Fear Not, The Guardian Has Economics Wrong Again

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So, the bloke who decided to pay all his staff $70k a year, by delving into his own $1 million a year salary. Shrug, efficiency wages and all that.

Then:

So are more companies following his lead? Nope. Price thinks that he might have influenced Amazon’s decision to raise its minimum wage, but then again Amazon’s boss is one of the world’s richest men. If he was to share his worth among his 800,000 employees, they would each be on double what Price pays his.

Sharing your wealth among your employees is different from sharing your income, no? After all, you can share your income every year, you can only share the wealth once.

It’s even worth pointing out that our intrepid income sharer does not share his wealth – he’s not signed over chunks of the company to the employees after all. We could even note that Jeff Bezos does share his wealth with the employees – full time permanent employees all do get stock grants, don’t they?

Or, as we might put it, The Guardian, wrong about everything, always. Doubly so on anything economic.

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Phoenix44
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Phoenix44

So the Guardian now believes that all employees should be “paid the same amount”. And they don’t see the difference between a tiny company with ten employees and say the NHS?

It’s like actual thought just isn’t important any more, just sounding like you are saying the “right thing” is all that matters.

swannypol
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swannypol

one wonders if the Guardian would like to follow his lead and be in the vanguard for the UK?
Thought not.

Nautical Nick
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Nautical Nick

I had a look at this story. Details are shaky, but it seems he had around 140 employees, some of whom were struggling to afford Seattle prices. If no-one other than him took a salary cut, on average they would have received around $7,000 extra- a little over 10% salary increase. The most likely conclusion, ISTM is that he was overpaying himself, and the company couldn’t afford his salary.

Michael van der Riet
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Michael van der Riet

The Guardian, wrong about everything, always, except on warble gloaming, on which subject Tim thoroughly agrees that we are all going to roast like chickens.

dodgy geezer
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dodgy geezer

My understanding is that the Australian authorities are claiming that an increase of 3 degrees in the average Earth temperature would make humans extinct.

That’s simply modelled, of course, and has no connection with reality. Nevertheless, were it to happen as if by magic, London would acquire the same temperature as Bordeaux. Where, of course, humans are hardly able to exist….

swannypol
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swannypol

The article doesn’t say whether he pays the office cleaning staff $70k. I suspect that most of the low value jobs are subcontracted…

Esteban
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Esteban

Never ceases to amaze me, how many people will state some variant of “If they paid the staff more, they’d be happier & more productive & the company would make more money in the long run”. Any guesses how they respond when asked “have you ever run a business”?

Jim
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Jim

One presumes that the CEO is also a significant shareholder, so one suspects his remuneration (in dividends, if any, and capital appreciation) from his ownership of the business will be completely unaffected (and may dwarf his actual salary).

And on a longer term basis one suspects the future of Gravity Payments will be similar to that of the Twentieth Century Motor Company………………….

Spike
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Spike

And for the same reasons: No bonuses for extra effort, no downside to excessive absences, pet bereavement, etc.

No employee with pride or hopes of betterment would stay with a company where your life and mortgage are tools for the owner to make showy statements about his opposition to “income inequality.”