Theodoric writes:
What "conservative economic truths" are you referring to?
That investing in human capital; wages and benefits; is detrimental to the competitiveness and success of a company. You, yourself, have made such a claim.
I made no such claim.
What I said was that a company in an industry cannot unilaterally increase employee compensation without detrimentally affecting its competitiveness within that industry. I earlier said that if an entire industry raised prices (in the old days this would happen when unions, company by company, renegotiated contracts) that it would contribute to inflation, thereby reducing the buying power of the higher wages, potentially setting off an inflationary spiral, which has happened in the past.
But even your claim of what I said is not a "conservative economic truth." I don't think any economists, liberal or conservative, believe that
"investing in human capital; wages and benefits; is detrimental to the competitiveness and success of a company." I think the vast majority of economists believe that a company's competitiveness diminishes with diminished capital, which is what a unilateral increase in wages would do. Certainly there can be positive factors contributing to competitiveness that spring out of increased wages, such as increased retention, but the general principle is that decreases in available capital diminish competitiveness.
Mention was all that was done, but my position is that there are many ways to organize successful companies. I'm happy for Costco that they're doing so well (I have only your and RAZD's word for that, I haven't looked this up), but just because Costco is doing well doesn't mean that their corporate approach is the only way of being a successful company.
But they are a prime example that high wages and benefits does not make a company uncompetitive.
I didn't use the word "uncompetitive." I said that one result of unilaterally increasing wages would include, but not be limited to, reduced competitiveness. This isn't controversial but is something upon which there is broad, almost universal, consensus. One way companies increase competitiveness is by lowering costs, and employee compensation is one of those costs. None of us want lower employee compensation, but employee compensation is subject to economic forces that are very real. No economist would deny them.
Sure companies can be successful with low wages and crappy benefits; Walmart. But no one made that claim. You are throwing out a strawman. Walmart's success is on the shoulder of public benefits programs those on the right excoriate.
I went to the Fortune 500 list to see what company was at the top, and it happened to be Walmart. Others at the top are Exxon Mobil, Apple, Berkshire Hathaway, Amazon, UnitedHealth Group, McKesson, CVS, AT&T and AmerisourceBergen.
quote:
Costco can afford to pay such high wages because its employees are extremely productive.
They attract the best, so get above average productivity. And Costco employees are not dependent on public assistance.
But more productive workers deserve higher compensation. Your quote is an argument for hiring a more productive workforce, not for increasing the wages of every worker regardless of productivity .
This where a little knowledge is a dangerous thing.
Initially you provided no knowledge, just bald assertions. Thank you for providing a little information:
First of all Holiday Stores have been in the Duluth area for over 25 years. Kwik Trip first entered the market in 2015. Second of all, in order to get a feel for the number of stores you can not just search Duluth. The area around here is known as the Twin Ports. It includes Duluth, Superior, WI and surrounding cities and towns. By pulling up the websites for these companies I can get an accurate count of stores in the area. As Kwik Trip was not even in this area before 2015, I am going to include the area that encompasses their expansion post 2015. Holiday Stationstores has 20 locations, Kwik Trip has 21. All of Kwik Trips were built post 2015. The newest Holiday Store is at least 15 years old. But this is all another strawman. I never said they were the only chain in the area or that no one else is successful. Your claim is that higher wages and better benefits makes a company uncompetitive, This is patently not true.
Again, I did not say that higher wages and better benefits make a company uncompetitive. See above.
What I would say is that if Holiday StationStores substantially increased employee compensation to match Kwik Trip that it would have a detrimental impact on their competitiveness. HS is a bunch of interlocking pieces involving locations, store format, product mix, wholesale suppliers, employees, compensation structure, etc. You can't do a major yank on one of these pieces without having an impact on the rest. The same is true of Kwik Trip.
What you're seeing in the Duluth area with Kwik Trip is what we see played out across the country again and again: over time existing chains become tired and uninspiring, and then they are challenged by new chains with a fresh approach and more energy and imagination.
New chains displacing existing chains is a story that is repeated over and over and over again. Subway moved into New England and is still here all these years later. Quizno's moved into New England maybe 15 or 20 years ago, and now they're mostly gone. Same with Blimpie's. Jersey Mike's is just now beginning to move into the region.
Pizza chains have the same pattern (Pizza Hut, Unos, Papa John's, Domino's, Little Caesars, etc.), as do restaurant chains (TGI Fridays, Longhorn, Texas Roadhouse, Chile's, Applebee's, Ruby Tuesday, etc.). Eventually they all pass away, e.g., Howard Johnson's, Chi-Chi's, Horn & Hardart, White Tower, etc. It definitely cannot be claimed that the chains that displaced them all had higher employee compensation.
It's possible to create from scratch a successful corporation with a higher compensation structure. It's harder to stay a successful corporation if you didn't originally have that higher compensation structure already and then try to add it.
You and RAZD are making claims that you're not backing up with evidence. Where does your evidence of the success of Kwik Trip, Costco,
Are you claiming they are not successful?
No, I'm not, but why would I have any idea whether they're successful? Naturally I've heard of Costco and not Kwik Test, but why would I be aware of how they're doing competitively? Why would any random person? You made the claim, you support it.
But again, I wasn't questioning whether they're successful. I was taking you at your word regarding their success. What I said was that you've provided no evidence of your claim that Costco's and Kwik Trip's higher employee compensation is a contributor to their success.
Socialism means state ownership of business and industry
In fact using Wiki as you did, this is not correct.
etc.
etc.
etc.
You can't nuance the definition of socialism away:
"Social ownership of the means of production."
Even if all you mean by socialism is employee ownership or cooperative ownership, politically it's not possible to change what most people already think about socialism. When most people hear socialism they don't think Social Security, Medicare, Medicaid, welfare and healthcare. Older people carry with them the image of countries behind the iron curtain, while younger people think of the government taking over their lives.
Trump will slaughter anyone embracing the socialist label in November.
But no one is embracing that label are they? You seem to want to pin it on them, but no one is embracing it.
Bernie Sanders is embracing it. He was on Sunday's political analysis shows. He called himself a democratic socialist, which as you know since you've read the Wikipedia articles, is not all that different from plain old socialism. But it doesn't matter what modifier you put in front of socialism. Most people have a negative reaction to the word "socialism," and that isn't going to change in the few months left before the election.
--Percy
Edited by Percy, : Grammar.
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