The Burger Joint with Excellent Pay and Benefits

So how exactly is Dick’s able to offer more than the minimum wage and a plethora of benefits when its menu charges no more than $2.70 per item?

Jim Spady, the restaurant namesake’s son, company vice president and legal counsel, has surprisingly simple answers based on his dad’s business philosophy. (Dick is turning 90 next month and remains president of the company.)

“Among his special rules is you should make decisions for the long run so long as you can survive in the short run. The No. 1 job of a business is to make a profit. If you don’t, it’s not worth anything. No. 2 thing is to take care of your people. They’re the key to success,” he said. “So once you’ve taken care of your people and you’re making a profit, you should make an investment in your community. And if you have a healthy community, you’ll have a good business in the long run.”

In the Seattle Times Thanh Tan writes about Seattle-based burger joint Dick’s Drive In, which pays its employees $10 an hour to start with regular merit raises, a 401(k) retirement plan with employer match, up to three weeks of paid vacation, paid time for volunteer service, health and dental benefits, up to $22,000 in scholarships for employees working at least 20 hours a week while attending school, and up to $8,000 in child care assistance. Man, that was a lot to type out (see more here). They’re able to do this because of a simple thing: Dick’s Drive In is a popular and profitable establishment, and they believe that if you’re making a lot of money, you should take care of your employees. And they’re very business-minded about it as well: Jim Spady, Dick’s son, believes that raising the minimum wage could hurt small business owners who aren’t profitable and can’t afford to pay their employees more and that supply and demand will be what it is. Unfortunately companies that are highly profitable aren’t always as altruistic as Dick’s (i.e. Wal-Mart family members take four spots out of the top 10 richest Americans, while their employees continue to protest for better wages). In any case, here’s to Dick’s for treating their employees well.

Photo: Russell Bernice

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15 Comments / Post A Comment

The other important aspect here is that Dick’s is a private company — it’s not required to maximize shareholder value the way a public company (like Wal-Mart) is.

siege91 (#1,738)

@stuffisthings Maximizing shareholder value (especially on a quarterly basis) is a talking-point convention that arose in the mid-20th century, not a legal requirement of public firms. Good to keep in mind. The problem of course for large companies is that if their stock price drops they may risk a hostile takeover, usually by private equity or activist investors, which incentivizes short-term profits over long-term stability.

@siege91 No, not a legal requirement, but as anyone who’s ever taken any type of business-related class (management or otherwise) can tell you, the very first thing you are taught is that the purpose of any going concern is to maximize shareholder value. Whether those shares are traded publicly or they belong to a sole proprietor, they still exist. Private companies just (generally) have smaller ownership circles and therefore have more freedom to set their own rules without the constraints of quarterly EPS reporting.

@eternaloctopus Indeed. I also forgot the important qualifier “family-owned,” too.

deepomega (#22)

@stuffisthings More than that, I think, it’s that shareholders by definition do not give a shit about long-term value. That’s why we call ‘em stock jockeys.

@deepomega @siege91 made a good point though — this may be the dominant paradigm in Anglo-American business culture, but in other parts of the world it is definitely not. For instance, Germany and much of Northern Europe, places which incidentally have weathered the crisis far, far better than the more “liberal” countries.

These are places where you see labor representatives *on the board* and where companies explicitly have a duty not only to their shareholders but also to their employees, their customers, their suppliers, society, the environment, etc.

I’ll be interested if we start seeing attitudes like this in the automotive industry soon. German car companies are being pressured (from back home) to set up works councils in their US plants, which are mostly in “right to work” states, and unions own big chunks of GM and Chrysler now…

deepomega (#22)

@stuffisthings Definitely true. I think that’s the lever we have to throw weight into to fix a lot of our systemic problems – stockholders only caring about quarter-over-quarter results. It’s a cultural issue as much as a financial one.

Thuja (#2,542)

The most important thing is that Dick’s is DELICIOUS.

sunflowernut (#1,638)

This is awesome.

katiekate (#1,051)

They also do their best to source high quality, fresh (local?) ingredients. ALSO they only have four or five locations, and haven’t opened a new one in years – not a lot of interest in exponentially increasing profit. Of course, that is mostly a public company thing, as stated above.

honey cowl (#1,510)

I love Dick’s! SOOOO much. It’s real hard to type that without making that sentence look awkward, but seriously, I eat here like once a week. /shame

@honey cowl I used to eat there once a week. I hated that I couldn’t drive to Dick’s, this made it impossible for me to eat hot fries in the comfort of my bed. I had to scarf my fries down then walk home and eat my burger in peace. If i had a car when I lived in Seattle, I would’ve eaten there way more often.

honey cowl (#1,510)

@Anna Williams@facebook I have lived near two different Dick’s locations and only one was appropriate hot-fry walking distance (though I do drive) so I feel you sista

shannowhamo (#845)

I have only been to Dick’s once and they rubbed me the wrong way- charged for ketchup and wouldn’t make changes to any of the burgers (or something like that.) It was just like Whataburger taste-wise but so stingy! But at least I now they are nice to their employees so I’ll give them a pass.

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