Topic: 20th Century Motor Company

[Weisshaupt]

20th Century Motor Company  was the fictitious Marxist company in Atlas Shrugged,  there the owners decided they would pay the workers according to their needs, not their abilities.

Not quite there yet, but check these morons out

His idea bubbled into reality on Monday afternoon, when Mr. Price surprised his 120-person staff by announcing that he planned over the next three years to raise the salary of even the lowest-paid clerk, customer service representative and salesman to a minimum of $70,000.

“Is anyone else freaking out right now?” Mr. Price asked after the clapping and whooping died down into a few moments of stunned silence. “I’m kind of freaking out.”

If it’s a publicity stunt, it’s a costly one. Mr. Price, who started the Seattle-based credit-card payment processing firm in 2004 at the age of 19, said he would pay for the wage increases by cutting his own salary from nearly $1 million to $70,000 and using 75 to 80 percent of the company’s anticipated $2.2 million in profit this year.

Let me guess, he is not publically traded?  Even so, is there venture capital involved and how do they like this little stunt? Maybe they invested money with this guy for fun!  It wasn't to (GASP!) make more money- that is for sure!
And how is this going to go when you need to hire employee 121 and the value they bring to the bottom line is an additional $20K?
Or Employee 130?  His old average wage was around $50K.. so you have to think that - at some point,  some employees are not worth to the business what they are being paid?

How many employees earning their 70K a year will resent the people earning $70K while working part time answering phones?
How much cronyism will there be when opportunities for new hires do come up?

What if there is a downturn in his business? Can he stay in business, or are these people smiling because they know in two years their employer will be laying them off or reducing these salaries?



Stop smiling you liberal jackasses.
There A'int No Such Thing as a Free Lunch.
Eventually you will pay for it - one way or another.

[richb]

The only way to have higher then average wages,  is to staff at much lower levels then an industry norm,  and have each employee be  far more productive.  In some cases they need to be able to do the work of two or three people in the lower pay, higher staffed competitor. 

It does work in some situations,  if the employees know that's how it works.   I know someone that has a warehouse where he raised wages (he had lots of turnover and other employee problems).   He however has less then half the staff he once had.   No one new gets in the door anymore either,  so for the unemployed, its not so great. 

Aldi is an example of a higher then average starting wage too.   Notice how few people are working there?   They have less then half the staff of a similar grocer.

[Pandora]

The guy right-front doesn't look so pleased .......

[Libertas]

The guy right-front doesn't look so pleased .......

He is working on his contact list and about to GTFO, as he should, this isn't going to end well, and the Democrat-Media Complex will bury this story when it collapses...if somebody asks about Gravity Payments a decade from now the silence will be deafening. 

This is a service industry, there is no way this is going to work in the long run, no way.  There will be jealousies between those of lower responsibility/hours vs higher responsibility/hours, the higher responsibility people with any acumen will leave for more fairly compensated positions elsewhere, those remaining in senior leadership will be a mix of elderly true-believer socialists (of what kind of business acumen?) and formerly low-paid workers promoted to a senior position because they spout crap their (OWS assclown looking) Dear Leader espouses (and they'll be like, gosh, so cool to hang with and know what exactly about their industry?), etc, etc...

Once an unfair capitalistic imperialist higher salary is reimposed for senior leadership so people who know more than jack sh*t can save the company the fraud in the design will be exposed and the happy happy times will be over!

[Weisshaupt]

The only way to have higher then average wages,  is to staff at much lower levels then an industry norm,  and have each employee be  far more productive.  In some cases they need to be able to do the work of two or three people in the lower pay, higher staffed competitor. 

It does work in some situations,  if the employees know that's how it works.

Yes, I think if your selection process is really good you can get employees who can do in this sort of  environment.. but each employee has to do more - and these people smiling obviously haven't figured out that for this to work  they will have to work much, much harder than they are now. 

And I can't imagine there would be a way to make Shareholders happy at all 80%+  of profits used up in paying employees higher salaries? I bought shares and invested in this why?  So the CEO could play Santa Claus?  You won't get  the dividends expected, and if publically traded,  the company can no longer grow at a fast enough rate-  unless of course they can find enough hard workers  who will earn their salaries in that socialist cesspool. Good Luck with that.

[AlanS]

http://money.cnn.com/2015/04/14/news/companies/ceo-pay-cuts-pay-increases/index.html

 

Price said he's the majority owner of the privately-held firm, which he started in his college dorm room 11 years ago. His older brother, who gave him seed money to get started, is the only other stockholder.

"My brother Lucas reacted with caution and questions, but not objections," said Price. He's single so he didn't have to explain his pay cut to a spouse.

So it sounds like the brother took a pay cut, too?

[richb]

The guy right-front doesn't look so pleased .......

He is the guy already making 70k probably.   He will now make the same as someone with no skills.   He will likely never get a decent raise anymore.   He likely will be working elsewhere shortly.   That's the biggest problem with this,  they will lose key people they can't really "afford" to lose.

[Weisshaupt]

Ongoing differences...

A Seattle CEO who received widespread recognition after announcing plans to raise his credit-card-processing company’s minimum salary to $70,000 is being sued by his brother, King County Superior Court documents show.

Lucas Price, co-founder and director of Gravity Payments, accuses his brother, co-founder and CEO Dan Price, of violating Lucas’ rights as minority shareholder and breaching duties and contracts, according to court records.

The complaints were initially signed March 13 and filed April 24, 11 days after Dan Price announced the pay raises. Attorney Greg Hollon, who represents Lucas Price, said that while that announcement may play a role in the proceedings, it does not relate directly to the lawsuit.

In a separate filing, Dan Price denied all complaints brought against him and said Lucas Price did not raise any concerns about executive compensation or his ownership benefits as a Gravity Payments director.

“I know the decision to pay everyone a living wage is controversial,” said Dan Price during a phone interview.

“Although the decision was not entirely made for business reasons, my team and I are committed to making my vision a business success. I deeply regret the rift this has caused in my relationship with my brother, who I love, and I’m hoping and praying for a quick resolution that’s positive for everybody.”

A trial date is set for next May 3.

Who could have seen it coming...

[Libertas]

Yeah, that's a damned shame...

 

[AlanS]

His brother must be a capitalistic pig.

[Libertas]

His brother must be a capitalistic pig.

In this neck of the woods (HQ is in Seattle) they have to be an endangered species.

Now, his brother will be made out by these loons to be the bad guy, when in fact this scheme would eventually implode...the capitalist pig may have just done people a favor they will neither recognize nor appreciate.

[AlanS]

His brother must be a capitalistic pig.

In this neck of the woods (HQ is in Seattle) they have to be an endangered species.

Now, his brother will be made out by these loons to be the bad guy, when in fact this scheme would eventually implode...the capitalist pig may have just done people a favor they will neither recognize nor appreciate.

Since they're in Seattle, I'll bet he's only a capitalistic pig with his money. He's still a socialist with other people's.

[IronDioPriest]

To make such a promise without first clearing it with the minority shareholder - who happened to have given you the "seed money" to start the business, and who happens to be your brother - takes the kind of hubris and self-righteousness that can only come from a committed Leftist.

I have a brother I could imagine doing such a thing. Thankfully, the only business I will ever have with him is our parent's estate, and I am the executor.

[AlanS]

Thankfully, the only business I will ever have with him is our parent's estate, and I am the executor.

WIN!

[Pandora]

Thankfully, the only business I will ever have with him is our parent's estate, and I am the executor.

WIN!

Yeah, WIN! ..... after the lawsuit.  Because that's just how they roll.

What it took was an email to Gunsmith's sisters -- that I wrote under his name -- telling them to either agree to sell the damn house (his Mom's) as is or, as we live very frugally and have no kids, whereas they have four kids between them and are looking at college tuitions and taxes/utilities/water-sewer on the house until it fell in on itself, which we could very well afford, the ball was in their court.

They caved.

The only reason we didn't end up in court is because 1) one of the BILs is a cheap bastid and 2) Pan plays hardball.

[Libertas]

Thankfully, the only business I will ever have with him is our parent's estate, and I am the executor.

WIN!

Yeah, WIN! ..... after the lawsuit.  Because that's just how they roll.

What it took was an email to Gunsmith's sisters -- that I wrote under his name -- telling them to either agree to sell the damn house (his Mom's) as is or, as we live very frugally and have no kids, whereas they have four kids between them and are looking at college tuitions and taxes/utilities/water-sewer on the house until it fell in on itself, which we could very well afford, the ball was in their court.

They caved.

The only reason we didn't end up in court is because 1) one of the BILs is a cheap bastid and 2) Pan plays hardball.

I'd put more weight on that...but that's only because of my functional self-preservation gene.   

[Glock32]

Sounds like the CEO knew the lawsuit would be coming, and made this salary announcement as a preemptive populist maneuver in order to establish himself as "the good guy" (at least from public perception).  The whole "man of the people" thing is very old schtick.

[richb]

Surprise surprise,   well not really........

http://www.sfgate.com/technology/businessinsider/article/A-CEO-raised-his-company-s-minimum-wage-to-6418666.php

The company that is raising its "minimum"  wage is losing their important skilled people. 

[Libertas]

 

[AlanS]

Are we supposed to be surprised?