Living Wage - be careful what you wish for!

[JAZZMANB]

The very first move a business should be considering is its profit margin, and working from there.

Many businesses facing competition from new media or models, as with the cinema, however begin with maintaining how much they pay themselves at the top to to begin with, and then scrape around and put together whatever shitty service they can provide at the lower levels.

That's exactly what happened with the likes of Game, HMV et al. Pretend competition doesn't exist, charge a premium like they always did in spite of the fact that the competition can provide it far cheaper, continue to award yourself a massive salary, and make up the shortfall in cutting staff and quality lower down. That would appear to be exactly the same rulebook cinemas like this are taking pages from, despite the rise of Netflix etc.

Game and Hmv became slow victims of a change in how we bought that product ie online business they didnt struggle because other shops were better.
I take it your 1st paragraph is an example of a bad business because no right minded manager at any level would combat new competition with a worse customer experience?Most middle and top management live in a culture of do well or you're on your way with nothing thought of replacing you at any point.So looking after number 1 and letting the business suffer will come back around very quickly

 

[lurker]

Highest ever box office gross figures


But apparently people don't go to the cinema these days

More bullshit to inflate ticket prices and cut pay

They'll be banning people taking their own snacks next

 

[AndrewP]

Highest ever box office gross figures


But apparently people don't go to the cinema these days

More bullshit to inflate ticket prices and cut pay

They'll be banning people taking their own snacks next

I thought some did?

 

[lurker]

I thought some did?

Really? Hilarious if so

 

[Gonzo Mackem]

I thought some did?

They should ban all crunchy snacks!

Our local indy cinema allows you to text orders during the film and bring you booze and snacks from the bar.

 

[sonson]

Game and Hmv became slow victims of a change in how we bought that product ie online business they didnt struggle because other shops were better.
I take it your 1st paragraph is an example of a bad business because no right minded manager at any level would combat new competition with a worse customer experience?Most middle and top management live in a culture of do well or you're on your way with nothing thought of replacing you at any point.So looking after number 1 and letting the business suffer will come back around very quickly

I didn't say other shops were better. I said they struggled in the face of new competition, which is what the online businesses etc were. They didn't work out how to use their strengths and mitigate their weaknesses in light of that, they kept on as they had been, and they died.

You're right that most middle and top management are driven by outputs that demand they do well, but that doesn't mean they actually implement good policies. They tend to just bottom out and panic and push for profit in the most obvious places. I mean, do you honestly think it's a good move to charge someone nearly twice the price of a monthly Netflix subscription to watch one film for two hours? But that's what they're doing. They're not strategising, they're panicking and just trying to get as much money in at one point as possible. And they will die if they continue to do so, because no-one needs to pay that much for that experience any more, and eventually, they won't.

So you're quite right, it is an example of poor management. But it is rife because people just see what's in front of their nose and immediate profigt and don't have the nous to plan for the future or recognize wider trends.

 

[Lankester Merrin]

doesn't work in a gloablised economy though

Hmmm... not sure that Cinema staff are a good example of globalisation?

The Classic cinema in Mumbai might pay it's staff less, and have better popcorn. They might pass this onto the customer in lower admission prices, and a better range of catering options.

But the movie will all be shit, and they will all star Shah Rukh Khan. And it's miles away. And all they show are muscials. With Shah Rukh Khan in.

 

[monkeytassle]

Hmmm... not sure that Cinema staff are a good example of globalisation?

The Classic cinema in Mumbai might pay it's staff less, and have better popcorn. They might pass this onto the customer in lower admission prices, and a better range of catering options.

But the movie will all be shit, and they will all star Shah Rukh Khan. And it's miles away. And all they show are muscials. With Shah Rukh Khan in.

you get my point though, irrelevant of industry it's ALWAYS a race to the bottom.

 

[Lankester Merrin]

I don't see how it's possible. If someone has a few kids and the wife stays home to watch the kids, what sort of "living wage" would the working dad need to ensure benefit top ups were not required? Now imagine giving everyone that!! Sit back and watch inflation wipe away any gain.

We have had very lowe inflation in the UK for years now because we have slack capacity all around the economy - unemployment, underemployment, empty shops, empty factory units, businesses sat on cash, investors looking for opportunities

We would have to increase demand enormously to create inflation.

 

[shepherd88]

I didn't say other shops were better. I said they struggled in the face of new competition, which is what the online businesses etc were. They didn't work out how to use their strengths and mitigate their weaknesses in light of that, they kept on as they had been, and they died.

You're right that most middle and top management are driven by outputs that demand they do well, but that doesn't mean they actually implement good policies. They tend to just bottom out and panic and push for profit in the most obvious places. I mean, do you honestly think it's a good move to charge someone nearly twice the price of a monthly Netflix subscription to watch one film for two hours? But that's what they're doing. They're not strategising, they're panicking and just trying to get as much money in at one point as possible. And they will die if they continue to do so, because no-one needs to pay that much for that experience any more, and eventually, they won't.

So you're quite right, it is an example of poor management. But it is rife because people just see what's in front of their nose and immediate profigt and don't have the nous to plan for the future or recognize wider trends.

They used to charge twice the price of renting a video in the past though. How do you know they are not planning for the future. Some very bold predictions like especially since revenue and Ebitda has increased compared to last year.

 

[AndrewP]

They should ban all crunchy snacks!

Our local indy cinema allows you to text orders during the film and bring you booze and snacks from the bar.

That would annoy me, I hate it when people text during films.

 

[Harry Angstrom]

I don't see how it's possible. If someone has a few kids and the wife stays home to watch the kids, what sort of "living wage" would the working dad need to ensure benefit top ups were not required? Now imagine giving everyone that!! Sit back and watch inflation wipe away any gain.

I don't think anyone working should have benefit top ups.

 

[AndrewP]

We have had very lowe inflation in the UK for years now because we have slack capacity all around the economy - unemployment, underemployment, empty shops, empty factory units, businesses sat on cash, investors looking for opportunities

We would have to increase demand enormously to create inflation.

I think you're missing the point, if the living wage was set at say £20ph (for arguments sake) to take a couple with kids (one working parent) out of benefits, what would that do to inflation?

I don't think anyone working should have benefit top ups.

So you'd like to see the poorest working families much worse off, or you'd like to see a minimum wage set around the £20 per hour level?

 

[JAZZMANB]

I didn't say other shops were better. I said they struggled in the face of new competition, which is what the online businesses etc were. They didn't work out how to use their strengths and mitigate their weaknesses in light of that, they kept on as they had been, and they died.

You're right that most middle and top management are driven by outputs that demand they do well, but that doesn't mean they actually implement good policies. They tend to just bottom out and panic and push for profit in the most obvious places. I mean, do you honestly think it's a good move to charge someone nearly twice the price of a monthly Netflix subscription to watch one film for two hours? But that's what they're doing. They're not strategising, they're panicking and just trying to get as much money in at one point as possible. And they will die if they continue to do so, because no-one needs to pay that much for that experience any more, and eventually, they won't.

So you're quite right, it is an example of poor management. But it is rife because people just see what's in front of their nose and immediate profigt and don't have the nous to plan for the future or recognize wider trends.

Cinemas not my business but trying to run big sites with all it entails cost wise will never compete with Netflix on a ££ only basis ever,surely?As you say you have to look at it as a different experience entirely and sell its strengths.I'm not a regular but when i go with my son and spend say £20 on the whole visit the value for money doesn't enter my head.If someone was rude and i had a bad experience it would nark me but again the ££ has nothing to do with it.The whole home experience is challenging pubs,restaurants,cinemas etc and i don't think it' managers in those sectors fault that its happened

 

[Harry Angstrom]

doesn't work in a gloablised economy though

Well we could always unglobalise it.

 

[Lankester Merrin]

you get my point though, irrelevant of industry it's ALWAYS a race to the bottom.

I do get your point.

But some industries aren't a race to the bottom - they are a race to the top. The City pays enormous wages because in order to remain competitive they have to pay top dollar to get the best staff. Law firms the same. Top Drs too. The best in design, business, advertising also.

Defence/weapons research and sales, pharmaceutical research, top universities, management consulting, specialist engineering, specialists in engineering and petrochemicals. All of these industries rely upon paying higher and higher salaries to get the best people. None of them are in a race to the bottom.

The reason why I pick on the industries above, is because they represent the areas where Britain is most competitive globally - our biggest export earners, They are all industries where competitiveness is driven by higher salaries and better people (I have missed out specialists food and drink producers because they don't fit my argument). For most people in globally competitive industries, or in globally networked industries or cities globalisation has driven higher salaries, not lower.

The areas of the UK economy which have seen sharp declines in wages - the race to the bottom - are the ones which don't export and which aren't in a global race. Globalisation may have moved a small number of jobs to offshore call centres, but even if we shut the doors to the world tomorrow wages at the lower end of the market wouldn't pick up. All that would happen is those at the top doing well and paying tax would do worse.

 

[Harry Angstrom]

So you'd like to see the poorest working families much worse off, or you'd like to see a minimum wage set around the £20 per hour level?

If the supply of labour wasn't artificially boosted, we wouldn't need a minimum wage and we wouldn't need benefits for anyone apart from the really vulnerble. I am happy for people to be worse off if they cannot be arsed.

I do get your point.

But some industries aren't a race to the bottom - they are a race to the top. The City pays enormous wages because in order to remain competitive they have to pay top dollar to get the best staff. Law firms the same. Top Drs too. The best in design, business, advertising also.

Defence/weapons research and sales, pharmaceutical research, top universities, management consulting, specialist engineering, specialists in engineering and petrochemicals. All of these industries rely upon paying higher and higher salaries to get the best people. None of them are in a race to the bottom.

The reason why I pick on the industries above, is because they represent the areas where Britain is most competitive globally - our biggest export earners, They are all industries where competitiveness is driven by higher salaries and better people (I have missed out specialists food and drink producers because they don't fit my argument). For most people in globally competitive industries, or in globally networked industries or cities globalisation has driven higher salaries, not lower.

The areas of the UK economy which have seen sharp declines in wages - the race to the bottom - are the ones which don't export and which aren't in a global race. Globalisation may have moved a small number of jobs to offshore call centres, but even if we shut the doors to the world tomorrow wages at the lower end of the market wouldn't pick up. All that would happen is those at the top doing well and paying tax would do worse.

Why not? Would someone on massive wages not pay a decent wage for a cleaner instead of having to do it for themselves?

 

[AndrewP]

If the supply of labour wasn't artificially boosted, we wouldn't need a minimum wage and we wouldn't need benefits for anyone apart from the really vulnerble. I am happy for people to be worse off if they cannot be arsed.

OK, so you're prime minister, you abolish all in work benefits. How would you ensure the lowest paid working families aren't much worse off? It's not really possible, that's why it's never been done by any government since in work benefits were introduced.

I'm not talking the "can't be arsed", I'm taking families where someone is working.

 

[sonson]

Cinemas not my business but trying to run big sites with all it entails cost wise will never compete with Netflix on a ££ only basis ever,surely?As you say you have to look at it as a different experience entirely and sell its strengths.I'm not a regular but when i go with my son and spend say £20 on the whole visit the value for money doesn't enter my head.If someone was rude and i had a bad experience it would nark me but again the ££ has nothing to do with it.The whole home experience is challenging pubs,restaurants,cinemas etc and i don't think it' managers in those sectors fault that its happened

It's not their fault but they're in a business to make money, that's threatened by what the competition does, if they don't work out how to evolve in the light of that they'll die. That's how it works.

But just for example-one of the values of going to the cinema over the home experience is the getting out bit, the human interaction, the exchange yeah? It's more personable and bespoke than just sitting at home in front of the TV. What have they done in the example above? Made the whole experience staffed by a skeleton crew and removed the management who would have been responsible for making sure services run efficiently, which removes much of that unique experience at a stroke. Now you'll get overworked, distressed staff having to do more work and be more focused on their own job survival and just staying above water, to the expense of having the mental space and actual resources to provide a good customer experience.

 

[Thurston]

Cinema business set to sack 25% of staff after they won right to be paid the Living Wage: Cinema workers who won a campaign to adopt the London Living Wage have been told that a quarter of the workforce is now facing the sack. Picturehouse Cinemas said that the cost of increasing basic wages at the Ritzy Cinema in Brixton to £8.80 an hour would be absorbed by reducing the number of staff by at least 20, with a redundancy programme starting next month. Two management posts will be axed along with eight supervisors, three technical staff and other front-of-house workers from its workforce of 93. BECTU, the union that represents cinema staff, described the move, which came after a year of strikes and negotiations, as a “kick in the teeth”. The union is now preparing to ballot its workers on a further round of strikes at the popular arthouse cinema.

Disgusting. People are not philanthropists. If they're working and can't actually afford to live on the gains of their labour, what's the point of people going to work at all? Do these companies think people actually enjoy working to make other people rich while they and their families suffer? Do they actually believe all the stuff people say in job interviews, and that first and foremost, their main, if not only, priority for the worker and their families isn't to y'know, live?

Stuff like this sickens me. It's no different to what people slag Unions off for, but from the other side of the fence. Infact its far, far worse. It's all posturing and asserting themselves, at the expense of peoples livelihoods. The people behind this are utter scum.