Hello there readers! I’m taking a bit of a momentary break from Starforge editing to write this post and give myself a bit of time to decompress (though don’t worry, I’ll be back at Starforge shortly). This is a topic that’s been on my mind, coalescing, for several months now as shortages, particularly of the “worker” variety, have continued to make the news day after day.
Today’s particular musing comes from an actual—if short—conversation I had the other day with an individual who was very angry about the “worker shortage.”
A little bit of background for you; basically what they offered to me: This individual owned a local small coffee shop/kiosk, and was very angry about their current inability to have someone staff/work it. Apparently it was small enough that it could be run by just one worker, but they currently couldn’t find that worker. No one wanted to work for them.
Wait, it gets better. See, their little rant volunteered the information that they considered the job “minimum wage.” After all, they explained, it’s ‘just a coffee shop. No one should be making a lot of money from that. But now,’ they continued, ‘thanks to the laziness of entitled workers who think they should earn more, I’m not making my money from the coffee shop!’
As this was a group discussion, several people quickly asked questions which led to more information being offered—though based on the reactions that occurred, I believe this individual thought things were going to go very differently. Among this information we were given the following:
- The owner made quite a bit more per hour just owning the shop than the lone worker did. In fact, they seemed to consider it a large portion—based on their wording, I’d guess at least half—of their yearly income, which was again, from their words, at least six digits.
- Despite this, they refused to work in the shop itself, to the point that they would rather have the shop closed and be losing all that income than go work the position themselves because ‘it’s a low-tier position, I can’t be expected to degrade myself with that.’ It was also suggested among their words that they didn’t know how to do the job either: They’d just bought the setup and expected someone else to do it.
- The owner themselves had no interaction with the shop other than paying the bills, the paycheck, and collecting the majority of the money.
- They used the phrase ‘unAmerican’ to describe the concept of having to work at their own shop, and used the specific phrase of ‘it’s my right‘ to describe their relationship with employees and not being required to labor with the business.
After volunteering this information, they were both shocked and a little offended when few took their side. Instead of pity—though a few like minds did offer that—they instead found themselves challenged. My own voice was one of them calling out to the contrary to their claims, and I made a very pointed statement: Was it not entitled to own a store that they believed should only pay minimum level wage, that they themselves refused to work at, yet demand more than a minimum level wage for in essence, doing nothing other than throwing money at the place to start existing? I compared this to the concept of “The world owes me a living,” as this business owner believed it “beneath them” to be the one working the store, and yet wanted the majority of the reward for someone else doing that work.
I never got a response. The owner just left, apparently realizing that the particular audience they’d found was not sympathetic to his desire to be, in effect, the lazy grasshopper from The Ant and the Grasshopper.
But something they’d declared did stay with me. Not because I think it’s correct, but because I think it does serve as a source of so many of the problems facing the United Stated (and, by cultural extension, a lot of other countries). This concept that simply having “ownership” of a thing means that one is “owed” everything that comes from it … even if they’re not at all willing to put in any of the work or requisite knowledge.
I think this idea has become a toxic, if not cancerous, miasma across US work culture. And no, I’m not talking about the 9-5 front-line “essential” workers that were shoved under the bus as soon as the pandemic showed signs of lessening. I’m talking about people like the coffee-shop owner above, whose view of work, reward, and even the free market itself has been skewed by a frankly insulting amount of self-aggrandizement and laziness.
Let’s talk about that coffee shop again for a moment. Here is a small kiosk or shop capable of being run by one person. Actually, let’s change that wording. It requires one person to run it. If that one person does run it, it churns enough of a profit that it counted as a substantial part of the owner’s income … even after expenses and pay for that lone employee (who, recall, was minimum wage).
Minimum wage in the state he was speaking of being $7.25 an hour. Yearly, full-time, that’s a smidgen over $15,000, but also minus taxes.
In other words, this owner—who again, apparently was pulling down about half or so a near six-figure income each year from this shop—refused to work the shop itself, though based on some rough napkin math, a six-figure income is at least $100,000 … six figures. Half of that would be $50,000. And remember, that’s the profit they’re bringing in after all the expenses of the coffee kiosk (they claimed these rough numbers, not me). So if they were to work the stand themselves, they would earning, yearly, that $50,000 plus the $15,000 they were previously spending on means that they would be earning $65,000 a year just for working a coffee kiosk.
Okay, that was a lot of numbers, but this is how it shakes out: Said owner was not willing to work (in fact, even described the act as “unAmerican,” and yes, that is a quote) in his own coffee shop for $65,000 a year. However, he believed it was, and again, his own words, “his right,” to have someone else working there for only $15,000 a year (again, something he was not willing to do for $65,000) while he sat on his butt and collected the other $50,000. Why?
‘Because I’m the owner, and I put in the financial risk.‘
Well … yes and no.
First of all, when the difference between putting in that financial risk is apparently the difference between $15,000 and $65,000 a year, in a country full of banks that make a lot of their money by giving out loans, it’s not hard to see that the average employee might start doing the math and decide to take out a loan so that they can be making $65,000 a year in profit (minus the loan) instead of $15,000 a year for the exact same job.
But second, what financial risk? The store is already open and successful. There is a floating financial risk, yes, but as the owner is discovering, the most important part of this business from year to year is actually the labor. Labor they are unwilling to do.
And yet, they declared that as an owner, they had “a right” to have someone else work for them. Pro-tip: We fought a war over “the right” to have people work labor for us as we desired it. And have amendments preventing it. You have a right to entice people to labor for you. You do not have, in any way shape or form, the automatic right to someone who must work for you. That is the opposite of a little thing we call “the free market.”
You want capitalism? Then you have no “right” to force someone to work for you. You have to offer them something in return. Supply, meet demand.
But somehow, a lot of the US seems to have moved away from this idea. A lot of folks I’ve talked with, or seen interviewed on the news, angry and upset by this “worker shortage” believe that as an owner, they should be “allotted” labor by some sort of coercion. One interview I mocked rather severely in the state I live in was with a Subway owner who was furious that she was having to work in her own store. As she put it, as an owner she shouldn’t be expected to work. That was, and here it comes again, “unAmerican.”
Oh, it gets worse. The last bit of the interview was a rant about how entitled all these parents of local high-schoolers were, since they wouldn’t pull their children from high school to come work her minimum wage job offer so that she didn’t have to work. This woman really believed this. That parents and teens choosing to go to school was a problem, and that we needed some sort of “force” to make them fill her positions at minimum wage so that she could simply collect the money as an owner.
I got a real big shock for you, lady: That’s not a free market or capitalism. That’s authoritarian communism.
Worse, she’s far from the only one arguing for this approach, and not the only one arguing for laws to change to make this “True America” come forth. We’ll get rid of this troublesome “free market” and force people to work the job I don’t want to work while I collect all the money! What a great system!
The problem, I think, is threefold. First there’s an extremely large dollop of hypocrisy evident in each of these cases. Going back to the coffee shop, the owner could not see why someone else wouldn’t want/couldn’t be forced to do a job for $15,000 that he wouldn’t do—and I mean this to the degree that he was leaving it closed rather than bother himself—for $65,000. Along with the mistaken belief that anyone who’d be willing to do all that work (which again, they themselves also inferred they could not do and didn’t have the specialized knowledge required) wouldn’t be able to realize that they could just go acquire a loan and do it themselves.
Second, I think there’s a problem with a lack of education on the basics, willful or otherwise. Take the Subway owner, who from her interview believed that “capitalism” was forcing other people to work, or rather having the “right” granted to her or the government to force others to work on her behalf, independent of freedom of choice or supply and demand. I’ve seen a lot of this lately, people that rally behind cries of “capitalism” and “the free market,” but what they’re actively describing, argue for, and work toward is anything but that.
The problem is that they don’t know what capitalism is. Firsthand I’ve seen people asked to define capitalism or the “free market” stutter, stumble, and then crash and burn as they offer something completely different. And when you have these people entering a market, trying to shape it while having little to no concept of what that market is and how it works, problems inevitably arise.
Prime … but not the core largest disconnect causing so many problems right now. Which is that most people quite frankly do not understand the concept of labor.
And no, I’m not talking about those workers that decide to open their own coffee kiosk over working for someone else’s. I’m talking about the owner that is “someone else.”
See, let’s go back to that coffee shop. And the Subway. And a whole lot of other “business owners” who do not understand a very vital part of any and every business: The labor quotient. I’m using my own term for this, by the way. But let’s look back at that coffee shop and the owner who defended taking $50,000 of the profits while paying the lone worker running the joint $15,000. To paraphrase their own words, they ‘put in all the money and owned the business, therefore why didn’t they deserve most of the reward?’
To a lot of people this is a very seductive logic. “Yes!” they say. “I bought the business and the license and the equipment! Why shouldn’t I get all the income for my risk?”
Like most things, there’s a grain of truth to this. If I, for example, were to put my money into building say … a sandwich food truck, I should get something back, otherwise what’s the reason to put that money there in the first place.
However, this argument does miss a very critical part of the process. For all jobs (and we’ll talk about differences in a bit) that bit is the labor. Note that the coffee shop owner did not want to do this part of the investment. They wanted to pay someone else to do it.
So here’s the question, then: Yes, it is important that the holdings, supplies, etc, all be paid for. But can the business generate money from those alone, or is labor required?
This, I think, is where so many people in the US right now have gone wrong. They’re looking at things like coffee kiosks as static, income generating investments that require no labor. Like how they think an MP3 works. An artist releases a song and continues to make money on MP3 sales, so shouldn’t a coffee shop owner be able to buy a kiosk and just, you know, generate money? That’s how investment works, right?
The problem is … no, it doesn’t work like this at all. A lot of the anger and “entitlement” we’re seeing from business owners right now I think stems from that fact that they believed this, but it’s not true at all.
For example, things like books and music still had a fantastic amount of labor put into them long before the one collecting the royalties ever saw a penny. And once they’re out in the world, the creator’s profit is a return on that labor. But there are still others to be paid. Hence, when someone buys one of my books, the store hosting it on their shelves, digital or real, takes a cut because they did the effort of putting it there for the customer and selling it to them. The amount of that cut is something we both agreed on.
Labor of some kind still has to be performed for any of my products to make money. And the seller takes a cut of selling my product in return for their labor. If I don’t like the cut, I’m welcome to take my book elsewhere, and the seller likewise if they don’t like their cut and it’s not worth their investment of time.
Without their labor selling the book, or mine, no money is generated, no matter what I put into the product beforehand.
So it is with all business, and I believe this is something that people have either forgotten or have decided to take for granted. The coffee shop that spawned this whole post, for example, makes no money despite the investment in its existence unless there is someone there putting in the labor component. The owner believed that by right of “I spent money” they were entitled to make a profit from the business because they didn’t count labor as a part of the business. To them, the business was the ownership of the materials, not the experience and the gumption to take those materials and make something of them.
Same problem with the Subway lady. And a lot of businesses right now. They believe that the business is the place and the materials, not the labor that produces the product. To the degree that when faced with closing or doing that labor themselves, Mr. Coffee decided to just close the business and talk about how unfair it was that he wasn’t just “making money” from owning the materials.
In fairness, it’s a seductive dream. What a world would it be if I could just buy the thing and achieve the profit without all the steps in-between. If I could just purchase a Lego set and then have a fully assembled set without the labor of it being put together!
But the real world doesn’t work like that. Everything comes in pieces, and then someone must assemble those pieces (and know how to). The only way to make money off buying pieces and not assembling them is if those pieces become more valuable after you’ve purchased them, and you’re willing to sell them to someone else who is going to assemble them into something more.
What we’re seeing then, is a vast swath of people who believe that they should be able to pay the cost for the “lego set” and then sell the completed set … but believe that they should as a right not be required to take the step of assembling it. Or even know how to! That the product should magically assemble itself . Or, if it doesn’t, that they should be able to pay as low a price as they want for that act, because clearly if they “don’t want to do it themselves, it’s not that important.”
Ergo, coffee-employee realizes “Hey, I could just buy my own “Lego set,” assemble it, and sell it to the buyer, and keep all that income. Whereupon Mr. Coffee throws a fit about how “unAmerican” this has become.
I think it says a lot that in this case Mr. Coffee very emphatically stated that he refused to do the work himself because they considered it beneath them (while at the same time, not knowing how to do it and being unwilling to learn). It implies a massive disconnect in what really allows a business to exist. Which is the act of someone doing something. Mr. Coffee wanted to be the grasshopper, to spend his labor doing what he wanted rather than gathering food … but then still wanted to have the food when winter arrived.
Of course, there is a solution to that situation: Mr. Coffee could simply view the cost of labor through a realistic lens, that it is something that is required to make his business work, and that he himself is unwilling to do even for a paycheck of $65,000. He must acknowledge that the labor is a core part of the business, and therefore negotiate with someone else who is willing to do that job.
The catch is, that person is selling the labor Mr. Coffee doesn’t want to do, so in a free market, Mr. Coffee must meet their price they value the labor at, or he cannot purchase their labor. He is not entitled, nor is it the “right” of an American Business Owner to simply force that labor to be done at whatever price they “feel is fair.” Because that’s not selling, nor is it the free market. That’s literally the one who isn’t doing the labor setting the price, and that’s a recipe for disaster (see the USSR for why this doesn’t work).
The real question then that America is facing in all this is the following: How valuable is the labor of a business compared to all other aspects? Why we’re facing so many troubles right now stems from a mistaken belief that labor is, if not the least valuable part of a business, then one of the least valuable aspects. This labor is then priced according to that belief, and well … those who provide the labor look at the business, shake their heads, and go elsewhere.
Nowhere, and I repeat, nowhere, in anything that makes up the US economy is there a law or a “constitutional right” to just throw money at something and automatically earn a profit on your own terms. Sure, as I’ve pointed out today a lot of people seem to think this, or even want this … but that’s not how things work. Not under any sort of capitalistic/free market system. You either must do the labor yourself, pay the asked price of those who will do the labor (and know how to do it) … or sit and make nothing. There is no law, nor amendment, nor policy that says “Hey, you bought a coffee shop, you’re entitled to free labor so you can make money!”
You either provide that labor yourself, pay the asked costs of those that will do it … or you get out of business. Simple as that.
Going back to my own example, I could sell copies of my book on my website. I’d get to keep 100% of the profits in exchange for hosting them myself. Instead, I give up a chunk of my profits to those that do host them, since division of labor is useful: They sell the books, not just from me, and they earn their commission for the labor facet of doing so. I collect my amount for providing a completed product to grace their shelves.
But at no point am I entitled to tell them they have write the book, and keep the same rate. It just doesn’t work like that.
So at the end of this all … What’s the point?
Well, maybe this will stir some thoughts in someone’s brain. It’ll probably make some people angry too, those that have bought into the idea that they get to determine what another’s labor is worth when they are unwilling to do the labor themselves.
But hey, it’s my OP-ED, on my site. If they don’t like it, tough. They can go labor and write their own post.
Jokes aside though, I think it is important that we dispel this myth that monetary influx is all that’s required to create and operate a business, and that labor is just some sort of unimportant byproduct that we don’t really need.
You really do. And if you’re not willing to provide that labor yourself, no matter how much money you have, you’re at the mercy of those who are willing to provide the labor … in return for their price.
And if you can’t, or more likely won’t, meet it? Well … then you’d better be willing to do it yourself.
Because the world doesn’t owe you a living, Mr. Coffee.
Comments? Thoughts? Leave ’em below!
Featured image stock from Pexels.com.
3 thoughts on “OP-ED: Labor and Ownership”
Sadly, how many owners see ‘labor relations’.
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I could probably go on for a long time on this subject, but there is something lacking in your argument. Two somethings, actually. Three if we want to get picky.
1. How much is the property worth?
2. What does the owner do *other* than own the building?
3. Net or Gross?
All across the country, you will find small farms that are valued at well over a million dollars in land, equipment, and buildings. That asset value *must* return a certain ROI or it’s just not worth owning and operating. (Many farmers do anyway.) After all, sell your farm for over a million dollars, invest it in something that returns 10%, and you can retire to a house in the country and clip coupons.
If Bob the landowner/shopowner has a business that is short an employee, and Bob makes far more money at his regular job (i.e. if he’s a lawyer, for example) than he would pouring coffee, of *course* he’s not going to tell the firm he needs to take six months off to earn minimum wage.
Practically every business owner will express their income as Gross instead of Net. The margin for many of these businesses can be as little as a single percentage point, considering they may ‘own’ as little as ten percent of it with the bank holding a mortgage for the balance. Often this leaves the owner with microscopic wiggle room on wages because simply raising prices will generate a descending spiral as customers leave and fixed costs don’t drop.
In the end, Bob the Employer may be able to hire somebody for minimum wage, but inside of a year, that employee has gained skills, earned a reputation, and if they’re a good employee, will be hired away by somebody willing to pay more. The cost of labor is another commodity in the market, just like artwork or oil. (but more complex)
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Well, is it lacking? I’ll response number by number and point by point.
1) We don’t know. Mr. Coffee didn’t offer this information. However, it was, according to Mr. Coffee, small enough one person did everything, AKA a klosk. If it’s anything, it’s location rather than the actual store that’s valuable, but the store itself does have to have something in order to sell. Could this change the value a little? Well … yes and no. If it’s a valuable location, then the profits will be higher, ergo Mr. Coffee can afford to pay someone more. If it isn’t, then he’s already on a risky proposition.
2) Again, not offered. Below you make the point of “Well, maybe this high powered lawyer doesn’t want to sling coffees. Which is a fair point except that this means the value of the labor for the shop is even higher, since if he cannot do the job, then he is fully at the mercy of someone else who is capable of doing it. And again, if he is unwilling to pay that price, that is not the fault of the worker for asking what their labor is worth. It merely means that with the limitations, Mr. Coffee should not be in business as he can’t afford it.
3) Again, net or gross wasn’t offered concisely but Mr. Coffee was pretty vocal about how much his earnings were, which would imply gross, not net. Again, this is subject to debate, but … Let’s look at this realistically: If Mr. Coffee’s “success” with this business is so small that he is, for example, only making a few thousand a year gross (a vast assumption based on my interaction with him) then he’s running a business that’s only one accident away from failure and collapse. Which economically, the US has just gone through both of. Rather than lamenting about how he cannot find any cheap labor, he should probably be looking into closing shop and cutting his losses. Especially as labor demand right now is very high, not because of some “lazy workers,” but because people both got tired of being treated poorly and COVID wrecked the economy. Over a million workers left the job market permanently in 2021, either through death or early retirement. That’s more than a percent of the whole market. If you’re buying a product and know all production will lessen by more than a percent the next year, expect demand.
I kind of blended in a few responses to the later paragraphs, but I will note that combining that sudden drop in the number of employees combined with your last point—experience and getting hired away—just means that it’s all the more likely someone won’t work for Mr. Coffee in the first place. Aside from that fact that he seems to act completely entitled, something any employee will pick up on, as noted there is a strong demand for employees right now, and many places are starting to raise wages for the first time in a decade or more. Why would anyone stick with a job that pays so little when they could get more literally anywhere else?
Which again, comes back to the point of “If you can’t/won’t do it yourself, then you have to pay what the laborer desires.” And if they don’t … then they’re just out of luck. You’re absolutely right that labor is a commodity, but it’s one that’s been devalued now for several decades, and now it’s starting to move back up.
Comparatively then, there will be “Bob’s” that employed people, but only were allowed to operate a business not because their business was good, but because the labor market was so depressed. To pull a hypothetical, like becoming a purveyor of any good while the good is half it’s normal value and relying on the market staying that low to stay in business, with either the majority profits funneled to the top (common) or barely squeaking by because the business isn’t really viable without that low item price.
The moment the economy recovers that business just can’t exist anymore. Maybe that’s Mr. Coffee’s coffee kiosk. But either way, if he were honest, he’d be willing to identify the true source of the problem, rather than telling everyone the problem is the worker knowing their value.
You’re right: It’s very complicated. But folks like Mr. Coffee or Mrs. Subway trying to make it out to be “people just need to work for me for nothing” is a foolish simplification.