Henry Ford figured it out in 1914 when he doubled his workers’ daily wage. He did so on the assumption that they would spend the additional money on stuff beyond subsistence needs and he was right — they bought Fords.
Companies today still haven’t learned that lesson and continue to treat workers as disposable, fighting the idea of a living wage and crying that the cost will destroy them.
The annual cost is probably around $50, which is a lot considering the pay.
Richard Reynoso, a Wal-Mart employee in Duarte, Calif., representing a campaign called Organization United for Respect at Walmart said in a letter to the company’s management: “I’m getting paid only about $800-$900 a month. The sad truth is that I do not have $50 lying around the house to spend on new uniform clothes just because Wal-Mart suddenly decided to change its policy.”
If pushed the action is likely to generate additional class action lawsuits, not to mention fan public outrage and generate a significant backlash.
But that isn’t what troubles me.
In the 21st Century our largest employers are the likes of Walmart and McDonald’s.
They pay $8 to $12 an hour and would pay less if they could get away with it.
Businesses on and off-line are working to improve your shopping experience, but most are unwilling to do what Henry Ford did 100 years ago.
Pay people enough that they can afford to consume.
Would you like to work for a company where the 401K matching on 5% of salary is as much as 11%? Where you can become a manager earning $62,000 plus bonus and company car with no college degree, no Union, no trade—nothing but hard work.
Of course, you’ll have to put up with snickers and even scorn if you mention your job in public.
All of that is what’s available to the 6,700 managers at company-owned McDonald’s restaurants.
“While an average McDonald’s grosses $2.2 million a year, seasoned managers who motivate employees and keep customers coming back can add more than $200,000 to that total.“Restaurant managers are in the most important position in our company,” says Richard Floersch, McDonald’s chief human resources officer.”
Moreover, with corporate culture being recognized as the moving force behind corporate performance, why is it that articles about changing culture in major corporations employing mostly skilled, well-paid workers, such as IBM, are met with serious discussion, while changing it in major corporations with mostly minimum wage earners, such as McDonalds, is marked down as hype?
Why was a cultural change at IBM seen as key to the company’s survival, but instilling pride in the workers at McDonalds, Taco Bell and KFC is viewed as hype, “Raising spirits is cheaper than raising salaries.”
Why do we expect young people to take pride in their first ‘real’ job, or care about the customer, when they were laughed at for the same attitudes/actions in their minimum wage job?
Why does our society denigrate those who work low-paying jobs, when they are honest, hardworking, raise families and even pay taxes, which is more than you can say for their wealthier counterparts?
In the same vein, why is the four-year grad, with a degree paid for by mom and dad, considered a better candidate than the one who took longer working ‘non-professional’ jobs to pay for the same degree from the same school?
Maybe companies need to wake up. No matter what their family’s economic status, I haven’t seen the same high sense of entitlement in kids who spent their summers working in average and minimum wage jobs as I have in the ones who worked frequently overpaid jobs for their parents or didn’t work at all.
Profits guaranteed. Isn’t it nice to know that some folks will make money as a result of the current disaster—and it isn’t even off stock options. All you need is a law degree and a spot at the right firm. Of course, you know who’s going to foot the bill, right?
Two other bits from Business Week; one could be considered investment intel and the other answers the question of why Ponzi schemes are popping up like mushrooms after a heavy rain.
Let Them Eat Big Macs
The swelling ranks of jobless can’t afford to dine out like they used to. While that’s bruising full-service restaurants, austerity is usually a plus for McDonald’s. The chain, which has been playing up its cheap eats, said on Jan. 26 that same-store sales jumped 7.2% worldwide in the fourth quarter, while operating income rose 11%. To pump up its numbers further in 2009, McDonald’s said it will spend $2.1 billion on construction, including 1,000 new outlets.
Ponzi, Ponzi Everywhere
Bernard Madoff may have pulled off the mother of all Ponzi schemes, but the downturn seems to be exposing lots of smaller-fry variants. On Jan. 26, for example, Nicholas Cosmo, suspected in a $380 million scam, surrendered to federal authorities on Long Island. The next day, FBI agents arrested Arthur Nadel, a Florida hedge fund adviser accused of bilking clients of tens of millions of dollars. Other cases in Florida, Georgia, Idaho, and Pennsylvania have recently come to light. Why now? Because in a downturn, investors often try to get their money out—and there’s no new cash coming in to pay them.
I wrote a guest post for Sean over at FranchisePick in which I said, “Why does our society denigrate those who work low-paying jobs, when they’re honest, hardworking, pay taxes and even manage to raise families?”
Then in an email Sean said, “I think this is a good topic and one that’s had some controversy – especially when “McJob” was added to the dictionary despite McD’s protestations.
I have personally seen many many times training situations where teens and adults were being trained in basic manners and courtesy that they never learned from home or school. We’ve got this snotty attitude instead of teaching the value of service.
My poor kids work… their friends pull up in brand new Audis they never had to work for. You value what you earn.“
A couple of decades ago I read a study that showed how a lack of ownership tied to a lack of respect for private property leading to a casual attitude to its destruction. (I can’t find a URL, so if anyone out there has it please add it to the comments.)
I don’t think this has changed, in fact, I would posit that it’s gone much further—
employers consider renters are less stable;
single people are subject to higher turnover;
car age reflects negatively on the owner;
clothes labels are indicative of intelligence;
and dozens more.
All this goes hand-in-hand with the writings of CandidProf and related posts and the angst found in thousands of article on the subject from around the world.
Why is it that articles about changing culture in major corporations employing mostly skilled, well-paid workers, e.g., Ford, are met with serious discussion, but changing it in major corporations, with mostly minimum wage earners, e.g., McDonalds, is marked down as hype?
Why is a cultural change at Ford seen as key to the company’s survival, but instilling pride in the workers at McDonalds, Taco Bell and KFC is viewed as hype, ‘Raising spirits is cheaper than raising salaries.’
Why do we expect young people to take pride in their first ‘real’ job, or care about the customer, when they were laughed at for the same attitudes/actions in their minimum wage job?
Why does our society denigrate those who work low-paying jobs, when they’re honest, hardworking, pay taxes and even manage to raise families?
In the same vein, why is the four-year grad, with a degree paid for by mom and dad, considered a better candidate than the one who took longer working ‘non-professional’ jobs to pay for the same degree from the same school?
Maybe companies need to wake up. I haven’t seen the same high sense of entitlement in kids who spent their summers working in minimum wage jobs as I have in the ones who worked frequently overpaid jobs for their parents or didn’t work at all.
And I, for one, am thrilled that companies such as YUM! Brands and McDonalds are finally building their people up and, hopefully, offsetting the normal teardown that goes with these jobs.
Entrepreneurs face difficulties that are hard for most people to imagine, let alone understand. You can find anonymous help and connections that do understand at 7 cups of tea.
Crises never end.
$10 really does make a difference and you’ll never miss it,
Henry Ford figured it out in 1914 when he doubled his workers’ daily wage. He did so on the assumption that they would spend the additional money on stuff beyond subsistence needs and he was right — they bought Fords.
All of that is what’s available to the 6,700 managers at company-owned McDonald’s restaurants.
Just three short goodies today.
I wrote a guest post for Sean over at 
