[mcaravey]

We’ve seen a lot of issues with hiring at the bakery I run. Minimum wage is already very high in Oregon at $14 (will likely increase next year). We pay more than that for our entry-level jobs, buts we’ve found it’s very hard to compete with the big companies. Our delivery driver position has to compete with $20/ hour starting wage + full benefits + $3000 signing bonus offered by Amazon contractors for zero experience. Yes, we’ve had to increase our wages, but people still don’t want to work.

We’ve had people come in thinking that we were like the baking shows you see on Netflix, just making fun cute things all day. They get scared of the work. A lot of younger applicants have a distinct air of entitlement, that their work is so incredibly valuable, even though they’ve never had working experience before. I can’t (literally can’t) pay these people huge wages. They don’t provide enough value, and no customer is willing to pay the associate price increases to the product to compensate the wage increase. If everyone agreed that paying $10 on a croissant was acceptable, then sure we could pay more, but it’s not purely the decision of the business owners.

I’m aware that we could just increase prices, pay better wages, etc. But there’s a very real risk to the business when making a large price change. We sell to a lot of other businesses, and they are sensitive to price changes. So while I’d love to hire and pay people extremely well, we can’t simply decide to pay more and have it work.

All that said, about half our employees are quite young (not teens though). They are usually the most energetic and willing to learn, but they are also the most unreliable (ghost, quit with no notice, untruthful about time off, etc). Managing people is way harder than it looks…

[xxpor]

So in other words then, you don't have a viable business...

[mcaravey]

Oh, don't get me wrong, it's a viable business. The issue I am bringing up is the disconnect between white-collar workers and blue-collar workers.

Blue collar work is by definition manual labor. Low skill labor goes in, product comes out. You have to constantly provide labor in order to create value. Software is very different because once it has been written it continues to provide value without constant input (yes, I'm ignoring maintenance and such). In theory the software can provide exponential amounts of value compared to the cost of labor. In that case sure, increasing the wages won't have a meaningful impact on the company income.

With blue collar work, and our in particular, there is a direct correlation between the cost of the labor and the profit from the product. The kinds of people we might employ have 1) zero experience, 2) troubled past that wouldn't pass a background check, 3) little to no education (many never finished high school), or any other multitude of reasons. These are vastly different kinds of people than what you might find in a white collar job.

In a business based on blue collar work, you really only have two choices: increase sales prices in order to pay employees more and hope the market will bear it. If not, you can pay employees market rates and keep the doors open. We have plans to start offering health insurance and benefits to all our employees, in addition to raising wages, so there's that to consider...

[zumu]

I have a feeling lots of small businesses in Oregon are no longer viable. Whether this is the general public best interest, only time will tell.

I say this as a former Oregon service industry worker.

[hazza_n_dazza]

thats what a small business is, just making ends meet. world over. same story. its where a decent lunch comes from.

[908B64B197]

> They don’t provide enough value, and no customer is willing to pay the associate price increases to the product to compensate the wage increase. If everyone agreed that paying $10 on a croissant was acceptable, then sure we could pay more, but it’s not purely the decision of the business owners.

> I’m aware that we could just increase prices, pay better wages, etc. But there’s a very real risk to the business when making a large price change. We sell to a lot of other businesses, and they are sensitive to price changes. So while I’d love to hire and pay people extremely well, we can’t simply decide to pay more and have it work.

I don't think your business model is viable.

You'll need to cut costs somehow. Time to re-negotiate your lease?

[AnonMessiah]

If your business model isn't sustainable without exploiting your workers your business doesn't deserve to be open. "They don’t provide enough value" - labor is the thing that creates value.

[mcaravey]

No one said we are exploiting our workers. That's just an assumption being made because it is not possible to pay everyone huge wages.

And I am aware that labor creates value, but not all labor is equal. No one questions if a junior developer should earn as much as a senior/partner/staff engineer, but it's very much the same here. I ask someone to roll some dough into a ball and that I'll pay them $17/hour to do that. Some people will be faster and produce better balls, while others will be slow and produce lumpy round things. They are not producing the same quality and quantity but the cost to me is still $17/hour, therefore on paper one is more valuable than the other. That's not a heartless or mean way of looking at it, that is literally a required part of costs of goods sold. Ingredients and labor dictate how much each ball of dough costs to make.

We try our best to take care of our employees because they are so important, and you won't find a single one of them that says we are exploiting them. But they are not software people, and the dynamic is very different in the world of manual labor.

[AnonMessiah]

I would argue wage labor, and capitalism as a whole, are inherently exploitative. I came from a manual labor background; Ranch hand, construction, metal fab, which is why I'm so passionate about this. I'm used to being paid $~15/hr to do very physically demanding work, knowing that the contracts are often 10-15k for a job a crew of four guys can knock out in a day or two, including labor and materials the expense is ~3-5k plus indirect costs (tools, trucks, taxes etc.), so why shouldn't the remainder of the profit go to the people that generated it? I understand the margins are thinner in most retail and service situations but the same logic can be applied. If you were losing money on an employee, or even just breaking even, would you keep them on they payroll?

[908B64B197]

> knowing that the contracts are often 10-15k for a job a crew of four guys can knock out in a day or two, including labor and materials the expense is ~3-5k plus indirect costs (tools, trucks, taxes etc.), so why shouldn't the remainder of the profit go to the people that generated it?

Sounds like the crew of 4 should just incorporate...

[horns4lyfe]

If they were operating in a true free market, then you’d have a point, but they’re not. They’re are artificial constraints like min wage, unemployment insurance that pays more, etc. those aren’t market forces, they’re state forces. In that context, you’re implying without realizing that you’re ok with living in a world where the only businesses are the Amazons of the world or those that receive state subsidies. That’s not a world I want to live in.

[AnonMessiah]

Businesses are only able to grow to the size of amazon because of the exploitation of the working class' labor and government subsidies. Minimum wage and unemployment aren't an artificial constraints, they are things that workers have exercised their collective strength in to win concessions from their employers via labor organizing and collective action. It's the same reason we (generally) have an 8 hour work day, a 5 day work week, holidays off, safety requirements, workman's comp, and child labor laws to name a few things.

Edit: fixed typo.

[908B64B197]

I'd argue that business grew the size of Amazon because of those things.

Amazon has economies of scale that smaller shops simply can't achieve. That makes certain business models only viable at their scale.

[kelseyfrog]

Have you considered pivoting out of the baking industry and into something more profit-positive?

[mcaravey]

Yes. I do run a software company as well, but the bakery is a family business that will be sticking around. We are considering selling the custom software I wrote to other bakeries to manager their production.

[hazza_n_dazza]

thanks for baking, mate, its not all about the cash. its nice to have food too.