This and the next post are both about fast-food employers, but a lot of the principles they endorse transfer to other fields as well ~ employees who are treated better and respected do better work and actually save the employers $$$ in the long run ~ Sooz

The Burrito Chain That Pays Entry-Level Workers $10 An Hour And Wants To Pay More
By Bryce Covert on August 30, 2013 at 10:15 am

Boloco, a Boston-based burrito chain, pays its entry-level workers anywhere from $9 to $11 an hour, most of them making $10, with many who advance into higher roles making $17 an hour or more, CEO John Pepper told Fox Business News.

Unlike the majority of his industry, Pepper told host Stuart Varney, “As opposed to constantly looking for ways to keep wages down, we’re constantly looking for practices and ways to bring wages up.” Given that labor is one of the biggest costs for fast food chains like his, many companies like McDonald’s and Burger King are notorious for keeping wages low. “It’s a lot easier to keep wages down than it is to find better practices, bolder practices, more efficient practices, which come through training,” he noted. But paying more and treating workers better is Boloco’s path to profits. “It’s about connecting with guests…and building a loyalty that drives people back, that alongside productivity is what builds sales and what builds profitability,” he said. “In that case you can pay people a lot more than what we pay as a rule in this industry.”

And while a burrito at his restaurant costs more than a burger at McDonald’s, a lot of the higher price is due to higher quality ingredients, not paying workers more. Those price increases for organic and humanely raised food have been greeted by customers who have said, “Okay, we’ll pay,” he noted. “But what about the people?” he asked. “What about paying people to come in and have high quality lives just like we want the cows to have high quality lives?”

Watch: [Sooz says video accessible via end link]

Pepper isn’t the only CEO to pay fast food workers much more than minimum wage. The In-N-Out burger chain starts employees at $10.50 an hour, and workers at Dicks Drive-In in Seattle start at $10. Moo Cluck Moo, a burger chain in Detroit, pays its workers $12 an hour.

The CEO of McDonald’s has claimed that his company also pays above the minimum wage, but even if that’s true, pay is mere cents above $7.25.
The company also admitted that its wages and benefits are so low that to get by workers should consider getting a second job and not paying for heat.

Low pay in the fast food industry has sparked a wave of worker strikes, the largest of which hit 58 cities on Thursday. Pay for entry-level fast food jobs isn’t just about how much teenagers will make at after school jobs. The majority of these workers are well out of their teens and a third are supporting children on their wages. More and more workers are finding themselves in these jobs: Low-wage work has represented the majority of the jobs added since the recession, replacing mid-wage positions.

Meanwhile, Pepper is right that higher wages can be a boon to business. Many studies have shown that raising the minimum wage doesn’t hurt job growth and can actually help businesses by raising productivity, lowering turnover, and increasing demand when workers have more money to spend.

http://thinkprogress.org/economy/2013/08/30/2556301/burrito-chain-pays-entry-level-workers-10-hour-pay/

I love this attitude ~ we've seen the same thing in Costco/Sam's Club comparisons ~ there's an important lesson to be learned ~ Costco's numbers are soaring while Sam's Club numbers are stagnant at best ~ there are "live links" to more/corroborating info in the original ~ Sooz

The Burger Place Paying Entry-Level Workers $15 An Hour
By Bryce Covert on September 9, 2013 at 12:56 pm

Michigan's Moo Cluck Moo currently pays entry-level workers $12 an hour — far above the state floor of $7.40 — but come October 1, that starting wage will rise to $15, co-owner Brian Parker told the Daily Beast’s Daniel Gross.

Asked why the restaurant, which has only been open since the spring, will raise its wages, Parker told Gross, “We always wanted to be at $15 an hour. It just feels human to do it.”

Its previously high wages brought the company better customer service, more skilled employees, less turnover, and free publicity. The time saved from having to hire new workers and train them will save it money. And with five people working at any given time, the increase in wages will mean an increase in hourly costs of $15, the cost of two transactions. The owners are betting that it will be a good investment.

While the restaurant only has one location outside of Detroit, other larger companies have followed a similar path. The West Coast In-N-Out burger chain pays entry-level workers $10.50 an hour. Massachusetts-based burrito chain Boloco pays $10 an hour and also wants to increase that figure. Dicks Drive-In in Seattle starts at $10.

Increasing wages has been found to be good for the bottom line. Raising the minimum wage can help businesses by increasing productivity, lowering turnover, and boosting demand from workers who have more money to spend on the food they make. There is also scant evidence that it hurts jobs.

Yet while the CEO of fast food giant McDonald’s claims its workers are paid above the minimum wage, wages are still too low for workers to get by. It admitted so itself when it created a model budget that instructed workers to get a second job and skip paying for heat. The pay in the industry generally is so low that workers have been striking for $15, the wage being offered at Moo Cluck Moo, with a strike that hit 58 cities last month.

http://thinkprogress.org/economy/2013/09/09/2591251/burger-place-paying-entry-level-workers-15-hour/

speaks truth to lies.

All the evidence shows that treating your employees well is more effective in the long run than constantly trying to essentially reduce their wages and conditions.

So, the real question for me is why do large corporations continue to act in these ways?

A couple of "off the cuff" answers spring to mind:

1. Its seems to be the easy and obvious way to make more money. Lower wages=higher profits don't they? To accept that the answer is "no" would require managerial groups to not only give up ingrained ideological predispositions, but to actually think about things. And since many (not all) of the managerial class think they already know the all the answers that can be a bit too much to ask.

2. Its endemic short-termism. Who cares about 5 years down the road? If I can come into a company and increase immediate profits, boosting next years bottom line, then it shows what a great manager I am and that will benefit me greatly when I come to apply for that new position.

3. Its what happens when you let the money men run the enterprise rather than people who actually know how the industry works.

Any other thoughts?

I think you covered it very well, Cattleman.

sure. people run businesses like an academic exercise. if you look at a balance sheet, you have cost of goods sold, and you have overhead. the idea is that you must generate enough revenue to cover expenses, but if your cost of goods sold is too high, then it will make it harder to do that. in other words, your cost of goods sold must be kept as low as possible if expenses are high.

what makes high expenses? well, salaried staff for one. fancy offices. costly benefits. bonuses. stuff that is completely unrelated to production- and stuff that managers live and die for. in other words, management is in competition with production (yet dependent on them) for resources. that is a typical top-down corporation.

but there is another approach that works. if management demands LESS, then there is more money for production, which means that you might actually have the same break even point if you skewed the finances more toward production than management. however, when the rewards came in, the management would get a smaller share of each dollar (which personally, i think is fair). the corporate world is heading in the opposite direction, however, so i don't know why i even bother posting stuff like this.