By Matthew Dunn
On a warm summer evening where is
one to go in order to fulfill that craving for something cool; to the ice cream
parlor of course! This past Sunday was
National Ice Cream Day, and ice cream stores around the nation, created
promotions designed to get people to buy ice cream. When arriving at a local Carvel that evening,
my wife and I had to wait in a considerable line because Carvel was offering a
two for one deal. Waiting in line is
never a pleasant experience, but we shouldered through it because, I mean it
was two for one.
Behind
us, I could hear a woman who was dissatisfied with the service. The main cause of the line was the fact that
there were only two employees handling all of the business of the store. She observed this and she said “Shame on the
owner, for only having two people work today”.
However, as a frequent customer at this establishment, I don’t think
that I have ever seen more than two or three people working there. In fact I don’t think I’ve ever seen more
than two or three people working at any Carvel, or any other ice cream
establishment. As a person who briefly
worked the ice cream counter at Friendly’s, it can become a fairly stressful
experience for employees, especially when customers get agitated.
So why
not have more people working? Simple:
Labor costs. Labor is a large business cost,
and it is one that is most easy to control.
Businesses have little effect on the overall cost of supplies needed
like electricity, fuel, or food, but they can control labor costs. So businesses generally try to do their best
on saving on labor costs. One can
imagine that the two employees of Carvel were probably making close to minimum
wage. So judging by the fact that an ice
cream cone is at least five dollars, the owner could pay their hourly salaries
with the sale of four ice cream cones.
So it seems that this owner is probably doing very well.
So who is the owner? Carvel stores are independently owned
franchises but the Carvel brand is a
subsidiary of Focus Brands, which is in turn an affiliate of The Roark Capital
Group. Roark Capital, is a private
equity firm which specializes in buying businesses such as Carvel. They also have ownership of restaurants such
as Carl’s Jr., Hardee’s, Arby’s, Cinnabon, and Auntie Anne’s. Because they have ownership of restaurants
that sell mostly high fat, high sugar food, they balance that portfolio with diet
and fitness products like Atkins Nutritionals and Anytime Fitness. Besides these and other food service restaurants,
they own supermarkets, pet stores, professional sports leagues, car service
companies, and private schools. Overall
according to their website they have over $6 billion in assets under
management.
Now on this company’s website they
list the members of their team. By my
personal count there were 54 people listed.
In fact those seem to be the only direct employees of Roark
Capital. There are 27 people listed
under the investment professionals section, some of whom have the title of
summer intern. From the fact that they
are in charge of such large brands and so much capital, it seems that they can
do a lot with what they have.[i] So if a $6 billion company has only 54 people
listed as part of the team, why would we expect an ice cream parlor to have
more than one or two?
The simple fact is, is that there
are too many people for the jobs that are available in the United States. Walmart is the largest private employer in the
world and the only two entities that employ more are The United States
Department of Defense and the People’s Liberation Army of China.[ii] Now,
Walmart is considered by many to be a terrible place to work. Almost anything you can associate with a bad
job, Walmart has it, and it has become well known. So even with the things that people know
about Walmart, The Washington Post
reported that when a Walmart opened in the Washington D.C. area, 23,000 people
applied for 600 jobs.[iii] Just think of that statistic the next time you
think, “man that person should get a job.”
The fact is that the private sector
is not in the business of employing people.
They are in the business of making profit. If hiring people helps them make a profit,
then they will hire. If not, then they
will not hire. If they can have one
person do several jobs, like at the ice cream store they will. If they can replace an employee with a
machine, they will. At a time, when so
many are desperate for employment, the business owners will not save us. In fact the more we rely on business owners,
we will continue to see great numbers of people who are unemployed,
under-employed, or employed at positions which pay them a less than
satisfactory wage.
The government needs to step in and
take charge in these situations. When Franklin
D. Roosevelt was president, many government jobs programs were created. There are countless opportunities that can be
created in any number of industries. It
is time that this period of our history was repeated.
[i]
Information retrieved from the Roark Capital Group Website. http://www.roarkcapital.com/. Retrived
7/19/2015. If there are any errors in
the calculations they are the error of the author.
[ii] “List
of Largest Employers in the World. https://en.wikipedia.org/wiki/List_of_largest_employers.
Retrived 7/19/2015.
[iii]
Ingraham, Christopher. The Washington Post, 3/28/14 http://www.washingtonpost.com/blogs/wonkblog/wp/2014/03/28/wal-mart-has-a-lower-acceptance-rate-than-harvard/.
Retrieved 7/19/2015.
