I used to work for a franchising company, so I spent a lot of time training new franchisees and supporting existing ones.
Most of them simply could not comprehend that the cost of an employee is not just the amount of wages plus burden.
Among the factors that figure into how much an employee’s actual cost is: production rate, cost of mistakes and accidents which eat up management time in addition to the cost of redoing the work, the extent to which employees are self-supervising so you don’t have to hire more supervisors, the cost of poor work pissing off customers.
And the list is much longer than that. But most of the idiot franchisees persisted in believing that the cost = what they paid in wages plus burden. Probably because that was a number they could readily compare.
So they paid minimum wage or as little above it as they could get away with, and they got work proportionate in quality. A lot of them are out of business now.
The strategy I always proposed was to pay $2 or more per hour above “the going rate.” Keep the good employees and lay the crummy ones off. The franchisees who followed this advice are mostly still in business and profitable.
I understand your points and agree with the pay for better workers philosophy 100%.
In my own experience, major employers have drank from the cheap labor flask.
A case I experienced first hand: I used to pull meat from the mid west, kansas, Colorado, Iowa, and Texas.
Tyson Foods bought out Iowa Beef Packers (IBP), IBP had many Hispanic employees, but they were all production line workers.
After Tyson bought them out, there was a drastic change. It seemed that the truck loaders went from 40% Hispanic to 95% Hispanic in 2 or 3 months.
Only the top supervisory jobs were held by Americans.
The loads typically had 5 or 6 stops scheduled over a two day period.
Once the docks became majority Hispanic, the loads were completely screwed up.
It seemed the loader just slammed pallets on the truck with no thought about the stops.
What should have been a two day unload became three days.
The last load I pulled for Tyson was in 2006, a 6 stop load with two days of scheduled unload.
Because of the sloppy loading, it took me four days to get unloaded.
Until I retired in 2012, I refused to pull another Tyson load.
It simply wasn’t worth my time.
I talked to my old dispatcher last year, he said the problem hasn’t gotten any better.
These are large companies operating their own facilities. I guess saving a peso on the dock is working for them.