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Drudge Retort: The Other Side of the News
Tuesday, September 21, 2021

Dan Price faced praise and criticism six years ago when he boosted all his employee's salaries to $70,000 a year. But instead of the economic gloom and doom that was predicted for him, the company and its workforce, by all metrics, has thrived.

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Happy workers, sky high employee retention ...

This used to be the way at most companies until Reagan came along and busted unions.

#1 | Posted by AMERICANUNITY at 2021-09-21 05:18 AM | Reply | Newsworthy 3

PS - Rush Limbaugh and other right wingers were predicting doom for Gravity Payments.

Meanwhile, Gravity is alive and well. Rush isn't.

#2 | Posted by AMERICANUNITY at 2021-09-21 05:21 AM | Reply

I will never understand why Conservatives are so insistent that his company and the American economy as a whole would be better off if all that extra money were going to the C Suite instead of the workers.

#3 | Posted by snoofy at 2021-09-21 08:32 AM | Reply | Newsworthy 3

How is this guy in the news again - I feel like I see his articles, videos, TED talks circulate once a quarter

#4 | Posted by GOnoles92 at 2021-09-21 08:33 AM | Reply

#4 Because of the class war that you were born into and ended up on the wrong side of.

#5 | Posted by snoofy at 2021-09-21 08:35 AM | Reply

His business actions are nice, but the individual himself acts like a cult leader and has allegations of domestic violence/abuse in his past.

#6 | Posted by GOnoles92 at 2021-09-21 08:39 AM | Reply

#6 Way to focus on the economics!

#7 | Posted by snoofy at 2021-09-21 09:01 AM | Reply | Newsworthy 2

A lot of the focus on his business economics has his identity and name slapped everywhere - this guy isn't on the same level as the Zappos or Whole Foods CEOs - who to my knowledge aren't abusers to their spouse(s).

#8 | Posted by GOnoles92 at 2021-09-21 09:08 AM | Reply

RIP Tony Hseih

#9 | Posted by bocaink at 2021-09-21 10:44 AM | Reply

I have a question about the all employees paid $70,000. Does this include custodial staff and such or does he get around that by contracting such services so they are not employees?

#10 | Posted by MBlue at 2021-09-21 11:19 AM | Reply

You think the business world cares if you abuse your spouse, GoNoles?

The business world doesn't even care if you abuse your employees.

You are trying to character assassinate him. I don't think you realize why, though.

#11 | Posted by snoofy at 2021-09-21 11:21 AM | Reply | Newsworthy 4

Of course the con..con...conservatives predicted doom and gloom, it's what their C suite masters told them to do.

Costco is another example of treating employees above the bare minimum and wall street hates that.

Wall street loves the WalMarts of the world where employees have to have canned food drives to feed other employees who cannot afford to buy their own food.

#12 | Posted by Nixon at 2021-09-21 11:38 AM | Reply

You think the business world cares if you abuse your spouse, GoNoles?

Con...con...conservatives didn't even care that their orange savior had a history of abusing his wives and other women before replacing Jesus with him.

#13 | Posted by Nixon at 2021-09-21 11:40 AM | Reply | Newsworthy 1

"#4 Because of the class war that you were born into and ended up on the wrong side of."

Jesus...it's just a shame you were born so late.

Now you're left with no other Marxists to hang out with.

#14 | Posted by madbomber at 2021-09-21 02:06 PM | Reply

"Costco is another example of treating employees above the bare minimum and wall street hates that."

Ultimately it comes down to the shareholders. If they're willing to pay more than market value for labor (or any other factor of production), that's OK. It's coming out of their pockets.

#15 | Posted by madbomber at 2021-09-21 02:08 PM | Reply

^
In who's pocket does your pay originate?

In other words, what shareholders do you answer too?

#16 | Posted by ChiefTutMoses at 2021-09-21 02:50 PM | Reply

The 50% or so households in the US that pay the federal incomes taxes that wind up in my bank account.

In reality, the other 50% have a say as well...although I'm not quite sure why.

#17 | Posted by madbomber at 2021-09-21 03:11 PM | Reply

#1 | Posted by AMERICANUNITY

One thing about 80s unions - I am focused on the Automotive ones - they took things WAY too far (and still do in Automotive). Worthless employees who would sneak off just to leave or go get drunk or whatever were protected. Quality of American cars at that time was maybe the low point too. There have been improvements but the things people can get away with are still atrocious. Asking someone to do a job they are trained and certified for that they don't want to do will land you in front of the committee.

I am still pro-union. It's just that there needs to be balance. I have talked about it here before how my grandfather was an original sit down striker as a young man (with a family) and how his son (my uncle) was the epitome of the awful union worker of the 70s and 80s.

That said - what Reagan did to air traffic controllers was wrong. I am also against what the controllers did as well but I also wasn't in tune with why they felt the need at the time. Note: Having traveled more than a little in Europe when segments of the transportation system go on strike, all too often chaos ensues.

#18 | Posted by GalaxiePete at 2021-09-21 03:22 PM | Reply

Ok

So where can I go for a trade-in?

You have made it abundantly clear "50% or so households" grossly overpaid for your labor. I believe we can do better for less money

#19 | Posted by ChiefTutMoses at 2021-09-21 04:06 PM | Reply

#15 | POSTED BY MADBOMBER

So, it could be said that the investment on the shareholders part in paying more than market value for labor could result in higher profits for shareholders, could it not? IOW, the extra money coming out of shareholders' pockets for higher labor costs positively impacts revenue in the long run.

#20 | Posted by rstybeach11 at 2021-09-21 04:53 PM | Reply | Newsworthy 1

#15 | POSTED BY MADBOMBER

So, it could be said that the investment on the shareholders part in paying more than market value for labor could result in higher profits for shareholders, could it not? IOW, the extra money coming out of shareholders' pockets for higher labor costs positively impacts revenue in the long run.

#20 | Posted by rstybeach11

That was Henry Ford's prescient attitude when he was the first to offer a living wage to his employees. They could afford to buy his cars. Other companies followed suit and automakers including Ford flourished as a result.

#21 | Posted by AMERICANUNITY at 2021-09-21 05:30 PM | Reply

"You have made it abundantly clear "50% or so households" grossly overpaid for your labor. I believe we can do better for less money"

Statistically...probably not.

First, the upfront costs to train a combat aviator are in the tens of millions of dollars. The cost of getting a B-52 pilot from classing up at pilot training to being a qualified combat aviator is $9.7 million dollars. On top of that, they'll fly about twice a week for the next 6-7 years at a cost of around $60k per flight hour. Additionally, they will go through different upgrades that incur additional charges.

And these are just the costs for their flying duties. There are other professional military education courses that must be attended as well.

So all in all, the actual salary of a combat aviator is a sliver of the overall cost of training and maintaining them. With the airlines typically serving as a suitable alternative, do you really think it wise to risk a multimillion investment over a few hundred thousand dollars?

The Air Force doesn't, which is why pilots can get bonuses of up to $500k for agreeing to stay in the service.

#22 | Posted by madbomber at 2021-09-22 12:29 AM | Reply

"So, it could be said that the investment on the shareholders part in paying more than market value for labor could result in higher profits for shareholders, could it not? IOW, the extra money coming out of shareholders' pockets for higher labor costs positively impacts revenue in the long run."

You would have to make that argument. I'm not saying it wouldn't happen...I'm just saying you haven't provided any evidence it would. I think the best example supporting your claim would be a CEO or other member of executive staff who is brought in with the expectation they would increase profits...but even then their wages would be negotiated. ceteris paribus, these employees are going to take advantage of the best opportunity they're offered, which will likely be driven in large part by wages or other benefits.

But if your argument is that paying more for labor could result in higher profits...what about other factors of production?

Should Dan Price being paying more for rent and utilities as well? Would the result of those higher costs mean higher profits? Intuitively, they wouldn't. But I'll let you make the case on how paying more for factors of production results in greater profits.

#23 | Posted by madbomber at 2021-09-22 12:36 AM | Reply

That was Henry Ford's prescient attitude when he was the first to offer a living wage to his employees. They could afford to buy his cars."

That's a fun urban legend long proliferated by progressives, but it's not really true.

Henry Ford raised wages in order to reduce turnover. In 1913, the company hired 52,000 people to fill 14,000 positions. Walk-offs resulted in shut-downs as well as the need to hire and train new employees.

Furthermore:

"The $5-a-day rate was about half pay and half bonus. The bonus came with character requirements and was enforced by the Socialization Organization. This was a committee that would visit the employees' homes to ensure that they were doing things the "American way." They were supposed to avoid social ills such as gambling and drinking. They were to learn English, and many (primarily the recent immigrants) had to attend classes to become "Americanized." Women were not eligible for the bonus unless they were single and supporting the family. Also, men were not eligible if their wives worked outside the home."

#24 | Posted by madbomber at 2021-09-22 12:44 AM | Reply

"So it wasn't $5 a day and it was done actually to reduce total labour costs by reducing labour turnover. And as a final nail in the coffin of the argument that it was done so that the workers could afford the cars, there's this.

Car production in the year before the pay rise was 170,000, in the year of it 202,000. As we can see above the total labour establishment was only 14,000 anyway. Even if all of his workers bought a car every year it wasn't going to make any but a marginal difference to the sales of the firm.

We can go further too. As we've seen the rise in the daily wage was from $2.25 to $5 (including the bonuses etc). Say 240 working days in the year and 14,000 workers and we get a rise in the pay bill of $9 1/4 million over the year. A Model T cost between $550 and $450 (depends on which year we're talking about). 14,000 cars sold at that price gives us $7 3/4 million to $6 1/4 million in income to the company.

It should be obvious that paying the workforce an extra $9 million so that they can then buy $7 million's worth of company production just isn't a way to increase your profits. It's a great way to increase your losses though."

www.forbes.com

#25 | Posted by madbomber at 2021-09-22 12:45 AM | Reply

It should be obvious that paying the workforce an extra $9 million so that they can then buy $7 million's worth of company production just isn't a way to increase your profits. It's a great way to increase your losses though."
www.forbes.com

#25 | POSTED BY MADBOMBER AT 2021-09-22 12:45 AM | REPLY

How much profit does the USAF make on those "million dollar" pilots, and what do the shareholders think about it?

#26 | Posted by Scotte at 2021-09-22 10:20 AM | Reply

"How much profit does the USAF make on those "million dollar" pilots, and what do the shareholders think about it?"

Shareholders isn't the right term. I think you mean stakeholders

And you would have to ask one of those stakeholders in the 50% of households that actually pay those salaries what they think about it.

And to be clear, there are no million dollar salaries for aviators or any other government employee. Although I do think that the coaches at the various service academies are the highest paid employees of the federal government.

#27 | Posted by madbomber at 2021-09-22 02:46 PM | Reply

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