[chucker]

Originally Posted by Dr. Bobsky But prices everywhere go up month to month -- have you never noticed that the price of milk fluctuates week to week (or month to month)? It's not like the supermarket has to tell you that this is owing to variations in the supply chain and its employee costs...

Consumables aren't the same thing as clients. Their price fluctuation is well-known, and your relationship with the grocery store is fairly superficial.

A client is a many-year relationship, hopefully.

Originally Posted by PB PM Working with clients is different, they have budgets, and other plans. Keeping a long term clients can in the long run be worth more to a business than charging them different rates month to month, or week to week. We tend to add new clients at new rates, and slowly bump up existing ones over a period of years.

This.

[Dr. Bobsky]

My point is that you can do an annual rate review -- in your initial contract with clients specify that salary costs will be amortised across the workload and that these will track with the official local inflation rate (or some set percentage) on a yearly basis.

Both of you are making this seem impossible. It is not. My renters agreement specifies annual increases on the basis of inflation rates.

[chucker]

Originally Posted by Dr. Bobsky My point is that you can do an annual rate review -- in your initial contract with clients specify that salary costs will be amortised across the workload and that these will track with the official local inflation rate (or some set percentage) on a yearly basis. Both of you are making this seem impossible. It is not. My renters agreement specifies annual increases on the basis of inflation rates.

It’s not “impossible”; it isn’t standard industry practice. If you do it, they’ll move to someone who doesn’t.

[Dr. Bobsky]

Originally Posted by chucker Consumables aren't the same thing as clients. Their price fluctuation is well-known, and your relationship with the grocery store is fairly superficial.

You've lost the plot here a bit: consumables weren't being compared to clients. You are the client to a grocery store, the consumable is the good they are providing and the price of which is expected to fluctuate on a short time frame. Regardless, none of this is impossible to work out with the clients at the beginning or during negotiations of contracts.

[Dr. Bobsky]

Originally Posted by chucker It’s not “impossible”; it isn’t standard industry practice. If you do it, they’ll move to someone who doesn’t.

And the fact that this isn't an industry standard is a clear problem, and these arguments are specious, you don't know they will move to another company. Salaries being pegged to inflation is not a radical idea.

[chucker]

Originally Posted by Dr. Bobsky And the fact that this isn't an industry standard is a clear problem, and these arguments are specious, you don't know they will move to another company. Salaries being pegged to inflation is not a radical idea.

This is silly. Yeah, if you take your armchair ivory tower view, you can argue contractors might as well just peg their hourly rate to inflation. But I live in the real world, as an actual, concrete rather than hypothetical, abstract person, and while I don't know that they'll leave me for another company, I would prefer not to risk it.

[PB PM]

The biggest difference between the grocery store and clients to a small business is rather obvious, to me anyway. The grocery stores tend to all fluctuate prices together, because their sources of supplies do as well. Consumers have no choice but to buy food at those prices, unless they grow their own food.

When it come to a small business, or a contractor you face people who have, in some cases, a lot of options at different price points. For some of them the quality of work is more important than price, while others care about the price more than anything else. The latter group will often cut back how much work they request or switch to someone cheaper if the price goes up too much. Most clients are somewhere in the middle, and if you do a good job they are willing to accept some increases over time, as noted. If we sharply increased prices with inflation (it’s hit over 6% in Canada just this year for example), almost every client would drop us instantly. That’s the real world.

[Dr. Bobsky]

I love the fact that if you two are any indication, the entire wages-not-keeping-up-with inflation is a complete self-own.

[PB PM]

This is why people dislike union members, so entitled, thinking the world owes them something. Guess what, it doesn’t. Some of us just have to take what we can get, that’s the reality for most people in the world.

Most people will buy the cheapest services they can get, that meet the standard they expect, and don’t lie and say you don’t do that too. Would you be willing to pay 50 Euros for a Big Mac? Of course not, but if McDonald’s paid it’s employees by inflation, that’s likely what it would cost.

[Dr. Bobsky]

Originally Posted by PB PM This is why people dislike union members, so entitled, thinking the world owes them something. Guess what, it doesn’t. Some of us just have to take what we can get, that’s the reality for most people in the world. Most people will buy the cheapest services they can get, that meet the standard they expect, and don’t lie and say you don’t do that too. Would you be willing to pay 50 Euros for a Big Mac? Of course not, but if McDonald’s paid it’s employees by inflation, that’s likely what it would cost.

This is complete bullshit. You are not earning the same real world money that you were earning last year because of inflation. It doesn't take a genius to understand this, and to recognise that your work has not decreased in value over the same period. But, effectively by not increasing your salaries in line with your costs, you are saying this precisely. This isn't something for nothing. You are supplying the exact same labor but at a lower pay. You're taking a salary cut, and it's your own damn choice. And yes, I'm laughing at this being the pragmatic, hard nosed small-business person response -- when in reality, it's just a failure to be honest with yourself and the value you're producing. If I were a client and you didn't raise prices, I would never enter any negotiation with you going forward without remembering that you clearly overvalued your labor in previous years -- because you're broadcasting this loudly. Your costs are going up and you're not adjusting prices... this is a good way to go broke.

I don't eat at McDonalds, and every single shop in the UK as far as I can tell has increased their prices in line with inflation.

[PB PM]

Keep living in your fantasy unionized world and enjoy it. Of course the power of dollar is less, I wasn’t born half past two yesterday. Doesn’t mean I can do anything about it. If clients won’t pay an inflation rated price and we lose all of them, we go out of business. That’s the cold hard facts.

As for burger joints, yes they increased prices to cover increased food costs. Employees? Likely still making minimum wage.

[Dr. Bobsky]

Originally Posted by PB PM Keep living in your fantasy unionized world and enjoy it. Of course the power of dollar is less, I wasn’t born half past two yesterday. Doesn’t mean I can do anything about it. If clients won’t pay an inflation rated price and we lose all of them, we go out of business. That’s the cold hard facts. As for burger joints, yes they increased prices to cover increased food costs. Employees? Likely still making minimum wage.

Minimum wage in the UK is generally tied to inflation (higher in some years, lower in others, but at a rate designed to keep pace with purchasing power changes).

So lolololololololololololololol. (and it was labour advocates and Unions that helped bring this completely rational policy to bear)

The notion that this is especially reserved to the lowest earners in an economy is ridiculous. I would never argue the folks earning minimum wage getting cost-of-life adjustments are getting something for nothing, but that's precisely what you're arguing here PB PM.

It's like I'm arguing with people stuck in a bubble, who have no sense that their 'reality' is just a series of self-justified, self-owns.

[PB PM]

Not all of us are in the UK, I have no clue what the labour laws are there.

[Dr. Bobsky]

Originally Posted by PB PM Not all of us are in the UK, I have no clue what the labour laws are there.

Take this into consideration and read all of the prior comments from you and chucker talking about how I live in a fantasy land... no one would call the UK a fantasy land.

[PB PM]

That’s just minimums wage for employees, we were talking about what a business can successfully charge clients. Those are very different things. What we pay our employees is well over minimum, just for clarification, an employee takes over half of what we charge per hour for work.

[chucker]

Originally Posted by Dr. Bobsky no one would call the UK a fantasy land.

2016 is calling and would beg to differ.

[Quagmire]

Originally Posted by PB PM This is why people dislike union members, so entitled, thinking the world owes them something. Guess what, it doesn’t. Some of us just have to take what we can get, that’s the reality for most people in the world. Most people will buy the cheapest services they can get, that meet the standard they expect, and don’t lie and say you don’t do that too. Would you be willing to pay 50 Euros for a Big Mac? Of course not, but if McDonald’s paid it’s employees by inflation, that’s likely what it would cost.

And good luck staying in business when everyone quits because they can no longer afford to work for a boss that lets their value of work decrease through no fault of their own.

You need employees as much as we need a job.

[PB PM]

Originally Posted by Quagmire And good luck staying in business when everyone quits because they can no longer afford to work for a boss that lets their value of work decrease through no fault of their own. You need employees as much as we need a job.

When did I say I wasn't willing paying employees well. We pay above the industry average in the area already, what more do people want?

[Quagmire]

Originally Posted by PB PM When did I say I wasn't willing paying employees well. We pay above the industry average in the area already, what more do people want?

Wasn't accusing you of not paying employees well, but just replying to the whole entitlement attitude you accused union people have. Everything requires balance, but I will always be on the side of labor over management. If management wasn't abusive, treated employees well, paid them well with clauses that will do a decent job of keeping up with rising costs of living, etc then unions wouldn't be needed. That is all I want because while you are facing increasing pressure on costs, guess what? Your employees are facing the same pressure. Don't ask them to take the pain for you.

I have been involved working with management as a member of the union at a former airline I worked at. Had management put pressure on pilots all the time to perform a flight, question their decision making, etc. Questioned why crews declared emergencies for no shit malfunctions just because they wanted to avoid any bad light from the FAA, etc. The union had to spend 2-3 months defending a captain because they refused to fly into a thunderstorm. Constantly breaking the contract to see how many pilots will go with it because they don't know better. Heck they break it anyway because aviation is limited by a US regulation known as the railroad labor act that essentially tells us we can only grieve it and still fly. And the grievance can take months or even years to resolve.

You have non-unionized shops try to intimidate employees in not sharing their salaries with co-workers despite being illegal for them to do that.

If you treat your people well, then I don't have any beef. But unions are very much still needed in some fields.

[PB PM]

I think unions can be very useful in some fields of employment, and not as much in others. I can see a union being very helpful in shops, warehouse environments, and large offices where individual voices cannot be heard by those at the top. In a small company
(less than 10 people) where you are working directly with ownership it's a little different. If the owner is a prick, get out quickly.

There is a fine line between paying well and paying what an individual employee is worth. I think the problem unions can have is the employees who don't do their share and weigh down the employees who do. That bothers me, as someone who employees people. That is where some of my feeling on union entitlement comes from. Should the employee who is weighing down the group be given a raise just because of inflation? You might just say, "well fire them", but current labour laws actually make that difficult once the person is clear of probation. Fights with the labour relations board is no joke, and it's usually the worst workers who drag you through it.

[kscherer]

Here is where a union makes sense.

Delta does not pay flight attendants until the doors close?

So, they're on the job, dealing with unruly passengers, prepping the plane, etc., but they do not get paid until the doors close?

Hell, no!

I can support unionization in a case like this.

[PB PM]

Agreed, how they get away with stuff like that is mind blowing. If someone is doing work, pay them!

[Quagmire]

Originally Posted by kscherer Here is where a union makes sense. Delta does not pay flight attendants until the doors close? So, they're on the job, dealing with unruly passengers, prepping the plane, etc., but they do not get paid until the doors close? Hell, no! I can support unionization in a case like this.

Same with us pilots. We don't start earning our pay until door close as well.

[chucker]

lol, 'murica

[Dr. Bobsky]

Once again: adjusting income because of inflation is not a raise.

[turtle]

I was talking to my mom about the responses in this thread which boil down to "the union is for a collective voice to bully/persuade the company to make changes". Which adjective depends on your perspective is the bottom line.

She actually brought up another good point for the union though. The same family member I referred to in the original post is currently drawing a pension thanks to their years in the union. The word "vested" was used but I don't know how that technically works with their union, or even which specific union they were a member of. I just know they are getting paid monthly as though they had worked for a company for 30 years old school style, they just didn't get a gold watch too.

[PB PM]

Originally Posted by Dr. Bobsky Once again: adjusting income because of inflation is not a raise.

That’s a matter of opinion, not a fact. In some industries it is an easy process, others not so much. Not that employees could hope to understand that. I didn’t get it when I was an employee either, so I don’t blame people for not understanding.

[kscherer]

Bruce is correct that inflation robs the value of income. $15/hour today is not $15/hour 30 years ago. My first job back in 1988 I got $5/hour and thought I was rich! A high school kid making $5/hour today would think they were getting robbed.

They are, and they aren't. The value of their work is limited, but the value of the dollar has decreased, also.

If an employer pays someone $10/hour today, and inflation rises 10% over the next year, then the value of that $10/hour is reduced by 10%, resulting in the net income being ~$9/hour at the end of next year. That is a pay reduction.

But that pay reduction is not the employer's fault. Rather it is the fault of circumstances beyond the control of either the employer or the employee.

So, if the employer wants to remain competitive in the employment market, he/she needs to raise the employee's pay by 10% to compensate for inflation, but that also necessitates raising the cost of goods to the customer by 10%, which has the endgame effect of causing inflation (to a small degree).

It's a relentless game.

Governments printing money is not helping. Neither is COVID, nor wars, nor exorbitant greed.

[PB PM]

I’m just saying it is simple not possible for every business to do that. It not me being greedy, clients using our industry just will not accept that kind of charge increase. They’ll just go to the cheaper companies that scrape the bottom of the barrel with illegal immigrants. Then my workers will be out of work. That’s the reality.

[kscherer]

Yes, and I agree with you, too. It's a very complex issue.

The general consensus with many people is that the "owner" is greedy and just won't pay a fair wage, when the truth is that the owner cannot raise their prices without being forced out of business, so it's very difficult to keep up.

"Corporate greed" and "small business profit" are not the same things. A fair number of the small business owners I know actually earn less per hour than their employees. Paying 10 employee's an extra dollar/hour results in the employer making zero money for themselves. Who is increasing their pay?

Certainly not the customer, as I know well from personal experience. If we raise prices by even 1% we lose the majority of our customer base to Amazon, and our doors are closed within three months.

People talk big for the sake of talking. "We like to support local" only works when local is the same price as or cheaper than MegaCorp. The moment you're 1% over, those big-talking folks are gone.

Bruce, while I agree with what you're saying — in general — it doesn't hold up for most small businesses. We scrape by day-to-day, and any increase in prices is seen as an "affront to local" by those who talk big about supporting local. I've seen a massive migration in retail toward the Amazons of the world, and it is driven 90% by pricing, with perhaps 10% being "convenience" (it's not at all convenient when the cheap crap you buy doesn't work and you actually have to get off the couch). Price is everything for most people, and the cost of goods will not be absorbed by the customer unless it is absolutely forced upon them and they have no other, cheaper, alternative. Small businesses are hanging on by a thread, and a percentage point can kill us!

And no union is going to fix that.