Applebee’s exec urges using high gas prices to push lower wages, sparks walkout

https://www2.ljworld.com/news/general-news/2022/mar/23/an-email-urging-lower-wages-for-new-employees-due-to-higher-gas-prices-sparks-walkout-at-lawrence-applebees/

by Geekette • 4 years ago

547 544 4 years ago

www2.ljworld.com

metadat3• 4 years ago

Wayne Pankratz, executive director of operations for Applebee’s franchisee Apple Central LLC.
“The advantage this has for us is that it will increase application flow and has the potential to lower our average wage. How you ask?
“Most of our employee base and potential employee base live paycheck to paycheck. Any increase in gas price cuts into their disposable income. As inflation continues to climb and gas prices continue to go up, that means more hours employees will need to work to maintain their current level of living.”

Just wow, what a soulless scumbag.

Not that I ever went to Applebee regularly, but seeing as how this is the kind of person the organization promotes, I will never return. I'd even rather starve. Utterly disgusting.

Thank goodness for HN today, because with this broadcast I know that by tomorrow or the next day the news feeds will be awash with this story.

Is it just one worm, or is this Apple is rotten to the core?

toomuchtodo2• 4 years ago

Offtopic: These people are everywhere, which is why policy guardrails to defend against sociopaths is so important.

aerovistae• 4 years ago

Not off-topic. Strictly on-topic.

colpabar• 4 years ago

To put this another way: any argument that boils down to “the free market will solve it” is complete bullshit because it doesn’t account for these people.

profile532• 4 years ago

Agreed. One of the things that surprised me the most working in healthcare was how many people have a flagrant disregard for anything but self interest — even human life. Sadly the policy mechanisms have failed to keep these people out.

HarryHirsch2• 4 years ago

And now you know why everyone talks so loudly about property rights - to have people think that they are the only kind of right that needs protection.

user3939382• 4 years ago

My open letter to Wayne would read: your food sucks, the portions are small, and your prices are high. The service is hit-or-miss at best.

You’ve bean-counted this chain into the ground, maybe spend a little less time looking at financial tricks on your balance sheet and a little more figuring out how you can make food people want to eat at a reasonable price.

mym19903• 4 years ago

I can hardly blame the hit-or-miss service when you have to worker under management like this.

nvahalik3• 4 years ago

I think one of the overlooked pieces of the email is on the second page. I read it yesterday so my memory isn't super fresh. But he essentially says that:

* they've been hiring people at $18-20/hr

* the government pandemic aid/unemployment is dropping off and therefore they are no longer "competing with the government"

I think a lot of the "progress" with increasing wages was artificially inflated by government overspending of unemployment and COVID benefits. The people out there looking for jobs were in a sellers market. They could get a better rate because people were staying at home because "they could make more on unemployment". Now we're moving back to a buyer's market as that runs out and people are forced to re-enter the workforce.

While I think we can agree what he is saying here is cold, he has an interesting point. Ultimately the government is responsible for this and it will be interesting to see how it impacts wages and the mid-terms given what inflation is doing.

Personally, it seems like we are in for a "correction" in the labor market where we will see wages go down since more people _need_ jobs and aren't relying on government handouts. But I think he's mainly pointing out that the wages were artificially high and are going to lower back down. Perhaps to $12-15 an hour? Who knows.

Schroedingersat4• 4 years ago

Seller's market is a funny way of saying they're not being held hostage for their lives.

mym19903• 4 years ago

I think thinking through the economics of the situation is one thing, but voicing it to the people you employ is a bit different.

sour-taste2• 4 years ago

OK, agree with the sentiment but:

I'd even rather starve

A bit dramatic don't you think? Hyperbole and outrage doesn't usually make for productive conversations.

dvtrn• 4 years ago

Fasting as a form of protest is now “hyperbole”, is it?

daenz2• 4 years ago

Aside from the fact that this person is a soulless scumbag, how do you ever even get to the position of executive director without realizing what a toxic and abusive attitude that is and should never ever be expressed by anyone in his position? Did he think that what he said was smart business sense? Is he that disconnected from the average employee? I just don't understand how it made it past all of the ethical filters that someone in a leadership position should have, and how that failing never manifested itself sooner.

tablespoon2• 4 years ago

I just don't understand how it made it past all of the ethical filters that someone in a leadership position should have, and how that failing never manifested itself sooner.

Ethical filters? They're probably less likely than you think. There's a not-uncommon idea that the sole ethical obligation of a business is to make money for its shareholders, and this soulless scumbag seems to be thinking that way.

This guy's professional mistake probably just saying the quiet part loud, not so much thinking what he did or acting on that strategy.

conductr• 4 years ago

I’ve been at executive level for a decade or so and am honestly not surprised at all.

1) their main job is “be strategic” and as such they throw out all kinds of horrible ideas to improve the normal business metrics / profitability. In healthcare, I hear things that clearly and obviously would worsen patient care and the line “let’s run that by Clinical” essentially means I really doubt that idea deserves consideration.

2) they’ve been hit with a multitude of problems. Rising wages is certainly the hottest topic since they were furloughing people in 2020. They begrudgingly raised menu prices. It continues to puzzle them where all the labor went?

3) as much as I hate to admit it, there might be some truth to the point he’s making regarding gas prices. I’d never put that in writing, but it happens and is rather normalized behavior.

kirykl• 4 years ago

Happens all the time. Steve Jobs had several non poach agreements which both lowered wages and lowered attrition

wahnfrieden4• 4 years ago

This is the economic model they operate within. It’s dangerous to paint systemic issues as bad individual actors because it gives false relief when individuals happen to appear dealt with or reformed but the structural issues and powers remain. See for example the false relief of On the Waterfront’s ending (an incredibly and subversively anti-worker film for this reason)

watwut• 4 years ago

I mean, yes.

But also, these people do have a choice. They could work elsewhere, they could be more ethical. It is more that the system picks and rewards people like this.

What is often forgotten are many people who reject positions and situations and systems like this. And work elsewhere, for less money and less power, because they made active choice to not be like this.

happytoexplain• 4 years ago

It's both. There's a tendency to excuse bad behavior because they "have to" due to systemic forces, but the system does not have them at gunpoint. Businesses in this system can and do survive without being ruthless and amoral right up to the edges of legality, even when they don't reap the rewards of a positive image because they decline to publicize such small integrities. You're right, however, that the system is the bigger problem.

bin_bash• 4 years ago

It seems you're mixing up Applebee's and the franchisee that he works for—Applebee's never promoted him.

dominotw• 4 years ago

how you ask?

prbly thought he came up with a genius insight

endisneigh2• 4 years ago

I wonder what the USA would look like if minimum wage was defined as; two people being able to afford a 1 bedroom apartment within a 1 hour drive without traffic.

The static (both in the nominal and inflation adjusted sense) for minimum wage doesn't make sense imo. Minimum wage should be tied to some level of living (not necessarily a great living, but something)

This guy smh

elil17• 4 years ago

God a one hour drive without traffic is like a inhumanely long commute

Interesting thought though

shadowgovt2• 4 years ago

Apparently, a little under 1 in 10 US workers have a 1-hr-plus commute time (https://www.census.gov/content/dam/Census/library/publicatio...).

wnevets2• 4 years ago

I wonder what the USA would look like if minimum wage was defined as; two people being able to afford a 1 bedroom apartment within a 1 hour drive without traffic.

Slightly smaller yachts for the executives.

gruez19• 4 years ago

Slightly smaller yachts for the executives.

Yeah, it will result in lower real income for executives ...along with anyone that make more than 3x the poverty threshold, per CBO's report:

https://en.wikipedia.org/wiki/Minimum_wage_in_the_United_Sta...

wccrawford• 4 years ago

That's not nearly enough detail for the setting of the wage. Companies would simply assume that they always eat the cheapest food, buy the cheapest transportation, never go on vacation, no luxuries at all, etc etc. If you don't factor all that in, they'll factor it out.

TaylorAlexander2• 4 years ago

Companies would simply assume

This could be defined by local governments with additional standards not written in to this internet comment.

tartoran3• 4 years ago

Even with all that factored in, and even with skipping meals, not traveling anywhere minimum wage does not afford one a roof over their head. Maybe with hours of commute it could start working out (if far away remote places are considered) but commute time is not included as wage and commute also costs money so it breaks the equation again. But CEOs are getting insane paychecks and bonuses.

Schroedingersat4• 4 years ago

Still a great deal better than the current situation. Currently if you do all that stuff and have room mates you might break even.

I'd be here for using the same standards as rental agencies do though so it's actually possible to get a place: 3x the rent of 1 bedroom for one full time job. And make it within 30 minutes during peak hour (by whichever means is fastest). Also if they cite a train as their fastest, then no car or license requirements on the job and no penalizing anyone if the train is late.

If they want to be feudal lords, they can at least have the bare minimum responsibilities that actual feudal lords had.

bo10244• 4 years ago

A universal basic income would have some advantages over a minimum wage. Minimum wage interferes with supply and demand in the labor market, which is why some economists dislike it. UBI moves the supply curve to a different place, but it allows those principles to function.

xwdv2• 4 years ago

UBI won’t do anything I’m afraid, that experiment already failed during the pandemic and now we have massive inflation across all assets.

bogwog• 4 years ago

UBI could allow the elimination of minimum wage entirely, along with a ton of other scattered welfare programs that have lots of administrative overhead and the typical middleman industries that leech off of government programs.

It’s a no-brainer!

glitchc2• 4 years ago

1) UBI is not UBI unless everyone gets it.

2) Any income surplus generated by UBI is rapidly consumed by middle people and rent-seekers. That’s how we get inflation.

boredumb• 4 years ago

Would probably look like everyone working for the same dozen companies.

Grollicus• 4 years ago

There'll be a bunch of cheap singular apartments spread all over the US - let's for convenience's sake assume they're about a one hour drive apart from each other but that's a totally random number of course.

You can rent them for very cheap but just as you're about to move in they suddenly become unavailable for whatever reason? Probably the owner lost their keys or something and then lawyers can argue for years if the owner is actually required to hand over the keys. Or maybe the apartment has no way to enter and lawyers can now argue for years if an apartment needs to have a door?

At least that's what I can imagine would happen.

tshaddox3• 4 years ago

You can rent them for very cheap but just as you're about to move in they suddenly become unavailable for whatever reason?

I mean, presumably in this hypothetical situation we wouldn't want to simultaneously dissolve basic renter's rights.

tablespoon2• 4 years ago

> I wonder what the USA would look like if minimum wage was defined as; two people being able to afford a 1 bedroom apartment within a 1 hour drive without traffic.
[imagined nonsense rules-layering]

That won't happen for two reasons:

1. It requires a massive conspiracy.

2. Any law like the GP describes would most likely be written to block off the exploits that it took you five minutes to think of. Exploits that are missed can be addressed in subsequent laws.

Practically, a minimum wage defined like the GP's would require a detailed census of actually-paid one bedroom apartment rents, which would be immune to your exploits.

quantum_magpie2• 4 years ago

two people being able to afford a 1 bedroom apartment within a 1 hour drive without traffic.

My immediate reaction to this statement was.. it's insane? In my opinion it should read 'a single person able to afford a 1 bedroom apartment within an hour of public transport commute.'

Otherwise it sounds like you don't think anyone should be able to live anywhere reasonable without roommates?

namecheapTA• 4 years ago

He didn't say that no one should live reasonable places without roommates. He said that the few percent of people making the lowest wages in the country might have to have roommates.

srjek• 4 years ago

That was also my first reaction, but an alternate reading is that it's two people living on the (minimum) wages of one person.

monkeybutton2• 4 years ago

Perhaps the assumption is of a couple living together? Also known as: shack up and produce offspring/future worker bees.

shafyy• 4 years ago

Exactly. Even the mindset of thinking in "driving" vs. walking or public transport shows a lot.

MisterBastahrd3• 4 years ago

An hour? Why is it acceptable or reasonable to spend 2 hours of your unpaid time wasted on commuting?

jpcfl2• 4 years ago

Otherwise it sounds like you don't think anyone should be able to live anywhere reasonable without roommates?

I think your confusing "should be able to" with "shall be able to, enforceable by law".

I don't expect that a 15 year old working his first job as a fry cook at an Arby's should be compensated enough that he can afford to live on his own. In fact, that could be dangerously disincentivizing his hard work toward his education.

licebmi__at__• 4 years ago

It’s funny that the ideals of granting everyone “life, liberty and a the pursuit of happiness” are regarded as wisdom, but as soon as somebody tries to ponder of what that might be on the specific, then it’s regarded as crazy.

bee_rider4• 4 years ago

Also, you'd think the people with 'traditional values' or whatever would be really excited if a single worker could support a couple.

Aeolun• 4 years ago

This sounds to me like they want to be able to provide for a SO?

foolfoolz• 4 years ago

living alone is a luxury all over the world. i don’t think it’s good to expect minimum wage will afford you a luxury style of living. we don’t have the infrastructure to support that for all. nor does any country

syshum2• 4 years ago

Why is it reasonable to expect people to live alone. I would think people would desire people to have roommate for environmental and other reasons?

johnrob• 4 years ago

Without debating the merits of said concept, the effect would be to (finally) boost the supply of housing, and find a way to transition (decouple?) stored wealth from real estate assets to something else.

gruez19• 4 years ago

I wonder what the USA would look like if minimum wage was defined as; two people being able to afford a 1 bedroom apartment within a 1 hour drive without traffic.

More labor being "outsourced" to cheap counties, for one. Rather than a restaurant making meals on site, they'll do most of the prep work 50 miles away where the CoL (and minimum wage) is cheap and truck it in.

tshaddox3• 4 years ago

I'm pretty sure any restaurant in the United States that prepares meals on site does so because that's a crucial part of the product they're offering, not because it's cheaper to prepare the meals on site.

exac• 4 years ago

Correct me if I'm wrong, but wouldn't it be better for the environment if all the produce is delivered in one trip, verse the environmental cost of 50 employees driving 100 miles / day? I'm assuming the LCOL employees live close to the factory.

babelfish• 4 years ago

Places like Applebee’s already do this…

Schroedingersat4• 4 years ago

Nah,

Make it one bedroom per adult (so 1 bed apt for one, or 2 bed for 2, whichever is more) with a 30 minute commute in peak hour (by any means), as well as enough left over for a deposit on a similar home in 5 years for 20% lvr assuming current property value growth continues.

paulpauper• 4 years ago

there are way more expenses besides that. it will never be enough without creating problems . Rather than putting the onus on business, just fire up the brrrrinter.

munk-a4• 4 years ago

I am failing to understand what that second sentence means - can you de-meme it a bit?

sokoloff5• 4 years ago

The word “afford” is doing a lot of work there. Is paying 40% of gross income for rent “too much”? 35%? 30%? What if utilities were included vs not? 10th percentile rent? 25th percentile?

Spooky238• 4 years ago

Usually 36-40% is the standard. Around $1000 assuming $15 minimum wage and full time employment.

There’s already a standard for this with things like Section 8 vouchers. It’s hilarious how many HN commenters think these are intractable, impossible problems.

wernercd2• 4 years ago

That idea ("1 bed room within 1 hour") is simplistic when you consider places like CA that have NIMBY brigades and huge amounts of red-tape making housing needlessly limited driving up prices with bad leadership.

Hard to feel super supportive of massive changes to min-wage for places that literally make affordable housing impossible.

Growing population + massive regulation + NIMBY = you're gonna have a bad time.

Increasing minimum wage without fixing other issues is a ticket to non-solutions.

Spooky238• 4 years ago

California is subsidized by the people living in their cars.

Wage adjustment like that will drive some of the market effects that are suppressed by the inertia that unchanging property taxes creates. Grandma would move out of her 4 bedroom home that costs $300/yr in taxes if she had to pay the gardener $40/hr.

Those cost increase tax would reduce property cost. In states where property tax adjusts you can see that dynamic.

NYC metro area is cheap compared to California, and the depressed upstate cities feature high taxes and incredibly cheap property.

throwaway0a5e2• 4 years ago

if minimum wage was defined as; two people being able to afford a 1 bedroom apartment within a 1 hour drive without traffic.

It would implode or we would adjust our standards in every other area to make it happen. We are simply not rich enough to afford that for everyone the way things are currently structured.

sg47• 4 years ago

You should also add 'with one job per adult family member under 65'.

dlbucci• 4 years ago

Or, you know, have a Cost of Living/Inflation adjustment every year. That's such a simple idea to me and it's sort of insane to me that not only is that not something that happens, but no one seems to be even suggesting it (or at least, no politicians are campaigning on it). Hell, adjusting the 70's minimum wage to today's dollars puts it at like $24, so just hearing that, I don't know how it shouldn't be around there today, but people talk about $15 like it's crazy.

frumper• 4 years ago

Maybe a source? I was curious and using federal minimum wages from either 1970($1.45/hr) or 1979($2.90/hr) would yield less than $12/hr. I know you can contest how inflation is calculated, or use shadow stats, but then you're getting into murky waters. The official numbers are no where near the claim of $24/hr though.

jandrewrogers• 4 years ago

That math doesn't work out. $24/hr is roughly the average (not median) US wage today. $15/hr is close to the median US wage. Making that work would imply extreme wage compression for everyone regardless of occupation or skill.

metaphor2• 4 years ago

Hell, adjusting the 70's minimum wage to today's dollars puts it at like $24...

Bullshit...the unqualified assertion doesn't even pass a ballpark sniff test using Department of Labor's historical federal minimum wage rates[1] and Bureau of Labor Statistics' CPI inflation calculator[2] against Feb 2022 buying power.

  | Eff Date | Rate | Today |
  |----------|------|-------|
  | Jan 1970 | 1.60 | 12.01 |
  | May 1974 | 2.00 | 11.68 |
  | Jan 1975 | 2.10 | 11.44 |
  | Jan 1976 | 2.30 | 11.74 |
  | Jan 1978 | 2.65 | 12.03 |
  | Jan 1979 | 2.90 | 12.05 |

[1] https://www.dol.gov/agencies/whd/minimum-wage/history/chart

[2] https://data.bls.gov/cgi-bin/cpicalc.pl

sjmm19892• 4 years ago

Um, actually... You're in for a bad time mate: ($1.00 = $7.31) https://www.in2013dollars.com/us/inflation/1970?amount=1

Even at a 100 year range it comes out to: ($1.00 = $16.89) https://www.in2013dollars.com/us/inflation/1922?amount=1

BUT, these numbers may not yet be taking into full account some of the most recent upticks in inflation. SO, there may be some room for error yet. But $24... sorry pal, but nope. Not quite there yet.

And for the Canadians out there: It's pretty much the same deal. I think last I checked, it was at $15.65 for 1$ @ 100 years range.

imgabe7• 4 years ago

Mass confusion. Every location has to have a custom minimum wage based on the local real estate market? How are you going to enforce that?

How about people figure out how much money they need to afford the lifestyle they want and then get a job that pays that much?

all23• 4 years ago

The US Department of Defense already has a Cost of Living Allowance (COLA) calculated for most of the United States, large parts of Germany, and large parts of Korea.

The work is already done.

gunfighthacksaw• 4 years ago

Every location has to have a custom minimum wage

I think the federal structure of the USA lends itself nicely to that problem.

There would be an issue in extremely heterogeneous states like Washington or California, where the big cities on the coast are known for being expensive while the interior is often cheaper, less desirable and subject to snobbery, as in the case of Bakersfield which I have never heard anything good about.

philipsunrise• 4 years ago

For a lot of people, the lifestyle they want is "a place to live" and getting a job that pays that much is impossible.

Wowfunhappy2• 4 years ago

That was my initial reaction, but the more I think about it—is it really so unreasonable? Right now, we force employees to deal with the burden of ever-changing real-estate markets. Why not make employers do that?

And if it's too much of a hassle for the employer, just pay your employees substantially above the minimum.

gotaquestion2• 4 years ago

How about people figure out how much money they need to afford the lifestyle they want and then get a job that pays that much?

What if your lifestyle consists of:

1. pay off student loans in 10 years

2. be able to take transit to work (can't afford a car)

3. save at least 5% of take home pay to get a used car

4. eat ramen and salad

5. maybe see a movie once a month, or go to a bar twice a month

6. internet & cell phone

7. try not to starve or get evicted

8. avoid more than 2 roommates

9. have Obamacare catastrophe-ony health insurance (bare minimum)

And the only job you can get doesn't even pay for that?

That's pretty much the lifestyle of every 30 something I know who is struggling. That's also why this and student loan debt is being called a crisis, because it is. It's not like people honestly want a lifestyle that involves a McClaren and weekly trips to Bali.

thepasswordis• 4 years ago

I wonder what the USA would look like if minimum wage was defined as; two people being able to afford a 1 bedroom apartment within a 1 hour drive without traffic.

It would look like both minimum wage, and rent/real estate prices going directly to infinity.

tenebrisalietum3• 4 years ago

I wonder what the USA would look like if minimum wage was defined as; two people being able to afford a 1 bedroom apartment within a 1 hour drive without traffic.

A lot of stuff would be automated or simply not exist. I don't see how high minimum wage can "work" to solve social issues if companies can choose between not hiring people and paying a high minimum wage.

munk-a4• 4 years ago

If automation was free it'd be here already. Automation creates high skilled jobs to manage the automation - it can be a significant labour save but the way healthy economies work that freed labour is going to find some other service to offer.

kube-system• 4 years ago

It would look like somewhere between $7.25 - $725/hr, depending on their circumstances.

ALittleLight6• 4 years ago

I think there should be an exception for people who are financially dependent on someone else. If you're a teen living at home you should be able to work for whatever someone will pay.

bobro• 4 years ago

why?

mrfusion• 4 years ago

You should include traffic in it.

brightball3• 4 years ago

I know this won’t be popular but minimum wage shouldn’t exist. Basic income, sure but not minimum wage. Every discussion of minimum wage blames employers for something that is completely out of their control: inflation. When the price of gas, housing and food rises the business where you work doesn’t suddenly have more money to hand out. If anything their costs have gone up too reducing what they can afford to pay out.

It blows my mind that people continue to act like rising costs are the fault of their employers, who have no control of it at all.

No doubt, this exec in particular was a moron who deserves to be fired for even suggesting what he did but the overall sentiment just doesn’t jive for so many businesses that are getting squeezed harder and harder everyday.

tssva2• 4 years ago

Hmmmm, how could a business possibly compensate for increased costs including labor costs?

account425• 4 years ago

I agree that UBI would be better than minimum wages. Until we have UBI though (and it does not look like that it will be a reality anytime soon if only because those with wealth really don't like wealth redistribution schemes) minimum wage is the next best thing we have.

deegles• 4 years ago

A better method is to give everyone a universal basic income enough to afford a place to live and to eliminate the minimum wage. That way jobs would have to pay what the job is worth to people, not amounts that create a poverty trap.

vsareto• 4 years ago

The real estate industry would need significant overhauls before tying it to UBI. A minimum wage increase based on inflation would be vastly easier to get done politically in the US and even that bare minimum still hasn't happened yet.

nostrademons3• 4 years ago

Inflation, probably followed by corruption. Minimum wage would rise to the point where a person could afford a 1BR apartment within a 1 hour drive without traffic. Then the rents of those 1BR apartments would rise to capture that new minimum wage. Then minimum wage would rise to afford the new rent, and so on. Eventually someone's going to say "Hey, I own an apartment block downtown, I'm supposed to rent it out to the hoi polloi, but I'll let you live there rent free if you work for me and do exactly as I say, wink wink".

This is a very common situation in much of Latin America - both inflation being transmitted through CoL-indexed social goods, and the corruption that comes from trying to bypass that.

Any durable solution needs to address the questions of "How do we ensure that there are enough 1BR apartments within a 1 hour drive for everyone who wants one to get one?", "How do we incentivize the construction of these 1BR apartments?", "How do we maintain the desirability of these apartments once they're built?", and "How do we prevent one firm from owning all of the desirable 1BR apartments and setting whatever price they want?"

dv_dt• 4 years ago

If the rent pricing exceeds the production or maintenance cost of the apartments by too high a profit margin, then a government or regulated private entity should be formed to build them at a reasonable margin, thus controlling the minimum wage growth.

Alternately a large enough ratio of government controlled units within a market could be managed to provide a market weighting to reasonable prices. (you can see that in play in some European cities).

glenstein4• 4 years ago

Then the rents of those 1BR apartments would rise to capture that new minimum wage.

This is commonly expressed as a consequence of raising the minimum wage, but in the most nuanced discussions of inflation that I've been exposed to, people are mindful of the fact that inflation ripples out into different segments of the economy in different ways.

I think the most plausible outcome is that certain segments of the economy function as shock absorbers, which take the hit of inflation disproportionately as the economy rebalances itself and relieves pressures on segments of the economy that were being squeezed unsustainably hard.

And so there is indeed a ripple effect of raising the minimum wage, namely there's more money to spend, but it radiates out into the economy in disproportionate ways, and can be a net benefit to wage earners because prices on critical necessities may rise, but not in proportion to the rise in wages.

colechristensen3• 4 years ago

Zoning. You link the "zones which employ people" and "zones which house people" to balance so you don't have significantly more jobs than homes.

Next you zone for type of housing, where you only allow a certain percentage of the most profitable 1BR apartments to be built, and require those to be above certain size thresholds so that a variety of life situations can actually live in your city.

You don't need to "incentivize" construction, the people that do that already make enormous amounts of money.

cbozeman• 4 years ago

That's a very long way of saying, "We don't have enough housing in America."

ummwhat3• 4 years ago

My pet theory is cities are malthusian. Contrary to popular belief, Malthus didn't predict runaway population growth. What he actually predicted (and was right for most of human history), is that any gains in productivity would be eaten up by population growth until the average wealth per person diluted down to it's previous level. So back to cities. Here's my pet theory. You build more apartments, or faster trains or whatever to expand the availability and affordability of 1 be apartments within a 1 hour commute, and it will work for a while, but within a few years people chasing opportunity will have moved to the city until the rents and costs of living eventually return to previous levels. This dynamic works because unlike pre industrial malthusian times, cities do not rely on birthrates for population growth.

bduerst5• 4 years ago

New construction is unlocked by increased income-linked demand and rents only marginally increase.

andy_ppp• 4 years ago

Norway is really corrupt hey.

113• 4 years ago

Surely if it's the case that rent will always absorb any increase in wealth then that is a housing problem, not a wage problem.

breadbreadbread• 4 years ago

rent control

bun_at_work• 4 years ago

Unfortunately, adding complexity to legislation often makes it impassable. This is especially true now, with the increased polarization in our politics.

Some variation of your suggesting is better than what we currently have for minimum wage. However, getting that through congress seems impossible, IMO.

woah• 4 years ago

I wonder what the USA would look like if zoning laws were defined as: Issue building permits until people can afford a 1 bedroom apartment within a 1 hour drive of work without traffic

pvarangot2• 4 years ago

You need to issue building permits and also build public transport infrastructure to guarantee the 1 hour commute. Driving from all around the Valley to Big Tech campuses is already pretty bad with traffic and the highways are not bad, and the urban density is ridiculously low.

karaterobot• 4 years ago

Everybody is giving you theoretical answers, but I am literal minded.

According to some website, Miami, FL is the most expensive real estate market in the country, and Florida has a fairly low minimum wage currently. So, I'll work with that.

I assume that a 1 hour drive without traffic puts you at most around 55 miles (freeways are faster, city streets are slower, but this is an estimate).

That could put you in places like Belle Glade, Florida, where the 1 bedroom apartment listings are between $400 and $650 per month.

But, it could also put you in the much nicer West Palm Beach, Florida, where (according to Zillow Fair Market Rent for ZIP Code 33401) the average rental for a 1 bedroom apartment is $1274 per month.

Divided between two people, that's $637 per month. If we go with the rule that 1/3 of your wages should go to housing, that means you'd need to make $1911 per month to afford that apartment. If you worked 40 hours a week, and there are (on average) 4.3 weeks per month, that means you'd need to make $11.11 per hour to afford that apartment.

According to this other random website, the average hourly wage in Miami is $21 per hour. The minimum wage in Florida is currently $8.65 per hour.

In summary, if they took the least generous interpretation of your rule set (the Belle Glade case) they could safely lower the minimum wage. If they took the most generous (the West Palm Beach case) they would need to raise it by about $2.50 per hour.

The average wage across the U.S. is about $27, and 2/3rds of people make "at least" above $15/hour, so it may not affect most people at all, ceteris paribus, and making the assumption that the example region is a useful example.

This is all very hand-wavey and back of the envelop, of course.

dxbydt• 4 years ago

Hey stranger, thanks for doing the math! This is very helpful. I didn't know where to begin, but you've done all the work for me. Thank you again.

metaphor2• 4 years ago

Divided between two people, that's $637 per month. If we go with the rule that 1/3 of your wages should go to housing, that means you'd need to make $1911 per month to afford that apartment. If you worked 40 hours a week, and there are (on average) 4.3 weeks per month, that means you'd need to make $11.11 per hour to afford that apartment.

Apologies for the approximation nit and acknowledged that it was all back of the envelope, but $11.11/hr struck me as low at face value.

Upping the ante a bit, let's further assume single standard deduction earner with a $1911 net monthly income requirement (because you can't actually pay with money you don't have), which roughly implies 12% marginal tax bracket. Let's also account for fixed 6.2% social security withholding, and fixed 1.45% medicare withholding.

Squaring against this standard 2022 IRS Publication 15-T withholding method[1], we come to the following arithmetic expression to determine gross monthly income requirement:

(grossMonthly - fixed10pc - marginal12pc - ssWithholding - mcWithholding = netMonthly)

  x - 85.60 - 0.12(x - 1935) - 0.062x - 0.0145x = 1911

Crunching the numbers (~$2196 gross monthly income) while using your proposed 4.3 weeks per month scalar, it's more like $12.77/hr (or $11.11 being -13.0% in relative error).

To be sure, this assumes complete omission of common tax-advantaged benefits such as deferred 401(k) retirement savings and medical/dental insurance coverage.

The minimum wage in Florida is currently $8.65 per hour.

Florida's prevailing minimum wage is in fact $10/hr[2], with scheduled increases at $1 every year towards a $15/hr target by 2026[3].

[1] https://www.irs.gov/pub/irs-pdf/p15t.pdf ref PDF p. 59

[2] https://www.dol.gov/agencies/whd/minimum-wage/state#fl

[3] https://floridajobs.org/docs/default-source/business-growth-...

EDIT: Whoops, accidentally used table values for two-or-more jobs scaling; corrected.

bloaf• 4 years ago

Employers would pay apartment owners to keep a below market apartment "available" but turn down all applicants, then use that below market price to justify arbitrarily low wages.

ars6• 4 years ago

Think about the positive feedback loop you are proposing here:

Minimum wage goes up -> everything costs more -> minimum wage needs to go up some more.

So labor expense grows and grows, while expense for "stuff" becomes a smaller and smaller part of that.

So how do you make that stuff? You can't hire anyone - too expensive. So either automation, or buy things from other countries. This means firing people.

Your proposal will lead to mass unemployment.

But it gets worse, since you've tied your numbers to the cost of housing, and cities have the most expensive housing, people won't be able to live in the city (no jobs available that pay enough).

So mass migration to places with lower housing, until the cost of housing in a city goes down. What's you've done is incentivized everyone to kind of spread out in a diffuse way to keep down the cost of housing.

But where are the jobs in these places? There are no service jobs, since services are too expensive for anyone to buy. You'd have to drive more than an hour to find a job.

People will respond by demanding rent control, but that also means less housing is available.

So not only did you cause mass unemployment, you also caused mass homelessness.

scarface744• 4 years ago

“Minimum wage” is different for a single guy and a single mother. Business shouldn’t be responsible for making sure everyone has a “livable” wage. If you believe that should be a policy -and I agree. Then that should be the responsibility of the government.

We already have something like that - the earned income tax credit. It just needs to be expanded. Every administration before Trump - both Republican and Democratic supported expanding it.

It does take into account the difference between my 18 year old son living at home and a single mother.

The government should collect taxes and implement social policy - not private business.

See also - health care.

Karrot_Kream2• 4 years ago

EITC is too little too late. I agree that this is the job of the government, to make sure everyone has livable wages, but basing something on an optionally claimable tax credit which most low/moderate income people are only dimly aware of and gives you a net payment from the IRS doesn't help when the cost of living rises suddenly and you face the question of eviction.

In general the US government is very bad at handing out benefits to its population. The closest thing that it can do with consistency is task the IRS with debits and credits on a yearly basis, a task that hasn't changed in decades. Until the US gov't can get better at this kind of work, any benefit scheme is bound to fail.

parkingrift• 4 years ago

The minimum would be way, way lower than $15 per individual in an extreme majority of areas. An hour from a job will get you well out of most every urban center.

Even in Manhattan two working adults could easily afford a 1BR apartment on a combined income of $30/hr. If you extend that out to one hour in any given direction it drops to as low as $24/hr.

syshum2• 4 years ago

I commend you for actually defining a "living wage"...

using your standard, against the current average 1 bedroom apt rent in my area, factoring housing as 1/3 of the budget. I come at $11.00-11.75 as minimum wage for my area...

trentnix• 4 years ago

The US would import lots more illegal immigrants (because they aren’t subject to wage laws, being illegal and all that), unemployment of unskilled labor would go up, and everything would cost more. And whoever owns Boston Dynamics would get really, really rich.

You can play as many games as you like, but if people aren’t able to generate enough value to justify their pay, Stein’s Law will bring things to an abrupt halt.

whyenot• 4 years ago

I think that may be aiming a little too high. How about defining it as the minimum you need to be able to feed yourself, have a roof over your head, and healthcare without needing food stamps, medicaid, or other basic government assistance.

sjmm19892• 4 years ago

1. You tie it to always being set about 5% higher than current inflation. Minimum. It's not that great a pay raise when the inflation goes up, but seeing as how they don't even do this all the time in every area... it would be a start to get them all on the same page between Canada and the USA. (All meaning provinces and states.) The only grace period that employers should retain, is 1 month to change their pay accordingly. And without reducing hours. On that note.

2. Make it illegal to reduce hours in an attempt to reduce pay due to higher wages; with out some legitimate reason that pertains to the employee's conduct and not external forces. If the employer has to increase prices to make this work, then fine. Do it. But make sure to not skimp on the cheese, etc. Customers who get annoyed over price raises will ruin you if you are just an ass. And at that point, rightfully so. Fines for something like this should be something like forcing them to pay all their employee's extra $$ per hour every time they do it. This way the money goes to those who need it, and not those who don't; cause lets be real here, lawmakers and governments don't need every penalty paid put into their pocket. Theirs is a crime against the people who work for them, so therefore they should get that cash.

3. Enforce not exactly a minimum wage, but something that might be referred to instead as a 'balanced' wage. Not a living wage, cause that's basically what we are already talking about. No, instead we should just accept that not every job is worth X$/hour. But a person still needs to get the money they need to get by. So what to do? You base it off that persons budget and potential future expenses vs the job they will be doing. If the employer and employee cannot come to terms on what is appropriate, then the employee probably needs to find a different job worth that much instead. Personally, I have no issue with this idea not because it is my own; but because I wish we took this kind of approach more often, instead of 'trying people out' just to fire them. This would reduce that, while being more beneficial to things like income equity, instead of equality, because again... not everything is the exact same. Not all jobs are worth X$/hr.

Basically the premise of 3 is ultimately to enforce fair pay, instead of minimum pay. Minimum makes it into a benchmark. If you meet that benchmark, you are considered an okay employer, even if you're a p.o.s. We need to do away with that, without ruining people's lives at the same time. I think this is the best step forward for that, while being reasonable to all sides needs and demands. Also, things like wage ceilings and gaps and etc would essentially disappear as a notion, since at that point it's up to every single person on a equal front to determine their ideal pay for each job. It's not longer just up to the employer, but also the employee. Some may say it's already like this, but it really isn't. Not like I am explaining. Then again, it also may be a factor of what kind of work a person is in. Like many, I'm currently service industry. Even as I fix computers on the side.

4. All employees should essentially be treated like contractors in terms of taxes. It may be convenient to never have to think about it, but having automatic income taxes and other payroll taxations occur just embolden governments to spend that money however they like. Instead, we should be creating a system that better understands just how much a person uses or contributes in regards to society, and tax them according to both that and their current income based annually; but with each month in a separate table as well for better context.

I think if done right, most people would prefer this system, since it would only ever be taking what you should actually be having to pay for in the first place. That said, rebates will probably not ever be a thing anymore, since they don't have the automatic tax base to fund it all with.

Tit for tat, right?

Either or, these 4 things I think would mostly solve our pay problems. Or at least help us get onto a better path again.

alluro2• 4 years ago

Why is it such a hard question? Half of the world does it this way. If implemented right, it would be a socialist democracy and function mostly as Scandinavian countries do - free market for everything, except the stuff that is affecting basic quality of life for majority of population.

scythe• 4 years ago

The anchor you're looking for is the median wage. In the US, the minimum wage tends to be around 35-45% of the median wage, and is mostly harmless to employment. In Chile, it hovers around 65% and the effects are more significant, while the distributional effects seem to be exhausted:

https://onlinelibrary.wiley.com/doi/full/10.1111/ilr.12007

https://take-profit.org/en/statistics/wages/chile/

Half the median wage is obviously the simplest answer, but some studies have suggested other numbers.

Now you're probably wondering: what does the median wage have to do with a "level of living"? It's simply the presently existing normal "level of living"! The median wage reflects various aspects of the local economy, and is responsive to things like housing prices.

seanmcdirmid9• 4 years ago

Not just the USA, but what country does that hold? I guess if housing standards are lower, it is easier to survive on a minimum wage, but you specifically stated an at least 90 sqm 1 bedroom apartment in a semi-prime location. Where in the world is that already possible?

AniseAbyss• 4 years ago

Obviously you could set up a very complex super computer run socialist system of welfare subsidies (European countries do it) that makes life better for the poors but that only works if you can get the rest of society on board to actually give a shit.

I was impressed with the Trump cheques though. Did not think the US would just helicopter drop money into the economy like that.

earthboundkid• 4 years ago

https://www.bloomberg.com/news/articles/2017-06-09/the-hourl...

eek2121• 4 years ago

It wouldn't fix things if that is what you are wondering. You MIGHT get away with 1 person with a 1-bedroom apartment. However, regarding gas prices, contrary to popular belief, the US does not have any permanent control at all over gas prices. They COULD have control over gas prices, however that would require all parties to pass a law to prohibit speculations (aka "futures") on oil pricing. There are too many hands in the pot for that to happen. Note that this isn't an issue unique to the US. Not a single country in the world has a law like this.

That being said, I 100% agree with minimum wage being 3x the median cost of a 1-bedroom apartment for 1 person working 20 hours a week. Why 20 hours a week? Companies LOVE to only give folks part time hours. Of course, in my area that equates to $42/hour, however, note that even at 40 hours a week you are looking at $21/hour. Also, why 3x? When you apply for a mortgage OR sign a lease you typically need to earn 3x the housing cost in order to qualify. Mortgage companies and landlords alike typically want to see housing take less than 33% of your pretax income.

mrtesthah• 4 years ago

I wonder what the USA would look like if the cost and supply of 1 bedroom apartment were guaranteed in order to ensure affordability by those making minimum wage.

In other words: why should landlords be allowed to capture the majority of value created by society? There are plenty of examples of successful affordable housing -- case in point, Vienna:

https://thetyee.ca/Solutions/2018/06/06/Vienna-Housing-Affor...

renewiltord• 4 years ago

To be honest, I think that’s thinking small. I think we should define minimum wage as being tied to how much one needs to afford a single space colony. Two space colonies would be too much, but one per American seems reasonable.

cbar_tx2• 4 years ago

you could bypass all the bull and get a far better outcome by simply tying the salary of every member of Congress to the median income. One day people will realize how important it is to hold their representatives accountable and hopefully make it happen.

toomuchtodo2• 4 years ago

Pics of email: https://twitter.com/vote4robgill/status/1506666976344784900

grover35• 4 years ago

Hopefully this is the moment we realize that capitalism is really not serving us in any meaningful way. As long as we have enough people brave enough to quit and take to the streets the working class might have a fighting chance at ending their exploitation.

metadat3• 4 years ago

Unfortunately only some of us have realized this, and there is no clear path forward yet. We still have a long, long way to go to achieve meaningful improvements.

mbostleman• 4 years ago

Capitalism punishes this behavior, as it did here. The market worked as we would expect and hope.

rat9988• 4 years ago

No it doesn't. Your example only works because information gets leaked. And market can only absorb that much information, unless you put special regulatory bodies. And "punish" is still to be seen here.

FredPret• 4 years ago

Capitalism is a system, this guy is just a participant. Make him famous and turn the system against him.

I’m a dyed-in-the-wool ubercapitalist, and I hate scarcity-focused, race-to-the-bottom companies and people like these. It’s a question of values and approach to life.

ivan_gammel• 4 years ago

As far as I can see, one particular flavor of capitalism works quite well: https://en.wikipedia.org/wiki/Social_market_economy

It's not like bad things do not happen, but the system continuously checks the balance between employee and employer interests and adjusts.

colinmhayes3• 4 years ago

This isn't capitalism's fault, it's just human nature. Every economic system will have scumbags who try to exploit other people for personal gain.

cardiffspaceman2• 4 years ago

Achieving the optimum economy by allowing human nature to do its thing was supposed to be the way capitalism works. To me that would mean including scumbags, somehow the invisible hand would create paradise.

daenz2• 4 years ago

And capitalism's main advantage is that tries to account for the scumbag human nature (competition) and attempts to use that to its advantage (creating an economy that strives to be efficient). Other systems pretend like that human nature doesn't even exist, and everything will be fine if we ignore it.

Mezzie5• 4 years ago

Yes, and therefore governments and economics need to account for this to keep society running.

That's what governing IS.

vlunkr• 4 years ago

One guy that works for a franchise of an increasingly irrelevant restaurant chain has a bad take in a private email conversation and you think this is the end of capitalism?

warent3• 4 years ago

This is the reason why communities like r/antiwork are so massive. The sad fact is that working class people who don't possess rarer skills are frequently mistreated this severely. In other words it's much easier for a sociopath to exploit unskilled labor than skilled labor. This in my opinion is part of the responsibility of the government which they've been largely failing at lately, it's supposed to balance businesses so they don't just throw humans into the furnace to keep the wheels turning.

Mezzie5• 4 years ago

More people need to learn some labor history.

The oligarchs and people at the top aren't your friend. Granted, neither are most middle managers or small business owners, they just have a smaller pool of people to throw into the furnace so it's in their own best interest to show some restraint.

Ekaros2• 4 years ago

Also middle managers are out of job if they can't fulfil their goals. Slave masters have only so much use when they don't effectively extra enough out of the slaves under their control. Maybe someone else will do better job.

oh_sigh2• 4 years ago

The title should be "An email urging lower wages for new employees due to higher gas prices sparks walkout at Lawrence Applebee’s", per HN guidelines.

The user-created title is also incorrect, because it was not an Applebee's exec, it was the director of operations for a company that franchises Applebees who wrote the email.

I also find it interesting that the author of the email doesn't even get a smidgen of credit for his parting paragraph:

"Your employees that live check to check are impacted more than the people reading this email. Be conscious of that. Many will need to work more hours or get a second job. Do things to make sure you are the employer of choice. Get schedules completed early so they can plan their other jobs around yours. Most importantly, have the culture and environment that will attract people"

I don't think the author is a bad person. He was just caught treating a certain business expense like one treats other business expenses, except in this case it is the wages of the employees and so looks wrong. Many people are of the mind that businesses aren't charities, have no need to pay their employees anything more than the employees accept, and through free association, if you accept an offer, that means you agree with the terms of the offer.

In my mind: If you don't like the wages Applebees will pay, then don't accept a position at Applebees. Maybe there are huge structural problems with society forcing your hand, or maybe you're just a skill-less deadbeat, or maybe Applebees is shooting itself in the foot by not offering high enough wages, but regardless, that is not Applebee's responsibility to pay you more than what they view your labor as worth.

WestCoastJustin2• 4 years ago

Your suggested title is too long for submission. Sometimes you need to use your best judgement in applying the HN guidelines.

bjterry• 4 years ago

The headline is deceptive as written. It's an executive at an Applebee's franchisee with 47 restaurants, not the chain itself.

oh_sigh2• 4 years ago

That's fine, but the title should at least be factually accurate if the user is going to write their own.

darth_avocado2• 4 years ago

Rising gas prices mean we can lower wages to keep employees?

Outside of the moral implication, this doesn't even logically make sense.

People are already facing higher costs, if you pay them lower, they will not work for you, because you know, commuting to work at your place will eat into the budget.

juancb• 4 years ago

Those with exploitative mindsets have learned over time that it's easier to take advantage of those who they see as weak and desperate.

22c2• 4 years ago

See also: employees on a sponsored work visa

sour-taste2• 4 years ago

Many people will have no choice, they're force to work wherever they can at whatever wage they can get.

V-eHGsd_• 4 years ago

Outside of the moral implication, this doesn't even logically make sense.

If I'm reading his point correctly ... He's saying there _was_ an employment crunch, and companies were competing with each other for employees by raising wages. He supposes that an increase in gas prices means that people need more money, so there are more employee hours "to go around". Therefore, companies don't need to compete as much with each other to attract employees, so they can go back to not paying as much.

ashtonkem2• 4 years ago

This reeks of motivated reasoning on behalf of the manager, as this analysis makes absolutely no sense.

awa• 4 years ago

I think the point was since the stimulus money has stopped they don't have to compete with the government and with inflation these folks will need to find a job.

throwaway0a5e2• 4 years ago

The logic only works because we're coming out of a period where workforce participation fell off a cliff.

Rising CoL because of energy and inflation -> people need the jobs more badly -> more labor available -> reduce wages

And before anyone tries to score a few easy points building a strawman, I'm just explaining the logic. I'm not endorsing it or saying it's ethical.

jabbany• 4 years ago

The idea is that they think of themselves as a labor monopsony. They are foreseeing an increase in supply (due to higher living costs forcing more people into the labor market, either those not previously working or those who are now taking on second jobs) and thus plan to accordingly reduce the price (wages).

The main fault in their reasoning is the belief that higher living costs necessarily results in more people getting into the labor market.

At some point the marginal benefit to a worker becomes zero or negative, where higher living costs can actually result in a reduction in the labor pool. Whether we are at that point though, is not known yet without more information about the localized economy.

elliekelly• 4 years ago

They’ll also eat at Applebee’s less. This exec seems really out of touch with who the typical Applebee’s customer is and how much money they earn.

maxerickson• 4 years ago

They are assuming the long time soft labor market that existed a couple years ago (vs the tight labor market that actually exists).

Maybe out of habit or something?

mywittyname3• 4 years ago

“Most of our employee base and potential employee base live paycheck to paycheck.

Including store management.

zitterbewegung• 4 years ago

I believe the opposite is happening for people who do ridesharing / taxi drivers and delivery services .

eatonphil• 4 years ago

I don't think it's an Applebee's exec it's an Applebee's franchise exec. Unless I'm misunderstanding.

cardiffspaceman2• 4 years ago

I agree with this interpretation. Notice that "Apple Central" is referred to at least once.

lotsofpulp2• 4 years ago

The former will get more clicks.

InitialLastName2• 4 years ago

Actions of the franchisees reflect on the brand (that's the point of franchise agreements). In case I want to avoid giving this guy money (as is my right as a consumer under capitalism), how can I easily confirm which franchises his company owns? I can't, you say? Well, next time I want to eat mediocre food in a bland corporate environment, I'll have to go to Chili's instead.

burntwater• 4 years ago

In case anyone is wondering, Applebee's and Chili's are in fact two separate companies, not owned by the same head corporation. https://www.businessofbusiness.com/articles/happy-hour-showd...

function_seven2• 4 years ago

Exactly. It's totally reasonable to attribute to the larger brand the shitty actions of their franchisees. That's the downside to licensing out your brand and image to separate businesses. Their actions taint the same brand.

You can't be "Applebees" when you're doing good, then become "Apple Central" when you're getting shady.

It's also why many businesses refuse to sell franchises in the first place. Doing so reduces your quality control.

sonotathrowaway• 4 years ago

I think the article said it was from a regional manager. That counts as an Applebees corporate exec.

azinman2• 4 years ago

Not when it’s a franchise that affects a small portion of their stores.

tootie• 4 years ago

It also doesn't look like any sort of policy suggestion and more like an attempt to size up the situation and see if they can get away with lower wages. Market forces will still prevail regardless of what anyone predicts.

nostromo• 4 years ago

Ethics aside, this is bad analysis.

Gas prices putting financial stress on Applebee's employees will also put financial stress on Applebee's customers, who may cut spending on things like going to Applebee's.

jasonhansel2• 4 years ago

It will also force employees to look for higher-paying jobs, potentially causing them to leave if Applebees doesn't raise its pay. Normally inflation is associated with higher wages, not lower ones.

gruez19• 4 years ago

It will also force employees to look for higher-paying jobs

...implying they weren't already doing so? I'm not sure about you, but I don't think applebees is the type of place you stick around for "the good work culture" or whatever.

ashtonkem2• 4 years ago

In fact, high transit costs might make low paying jobs like Applebees completely untenable. Why take a job if the cost of getting there is higher than what they pay?

crackercrews• 4 years ago

I agree they may need to cut their prices. How would this email have been received if it had said:

We are facing headwinds and may need to cut prices

To stay viable this means we need to cut costs

One way to do this is offer lower starting wages. Though this wasn't viable in the recent past, it may be possible now. That's because our pool of workers are feeling pinched and may need to pick up extra jobs

I understand he does not talk about the need to tighten the belt on prices in his email. But obviously all restaurants have been under pressure with COVID and inflation. It may be understood by the recipients that they need to cut costs wherever possible.

MisterBastahrd3• 4 years ago

Wages have been going up for restaurant staff, not down, because nobody wants such a high-stress, low-quality job. Offering lower starting wages will end up with reduced staff and burnout.

Traster• 4 years ago

The core line of logic "We can pay our workers less, because our workers are more desperate" never gets any better. It's one thing to say they're going to pay less because the business isn't viable at these levels of pay, but extending that to "so we're going to focus on who we can exploit" is where it crosses the line. Becuase if the reason you're cutting wages is that you can't afford them... well, let's start with that big fat juicy CEO bonus.

munk-a4• 4 years ago

I think maybe workers would be receptive to this if it weren't for the fact that whenever there's plenty of cash going around it doesn't loosen the belts of workers - it just gets dumped into BS like stock buybacks.

You can't ask for grace when you offer none.

ehnto• 4 years ago

It may be understood by the recipients that they need to cut costs wherever possible.

Except executive compensation, I suppose.

It's also not an isolated event, just another moment in a trend of big corporate entities pushing wages in only one direction, down. No matter how you word it, it's starting to look a lot like: "We need to lower wages because no one can afford anything anymore because no one is paying high enough wages".

hinkley3• 4 years ago

Financial stress on the customers means also likely means smaller tips. With fewer customers, that also means fewer tips, and fewer hours. So the employees are fucked even if Applebees doesn't say, "Hey if you twist this knife handle a funny noise comes out. Here, you try it."

threatofrain• 4 years ago

The cited part of the analysis wasn't covering that. It was only looking at the employee conditions and wages.

sosodev• 4 years ago

It’s interesting because I’m sure many executives think these things. They just aren’t dumb enough to put it into writing.

karmasimida2• 4 years ago

I don't understand the reasoning.

If the inflation is up, why won't the employees demand more wage to cover the rising cost? It isn't like Applebee is a high-sought after career, isn't it?

bladegash• 4 years ago

Think the premise is that people who work there don’t have many alternative options other than continuing to work for them. In addition, greater financial pressures presumably contributes to forcing them to remain employed where they already are.

These are not employees who get paid time off and can take days off to go looking for other jobs/interview.

Meaning any time they take to find another job might be eating into their finances even more, and really be more of the same (e.g., another restaurant).

_jal• 4 years ago

The core idea is the more desperate people are, the lower you can push their wages.

Same reason exploitive employers oppose increasing the minimum wage, single payer, etc. Keeping people wretched means a steady supply of new bodies if the ones you're employing start thinking they can negotiate.

karmasimida2• 4 years ago

Currently it is definitely not a good time for those employers to talk about slashing wages or adding up hours, when there is literally a labour shortage in US.

The talk to exploit the high gas prices to their benefits sound nothing but delusional.

fundad2• 4 years ago

That's your BS detector tingling, they're making up any reason to pay people less and keep more money.

Alternatively, they're projecting more people will need second jobs and take the lower wages if offered.

colinmhayes3• 4 years ago

Economic analysis has shown the low skill labor market has monopsony power. https://journals.sagepub.com/doi/abs/10.1177/103530462110424... This means the workers at applebees don't have much leverage to demand higher wages. Their options are accept a shitty job or don't work. This manager believes higher gas prices will force them to shift towards the "accept a shitty job" part of the spectrum.

savanaly• 4 years ago

Based on the abstract you are overstating the conclusions of that paper to a ridiculous degree.

danielmarkbruce5• 4 years ago

Its some dude at a franchise. He isn't an economist.

crate_barre4• 4 years ago

Is it better that this was said or left unsaid?

aluminussoma• 4 years ago

Exactly. He is not the only person thinking this; he was just the only one who put his thoughts on paper. I remember when American capitalism was about succeeding by making other people successful. This kind of business - succeeding by sucking the blood out of your employees - should never be tolerated.

freeone3000• 4 years ago

When, exactly, was American capitalism about anything other than extracting maximal value from labor?

CobrastanJorji• 4 years ago

What an odd letter.

Besides hiring employees in at a lower wage to decrease our labor ( when able ) make sure you have a pulse on the morale of your employees...Do things to make sure you are the employer of choice. Most importantly, have the culture and environment that will attract people.

This is kind of amazing. Surely they know that the culture and environment that will attract people will be the one that pays better, right? The only thing more amazing is that some brown-nosing sycophant managed to call it "words of wisdom" without vomitting.

shadowgovt2• 4 years ago

Surely they know that the culture and environment that will attract people will be the one that pays better, right?

No, it's the one that offers the most perks, like foosball tables and microkitchens. Ask any successful Silicon Valley startup. /s

giraffe_lady2• 4 years ago

This is the restaurant industry so it's more on the level of like, the one that lets you take an unpaid day off every once in a while.

Fargoan• 4 years ago

Is this even real? I saw it posted on r/antiwork and it sounded fake.

fundad2• 4 years ago

Right, What are the odds some regional manager is actually putting this out? An investment banker would predict more people taking second jobs as expenses rise and charge a lot for the information. It takes analysis, skills, a budget...

tartoran3• 4 years ago

You never hear about lowering bonuses or executive paychecks. Why is that not revolting people anymore?

tclancy• 4 years ago

Yeah, corporate jets must be more expensive to fly now, so can we cut upper management salary offers?

rekabis• 4 years ago

The Parasite Class cares only for profit. Human suffering? Let’s leverage that! Let’s use that as a form of control, to extract even more profits!

jasonhansel2• 4 years ago

At least he was being honest.

I think that many corporate executives have thoughts along these lines: they want employees to be so desperate that they'll accept low wages and bad working conditions. That is, of course, why they tend to campaign against e.g. minimum wages, food stamps, and reforms that would make it easier to unionize.

The only difference is that other execs have the good sense not to put such thoughts in writing.

mateo1• 4 years ago

Yeah, this guy clearly hasn't worked in a company big enough to know he has to translate this to corporate speak for all written communications.

willcipriano• 4 years ago

People like this love food stamps. They are quite happy to have the taxpayer feed their workers for them.

Many years ago I applied to work at Kmart. The wages were lower than I could get elsewhere so I pass and the manager offers to go over "the benefits", he tells me that I can get healthcare (Medicaid) and money towards groceries (Food stamps) as well as rent assistance (another government program). They had systems in place to help you apply to these programs.

wave_function2• 4 years ago

According to this guy’s (possible wrong) view of market elasticity.

More food stamps-> each person work more hours to survive-> more labor supply-> lower wages.

(EDIT) Which would make him not like food stamps.

There are other effects of food stamps, but in this guys view, that’s the dominant term. Maybe he’d like it for his own employees, but certainly not for the market as a whole. I guess it’s the opposite of “restaurants have to pay people more to compete with coronabucks” narrative that started a year or two back.

greedo4• 4 years ago

At a certain level, I'm convinced that sociopathy is a strong factor in the executive world. They don't view the workers as fellow humans, but as a cost center to be minimized. Or rubes to take advantage of. They suppress what little compassion they have and are often rewarded by owners and boards of directors for hitting the financial numbers.

Not all are like this, but it sure seems like a trend. For every Dan Price, there are a thousand Jack Welch clones.

orky56• 4 years ago

The whole point of minimum wage is to ensure that employer wages to employees to exceed some level of poverty. If there is still flexibility within the wage amount, then the floor needs to be raised higher so the employer can't play within this gray space.

tenebrisalietum3• 4 years ago

This thinking seems to assume that employers are unable to choose how, when, and where they employ people. At some point it's cheaper to automate the job than hire someone to do it, or simply put money into higher ROI generators.

pipeline_peak• 4 years ago

Normalize releasing shady internal executive emails

sudden_dystopia• 4 years ago

Regional manager is not quite “exec” but disgusting email non the less.

sammalloy• 4 years ago

I just don’t understand how Mr. Pankratz’s opinion is considered acceptable in modern society. It’s 2022. Isn’t it time for humanity to evolve past this kind of thing? Why are we as a civilization still mired in a culture of exploitation and incentivizing suffering?

archhn2• 4 years ago

These chain restaurants have always freaked me out. I know most of the people working there are at the bottom of the barrel, but their job forces them to feign a cheery demeanor. It's like underclass hell--imo.

pvarangot2• 4 years ago

I've got friends that work those jobs and they are usually in a cheery demeanor all the time, even when they are angry. I couldn't do it because my default demeanor is like "depressed" but I understand that they get easy money out of it.

archhn2• 4 years ago

Yeah, that doesn't sound healthy. They are cheery when angry? Sounds psychopathic.

darknoon• 4 years ago

I appreciate the quote from corporate: “We are still scratching our head about what this gentleman was thinking.”

toofy• 4 years ago

this is probably uncharitable, but i can’t help but wonder if they’re true thoughts were with the addition of “We are still scratching head about what this gentleman was thinking saying this out loud.”

bufordtwain• 4 years ago

Yeah, right. They know exactly what he was thinking.

danielmarkbruce5• 4 years ago

I really doubt it. Can you imagine being an exec at some company and some random dude who is a manager at a franchise does something this stupid? You'd be pretty annoyed.

baobabKoodaa• 4 years ago

This quote from corporate sounds insincere. It's not hard to understand what this "gentleman" was thinking. Disagree with him, sure, but _not understanding_ him? Please.

rdiddly• 4 years ago

And then he suggests doing things “...to make sure you are the employer of choice.” - LOL

So if your Chotchkies franchise is in the middle of a wasteland where nobody can walk, bike, or take the bus to work, and then gas prices go up, doesn't that mean people need, y'know, more money? Won't they be looking for higher wages? Paying less just makes other employers look better and positions you to capture exactly zero of the supposed new growth in the applicant pool. Even not working at all (i.e. not driving to a job) gains a few preference points compared to working at your Flingers. Seems like when they were handing out brains, this guy thought they said trains and said "gimme a slow one."

vmception• 4 years ago

This local franchise executive is an economist?

From reading the full email it seems like just one sentence lacked tact, only maybe inaccurate, and the rest was .... decent management? Like the part about making schedules for employees further in advance so they could accomodate their other jobs? That's pretty good.

The part about what employment trends will look like due to gas prices and competing employers having to shut down? Is that inaccurate?

Mentioning directly to offer lower wages, didn't have to be mentioned... that way.

Do I like that the managers walked out over that? Absolutely

subpixel• 4 years ago

If I were King of America, the tax code (and other financial instruments I can't think up on the spot) would reward companies based on the degree to which they enrich their rank and file employees.

InitialLastName2• 4 years ago

Start off by charging them extra in taxes to cover any welfare their full-time employees qualify for.

edit: with a 200% penalty for administrative fees.

gruez19• 4 years ago

Start off by charging them extra in taxes to cover any welfare their full-time employees qualify for.

Isn't this equivalent to raising the minimum wage? I'm not sure what's the point of policies like this other for the cathartic effect/grandstanding.

gruez19• 4 years ago

would reward companies based on the degree to which they enrich their rank and file employees.

How would this work? How is this different than a payroll subsidy or the EITC?

Mezzie5• 4 years ago

Off the top of my head:

- Tie tax rates/benefits/penalties to the discrepancy between CEO/C-suite pay and average/lowest-paid employee pay

- Tax benefits to companies who provide enriching programs for employees (like some universities that offer tuition benefits and programs to help you get mortgages, etc)

- Tax penalties for not giving COL raises each year

Etc.

dragontamer• 4 years ago

Reading down to the later parts of the article, this sounds like a bad game of telephone from upper-management to middle-management.

Central Applebee management puts out vague message about inflation affecting costs and revenues. That hiring managers need to work harder to retain their employees by giving potential employees more flexible schedules (which may have a benefit of cutting costs: some employees may be willing to take a lower pay if they can have a different schedule).

Some middle-manager reads that statement as having to do with gas-prices making prospective employees more desperate for a job.

And the rest is history.

------------

Upper-management always issues vague strategic-level statements. Its the middle-managers who have to translate the vague statements into something that connects with the lower-level employees. This middle-manager colossally failed at the job.

bremac• 4 years ago

As much as I am not a fan of Applebee's, the article title on HN should probably be fixed. The executive who sent the email works for Apple Central, a mid-sized franchisee with less than fifty locations. They do not work for Applebee's itself, nor do they represent a major franchisee. (Though in this case, it sounds like their views aren't even representative of their own franchise.)

tyingq• 4 years ago

A walkout at one franchise, though I suppose the press value is helpful.

rileyphone• 4 years ago

Title is wrong, wasn’t a corporate executive but instead “Wayne Pankratz, executive director of operations for Applebee’s franchisee Apple Central LLC”, from franchisee that has 47 locations, out of 1787 total. In conclusion, this was corporate sabotage by Chili’s.

a4isms2• 4 years ago

When you run a business, you choose a location. If the landlord does something that causes a noxious smell, it's on you to fix it. We don't say, "Well, that's the landlord's fault." Your business, your leasing arrangements.

When you run a business, you choose employees. If an employee does something noxious, it's on you to fix it. We don't say, "Well, that's the employee's fault." Your business, your employee hiring, firing, and training.

In conclusion:

When you run a business, you choose franchisees and set standards of behaviour. If a franchise does something noxious, it's on you to fix it. We don't say, "Well, that's the franchisee's fault." Your business, your franchisee selection, training, and standards enforcement.

There's no weaseling out. You run a business, the buck stops at your desk. If you don't like that, don't run a business. It's 100% on you to choose your vendors, landlords, employees, franchisees, contractors, &c.

All your responsibility. In exchange for which, you enjoy the benefits when you get it right.

p.s. Your conclusion is speculation. It's fine to speculate, but I reject the claim that your conclusion follows from your argument. Your speculation could be correct, maybe Chillis bribed the manager to send a bad email, or heard about the ruckus and put their PR machine into high gear to publicize it. All possible, but it doesn't follow in any way from the relationship between franchisor and employee of a franchisee.

stickfigure• 4 years ago

This is a stretch. The corporate office may or may not have the contractual ability to intervene; they can't just cancel franchisees because they feel like it.

More importantly, it's up to journalists and even randos on HN to avoid trying to confuse the relationships involved. If some McD's manager said something stupid and offensive, we can't indict the whole chain. Individual humans have agency.

hinkley3• 4 years ago

I've worked with so many businesses, especially rental businesses, that don't understand that their business model - that every business model - is that they provide consistency and indemnification in exchange for more money than their other services are objectively worth.

It's not that I'm paying you for a bacon cheeseburger, it's that when I got chewed out by my boss about some work issue, and I'm telling myself I just need to keep my shit together to the end of the day, and then I'm going to go home and get that cheeseburger from my favorite place, and somehow that's the glue that is going to help me keep my shit together, that your store is open, and you haven't run out of bacon because the manager you sexually harassed was the only one good at keeping on top of ordering.

I, the average preoccupied customer, don't need to hear the sad story of the bacon supply, and frankly the idea of offering it shouldn't even cross your mind, let alone find my ears. It's one thing if I pull the whole story of a broken freezer or a burst pipe out of you, I've done that any number of times, but don't open with it. You're paid not to open with an excuse. Open with an apology, a discount, and possibly a recommendation another customer favorite that's good even without the bacon.

If you can't keep your doors open without a stream of excuses, then you fail at logistics and you should throw money at someone to solve that problem for you, or go back to working for someone else, or someone might send Gordon Ramsay to explain it to you with a lot more swearing and a lot less empathy.

glitchc2• 4 years ago

Why do folks like this always end up with a sleazy-sounding name? It can’t be a coincidence.

yalogin• 4 years ago

This is textbook example of a bad manager. These kind of people are the reason why employees leave. The person should be removed from that position and made into an individual contributor.

slantedview• 4 years ago

The only reason this new story became a problem for Applebees was the suggestion to exploit high gas prices. But the suggestion to hire people at lower wages is par for the course, unfortunately.

patientplatypus• 4 years ago

This doesn't make sense. If the cost of gasoline rises then they should be raising wages. The labor market is tight right now, I don't understand.

cwkoss3• 4 years ago

"that means more hours employees will need to work to maintain their current level of living."

Wayne really should have had someone who isn't siloed in an upper class bubble proofread this, because 'maintain their current level of living' really sounds like "in order to not die", which is worse than what he meant - even though what he meant is still super gross.

n-e-w• 4 years ago

Probably like many here, I read this and just had to vent outrage at the sheer injustice and inhumanity. This comment is for you to rage upvote.

Compassionate capitalism is more needed today than ever. Sure, this is likely just some low-level buffoon at a chain mouthing off in ignorance. But that's why it's dangerous; toxic capitalism has thoughtlessly metastasized to the middle.

Given the severe and extreme states most commodities markets have found themselves in of late, I expect an exacerbating withdrawal of liquidity by most market participants -- even posting margin for normal hedging requirements is beginning to require completely untenable amounts of free cash flow. I fear that severe inflation is very much looming at the door.

hikingsimulator• 4 years ago

Compassionate capitalism has never existed, and never will. It's not what's either in or outside the tin.

It doesn't matter how much people talk about CSR or stakeholders, it's still about profit, often on the back of the most downtrodden.

kthejoker2• 4 years ago

Everyone in this thread ahould be required to read Das Kapital, Poverty and Progress, and Economic Possibilities for our Grandchildren before commenting.

Your radical ideas about society, individualism, and economics have already occurred to others. Arm yourself.

dhx• 4 years ago

It looks like what needs to change most is consumer expectation for the true cost of dining at sit-down restaurants in their current format. Taking the Applebee's salmon menu item[1][2] as an example and comparing the cost if it were to be replicated in Australia:

Ingredients cost ~USD$11:

In Australia, fresh (never frozen) farmed salmon from Tasmania is $USD29/kg delivered to your doorstep within 24-48hrs of being pulled out of the water. Applebee's salmon menu item[1] looks to have approx 200g serve so that is USD$5.80 for the salmon. Fresh green beans are USD$6/kg (greenhouse as out of season in Australia) and there is probably 100g plated up in Applebee's item, so USD$0.60 for the beans. Premium fresh brushed potatoes are USD$3/kg and there is probably 200g plated up, so another USD$0.60 for the potatoes. Premium fresh asparagus is USD$25/kg (also out of season) and there is perhaps 75g plated up, so another USD$1.90 for asparagus. I've also seen some images of the dish plated up with broccoli instead of beans and asparagus and that is USD$6/kg (also out of season) and assuming 150g plated up, so USD$0.90 for broccoli as a cheaper option. Add two dollars very generously for sundries such as salt, paprika/other spice (not sure what I'm seeing in the photo), olive oil and the slice of lemon. All up, approx. USD$11 for ingredients if you were to make a similar dish at home in Australia. Restaurants generally get better unit pricing from the food service supply chain but the cheaper unit prices of buying in bulk are somewhat offset by increased delivery costs (premium service) and inevitable wastage of buying in bulk.

Typical cost to consumers should be higher than ~USD$36 but is currently ~$USD17 (US including +25% service) or $USD26-30 (AU):

An average food cost percentage for a successful restaurant business (note: still paying minimum or effectively below minimum wage to employees) is 28-35% so picking 30% we end up with this salmon dish needing to have a sale price of USD$36 or AUD$47. Instead, Applebee's are selling that salmon menu item for USD$17 (25% service included) and a salmon dish at a typical restaurant/pub in Australia would be sold for approximately USD$26-30. These sale prices would have to go up higher again to fix the already broken industry with regards to employee treatment and pay (for example, no overtime).

[1] https://www.tripadvisor.com/LocationPhotoDirectLink-g34094-d...

[2] https://www.fastfoodmenuprices.com/applebees-prices/

davemp• 4 years ago

You’re over estimating the quality of applebee’s ingredients. Also restaurants generally have higher profit margin items such as appetizers/drinks/deserts to offset entrees.

danielmarkbruce5• 4 years ago

Almost everything in Australia is significantly more expensive than in the US.

jagtesh• 4 years ago

Clickbait title. Applebee franchise’s exec, not Applebee exec.

Either way, a very low/apathetic thing to suggest taking advantage of people who are already in survival mode.

atlgator• 4 years ago

It wasn't an Applebee's exec. It was an exec for a small, regional Applebee's franchisee.

id020093• 4 years ago

Even the thought that anything would be communicated

The fact that the director of communication never says he disagrees with the actual sentiment tells me all I need to know about their culture.

He's either confused and claims he doesn't know what the email in question is. Or he's expressing disappointment about the communication.

He is against communicating such things, but he failed to communicate that tearing people that way is disgusting.

Applebee’s exec urges using high gas prices to push lower wages, sparks walkout

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