah, all we do is sit around in secret rooms talking about how we can screw the little guy without having to count beans.
This is all just new words for what used to be "more or we strike", more for less work, and no accountability for quality. the concept is over 100 years old, a pig with really hot lipstick and stiletto heels.
Money comes from sales of your product/service (after the initial investment). Profit = Sales - Cost Of Sales. Payroll is a Cost Of Sale item or, in other words, an operating expense not an investment.
Payroll is NOT investing in the business - it is simply meeting an operating expense. You do not grow your business by simply hiring more folks, or by paying the one's that you have now more money. Let's say that your business is cutting grass - are you likely to get more business productivity by paying your employees more or by supplying them with better (faster) trimmers, mowers and blowers instead? In order to compete, or to gain market share, you must do more (provide better goods/services) or the same for a lower cost than the competition - paying folks more or simply hiring more employees (absent excess demand) is not the answer.
Payroll is investing in the business if you make good use of labor. Hiring a new employee with a needed skill set certainly can make you more money.
Revenue.I was especially amused by his suggestion that employers do not put profits back into the business. Where does he think the cash flow for payroll and operating funds comes from?
Revenue.
Profit is whatever is left after all operating costs are paid.
Now, if a company decides to invest some of it's profit back into the company in some way, that's one thing - but profit definitely does not go into payroll or operation costs.
Revenue.
Profit is whatever is left after all operating costs are paid.
Now, if a company decides to invest some of it's profit back into the company in some way, that's one thing - but profit definitely does not go into payroll or operation costs.
Except for startup investment, all operating expenses, payroll included are ultimately paid for by profits that are put back into the business. The only exceptions are funding from shareholders if the company has gone public or in the case of some small business owner putting his own personal wealth in to prop up his business during hard times. My employer has been around for 99 years. I have been with them for 25 of those years. Pretty much all funding for operating the business comes from profits put back into the business. If not, a business cannot grow. It is not mantra from heaven.
Right.Labor and all the expenses associated with it ARE included in operation costs. Certainly the company that cannot retain the most competent and productive workers will not profit as much as the company that does, but the flip side is that company profits are the most important and essential component of the wages and benefits that the employees will receive. Without adequate profits, raises and improved benefits won't happen. Without sufficient profits the business closes its doors ending all the wages and benefits available to everybody.
This is the silliness in the 'tax the rich more' drumbeat of the left and Hillary's initial campaign strategy. You make the rich less rich, and you take away resources that the rich uses to help make others rich.
Right.
But profit is the money made over and above operating costs - which includes payroll.
You're talking about putting all or a portion of profits back into the business, which is what any good company does - it's required for growth and employee retention.
Bonuses, raises, promotions, etc.
All are extremely limited by misapplication of profits
No. Funding for operation costs comes from revenue. Profit is whatever's left after operational costs are paid.Still the funding for those operating costs have to come from somewhere. That somewhere is previous profits.
No. Funding for operation costs comes from revenue. Profit is whatever's left after operational costs are paid.
This is why profit can be used to expand and grow the business - because the operational costs are already paid.
Where do you think the revenue comes from?
From selling products or services to customers.Where do you think the revenue comes from?
This appears to be an admission that increasing profits will never go back into the business (specifically, the workers).
You didn't answer my question. When is the money going to trickle down? You said it would. The only thing that has happened since Reagan is that it takes two incomes to support a household, rather than one income prior to Reagan.
From selling products or services to customers.
No, that's revenue.Yep...profits.
No, that's revenue.
Profits are what is left after you pay operating costs.
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