PASSHE Institutions Merging

[Horror Child]

Costco starts at $16 an hour plus they offer pretty solid benefits for hourly retail. Nationally, in-store employees actually average $24/hour. It doesn't affect their prices. Their founders also aren't billionaires. My local Costco closed an hour earlier one day and every employee was given a free flu shot out of the pharmacy. Walmart isn't doing that. I think it comes down to what the corporate focus is on: maximizing customer value or maximizing wealth. In all likelihood retail has been able to keep wages low by employing a young workforce. A 30 year old with a family isn't going to take a $11/hr retail job but an 18 year old will. Retail probably could have survived the internet and pandemic shopping trends better if they had employed a smaller workforce of higher-paid full-time employees who probably stick around longer and care more about their work than someone earning a paycheck to blow on their days off.

Labor costs don't affect prices?!?!?!?

[Fightingscot82]

Labor costs don't affect prices?!?!?!?

I'm a Costco enthusiast and have started reading on their business model since the holidays when I noticed their prices were lower than nearly anyone including Amazon. Costco has fixed profit margins on some items. For example, the markup is only 15% on clothing regardless of brand. I bought an Eddie Bauer down parka for less than what Eddie Bauer was selling it during a half off sale. They lose money on their marquis items too - the $1.50 hot dog & drink combo and the $5 rotisserie chicken. The founders of the company also recognize the need for a well-compensated full-time crew. I think that makes huge differences for employee morale and customer experience. So fixed profit margins and well-compensated employees tells me that Costco isn't concerned with maximizing profit. My only regret is that we live in a state where they can't sell booze.

Long story short, I believe Costco makes the conscious decision to not let labor costs affect prices. There's a tech CEO, Dan Price, who has been posting a lot online about corporations finding ways to maximize profit, exec compensation, and stock price during the pandemic.

[iupgroundhog]

I enjoy arguing, but I don't always believe in the side I take. In this case, I am on the side of the people with whom I was raised. I am sensitive to the hypocrisy of liberal elites who advocate for social justice while remaining blind to the casual cruelty inflicted on the people below them on the class ladder, even as I usually would vote for them. Many have turned to more conservative news outlets over the last decade,as the Democrats are perceived to have turned their back on the very people who need their support. Some view working class conservative politics as an obstacle to overcome without trying to understand them. Best to end here, but thanks to all for for participating.

I can appreciate that. Plus, the conversation has morphed beyond recognition.

I will say that I try to understand all perspectives. For the state of Pennsylvania, that is easy for me because I've lived in so many PA environments, whether it is urban, suburban, rural, small town, east, west, central. But I'll make one final comment about rural PA. Rural/small town PA was at one time (not that long ago) literally the envy of the world. During the time you and I grew up, it embodied an idyllic way of life. Today, particularly in terms of economics, it has slid backwards and been left behind. Meanwhile, they continue to thrive on a perception of independence, not being cognizant of how dependent they have become. As you may recall, I have often stood up for rural interests in these conversations.

I am curious, though. Since you chose to bail on the conversation by responding to my post, do you perceive that I am a member of the "liberal elite?"

[IUPNation]

Is it learned helplessness when they cannot fix themselves? Maybe they only have themselves to blame for their failures, but that smacks of self-righteousness. They do live with a lot of contradictions, but I acknowledged how economic inequality produces real suffering, and how the barriers to mobility are real.

[IUPNation]

Labor costs don't affect prices?!?!?!?

[IUPNation]

I enjoy arguing, but I don't always believe in the side I take. In this case, I am on the side of the people with whom I was raised. I am sensitive to the hypocrisy of liberal elites who advocate for social justice while remaining blind to the casual cruelty inflicted on the people below them on the class ladder, even as I usually would vote for them. Many have turned to more conservative news outlets over the last decade,as the Democrats are perceived to have turned their back on the very people who need their support. Some view working class conservative politics as an obstacle to overcome without trying to understand them. Best to end here, but thanks to all for for participating.

[IUPNation]

Just like a flat tax. Income should be taxed at the same rate per dollar earned, from dollar 1 on up. Awesome that we can find some common ground. Or should we due the "that's different because..."

[IUPNation]

The PA Department of Health reports to the governor. Report your concerns here

The Philadelphia media pretty much dropped the bomb on them and we are now supposed to be getting more soon....

[IUPNation]

Close down money loosers and fill'em with homeless.
Shift money from inner city public housing to pay for all these empty spaces.

[Horror Child]

I'm a Costco enthusiast and have started reading on their business model since the holidays when I noticed their prices were lower than nearly anyone including Amazon. Costco has fixed profit margins on some items. For example, the markup is only 15% on clothing regardless of brand. I bought an Eddie Bauer down parka for less than what Eddie Bauer was selling it during a half off sale. They lose money on their marquis items too - the $1.50 hot dog & drink combo and the $5 rotisserie chicken. The founders of the company also recognize the need for a well-compensated full-time crew. I think that makes huge differences for employee morale and customer experience. So fixed profit margins and well-compensated employees tells me that Costco isn't concerned with maximizing profit. My only regret is that we live in a state where they can't sell booze.

Long story short, I believe Costco makes the conscious decision to not let labor costs affect prices. There's a tech CEO, Dan Price, who has been posting a lot online about corporations finding ways to maximize profit, exec compensation, and stock price during the pandemic.

From Costco:

In 2019, Costco made $3.35 billion from membership fees, an increase of 7% from the previous year. Its entire net income for the year was $3.66 billion.

Costco makes a little of its money selling goods, and a lot of its money selling memberships.

But here's a simple scenario, non-club membership scenario. A pure service business currently employs 6 people at $10/hr for $60 total hourly labor cost. Business profit of $30/hr means a sell price of $90/hr.

Now individual labor wage is increased to $15/hr. What are the options for the business to handle this increase in labor cost?

1. Increase sell price to $120/hr. If, and that's big if, the business has pricing power, it can increase prices on its customers. However, every business will do this, which would be inflationary - all prices will rise - which erodes each individual's purchasing power. So much for each person's increase to $15/hr.
2. Decrease profit. Total hourly labor cost - 6 people * $15/hr = $90/hr, sell price of $90/hr, profit of $0. The business closes and 6 people are unemployed.
3. Decrease total labor cost. The total labor cost can remain $60/hr if the number of people employed is reduced from 6 to 4. Two people unemployed, remaining four people unhappy since they are doing 50% more effort, which they may not be able to do, so performance/output slides, customers are unhappy, business fails.
4. A combination of the first 3. Use 5 people, decrease profit to $25/hr, increase sell price to $100/hr. So one person unemployed, remaining people unhappy about doing 20% more work, owner unhappy with less profit, consumer unhappy with higher price, still inflationary.

Why not increase the minimum wage to $25/hr?

[stealth]

You're funny. You think McD's CEO's salary is affected by the performance of your local McDonald's. The vast majority of local McD's are franchises, that pay a franchise fee. By increasing the minimum wage all you do is pinch the local franchisee.

But in all reality, very few people working fulltime jobs make less than $15/hr. Only part-timers make that.

IUPNation, you are so sad, and you hypocrisy is blaring so loudly that I can hear it on other websites. My hope is that you put some critical thought to your beliefs and what you hear.

[iupgroundhog]

IUPNation, you are so sad, and you hypocrisy is blaring so loudly that I can hear it on other websites. My hope is that you put some critical thought to your beliefs and what you hear.

No need for personal attacks. Especially since you're a guest here.

You think Nation doesn't think critically? No, I think he does.

[IUPNation]

You're funny. You think McD's CEO's salary is affected by the performance of your local McDonald's. The vast majority of local McD's are franchises, that pay a franchise fee. By increasing the minimum wage all you do is pinch the local franchisee.

But in all reality, very few people working fulltime jobs make less than $15/hr. Only part-timers make that.

IUPNation, you are so sad, and you hypocrisy is blaring so loudly that I can hear it on other websites. My hope is that you put some critical thought to your beliefs and what you hear.

Let me guess..you voted for Trump.

You probably defend every ounce of Qpublican hypocrisy. I can hear you now. Probably Whataboutism 24/7/365.

[Bart]

I can appreciate that. Plus, the conversation has morphed beyond recognition.

I will say that I try to understand all perspectives. For the state of Pennsylvania, that is easy for me because I've lived in so many PA environments, whether it is urban, suburban, rural, small town, east, west, central. But I'll make one final comment about rural PA. Rural/small town PA was at one time (not that long ago) literally the envy of the world. During the time you and I grew up, it embodied an idyllic way of life. Today, particularly in terms of economics, it has slid backwards and been left behind. Meanwhile, they continue to thrive on a perception of independence, not being cognizant of how dependent they have become. As you may recall, I have often stood up for rural interests in these conversations.

I am curious, though. Since you chose to bail on the conversation by responding to my post, do you perceive that I am a member of the "liberal elite?"

I doubt there are any elite liberals on the board. I recall growing up in a Democratic area. My family had pictures of JFK on walls and table tops. I think things started going south when relatives and neighbors started going to Vietnam, while "college boys" and rich kids got deferments. No one considered Republicans favorably, although everyone respected authority. Anyway, I graduated with a "useless degree", went to a Marxist leaning graduate program, and even took graduate level philosophy courses on Karl Marx at Villanova. We all get labeled as something.

[iupgroundhog]

I doubt there are any elite liberals on the board. I recall growing up in a Democratic area. My family had pictures of JFK on walls and table tops. I think things started going south when relatives and neighbors started going to Vietnam, while "college boys" and rich kids got deferments. No one considered Republicans favorably, although everyone respected authority. Anyway, I graduated with a "useless degree", went to a Marxist leaning graduate program, and even took graduate level philosophy courses on Karl Marx at Villanova. We all get labeled as something.

He and his brothers were great comedians. I almost took a course about them for Main Line School Night.