Beirut Spring’s “Knee-Jerk” application of ultra free-markets to Spinny’s debate misses the bottom line
Mustapha is never at his best when talking about economics. Here he applies the simplistic Republican/laissez-faire rebut to the growing online petition to force/shame Spinney’s into raising workers salaries in Lebanon.
A simple google search (and a bit more work on the company’s profit margin!) illustrates that his main point is evidently way off base: He says – “Spinneys is not resisting the wage increases because it’s an evil corporation that eats poor people for breakfast. It is resisting them because raising the wages of thousands of employees will immediately be reflected in the prices of their goods. By marginally increasing the livelihood of some of its employees, it is effectively making tens of thousands of its customers, and by extension society at large, worse off.”
Well look at this:
“Gulf supermarket chain Spinneys will cross the $1bn revenue mark in two years and is looking to expand further in the Middle East, its chief executive said on Sunday.
Un-listed Spinneys, which began operations in 1924 in Egypt, has seen its revenues growing by around 20 percent since 2007 in Lebanon, while in Egypt it is seeing even larger figures, said chief executive Michael Wright.
“We anticipate that by 2013 our annualized revenue will be at $1bn,” he said.
Spinneys, in which Dubai private equity firm Abraaj Capital holds a controlling stake, is seeing strong growth at a time of regional turmoil in the Gulf Arab world and a slowdown in global economic growth.
— There it is – Spinney’s is growing exponentially, so actually Mustapha is wrong to buy and then reproduce the 100’s of years old canard that increasing wages necessarily means increasing prices… Spinney’s shareholders and management might just have to sacrifice a lil bit that’s all.