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Store owner who shares her profit with employees gives ‘lesson in labor exploitation,’ and how owners take huge profits

Madeline Pendleton owns her own clothing line and vintage shop in Los Angeles called Tunnel Vision. But she built a name for herself by advocating for ethical consumption, inclusivity, and of course, alternative fashion. Her business sells a combination of vintage clothes and her brand’s original designs. And her house brand designs are all original, made in certified sweatshop-free environments, and manufactured in small batches. Plus, some of the proceeds go to monthly donations to Equality California and Black Lives Matter Los Angeles. [1] But more recently, Pendleton is going viral for publicizing how labor exploitation works. Particularly, that she gives herself and her employees equal salaries. 

What if Pendleton Paid Her Employees Minimum Wage?

In a TikTok series, Pendleton began with responding to a question from a follower: “How would your life be if you and your employees didn’t earn the same?”

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@madeline_pendleton Reply to @octig #greenscreen ♬ original sound – Madeline Pendleton

In the video, she responded (see above), “This is going to be a great lesson in labor exploitation. So I own a small business, but we all earn the same take home pay rate per day, which is $250. Full time workers work four days a week at my place. Part time workers work two days per week at my place. For full time workers, this amounts to an annual salary of $70,200 per year, which I know sounds very fancy, but it only makes us lower middle class in Los Angeles, where we are, still feels pretty rich to us, though, because most of us are used to being poor.”

She continues saying she has seven full-time employees and three part-time employees. “My total annual payroll expenses for everyone, including myself, is almost 600 grand per year. Now again, remember, this is total payroll expenses, but I only earn 70,200 like everybody else.”

Then she explains what would happen if she paid them minimum wage, which in LA is $14.25 an hour because they have less than 25 employees. “Our 54 day work week amounts to $23,000 per year for a full time worker and a little under twelve for a part time worker.” Meanwhile, Pendleton would have earned $418,860 a year. This is what most bosses do. But instead, she chose to divide the pay evenly. [2]

Plus, she does profit-sharing, as she explained in another video (see below). Meaning, when business is booming, the extra income is divided to whatever the employees need the most. For instance, the money went to employees who needed new cars or to pay off car loans. The extra profits are redistributed this way, leaving no extra income for Pendleton aside from her salary. [3]

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@madeline_pendleton Reply to @jimmyboy_1969 ♬ original sound – Madeline Pendleton

Why Do CEOs Earn So Much Money?

According to a 2017 report by the Economic Policy Institute, the average CEO earns 271 times the annual average pay of a typical worker in America ($58,000). Many argue that CEOs deserve this higher pay because of their experience and all of the difficulties that come with leading a company. However, this report doesn’t agree.

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CEOs are getting more because of their power to set pay, not because they are more productive or have special talent or have more education,” the report says. “Exorbitant CEO pay means that the fruits of economic growth are not going to ordinary workers, since the higher CEO pay does not reflect correspondingly higher output.[4]

An updated report published in August 2021, it states that CEOs earnings are now 351 times as much as the average worker in 2020. [5] This puts perspective on the current “labor shortage”. Underpaid workers in fast food and similar jobs have been deemed essential during the pandemic. Yet most don’t earn a livable wage and people are unwilling to take on these positions. Still, businesses are reluctant to remedy these low wages. [6]

In fact, companies like McDonald’s and Walmart are among the top employers in America whose workers rely on Medicaid for healthcare and food stamps. It’s a bad sign when full-time employees qualify for government assistance. Remember, these same employees were deemed essential during the pandemic. [7]

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Treat Workers Better

EDI suggests enacting “policy solutions that would both reduce incentives for CEOs to extract economic concessions and limit their ability to do so”. It’s unlikely that CEOs will accept equal pay to their employees like Pendleton, but she still proves that this business structure can work. To start, all workers deserve more humane treatment from their companies. 

Keep Reading: A CEO who gives his employees $2,000 to go on vacation says people are more productive than ever

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Sources

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  1. “About Us.” Tunnel Vision.
  2. Madeline Pendleton. TikTok
  3. Madeline Pendleton. TikTok.
  4. “CEO pay remains high relative to the pay of typical workers and high-wage earners.” Economic Policy Institute. Lawrence Mishel and Jessica Schieder. July 20, 2017
  5. “CEO pay has skyrocketed 1,322% since 1978.” Economic Policy Institute. Lawrence Mishel and Jori Kandra. August 10, 2021
  6. “American CEOs make 351 times more than workers. In 1965 it was 15 to one.” The Guardian. Indigo Oliver. August 17, 2021
  7. “Walmart and McDonald’s are among top employers of Medicaid and food stamp beneficiaries, report says.” CNBC. Hannah Miao. November 19, 2020
Sarah Biren
Freelance Writer
Sarah is a baker, cook, author, and blogger living in Toronto. She believes that food is the best method of healing and a classic way of bringing people together. In her spare time, Sarah does yoga, reads cookbooks, writes stories, and finds ways to make any type of food in her blender.
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