So, 12%. Got it. One successful year doesn't paint much of a picture. Especially when you remember that employees don't usually take pay cuts when business is not doing so well. In many jurisdictions, it is even illegal to see employee pay cuts.

> I'm specifically talking about bags

General coffers. Even if the margins really are 90% on bags, they're losing money elsewhere. That money is gone no matter how you slice it. They don't magically still have it to offer the workers. Business is hard.

> but analysts say Vuitton's profit margin came in at around 50% last year

Gross margin, yes. There is more to running a business than COGS, however. Especially a business of their nature.

It's 50% more compared to that number. And for last 5 years it was only going up, it's not one successful year. So it's not 12%. Got it? I don't know of anyone talking about margins and talking about 20 years average, they had 0% in 2001, it's counted in that ~20 years, don't you see how stupid this is to include that into discussion? profit margins from 20 years ago.

Labor and material are the lowest costs on bags, highest is marketing. Why I need to pay more to workers if I can build new corporate HQ? When I can pay for bonuses of people at the top? or get ~20% profit. I have 50% of the company profits anyway and I make all the decisions[1]. You want me to tell that he (Bernard Arnault) can't pay people that make these bags more because he don't have money? come on, this is such a naive view. Some products/industries indeed can't but this is not one of them, software also with average of 25-30% NET profit margins.

1. At the end of 2017, the only declared major shareholder in LVMH was the Arnault Family Group, the holding company of Bernard Arnault. The group's control amounted to 46.84% of LVMH's stock and 63.13% of its voting rights.

You can't forget the past. Louis Vuitton aside, it is well understood that even wildly successful businesses haemorrhage money for the first 5-10 years before reaching profitability. You're saying that as soon as a business does reach profitability, all the excess profit should go to the workers, even when they haven't asked for it, and not pay back the lost opportunity? If so, why would anyone take the risk?

> Labor and material are the lowest costs on bags, highest is marketing.

Indeed. As you recognize this, and as marketing is not included in COGS, I find it strange that you pointed to their gross profit margin earlier. What was meant to be the significance of that?

> You want me to tell that he (Bernard Arnault) can't pay people that make these bags more because he don't have money?

He did pay them more. Said workers went on strike last year because they wanted more, and shortly thereafter he responded by paying them more... Ask and you shall receive, as they say.

What are you expecting, exactly? Is it that you are appalled that workers have to make it known how much they expect to be paid? Do you want Bernard to walk the streets and surprise offer $100 bills to random passers-by?

If so, what about you? Everyone on HN can spare a a few hundred dollars (you couldn't afford to be here otherwise), and more likely, given how much the audience is generally worth, can spare tens, even hundreds, of thousands of dollars. How many $100 bills did you unsolicitedly hand out today? Or are you one of those people who never pays more than the asking price even though you can afford to pay more?

What? You mean VC backed businesses only? So like 0.0...1% of all businesses? and btw LV is not one of them. You think that successful restaurant owner "haemorrhage money for the first 5-10 years"? He would be out of business 10 times by then.

> He did pay them more. Said workers went on strike last year because they wanted more, and shortly thereafter he responded by paying them more... Ask and you shall receive, as they say.

In France, after strike. What about Asia? where there are no unions and strong labor laws, did he pay them too? No he didn't.

> What are you expecting, exactly? Is it that you are appalled that workers have to make it known how much they expect to be paid? Do you want Bernard to walk the streets and surprise offer $100 bills to random passers-by?

> If so, what about you? Everyone on HN can spare a a few hundred dollars (you couldn't afford to be here otherwise), and more likely, given how much the audience is generally worth, can spare tens, even hundreds, of thousands of dollars. How many $100 bills did you unsolicitedly hand out today? Or are you one of those people who never pays more than the asking price even though you can afford to pay more?

Sorry but what the hell are you talking about? Do you remember the topic of conversation still? Because I'm replying to what you said "Not having enough revenue to pay the workers a sufficient rate is just a symptom of that.", which I proved is not the case in my specific example (because THERE IS ENOUGH REVENUE to pay workers more, he did it in France where labor laws and unions are the strongest on this planet) and it's also not the case in software industry and you talk about me handing out 100$ to random people on the street??? What?

I don't really know on which world are you living, but the reason most of businesses do not pay workers more is not "not having enough revenue" but because they choose to hoard money to themselves out of greed. I have many business owners in my family and they are driving porsches while paying their staff minimum wage, I assure you that they have enough revenue to pay their workers more. I'm not here to offer solutions, I was writing this to show that the problem exists and that what you wrote is not true in majority of cases.

What about it? Are the workers there currently off the job while they wait for more money?

> Because I'm replying to what you said "Not having enough revenue to pay the workers a sufficient rate is just a symptom of that."

Oh? Are you sure? You have offered nothing to suggest Louis Vuitton is struggling to find workers. The closest we got was me mentioning that their workers were on strike last year, which was followed with more pay to compel the workers back. That shows that Louis Vuitton is, in fact, quite prepared to pay more when they can't find the workers they need.

Here I was convinced you were just going on some mindless "workers are victims" rant, not realizing that workers don't show up when they are not paid enough. If you don't believe in that, you need to go back to the original comment in this thread – the one before my first – and reply to it instead. As you know, as you surely read all the words before replying (haha), my comment merely followed the premise established there.

> Sorry but what the hell are you talking about?

It was suggested that head of Louis Vuitton is too greedy to randomly pay people more than what they asked for. I then asked if you go around randomly paying people more than they ask of you. If not, it would be strange for you to expect others to do so. Everyone here has money to spare.

No they aren't because it's Asia? You don't work then you starve. There is so much poor people there that you can pay whatever and you will find workers, no labor laws, no unions. So he pays them pennies because as you said "THERE IS SHORTAGE OF REVENUE"? That's not the reason and everyone knows that. Just admit that they are not paid because of greed and we can finish this discussion instead of framing it like poor business owner would need to charge higher price or they would be starving. That's NOT the case.

> Here I was convinced you were just going on some mindless "workers are victims" rant, not realizing that workers stop showing up when they are not paid enough

Ye, all of these people without education can choose to do whatever they want.. so they can just quit and then they eat air and pay for rent and their children school etc with air, with almost zero savings (because cost of living eats everything) especially in Asia without labor laws and unions. But ye live in your alternative world where workers can choose whatever they want, but it's not only Asia where its really bad or Africa, lets look at the richest country in the world where 57% of Americans can't afford a $1000 emergency, I guess these people with kids can't wait to just quit their jobs and be homeless.

> It was suggested that the guy at the head of Louis Vuitton is too greedy to randomly pay people more. I asked if you randomly pay people more as well. If not, it would be strange for you to expect others to do so. Everyone here has money to spare.

Difference is that these are not random people but people that do work for him, see the difference? It's the fruit of their labor. That's why again, WTH are you talking about?

I would never say such a thing as "shortage of revenue" is completely nonsensical. A shortage occurs when an external mechanism, such as government regulation, prevents price from rising. Revenue may be impacted by a shortage, but revenue fundamentally cannot be in shortage itself.

The original comment that set the stage for the thread stated that certain businesses are struggling to find workers because they don't pay enough to attract workers. That is true, but the reason they aren't able to pay enough to attract the workers they need to keep going is because the customers aren't interested enough in their product to want them to keep going. Not everything is worth doing.

It is not clear how you think Louis Vuitton fits into that. They seemingly have no trouble hiring workers, and when the workers do leave over concern of not being paid enough they demonstrably offer more to win them back. They have sufficient customer interest.

> Difference is that these are not random people but people that do work for him, see the difference?

No. You also have people working for you. Everyone, save those who have gone completely off grid (which you clearly have not), does. That is how an economy functions. The question stands: How often do you pay your workers more than they have asked of you?

> No. You also have people working for you. Everyone, save those who have gone completely off grid (which you clearly have not), does. That is how an economy functions. The question stands: How often do you pay your workers more than they have asked of you?

You seem to be fixated on deflecting the conversation away from the real issue at hand. Let's be clear: the topic of this discussion is not about me or whether I have people working for me as a customer. It's about addressing the widespread problem of companies underpaying their workers and prioritizing excessive profits over fair compensation.

While it is true that in everyday transactions, as a customer, I interact with employees at various businesses, that is not the crux of this debate. The main concern is the mistreatment and underpayment of workers within companies, especially those that are highly profitable.

As for the question of how often I pay workers more than they ask for, it is irrelevant to this conversation (but actually often I pay more, I tip people etc but I don't want it to be discussion about me). The focus should be on corporate practices and the need for businesses to recognize the value of their employees and provide fair wages.

So, let's get back on track and concentrate on the real issue – advocating for fair treatment, fair wages, and better working conditions for workers within companies.

Honestly, you're so focused on nitpicking and avoiding the real problem that it's frustrating to even continue this discussion. Stop defending the indefensible and open your eyes to the reality of the situation. Workers deserve better, and it's time for businesses to stop being so damn greedy.

Are you replying to my original statement or not? This has nothing to do with the original discussion.

But let's run with it: To underpay a worker ultimately means that you have an outstanding debt to that worker. Are you suggesting that Louis Vuitton has outstanding debt to its workers and that the workers continue to stick around only because they think "If I keep working hard enough I am sure that good guy Louis will eventually settle up!"

I can believe in the short term workers will really hold that view. Indeed, unlike robots which stop working the minute you hold back on pay, humans are a lot more forgiving. But, at the same time, only for so long. If the debts aren't eventually settled they will give up hope.

Louis Vuitton has been in business since 1854, so unless this is something that has only started happening in the past few months, I expect that isn't really the case. I expect the workers are actually paid up in full. Workers don't like to be banks. You won't last long if you treat them as such.

> You seem to be fixated on deflecting the conversation away from the real issue at hand.

Well, I tried going down your weird rabbit hole. Then you told me that you were actually talking about what I said originally. With us back to the original discussion, now you're telling me that you were still in the rabbit hole...? Pick a lane.

> So, let's get back on track and concentrate on the real issue – advocating for fair treatment, fair wages, and better working conditions for workers within companies.

Let's not. Advocacy requires presenting opinion, and presenting opinion is bad faith participation. Good faith participation limits itself to exploring the way things are. One can always use that information to form an opinion, if they so choose. And, frankly, if you are not familiar enough with the way things are in order to be able to contribute in good faith, you most certainly are not in a position to have a well considered opinion.

Yes, I am addressing your original statement, which implies that some companies underpay workers despite making massive profits. My point was that this is an issue we should consider in our discussion about fair wages and workers' treatment.

> To underpay a worker ultimately means that you have an outstanding debt to that worker. Are you suggesting that Louis Vuitton has outstanding debt to its workers and that the workers continue to stick around only because they think "If I keep working hard enough I am sure that good guy Louis will eventually settle up!"

No, I am not implying that Louis Vuitton or any other company has outstanding debt to its workers. The point is that if a company is making substantial profits but not adequately compensating its workers, it raises concerns about fair treatment and the distribution of wealth within the company.

> Louis Vuitton has been in business since 1854, so unless this is something that has only started happening in the past few months, I expect that isn't really the case. I expect the workers are actually paid up in full. Workers don't like to be banks. You won't last long if you treat them as such.

I agree that businesses must pay their workers adequately to retain a skilled workforce. However, the issue is not whether workers are currently owed back payments, it's about ensuring that workers are paid fairly for their contributions and that companies prioritize fair wages alongside their profits.

> Let's not. Advocacy requires presenting opinion, and presenting opinion is bad faith participation. Good faith participation limits itself to exploring the way things are. One can always use that information to form an opinion, if they so choose. And, frankly, if you are not familiar enough with the way things are in order to be able to contribute in good faith, you most certainly are not in a position to have a well-considered opinion.

I disagree. Good faith participation involves discussing issues with the goal of seeking positive change and improvement. While we explore the way things are, we can also advocate for fair treatment and better conditions for workers based on ethical and moral considerations.

The real issue here is about recognizing that some companies may not prioritize fair wages for their workers, even if they have the means to do so. By discussing this, we can raise awareness and foster a better understanding of the challenges faced by workers in various industries.

It's evident that your approach to the discussion has been selective and avoiding certain aspects that do not fit your viewpoint. It's disappointing to see you ignore crucial points about the challenges faced by workers in various regions, especially those with low wages and inadequate labor protections.

Addressing only parts of the conversation that align with one's narrative while disregarding significant aspects of the discussion limits the potential for a constructive and well-rounded exchange of ideas. This behavior not only hampers progress in finding solutions but also fails to acknowledge the complexity and diversity of issues related to fair wages.

Again, had you taken the time to read the full context, you would know the statement was made with respect to not being able to find workers to hire. How can you underpay, let alone pay at all, workers which do not exist? You can't. This has nothing to do with the original topic.

> The point is that if a company is making substantial profits but not adequately compensating its workers

If the workers are not adequately compensated then there must be debt. You fundamentally cannot withhold something in an exchange without accumulating debt. Perhaps you mean the workers have voluntarily forgiven any debt that was outstanding? Indeed, that is an option available to them, but not something workers usually take kindly.

> it's about ensuring that workers are paid fairly for their contributions and that companies prioritize fair wages alongside their profits.

What is fair is established when to exchanging parties reach an agreement on what they both consider to be an equal exchange of value. Until such an agreement can be made, a transaction does not begin. If, later, one party does not fulfill their end of the agreement then that would be unfair, but debt is also created. When there is unfairness, there is debt. They are intrinsically linked. Debt is literally a measure of how far one party has been unfair to another.

> Good faith participation involves discussing issues with the goal of seeking positive change and improvement.

You can't meaningfully seek positive change and improvement without understanding the current state of the world. Once you do understand it, that change is a natural consequence. It doesn't require drawn out discussion.

Jumping straight to pushing your agenda of what you think is the positive change and improvement is bad faith participation as it robs other parties from the understanding of why it is the change they too want to see, and is typically done so because the message wouldn't be compelling if the other parties had that underlying understanding. Even where intentions are pure, it is a self-centred position, and self-centredness is not faithful to the other participants.

> You can't meaningfully seek positive change and improvement without understanding the current state of the world. Once you do understand it, that change is a natural consequence. It doesn't require drawn-out discussion.

While understanding the current state is crucial, meaningful change often requires open and constructive discussions to explore various perspectives and potential solutions. Engaging in dialogue allows us to gain insights from different viewpoints and fosters a deeper understanding of the issues at hand.

> Jumping straight to pushing your agenda of what you think is the positive change and improvement is bad faith participation as it robs other parties from the understanding of why it is the change they too want to see, and is typically done so because the message wouldn't be compelling if the other parties had that underlying understanding.

Advocating for positive change can also involve presenting well-considered ideas and supporting them with evidence and reasoning. Engaging in open discussions allows us to better comprehend the underlying issues and work towards consensus on positive improvements for all parties involved.

> What is fair is established when two exchanging parties have reached an agreement on what they both consider an equal exchange of value. Until such an agreement can be made, a transaction does not begin. If, later, one party does not fulfill their end of the agreement, then that would be unfair, but debt is also created. When there is unfairness, there is debt. They are intrinsically linked.

Fairness in the context of business goes beyond just an initial transaction. It involves ongoing relationships between employers and employees. While formal agreements are crucial, there is also a moral and ethical dimension to consider in how workers are treated over time, especially in light of the company's profits and growth.

There is important additional context that needs to be considered when discussing fair exchanges in the labor market. In many cases, especially in poor countries or among economically vulnerable individuals, the concept of "equal exchange of value" might not be applicable in the traditional sense.

For many people in these situations, they may not have the luxury of multiple options or the bargaining power to negotiate for fair wages. When individuals are in desperate need of employment to survive, they might accept any job opportunity presented to them, even if the compensation is not sufficient.

In such cases, the power dynamics between employers and employees are significantly skewed, making it challenging for workers to demand fair wages. This imbalance can lead to underpayment and exploitation, and it may not be a result of an equal and voluntary agreement between the parties.

Recognizing this context is essential to understanding the complexity of labor issues and the intrinsic link between unfairness and debt that you mentioned earlier. It highlights the need for greater attention to workers rights, social safety nets, and the role of governments and businesses in ensuring fair treatment and better opportunities for economically vulnerable individuals.

In discussions about fair wages, we must consider the broader socioeconomic context and work towards addressing the root causes of inequality and exploitation in the labor market. By doing so, we can foster an environment where all workers are treated fairly and have the opportunity to thrive, regardless of their socioeconomic background.

There is no rush.

> Fairness in the context of business goes beyond just an initial transaction.

Well, sure. The world certainly isn't static. What is fair can change over time. And to be sure, one can negotiate at every turn to stay on top of that, but that's not terribly efficient for long-term engagements, so workers usually seek a long-standing agreement and renegotiate only as needed, like the Louis Vuitton workers did as discussed earlier.

Indeed, the workers we like to subcategorize as contractors often try to renegotiate at every turn, seeking opportunities in trying to stay current with what is fair. While it can be beneficial, the growth in what is fair has to exceed what is given up to navigate the inefficiencies, which often doesn't happen. We'd all be contractors if it was always a better deal. Usually the worker is better off when the agreement is long-standing.

> For many people in these situations, they may not have the luxury of multiple options or the bargaining power to negotiate for fair wages.

While this doesn't make sense, what I think you are trying to say is that some people are not worth as much as other people and that those people worth less will not be able to negotiate terms as favourable as someone worth more? If so, certainly. Everyone is different. Similarly, I expect your greed, as you call it, prevents you from paying Ferrari prices for a Chevy Trax as well.

After all, the whole reason for attaching a price to something is to deal with scarcity. The cost is supposed to scare you away. The higher the cost, the more scared you should be of using up the resource. But if someone has nothing else to do with their life, why would you want to be scared of them? Are they not best utilized to the betterment of themselves and humanity as a whole, not tossed aside out of fear?

On the flip side, you should be terribly afraid of hiring someone like a doctor to sew handbags. You want to see that they are tossed aside so that they can work as a doctor instead. They and all the rest of humanity is better off when you toss them aside. This is why they must carry a much scarier price.

Yes, long standing agreements can provide stability for both workers and employers. However, the ability to renegotiate and advocate for fair wages periodically is essential, especially in dynamic economic environments where factors like inflation, cost of living, and company profits may change over time. Workers seeking better conditions and wages is not an unreasonable expectation, as their contributions contribute to a company's growth and success.

> While this doesn't make sense, what I think you are trying to say is that some people are not worth as much as other people and that those people worth less will not be able to negotiate terms as favourable as someone worth more?

The point is not about devaluing individuals or considering certain people as worth less than others. It's about acknowledging that economic disparities and systemic challenges can limit the bargaining power of certain individuals, making it difficult for them to negotiate for fair wages and better working conditions.

> After all, the whole reason for attaching a price to something is to deal with scarcity. The cost is supposed to scare you away. The higher the cost, the more scared you should be of using up the resource. But if someone has nothing else to do with their life, why would you want to be scared of them? Are they not best utilized to the betterment of themselves and humanity as a whole, not tossed aside out of fear?

It is important to recognize that the labor market is not a perfect representation of resource allocation. The concept of "scarcity" in this context does not equate to the value of human labor or the potential contributions individuals can make to society. People should not be devalued or discarded based on their circumstances, but rather, they should be provided with opportunities and support to enhance their skills and contribute meaningfully to the workforce.

The goal is to ensure that all individuals have access to fair opportunities and can be compensated appropriately for their work, regardless of their background or circumstances. Empowering workers to improve their skills and capabilities benefits not only them but also society as a whole. By promoting fairness and addressing economic disparities, we can create a more inclusive and equitable labor market that benefits everyone.

It is never difficult to negotiate a fair wage. Tricking someone into paying an unfair wage, where you see greater value than you give back in return, is a lot harder. But that questions: Have you actually tricked them, or was the agreement fair all along? The reality is that any offer that is considered unfair, by either side, is rejected and a transaction never takes place. When an agreement is made, it is always considered fair. You, fundamentally, cannot work for someone for an unfair wage.

That is, assuming involved parties are holding true to the agreement made. If someone is not holding up their end of the bargain then that would be unfair, but that also introduces debt...

> It is important to recognize that the labor market is not a perfect representation of resource allocation.

There is no importance to that statement at all. It is a true statement, but it doesn't have any bearing on the conversation.

> The concept of "scarcity" in this context does not equate to the value of human labor or the potential contributions individuals can make to society.

The perception of scarcity is what drives the perceived value of human labour. If I think I can put out a job ad and see a thousand great people line up for a chance at the job, I'm not going to find much value in the work. If I think there is only one person in the world who can suitably do the job, and every other company wants to hire them too, I know it is going to take one hell of an offer to compel them in my direction.

Which brings us back to the first comment in this thread (the one before my first). That is exactly what they stated. If you think they mischaracterized the state of the world, you should take it up with them. These circles you keep us running around in are pointless.

Sure, you keep harping on about not tricking someone into accepting an unfair wage, but the reality is far from your idealistic view. Many workers, especially those facing economic vulnerabilities, have no choice but to accept whatever is offered, even if it falls short of fair compensation. And don't give me that "transaction never takes place" nonsense, exploitative agreements happen all the time, whether you care to acknowledge it or not. And don't use words like NEVER and FUNDAMENTALLY, unless you think that labor relation between slave and master in slavery period was a fair transaction, do you?

As for your dismissive attitude towards the importance of the labor market's representation of resource allocation, it just shows your lack of understanding. While it might not fit neatly into your narrow worldview, it's crucial to recognize the market's influence on labor value and the allocation of resources. Don't believe me? Here, educate yourself by reading these two reports from OECD and ILO with data and sources to research:

https://www.ilo.org/wcmsp5/groups/public/---ed_norm/---relco...

https://one.oecd.org/document/DAF/COMP/WD(2019)43/en/pdf

Things like economic disparities and systemic challenges in context of labor that I mentioned so many times and that you dismissed are discussed there and supported by data.

And don't even get me started on your skewed perception of scarcity. Yes, supply and demand play a role, but that doesn't negate the fact that unfair practices can still arise, leaving workers struggling while companies rake in massive profits. But I guess it's too much for you to grasp that concept.

You keep going in circles, pointing fingers at the initial comment as if it's some holy truth. Well, newsflash: discussions evolve, and we're addressing a broader issue here. If you can't keep up and insist on your one-track mind, then by all means, spare us your pointless circles and let those who are genuinely interested in understanding the complexities have a meaningful conversation.