Target, Which Cut Workers' Hours and Doubled Workloads, Shows the Folly in

[VonDerTann]

Otjm, you asked a question about what happens to a person already making $15/hour when the minimum wage gets raised to that from a lower amount.

Here’s the answer: often their wages rise too. Many labor unions LOVE increased minimum wage laws because they have collective bargaining agreements where their members’ wages are tied to minimum wage, i.e. 150% of minimum wage or something similar. This happens often with public contracts, i.e. Labor unions whose members work for government entities.

That’s part of why minimum wage laws are so insidious: they cause rising wages, and hence rising prices, to impact many many people, beyond who the public sees.

 

[Dan123]

Economists have repeatedly shown that a significant increase in minimum wage has several impacts; only one being price increases It additionally has the impact of reducing staff - meaning that people lose jobs.

https://www.businessforafairminimum...-minimum-wage-increases-do-not-cause-job-loss

 

[otjm]

Well, at least theoretically the people at higher brackets go up; but I doubt that if someone at $9.50/hour goes up 60%, that someone at $15/hour is going to see a similar increase, which is simply going to cause wage compression.

All of which will drive the prices of goods and services up, which is part of a definition of inflation.

 

[otjm]

I can’t find the comment that was just made in the last week or so, but to the exact contrary was a comment from a national economist.

But factually, it is already happening; some of the fast food places are going robotic to reduce employees. Economists can talk all day long about how many employees can “dance on the head of a pin” but the reality is already here. I see it myself in my rare forays into the world of “fast food”.

 

[njlisa]

I never use self-service checkouts at stores so I can try to save jobs. The last time I went to Home Depot, only one full-service lane was left.

 

[StudentMI]

That’s sad.

 

[Peeps]

Are you going to address the two long quotes I shared from Catholic social encyclicals?

I do not see that anything I say is in conflict with anything in Catholic teaching, including the quotes that you posted.

I do not believe in a toxic form of charity that keeps people poor because it doesn’t give them the tools and training and resources to climb out of their situation.

Certainly there is short-term relief and aid for those who are in desperate straits–victims of war, natural disaster, terrorism, unjust laws (e.g., racist policies), outbreaks of disease, etc.

But in the United States, many charities, especially government charities, simply give long term handouts instead of a long term “hand” to help them move up out of their situation. I do not think this kind of charity is consistent with Catholic (Biblical) teaching.

An example of this is the policy towards immigrants. Yes, we need to welcome immigrants. But to simply open the doors and say, “Come one, come all, you don’t need papers or examinations or any kind of skills or education or anything–we’ll pay for it all and you just have to sit back and enjoy the Land O’ Plenty! And you never have to become citizens–just stay here forever as our guests!” is NOT helping these people at all! They will be poor forever, and in grave danger of being victimized by opportunists (criminals) because of their lack of a job, skills, language, and above all, citizenship.

When we welcome immigrants, we need to give them immediate aid (food, shelter, medical care), but then we need to put them on a path toward full citizenship and integration into American life. That doesn’t mean forcing them to deny their heritage, their traditions and customs, their religion, their dress and grooming, their love for their homeland. It DOES mean that they will seek to become independent and self-supporting American citizens.

I think most legitimate immigrants WANT this–they don’t want to be dependent charity children for the rest of their lives! They want to take their places alongside all the rest of us! I know a lot of Hispanics (big population in our city), and they work their fingers to the bone, and they LOVE living in the United States and being free and independent!

Anyway, that’s just an example. I think my beliefs about workers is in line with Catholic teachings, including the pages you posted. I also think it would be good to always take all Catholic teachings IN context.

 

[Peeps]

Please allow me to give a personal example of helping immigrants.

My family has been involved with the sport of figure skating for three generations.

Several years ago, two young sisters from a Northern European country were brought over to Chicago by a young man who planned to form an ice dance partnership with the younger sister. (Both young women were of age, over 18.) The older sister would act as coach (both young women had degrees in sports coaching from a prestigious university in their home country.)

The girls spoke virtually no English, and had papers that entitled them to an “athletic visa”, meaning that they were in the country to compete. They were to stay in the home of the young man.

Within a few months of arriving in the U.S., the young man dumped them. Literally. He told them that they couldn’t stay with him any longer. And he dissolved the ice dance partnership.

They were in desperate straits. With no dance partnership, they would be in violation of their visa within a short time.

Our family and several other skating families jumped into action. We had all come to love these two young women and we raised funds for them, as well as offering them shelter. One woman, a widow, had a large home and asked the women to move in with her, which they did. Several people with connections were able to get their Visas changed to “teaching” visas, which allowed them to coach. Several families, including my husband, booked them as coaches and began taking skating lessons with them (they are the BEST ice skating coaches, if anyone in Chicago area is looking!).

Within five years, BOTH young women were full American citizens, speaking good English, and making a living with their coaching. One of the young women met a young American man, and after a loving courtship, they were married. The couple and the sister bought a large old home in a Chicago suburb, and eventually, their PARENTS moved over to the U.S. and moved into the house with them. There is also a room for any skater who needs a place to stay for a while–you see, they are giving back!

THIS is the kind of charity that is helpful to people–charity that helps them to become free and independent, self-supporting, secure citizens.

So we practice what we believe. We’re not just flapping our mouths and wearing red baseball caps.

 

[StudentMI]

I also think it would be good to always take all Catholic teachings IN context.

Could you please show how what I posted was out of context?

 

[F_Marturana]

How did they procede from “Teaching visas” to full citizenship without becoming permanent residents first? Before applying for citizenship one has to be a permanent resident. It’s normally not an easy process to obtain permanent residency. Maybe the process is quicker from a Scandinavian country (Northern Europe?).
Just the process of entering and exiting the US is much simpler from someone with a European passport. The process of sponsoring through marriage is much easier for someone from Europe.

There isn’t one “line” to wait on. There are multiple lines some short some long, and for some no line at all. Many undocumented immigrants do have sponsors. They still have to work through the existing laws. This administration has limited the amount of refugee and asylum seekers allowed in. They have issued a “zero tolerance policy for asylum seekers at the southern border, they have implemented the child separation policy.

John Oliver did a show on immigration recently, highlighting his experience as an educated British man with a sponsor and how much time it took and how much money it cost. It’s not for everyone because he uses crass language, and some vulgarity. But the points he makes are all accurate.

 

[Dan123]

I can’t find the comment that was just made in the last week or so, but to the exact contrary was a comment from a national economist.

But factually, it is already happening; some of the fast food places are going robotic to reduce employees. Economists can talk all day long about how many employees can “dance on the head of a pin” but the reality is already here. I see it myself in my rare forays into the world of “fast food”.

Well many studies show it doesn’t happen. If you can’t even find the quote or name the economist it’s hard to rebut.

Automation was always coming. $9.50 or $15/hr is irrelevant, the machines work for pennies on the dollar of what a human does. If you think keeping wages low will thwart automation then we need to be prepared to work for a fraction of what we do now.

 

[Calliope]

I know running a business isn’t easy, but there are corporations who literally pay some of their executives 1000x more than their lower tier workers. I would love to see one of those execs work a 12 hour shift in their factory or warehouse then look those workers in the eye and say “Yeah, one hour of what I do is worth 1000 times more than one hour of what you do”

These outrageous discrepencies weren’t always in place, but it’s becoming more and more the norm. Without the laborers there is no company, they are not expendable know nothing workers. They are a vital part of the business, yet it’s considered ok to pay them dirt, not offer benefits (which you can darn well be sure the execs get. Why is it ok to pay bloated salaries to some at the expense of a living wage to the people who keep the business running? And on top of that they get tax breaks and pay their execs bonuses when the companies do well…while the people making the company operate no longer get bonuses. It all goes to the top tier.

My boyfriend used to get a yearly bonus…12 years ago it was about 2K, kept going down until this year they got a T shirt instead. Their company is not hurting or going out of business. He makes less money every year, while the cost of living continues to go up and the companies profits go up. The stock holders may be seeing the benefits but the workers sure aren’t.

I understand that labor is cheaper overseas, so does that mean in order to compete for jobs American workers should be willing to work for 2 bucks an hour? Something has to give, because people need shelter, food, and medical care and feeling sorry for the poor corporations, and giving them tax breaks and telling the workers they aren’t worth a living wage can’t go on indefinitely.

 

[Calliope]

Should the owner pay the $7.25 per hour, pay more taking into account the needs of the worker, and ignoring their well-being, or not hire anyone?

I’ll give you an example. I worked in a retails setting for minimum wage. The corporation kept a close eye on labor costs. I received NO benefits at this job, just my wage. The store manager received a bonus if they cut labor costs.

There were days when the store was SLAMMED full. It was a tourist area and during the season we were very busy. Remember, I’m being paid 7.25 per hour. They make that profit selling one sweatshirt.

If I am working, putting stock on the shelves and keeping all sizes of t-shirts and sweatshirts stocked, they will sell more product. People like to find a style they like, grab it in their size and go. If their size isn’t on the rack, they don’t buy.

My manager would send me home to save 7.25 per hour, even though having me there would likely result in many more times that profit per hour. All they cared about was getting their bonus for cutting labor, even though they LOST more money by not having the racks and shelves stocked.

Of course, those of us sent home early got a smaller paycheck, never saw a penny of any bonus the store received, and the people they didn’t send home are doing the jobs of two or three people trying to keep up.

So, back to the donut store…having a clerk there for 15.00 an hour allows the store to do far more business. Yes, I think that it’s very likely that the store will make 7.75 more per hour selling donuts and coffee to make up for the extra cost in wage. The worker generates enough extra income that it’s worth it to pay to have them there.

That’s how business runs…it hires workers to keep up with the demand, and the demand pays for the workers. If there isn’t a demand, you don’t need extra workers.

If the donut shop can’t afford to pay a worker, then it’s not doing enough business to hire a worker. Supply and demand operate on BOTH sides of the business. Maybe they can only afford a part time worker during the busiest hours.

I had a job where I was making $12 an hour. Then the busy season hit and they needed me to work more hours because they were going to be having day camp for kids and needed more workers. So they thought they would drop my wage down to $10.50 per hour, so they could keep labor costs down…while my work would be generating more income for them, much more than what it would cost for them to pay me my agreed upon wage of $12. They thought that it would be ok, since they would have me work more hours and my paycheck would remain the same.

They thought that it was just fine to have me work more hours for the same pay…since hey, my paycheck wouldn’t change so why should I complain? They make more money, from MY work, and pay me less per hour and then tell me it’s just good business practice. I told them if they can’t afford to pay me, then I can’t afford to work there. My boss told me I was high maintenance.

 

[Calliope]

Well, at least theoretically the people at higher brackets go up; but I doubt that if someone at $9.50/hour goes up 60%, that someone at $15/hour is going to see a similar increase, which is simply going to cause wage compression.

All of which will drive the prices of goods and services up, which is part of a definition of inflation.

Interestingly the Bible has a story that directly addresses this. Parable of the laborers. It’s sad that the mindset is that if my neighbor is doing well that is somehow bad for me. So if everyone is making at least $15 per hour, people get mad that they aren’t making X amount more, as if somehow it’s bad that everyone is getting paid a decent wage. That’s a twisted mindset, but here we are.

The fact is that everyone is better off when there is less poverty, less welfare, a better educated, and healthy society. The idea that if someone else gets something it is taking it away from me, is the problem.

It’s fear and greed that drives that mindset. It doesn’t hurt me one iota if all the people I work with are earning a living wage or have health care, because I am earning a living wage and have healthcare. It’s only a problem when people decide that there isn’t enough to go around and see everyone as the enemy potentially stealing food out of their children’s mouths.

There is enough wealth in America for everyone to live a decent life, the issue is that it’s distributed in such a way that the many don’t have enough and the few have more than they know what to do with, and continue to make more from the labor of the many.

And somehow people are convinced that paying a living wage is socialism. I don’t think we should take away the rich people’s money and give it to the poor. I think we should have labor laws that are fair and just and see that workers are paid a living wage. Ultimately it would be good for the economy. Right now there’s a bottleneck, the rich get richer and the poor get poorer, that is bad for the economy and every other aspect of our life and culture.

 

[StudentMI]

You know the term social justice goes back further than it’s current leftist use, right?

 

[KMC]

If a student athlete needs 4000 calories a day to keep up with their needs but they’re eating 2000 calories a day, they need to eat another 2000 calories. If someone said “well if 4000 calories is better than 2000 then why not 10,000!!!” they would be completely missing the point and certainly wouldn’t be contributing anything meaningful to the conversation.

Except there has been more thought put into the amount of calories someone needs in a day than has the $15 per hour minimum. I don’t want to go down a rabbit hole on analogies, but you didn’t defend your point that somehow a business owner will benefit from paying the worker a higher wage. Unless the worker adds the increase in value, or drives more sales, etc., they won’t. They will have to raise prices.

And as I said a number of times, not every business model works. If your business only works by paying wages people can’t live on, why aren’t you the horrible business person? If your business model includes “and the government will make up the difference with social safety net programs” that’s an issue.

The market takes care of horrible business people. Sometimes, business models take time to turn a profit (like Amazon). Based on the way you phrased your question, it appears you have not run a business?

 

[KMC]

there are a few things in your post to address, one of them I can’t help: the way your company was managed. Certainly there are bad managers, bad companies with bad policies, etc. I’m sorry you were treated poorly. I believe in shopping where people are treated well (I like Costco).

The other topic is the donut shop. I would rather have someone get hired at $7.25 that for nobody to get hired at $15. While the government can force cost onto businesses, they can’t force the business to keep employees, or move.

 

[Socrates92]

Are you factoring in all the potential McDonald’s customers who also get raises when the minimum wage goes up and now have more money to spend in the restaurant?

Expecting that to account for a 16.85% increase in sales (300,000 divided by 1,780,000 gross profit), either through higher prices, or higher quantity, might be a little optimistic.

My issue is that for some reason wages and only wages are the issue. I bet the prices of linens has gone up, but it hasn’t crippled McDonalds. I bet the price of rent and insurance and legal services and food and utilities and maintenance and licenses and so on have all gone up, and they’re still around.

Those things rarely go up 50+% overnight, especially not by government fiat. Nor do they account for 39% of gross profits, as total payroll expense (Payroll + Management Payroll + payroll taxes) do in this example. “Rent & Fees” (just to take the largest alternative category) only accounts for about 22% of Gr.Pr, meaning for it to be comparable, it would have to increase by ~88% (50% x 39%/22%), overnight, by fiat.

McDonalds has traditionally been an extremely labour-intensive industry, as these numbers show. Many franchises are admittedly, and rightly, automating away from that in order to stay afloat.

 

[StudentMI]

How do we square all this with providing a just wage as Catholic social teaching says is morally just?

 

[VanitasVanitatum]

Too bad more people don’t choose to work harder in FREE public school from 1st grade through 12th grade even if they do come from less-than-perfect homes.

School doesn’t actually teach anyone how to function in the real world so it isn’t that useful.