Businesses brace for serious cuts for $15 minimum wage

[RandomGuy]

Robert Reich: Lousy wages are the real job killers

When in 1996 I recommended the minimum wage be raised, Republicans and the Chamber screamed it would “kill jobs.” In fact, in the four years after it was raised, the U.S. economy created more jobs than were ever created in any four-year period.

For one thing, a higher minimum wage doesn’t necessarily increase business costs. It draws more job applicants into the labor market, giving employers more choice of whom to hire. As a result, employers often get more reliable workers who remain longer – thereby saving employers at least as much money as they spend on higher wages.

A higher wage can also help build employee morale, resulting in better performance. Gap, America’s largest clothing retailer, recently announced it would boost its hourly wage to $10. Wall Street approved. “You treat people well, they’ll treat your customers well,” said Dorothy Lakner, a Wall Street analyst. “Gap had a strong year last year compared to a lot of their peers. That sends a pretty strong message to employees that, ‘we had a good year, but you’re going to be rewarded too.’”

Even when raising the minimum wage — or bargaining for higher wages and better working conditions, or requiring businesses to provide safer workplaces or a cleaner environment — increases the cost of business, this doesn’t necessarily kill jobs.

Most companies today can easily absorb such costs without reducing payrolls. Corporate profits now account for the largest percentage of the economy on record. Large companies are sitting on more than $1.5 trillion in cash they don’t even know what to do with. Many are using their cash to buy back their own shares of stock – artificially increasing share value by reducing the number of shares traded on the market.

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Walmart spent $7.6 billion last year buying back shares of its own stock — a move that papered over its falling profits. Had it used that money on wages instead, it could have given its workers a raise from around $9 an hour to almost $15. Arguably, that would have been a better use of the money over the long-term – not only improving worker loyalty and morale but also giving workers enough to buy more goods from Walmart (reminiscent of Henry Ford’s pay strategy a century ago).

There’s also a deeper issue here. Even assuming some of these measures might cause some job losses, does that mean we shouldn’t proceed with them?

Americans need jobs, but we also need minimally decent jobs. The nation could create millions of jobs tomorrow if we eliminated the minimum wage altogether and allowed employers to pay workers $1 an hour or less. But do we really want to do that?

Likewise, America could create lots of jobs if all health and safety regulations were repealed, but that would subject millions of workers to severe illness and injury.

Lots of jobs could be added if all environmental rules were eliminated, but that would result in the kind of air and water pollution that many people in poor nations have to contend with daily.

If the Affordable Care Act were repealed, hundreds of thousands of Americans would have to go back to working at jobs they don’t want but feel compelled to do in order to get health insurance.

We’d create jobs, but not progress. Progress requires creating more jobs that pay well, are safe, sustain the environment, and provide a modi of security. If seeking to achieve a minimum level of decency ends up “killing” some jobs, then maybe those aren’t the kind of jobs we ought to try to preserve in the first place.

Finally, it’s important to remember the real source of job creation. Businesses hire more workers only when they have more customers. When they have fewer customers, they lay off workers. So the real job creators are consumers with enough money to buy.

Even Walmart may be starting to understand this. The company is “looking at” whether to support a minimum wage increase. David Tovar, a Walmart spokesman, noted that such a move would increase the company’s payroll costs but would also put more money in the pockets of some of Walmart’s customers.

In other words, forget what you’re hearing from the Republicans and the Chamber of Commerce. The real job killers in America are lousy jobs at lousy wages.

http://www.salon.com/2014/03/01/robe...llers_partner/

Pretty much. I like Reich's take on most things. Measured, evidence-based, and even-handed. Decidedly progressive, so that alone earns him a lot of undeserved animus.

[RandomGuy]

This isn't how they make record profits. Nice touch by the AFL-CIO, as that's where that graphic comes from. There are other reasons why they are profitable.

I'm with pusher.

Pretty clear statement, so you must have some ready-at-hand-reasons.

[pgardn]

This isn't how they make record profits. Nice touch by the AFL-CIO, as that's where that graphic comes from. There are other reasons why they are profitable.

What are the reasons then?

And so if you were Costco CEO you would NOT pay employees like they do and make even more profit?

[Wild Cobra]

Explain Costco's business model.

LOL...

Their entire operation is different than other stores. They have different clientele.

[Wild Cobra]

but good wages + benefits doesn't prevent Costco from being profitable, as other mega-corps claim.

They are not competing against the same circle of businesses.

[Wild Cobra]

Agreed. Stable workforce has got to have a positive bottom line as well.

Yes, it does. I'm surprised they are only paying $45k.

[Wild Cobra]

I'm with pusher.

Pretty clear statement, so you must have some ready-at-hand-reasons.

Wouldn't it be good to see the whole staement in context?

That is a blip that the AFL-CIO used for their purposes. Any company that treats it's employees better than others of the same market type will attract the better of the workers. That's a given. That is not the reason for record profits. Only one of many reasons. This is where you guys fail to see deeper than the propaganda. If only paying better wages and benefits made a business more profitable, then wouldn't McDonalds be paying $100/hr?

[boutons_deux]

Wouldn't it be good to see the whole staement in context?

That is a blip that the AFL-CIO used for their purposes. Any company that treats it's employees better than others of the same market type will attract the better of the workers. That's a given. That is not the reason for record profits. Only one of many reasons. This is where you guys fail to see deeper than the propaganda. If only paying better wages and benefits made a business more profitable, then wouldn't McDonalds be paying $100/hr?

Who said paying more on the low-end makes companies more profitable?

Obviously, increased labor cost takes money out of the pockets of top mgmt and investors. That's why the VRWC War on Employees for 35+ years has stagnated household real income, to stuff their own pockets with the good salaries they don't pay their employees.

The Costco example is that paying employees a living wage doesn't preclude a successful, profitable operation.

[TeyshaBlue]

Wouldn't it be good to see the whole staement in context?

That is a blip that the AFL-CIO used for their purposes. Any company that treats it's employees better than others of the same market type will attract the better of the workers. That's a given. That is not the reason for record profits. Only one of many reasons. This is where you guys fail to see deeper than the propaganda. If only paying better wages and benefits made a business more profitable, then wouldn't McDonalds be paying $100/hr?

Nobody said it was the reason for higher profits. The point is Costco brings in high profit while paying good, solid living wages.

[Wild Cobra]

Nobody said it was the reason for higher profits. The point is Costco brings in high profit while paying good, solid living wages.

Yes, I agree that happens. Wages and profits are rarely mutually exclusive.

The gist of the AFL-CIO graphic in post #136 is that the pay and benefits are why Costco had record profits.

[TeyshaBlue]

It certainly is a factor.

Here's an interview with the CEO and company overview. Pretty interesting.

http://mobile.businessweek.com/artic...y-in-the-world

[Wild Cobra]

It certainly is a factor.

Here's an interview with the CEO and company overview. Pretty interesting.

http://mobile.businessweek.com/artic...y-in-the-world

Yes, it is a factor. No doubt at all. It is one part of several things that make the success. Just don't think it is "THE" factor.

[boutons_deux]

It certainly is a factor.

Here's an interview with the CEO and company overview. Pretty interesting.

http://mobile.businessweek.com/artic...y-in-the-world

"If you have 30 percent of the population that wants to reduce government or eliminate it,"

aka, as in Congress, it's the extreme VRWC-WELL-FINANCED tea bagger fringe minority ruling by intimidation.

[angrydude]

Nobody said it was the reason for higher profits. The point is Costco brings in high profit while paying good, solid living wages.

And no other company has a different business model. And if they do we should make it illegal. Am I right?

Land of the free.

[TeyshaBlue]

Put that strawman down before you hurt yourself.

[pgardn]

So one business model that works is the throwaway employee.


There is a pool of uneducated, disgruntled, lazy, disinterested people. But they need money every once in a while so they need work. So just recycle these people, replace the used up with those who want to work for a while.

This works for some businesses?

[Wild Cobra]

So if you ran the company, would you reduce wages and drop the insurance, this theoretically could raise profits?
Do you think this move could hurt profits? Explain.

No, I would pay my employees more than the compe ion and give them better benefits than the compe ion to attract the largest pool of the best workers I can select from. The problem is when lazy liberals think they are en led to what others deserve.

[pgardn]

No, I would pay my employees more than the compe ion and give them better benefits than the compe ion to attract the largest pool of the best workers I can select from. The problem is when lazy liberals think they are en led to what others deserve.

I changed my question.
Sorry.

But another interesting reply leads me to ask...

Are there lazy conservatives that just expect to live off of say... Inheritance?
Or the majority of lazy people are liberals?

[Wild Cobra]

Are there lazy conservatives that just expect to live off of say... Inheritance?
Or the majority of lazy people are liberals?

I would say there are lazy people living off inheritances. That's their problem. How does that apply? Are they asking for their inheritance to be supported by tax payers, or demanding business s out more?

Better wages and benefits are not en lements. They are incentives.

[boutons_deux]

All of the Arguments Against Raising the Minimum Wage Have Fallen Apart

Conservatives should be on the front line of the battle to raise the minimum wage. Work is supposed to make one independent, but with the inflation-adjusted federal minimum down by a third from its peak, low-wage workers depend on billions of dollars in public assistance just to make ends meet. Just this week, Rachel West and Michael Reich released a study conducted for the Center for American Progress that found raising the minimum wage to $10.10 per hour would save taxpayers $4.6 billion in spending on food stamps.

And even if you break your back working in today’s low-wage economy, it’s exceedingly difficult to raise yourself up by the bootstraps; it’s all but impossible to put yourself through school or save enough money to start a business if you’re making anything close to $7.25 an hour.

But those predisposed to defending the interests of corporate America – including retailers and fast-food restaurants – oppose any increase. That’s tough given that 73 percent of Americans – including 53 percent of registered Republicans – favor hiking the minimum to $10.10 per hour, according to a Pew poll conducted in January.
...

http://billmoyers.com/2014/03/07/all...-fallen-apart/

[pgardn]

I would say there are lazy people living off inheritances. That's their problem. How does that apply? Are they asking for their inheritance to be supported by tax payers, or demanding business s out more?

Better wages and benefits are not en lements. They are incentives.

So is it lazy to make money off inheritance by merely having Daddy's advisors invest it for you while you party? When you party you contribute to the economy. When you are poor and lazy... What good are you?
Are the majority of lazy people liberals?
You have to see what I am asking of you, or maybe not.

[Wild Cobra]

So is it lazy to make money off inheritance by merely having Daddy's advisors invest it for you while you party? When you party you contribute to the economy. When you are poor and lazy... What good are you?
Are the majority of lazy people liberals?
You have to see what I am asking of you, or maybe not.

I would say more people who are lazy are liberal rather than conservative. The rich are comprised of both conservative and liberal who have trust funds, or what ever inheritance you wish to use. There are also both conservative and liberal who use the social resources of this country. However, I will maintain that it is the liberal who feel they are en led to other peoples money, and that's why we get the liberal politicians we do.

[pgardn]

I would say more people who are lazy are liberal rather than conservative. The rich are comprised of both conservative and liberal who have trust funds, or what ever inheritance you wish to use. There are also both conservative and liberal who use the social resources of this country. However, I will maintain that it is the liberal who feel they are en led to other peoples money, and that's why we get the liberal politicians we do.

so you are for a big inheritance tax to get that money into circulation, or just let it sit and party off the interest?

So companies that get big subsidies not only feel en led to other peoples money, they actually receive vast sums of other peoples money, but that's ok. Because they are not lazy. And definitely not Conservative.

[Wild Cobra]

so you are for a big inheritance tax to get that money into circulation, or just let it sit and party off the interest?

Let them party if that's their gig. Why should it concern me? Their spending will add to the economy. If it's drawing interest someplace, it is funding growth through borrowing.

So companies that get big subsidies not only feel en led to other peoples money, they actually receive vast sums of other peoples money, but that's ok. Because they are not lazy. And definitely not Conservative.

What companies are getting other people's money besides those who I already have complained about myself? I say we stop all subsidies.

[pgardn]

Let them party if that's their gig. Why should it concern me? Their spending will add to the economy. If it's drawing interest someplace, it is funding growth through borrowing.


What companies are getting other people's money besides those who I already have complained about myself? I say we stop all subsidies.

Boutons had a huge list.
But of course I would have to question the accuracy as he is into dogma.
So no Boeing Lockheed subsidies. We can get our weapons supplied by other counties.

So lazy with money does not concern you, but lazy without money does. Because lazy without money steal money from tax payers?