Madeline Pendleton explains how business owners are choosing not to pay employees and keeping all the profits for themselves.
Editor's Note: This article was originally published on September 13, 2021.
A small business owner is going viral for sharing her earnings with her employees, so they get a good pay and lead better lives. Madeline Pendleton's employees make $70,000 a year and work four days a week—she even bought her them new cars. Pendleton is a fashion influencer, a Gen Z icon and a TikTok celebrity. She believes in ethical consumption and a counterculture style and owns a clothing line and vintage shop in Los Angeles, Tunnel Vision. Her popular brand focuses on size inclusivity, sustainability and economic equality, reported God.Daily.Dot.
She opened up about profit sharing in a TikTok video, pointing out how business owners take a huge chunk out and leave a pittance for employees. Madeline was responding to a question on her TikTok: “How would your life be if you and your employees didn’t earn the same?” Madeline broke it down for her 791,000 followers, dishing out what she called, "a great lesson in labor exploitation." Pendleton explained that she has seven full-time employees and four part-time employees with a total payroll expense of close to $600,000 per year. She gets paid just as much as other full-time employees at Tunnel Vision: $70,200 per year. Pendleton said that it may sound like a lot to many but it only makes them lower-middle-class in Los Angeles. "It still feels very rich to us because we are used to being poor," she said.
This is what it looks to run a business with passion and compassion. You can do what you love and make money without exploiting other people. The thirst for profit/wealth corrupts what could otherwise be a mutually fulfilling enterprise.— Animeemee (@MMiyukiM2) September 9, 2021
She then painted a scenario that's all too common with businesses. "Let's imagine I paid them just the minimum wage and I kept the rest. The minimum wage for my company in LA is 14.25 per hour because we have less than 25 employees," she said, before doing the math and revealing that her total payroll expenses would only cost $177,000 as opposed to what she paying them now—close to $600,000. She revealed that she could have kept close to $420,000 for herself by ignoring the workers' efforts. She concluded by saying, "This is what most bosses are doing."
While some did argue with her classification of "lower-middle-class," she was lauded for her paying her workers fairly and sharing the earnings of the company. Madeline Pendleton often speaks about socialism on her podcast, “Pick Me Up, I’m Scared” and this was her walking the talk. She also clarified that she doesn't take home any more than any other full-time employee at the company. This was in response to a comment from TikTok user @jimmyboy_1969: “She doesn’t mention that since she’s the owner, she also keeps profits. She hasn’t done anything revolutionary lol.”
Wow this really put it in perspective for me. Why is this legal? pic.twitter.com/WbEV0mL5Sk— I appreciate you (@DeeLaSheeArt) September 8, 2021
Here’s a follow up video that I think is really interesting and actually made me cry a little - imagine how much happier and well off we would be if all businesses were run like this pic.twitter.com/L1fjDILIZE— cheri (@gnomecrossing) September 9, 2021
"I have the same salary as everyone else. That is the only compensation from the job. When there are extra profits throughout the year, we do things for everybody. After we netted a huge profit from a recent sale, we bought everyone who needed one, a new car, paid off the remaining car loans for everybody else," she said, before adding, "We also put an option for people who didn't drive, telling them: 'Hey if this changes in the future, and you want to drive, we got you." So ya, we do sh*t like that and get as close to zero as possible. There's no profit leftover and we're distributing it all year long."
6 years ago today I raised my company's min wage to $70k. Fox News called me a socialist whose employees would be on bread lines.— Dan Price (@DanPriceSeattle) April 13, 2021
Since then our revenue tripled, we're a Harvard Business School case study & our employees had a 10x boom in homes bought.
Always invest in people. pic.twitter.com/o7Ca7I4b7e
The pandemic has shown more than ever how important is to pay your employees well, with severe worker shortage gripping America. One other business owner who made the headlines for similar measures was Dan Price, the head of a credit card payment processing company, Gravity Payments. As we reported, he took a pay cut of a million dollars and introduced a $70,000 minimum salary for all his employees. While many business analysts laughed at his supposedly "socialist" business practice six years ago, today Gravity Payments and its employees are thriving. His message was simple: "Always invest in people."