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0 pointsROTMetro2y ago0 comments

What you are referring to is a zombie business. It does not offer enough value so it can only survive via low wages, something that is not guaranteed and is externally controlled. I think banks should does including this measure when it comes to financing. If have to pay your people below market wages to survive you don't have a business, you have a zombie that can't only survive as a parasite on others. Figure out how to manage the business or increase your value add or be explicate this is a passion project not a viable business. I cannot buy produce from a farmer for less than it costs them to grow it, but somehow businesses think they can pay people less than it costs to live.

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randomdata2y ago

> If have to pay your people below market wages to survive you don't have a business

How does one pay below market wages? Someone's market wage is established by observing what they are being paid. They will always be equal, unless you mean an employer is illegally withholding funds owed to the worker?

> I cannot buy produce from a farmer for less than it costs them to grow it

Haha. As a farmer, I have lost money selling my produce more times than I wish to count. The customer couldn't care less about how much it costs you to produce a product. They are only going to pay what it is worth to them and not a penny more. The secret to a sustainable farm business is understanding how to weather those times when it costs more to grow the food than what the customer will pay.

TylerE2y ago

Well, probably the most traditional way is to hire for approx market rate... and then given little or no raises/cost of living adjutsments. Bam, 5 years from now, you're well under market rate.

randomdata2y ago

The market rate is established by observing the sales that have taken place. If the sale price continues to be the same five years later, the market rate hasn't changed. You would not end up being paid an "under market rate" just because five years have elapsed. You would still be paid the market rate.

An under market rate would only be significant to outside interests. If I am paying someone $20 per hour and you want to pay the same person $10 per hour, then the $10 per hour offer would be under market rate. However, if for some reason the employee jumped ship and accepted your $10 per hour offer, you would not be paying an under market rate. $10 per hour would become the new market rate.

TylerE2y ago

You're getting paid the market rate from 5 years ago. Due to inflation, this is 99.9% certainly less than market rate today.

You're ignoring the time element.

You hire the $10hr guy when the market rate is $10... and then give him just enough crumbs not to quit. So in a few years when the market rate is $15, he's making maybe $12. See how that works? Obviously many will jump ship, but many won't or can't (e.g. can't afford a gap in pay/insurance coverage).

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delfinom2y ago

It's fine, most banks don't directly finance small businesses lmao. They make you take out personal loans instead.

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randomdata2y ago

> If have to pay your people below market wages to survive you don't have a business

> I cannot buy produce from a farmer for less than it costs them to grow it

TylerE2y ago

Well, probably the most traditional way is to hire for approx market rate... and then given little or no raises/cost of living adjutsments. Bam, 5 years from now, you're well under market rate.

randomdata2y ago

TylerE2y ago

You're getting paid the market rate from 5 years ago. Due to inflation, this is 99.9% certainly less than market rate today.

You're ignoring the time element.

1 more reply

delfinom2y ago

It's fine, most banks don't directly finance small businesses lmao. They make you take out personal loans instead.

j / k navigate · click thread line to collapse