I have a problem with unions. It comes down to two things: Unions are too powerful and too easy to abuse. Unions are currently absolutely necessary to take care of problems that the government refuses to treat fairly.
The recent Supreme Court ruling on a dispute between an Amazon contractor and its warehouse employees (which I have discussed in more detail in a previous post) illustrates the second part of my problem. Without unions, many workers are just plain not treated fairly. In the Amazon case, workers were being forced to go through excessively long security checks daily without pay for the time spent. Our Supreme Court justices (whom I must assume are idiots, because the only other option is that they are deliberately helping to enslave and oppress innocent Americans, and I want to give them the benefit of the doubt) declared that businesses do not have to pay workers for time spent doing anything that is not, in essence, part of the job description. At this point, this declaration now counts as an infallible part of U.S. law. The government offers no protection for what amounts to blatant wage theft. There is only one solution: unions.
Unions were originally created in response to government inability to enforce fair labor practices. In the early U.S., it was common for employers to underpay workers and to require far more hours of work than is healthy or fair. Unsafe work conditions were more common than safe ones by a very wide margin. People were regularly inured or killed in workplace accidents that could have easily been prevented, because owners were too cheap to spend even small sums to ensure safety. Children were treated as slaves, working 16 hours days in these conditions, for so little money that entire families had to work, and that was still not enough to get by. The government was not powerful enough to do anything to stop these unfair practices, and in many cases, the government did not have enough reach to even be aware of them. The solution was labor unions.
Workers in these conditions eventually banded together, demanding fair treatment. Their employers refused the the demands and threatened to fire anyone who continued to dissent. Eventually the workers realized that if all of them dissented at once, their employers would be unable to replace them all fast enough to avoid financial catastrophe. The worker strike was born (it was actually born in France, but it was quickly adopted by oppressed U.S. workers). Nearly all of the workers in one or more factories refused to continue work until conditions, hours, and wages were improved. Employers were powerless against the unions because they were dependent on the employees. Firing them all would result in financial ruin for the company. Initially the government panicked: Worker's unions threatened the U.S. economy. If workers had so much power, they could easily force businesses to pay so much that it would cause rampant inflation. Besides that, even short strikes resulted in production halts, and in factories that produced necessities, those halts could result in serious harm. This did something else very important though: It put the problem of workers right in the face of the government, where it could no longer be overlooked or ignored.
The government realized that treatment of workers was a major problem. It also recognized its responsibility in doing something about it. The government still did not have the power or reach to handle the problem on its own. It did have the power to protect the workers in their own attempts to deal with the problem. Business owners lobbied the government to make unions and worker strikes illegal. Their claim was that these things caused economic instability. Their claims seemed reasonable, however, the government eventually recognized that the underlying problem was not the strikes, but the unsustainable hours and pay, as well as the often deadly work conditions provided by employers. Laws were passed to protect unions and striking workers from retaliation. Currently, workers cannot be fired for discussing unionization, actually unionizing, or for striking. Workers who are striking on economic grounds (wages, other compensation, or work hours) can be "permanently replaced" (they cannot be fired, but if a willing replacement can be found, the strikers hours can be reduced to 0 indefinitely, which is approximately the same as being laid off). The government also created a set of safety and treatment requirements and guidelines for how employees may be treated. Strikes related to these issues are further protected, prohibiting even permanent replacement. When it comes to safety and other government protected employee rights, replacements hired during a strike must be fired to make room for striking employees returning to work once the dispute has been resolved.
The potential for abuse of unions was still clear, so some restrictions have been added. Closed shops, where the company may only hire union members, was strictly prohibited. Closed shops allow the union to control all hiring decisions by restricting admittance into the union. This gives the union veto power over any hiring action. In the U.S., closed shops are illegal. Union shops, where new hires are required to join the union after being hired, are legal, as well as agency shops, where non-union members must still pay union dues, and open shops, where employees may choose but are not required to pay dues if they are not union members, are all legal in the U.S.. Prohibition of closed shops prevented the most obvious abuses of unions, but it still left some loopholes, most of which still exist.
When unions were originally created, they were necessary. They were very useful, and they did a great deal of good. Since then, many things have changed. The biggest change is power and reach of the government. Workplace safety is no longer a serious union issue, because OSHA, a government agency, defines and enforced workplace safety. If a workplace is unsafe, it is faster and easier for an employee to report the violation to OSHA than it is for a union to try to resolve the issue, and the penalties for those violations are enforced by the government, making workplace safety violations fairly rare. Wages are still a problem, but not because the government is not powerful enough to do anything about it. They are a problem because the government refuses to do anything about it. Worse, the most common places for wage issues are not well suited to unions, because employee turnover is too high. In the past several decades, most union wage issues were not problems of employers paying unfair wages. Most of the issues were greedy employees who were already being paid far higher than the U.S. average wanting more than their fair share (and, in the case of the U.S. steel industry, this was one of the blows that ultimately killed it). Unions are no longer useful tools for enforcing fair wages. Instead they are tools for overpaid employees to rip off their employers even more.
Work hours were another major thing that unions were good for. Twelve to sixteen hour work days were common. Unions pulled the U.S. work week down to 40 hours and the work day to 8, requiring extra pay for any time worked beyond that. Of course, the goal was actually closer to 35 or 30 hours a week (20 according to some), but unions lost sight of that goal almost a century ago. Unions are no longer necessary to enforce this though, because the government has enacted laws prohibiting employers from giving employees more than 8 hours of work in a day and 40 in a week, with an additional requirement that when this is violated, employees are paid extra for time beyond those limits. This is no longer a union problem; it is now a government problem. Worse, despite unions and government, the average American voluntarily works an average of 50 hours a week and often the overtime goes entirely unpaid. When the workers don't care, there is little unions can do to fix the problem.
Overall, unions have lost most of their usefulness. They still have potential for abuse though. Unions have a great deal of lobbying power. In Alaska, in the mid '90s I believe, the workers at some of the power plants went on strike. I don't know all of the details, but I do know that the labor union exercised power that belongs only to government and individual citizens, by manipulating the state government in making some very harmful laws. The power plants hired electrical workers from Washington state, as temporary workers until the strike was resolved. In retaliation, the union lobbied the state government to change certification laws to require electrical workers in Alaska state to have gone through their training in-state. In other words, a journeyman or master electrical worker in Washington state could only be hired as an apprentice in Alaska, without going through all of the time required for certification within the state of Alaska. The union did this to put more pressure on the power company by denying them well qualified temporary workers (the law specifically prohibited hiring them into positions that normally required journeyman certification). Besides being a low and very unethical blow, this has some severe economic implications. I am certain the argument given to the legislature and governor was that hiring out-of-state workers would drain money from the state economy. I don't think this justifies using the law to lie about a person's job qualifications, but besides that, this economic justification was incomplete. The end result was that the workers got most of their demands. The economic consequences of that was increased cost for power, which resulted in economically damaging inflation in a state where the cost of living is already quite high. There may have been short term economic costs of hiring out-of-state workers, but the long term costs of not doing so were far worse. There is also another long term economic cost: The electrical workers union in Alaska now has a legally enforced monopoly on electrical labor. The political power held by unions has not just been harmful in Alaska. In other places in the U.S., unions have used the law or other political influence to merge with other unions against their will (by "merge," I mean "hostile takeover").
Unions have largely become for-profit institutions in the U.S.. Their primary goal is no longer doing what it best for the workers or even representing the workers. Their goal now is to do whatever gets the union the most money. This frequently means demanding higher pay even when it is not needed or fair. It also preempts any requests for reduced hours, because reduced hours means lower gross pay, which means lower dues. By allowing union and agency shops, the government has allowed unions to force employees to become union members and to pay union dues against their will. Unions in the U.S. typically have a number of permanent employees who are not actually members of the union. In many unions, this includes a CEO and other administrative positions, who make decisions about what the employees want, without actually having any experience of being one of those employees. Some of these positions, like lawyer and accountant, are justified, but full-time administrative positions in a union are absurd. Unions are now run primarily by people who are totally disconnected from the union members and their work environment. Frankly, a union that is a for-profit business should not have any degree of legal protection beyond what is normal for any other for-profit business. Otherwise, it is even more prone to abuse.
So, now we come down to the problem: The government now has the reach and power to make unions entirely obsolete, and it has already made them mostly obsolete. Instead of doing that though, it is actually making unions more necessary. Unions should no longer exist, because they should no longer be needed. When they were created, the potential for good outweighed the potential for abuse. This is no longer true...except, when the government fails to do its primary job of representing the will and best interest of the people.
The Amazon case is prime example of where unions are useful. The employees are being robbed by their employer. They could unionize and strike, demanding pay for their time worked, demanding that the security check be listed in the job description (making it an essential part of the job, and thus legally part of paid work time), or demanding that the security checks be discontinued. They could even unionize and heavily lobby Congress to repeal the highly constitutionally questionable law the Supreme Court used to justify its appallingly oppressive decision (even abuses of power can have legitimate non-abusive uses). The problem I have with this is that they should not need to unionize to get paid for all of the time they spend doing work required by their employer.
An employer should have the right to require employees to do worthless work (plenty already do it anyhow), but employees should have the right to get paid regardless of whether the work required is profitable or not. This should be legally protected. What free society has a law that explicitly permits employers to blatantly and openly require work time from an employee that does not need to be compensated?
Showing posts with label minimum wage. Show all posts
Showing posts with label minimum wage. Show all posts
27 December 2014
10 November 2014
Taco Bell App
Taco Bell has come out with an ordering app that allows customers to use their smart phones to put in an order and pay for it. As the customer approaches a Taco Bell location, the app asks if they want the restaurant to start preparing their food. This process can involve almost no human contact (I suppose someone has to pass the food out the window, but ordering and paying is entirely electronic).
As this becomes more popular (Taco Bell is not the first to try this, and it most certainly will not be the last), a lot of jobs are going to be lost. Eventually, most drive through orders will not require a cashier, because most of them will already be ordered and paid for before the customer even enters the drive through. This will allow the drive through cashier position to be combined with another position. It is also likely that the added convenience will reduce the need for inside cashiers. Eventually this is going to spread to all fast food restaurants, because otherwise, they will not be able to compete. This is going to add up to a lot of jobs that are lost.
It is about time! Fast food restaurants severely underpay their employees. They claim that they cannot afford to pay more. I have argued this before, and I will repeat it again: A business that cannot pay employees enough to survive on is not worth existing. Work that is not worth a living wage is not worth doing at all. Pay that is below a living wage is just plain not sustainable. A business that cannot pay a living wage is not profitable enough or valuable enough to justify its own existence. Fast food is practically the bottom of the barrel (ok, agriculture is far worse, but also far less prominent). Current Federal minimum wage, which most fast food places start at, generates well under the poverty level in income, even full time. One of the most effective ways of reducing costs (so that employees can be paid fair wages) is automating processes and eliminating unnecessary employees. Food assembly is hard to automate (though, certainly possible). Automated order taking is now very easy to automate. It is the low hanging fruit. It is nice to see that fast food is finally figuring this out.
There is a catch. The most common response to increased profits through automation is faster expansion and better shareholder payouts (or, even worse, increased CEO salary). If Taco Bell choses to take this route, then not only is it not worth existing, it is actively worth destroying. Why? It is already vastly underpaying its employees. It should take this opportunity to make its employment system more sustainable by raising wages. Admittedly, eliminating maybe two or three employees will not save enough to pay all of the rest a living wage. An effort, however, would be nice. It would show that they care about paying their employees fairly. If, instead, they spend the profits on something else, then they are showing that they could care less about their employees. If this is the case, then the business does not deserve to exist, and additionally, it deserves to die so society no longer has to pay the costs of its freeloading on our unpaid labor (if it pays less than a living wage, then it is not paying for all of the labor it is getting). I hope they do the right thing, but I am not holding my breath.
As this becomes more popular (Taco Bell is not the first to try this, and it most certainly will not be the last), a lot of jobs are going to be lost. Eventually, most drive through orders will not require a cashier, because most of them will already be ordered and paid for before the customer even enters the drive through. This will allow the drive through cashier position to be combined with another position. It is also likely that the added convenience will reduce the need for inside cashiers. Eventually this is going to spread to all fast food restaurants, because otherwise, they will not be able to compete. This is going to add up to a lot of jobs that are lost.
It is about time! Fast food restaurants severely underpay their employees. They claim that they cannot afford to pay more. I have argued this before, and I will repeat it again: A business that cannot pay employees enough to survive on is not worth existing. Work that is not worth a living wage is not worth doing at all. Pay that is below a living wage is just plain not sustainable. A business that cannot pay a living wage is not profitable enough or valuable enough to justify its own existence. Fast food is practically the bottom of the barrel (ok, agriculture is far worse, but also far less prominent). Current Federal minimum wage, which most fast food places start at, generates well under the poverty level in income, even full time. One of the most effective ways of reducing costs (so that employees can be paid fair wages) is automating processes and eliminating unnecessary employees. Food assembly is hard to automate (though, certainly possible). Automated order taking is now very easy to automate. It is the low hanging fruit. It is nice to see that fast food is finally figuring this out.
There is a catch. The most common response to increased profits through automation is faster expansion and better shareholder payouts (or, even worse, increased CEO salary). If Taco Bell choses to take this route, then not only is it not worth existing, it is actively worth destroying. Why? It is already vastly underpaying its employees. It should take this opportunity to make its employment system more sustainable by raising wages. Admittedly, eliminating maybe two or three employees will not save enough to pay all of the rest a living wage. An effort, however, would be nice. It would show that they care about paying their employees fairly. If, instead, they spend the profits on something else, then they are showing that they could care less about their employees. If this is the case, then the business does not deserve to exist, and additionally, it deserves to die so society no longer has to pay the costs of its freeloading on our unpaid labor (if it pays less than a living wage, then it is not paying for all of the labor it is getting). I hope they do the right thing, but I am not holding my breath.
15 September 2014
Cheap Military
I was appalled (though not horribly surprised) when I read this article. It turns out that starting wages for military service are lower than average fast food wages. Just to get wages above the Federally defined poverty level, it takes around 3 years of service (with at least one deployment). In a previous article, I discussed some research showing that the Federal poverty level is around $10,000 a year short of the real poverty level (which is somewhere between $30,000 and $40,000 a year, depending on location). It takes 6 to 7 years of military service to get out of poverty for real. Most people who join the military never make it that far, in part because it is almost impossible to survive on what the military pays. Several years of military service can qualify a person for a law enforcement or security job that pays two to four times what the military pays for a much higher risk position.
The above mentioned article is about military families who must get some kind of food aid just to survive. In some areas over a quarter of food bank patrons are military. Part of the problem is that the military expects spouses to work as well, because many families in the US do have to have both adults work to make enough to get by. For military families that just does not work. For families with children, if the military parent gets deployed, the other parent is left caring for the children, and the extremely low military pay is just not enough to cover childcare in many areas. In addition, because the military frequently and unexpectedly transfers people, and it is currently difficult to find jobs, even in the ideal situation, the non-military parent often spends more time looking for a job than working. Worse, frequent job changes make it even more difficult to find a job. It is totally unrealistic to assume that spouses of military people will be able to work a job to make up the difference.
There are multiple things wrong with this situation. The first is that it is unethical to pay so little for such a high risk job. Even military service entirely in the US, without any combat, is fairly high risk. More soldiers die in mechanical accidents, on base, in the US, than in combat situations. Soldiers regularly die or are seriously injured in weapons accidents and other training accidents as well. Military service, especially for the lower ranks, is just plain dangerous. Paying low wages is straight up wrong for this kind of risk. The second is that soldiers need to be able to focus on their job. A soldier that is worrying about how he is going to provide the next meal for his family is not a soldier that can focus well on military service. Military service is stressful enough by itself. Adding more stress will result in potentially critical mistakes. Aside from practical issues, these people are being paid to defend our country. Is national defense really less valuable to us than providing low quality, unhealthy fast food? If we are paying soldiers less than fast food workers, we should expect more mistakes from them than from fast food restaurants. Do we really want our military to make mistakes? Mistakes in fast food are annoying. Mistakes in the military are fatal.
This situation is getting worse. This year, the Department of Defense issued a military raise of 1 percent. According to the article the DoD has said that it plans to continue asking Congress for only 1 percent annual raises. Annual inflation is bigger than that. This means that each year military workers are taking pay cuts, not getting raises. Over the last decade, inflation rates have ranged from 1.5% to 3.8% (with the exception of a -0.4% in 2009). At this rate of inflation, members of the military will be loosing 0.5% to 2.8% of value of their pay each year, even with the 1% annual "raise." While McDonald's employees get real raises that keep ahead of inflation (just barely), members of the military are getting veiled pay cuts. That is just plain wrong.
(Just for the record, with a minimum wage of $7.50 an hour, working full time all year, the yearly earnings come out to $15,600, about half of the real poverty level. With Obama's planned minimum wage of $15.00 an hour, this comes out to $31,200, which is above the real poverty level for the lower cost areas in the US. A military salary of $18,000 a year will be just under 2/3s of Obama's planned minimum wage. Note that this assumes no vacation time, because military work comes with no guaranteed vacation and typically entails far more than 8 hours of work a day.)
Now, I am not pro war, and I do not think that we need to throw more money at the military, but if we cannot afford to pay our soldiers enough to survive, something is very wrong. It is bad enough that we tolerate businesses paying wages that are too low to survive on, but our government should know better. No government job should pay less than the poverty level, otherwise the government is directly responsible for some amount of poverty. Our soldiers are not only working for our government and our nation, but they are the first line of security for our nation. By underpaying them, we are buying second rate security for our most important security. We are putting our lives and our freedom in their hands, but then we are paying them so little that there is no way we can expect them to do a very good job? That just does not make sense.
My solution to this is a smaller, more elite military. Instead of a large standing army, we should have a small standing army of extremely well trained soldiers. To balance this for emergencies, we can increase the reserves. Reserves work far less and typically work normal day jobs. They report for training for only a few weeks a year, unless there is something major that requires more soldiers than the regular military currently has. This makes them cheaper, and while they are usually less well trained than active duty military, they are still far better trained than drafted civilians would be. A military with fewer, better trained soldiers would also not need as large of numbers. The real kicker though is that we could even reduce the number of military by only 50% and start paying new recruits $36,000 a year, which is above both the Federal and the real poverty level. If we left the top end of the pay scale alone (those with 20 years typically make around $65,000 a year), we would actually save money by doing this. This might also reduce the rate of accidental casualties as well (given the better training).
At this point, it looks like our military is bloated, and it is becoming very clear that we cannot afford it. If things continue the way they are going, military jobs will be the worst paid (legally) jobs in the US. The quality of our military will continue to suffer, and eventually we may have the largest, lowest quality military in the world. By focusing on expertise instead of numbers, we could improve our military and cut costs at the same time. It is a travesty that we are willing to pay less for national security than we are for fast food, and something needs to be done about it.
The above mentioned article is about military families who must get some kind of food aid just to survive. In some areas over a quarter of food bank patrons are military. Part of the problem is that the military expects spouses to work as well, because many families in the US do have to have both adults work to make enough to get by. For military families that just does not work. For families with children, if the military parent gets deployed, the other parent is left caring for the children, and the extremely low military pay is just not enough to cover childcare in many areas. In addition, because the military frequently and unexpectedly transfers people, and it is currently difficult to find jobs, even in the ideal situation, the non-military parent often spends more time looking for a job than working. Worse, frequent job changes make it even more difficult to find a job. It is totally unrealistic to assume that spouses of military people will be able to work a job to make up the difference.
There are multiple things wrong with this situation. The first is that it is unethical to pay so little for such a high risk job. Even military service entirely in the US, without any combat, is fairly high risk. More soldiers die in mechanical accidents, on base, in the US, than in combat situations. Soldiers regularly die or are seriously injured in weapons accidents and other training accidents as well. Military service, especially for the lower ranks, is just plain dangerous. Paying low wages is straight up wrong for this kind of risk. The second is that soldiers need to be able to focus on their job. A soldier that is worrying about how he is going to provide the next meal for his family is not a soldier that can focus well on military service. Military service is stressful enough by itself. Adding more stress will result in potentially critical mistakes. Aside from practical issues, these people are being paid to defend our country. Is national defense really less valuable to us than providing low quality, unhealthy fast food? If we are paying soldiers less than fast food workers, we should expect more mistakes from them than from fast food restaurants. Do we really want our military to make mistakes? Mistakes in fast food are annoying. Mistakes in the military are fatal.
This situation is getting worse. This year, the Department of Defense issued a military raise of 1 percent. According to the article the DoD has said that it plans to continue asking Congress for only 1 percent annual raises. Annual inflation is bigger than that. This means that each year military workers are taking pay cuts, not getting raises. Over the last decade, inflation rates have ranged from 1.5% to 3.8% (with the exception of a -0.4% in 2009). At this rate of inflation, members of the military will be loosing 0.5% to 2.8% of value of their pay each year, even with the 1% annual "raise." While McDonald's employees get real raises that keep ahead of inflation (just barely), members of the military are getting veiled pay cuts. That is just plain wrong.
(Just for the record, with a minimum wage of $7.50 an hour, working full time all year, the yearly earnings come out to $15,600, about half of the real poverty level. With Obama's planned minimum wage of $15.00 an hour, this comes out to $31,200, which is above the real poverty level for the lower cost areas in the US. A military salary of $18,000 a year will be just under 2/3s of Obama's planned minimum wage. Note that this assumes no vacation time, because military work comes with no guaranteed vacation and typically entails far more than 8 hours of work a day.)
Now, I am not pro war, and I do not think that we need to throw more money at the military, but if we cannot afford to pay our soldiers enough to survive, something is very wrong. It is bad enough that we tolerate businesses paying wages that are too low to survive on, but our government should know better. No government job should pay less than the poverty level, otherwise the government is directly responsible for some amount of poverty. Our soldiers are not only working for our government and our nation, but they are the first line of security for our nation. By underpaying them, we are buying second rate security for our most important security. We are putting our lives and our freedom in their hands, but then we are paying them so little that there is no way we can expect them to do a very good job? That just does not make sense.
My solution to this is a smaller, more elite military. Instead of a large standing army, we should have a small standing army of extremely well trained soldiers. To balance this for emergencies, we can increase the reserves. Reserves work far less and typically work normal day jobs. They report for training for only a few weeks a year, unless there is something major that requires more soldiers than the regular military currently has. This makes them cheaper, and while they are usually less well trained than active duty military, they are still far better trained than drafted civilians would be. A military with fewer, better trained soldiers would also not need as large of numbers. The real kicker though is that we could even reduce the number of military by only 50% and start paying new recruits $36,000 a year, which is above both the Federal and the real poverty level. If we left the top end of the pay scale alone (those with 20 years typically make around $65,000 a year), we would actually save money by doing this. This might also reduce the rate of accidental casualties as well (given the better training).
At this point, it looks like our military is bloated, and it is becoming very clear that we cannot afford it. If things continue the way they are going, military jobs will be the worst paid (legally) jobs in the US. The quality of our military will continue to suffer, and eventually we may have the largest, lowest quality military in the world. By focusing on expertise instead of numbers, we could improve our military and cut costs at the same time. It is a travesty that we are willing to pay less for national security than we are for fast food, and something needs to be done about it.
01 July 2014
Fair Pay
I believe I have expressed my opinion on this subject before, so I will summarize: Any job that cannot pay enough for employees to live off of is not worth doing.
Minimum wage is starting to become a big deal again, as Obama pushes to have it raised by around 33%. Fast food employees have started a movement to have minimum wage, at least for fast food jobs, raised by almost 100%. Current minimum wage is almost half the poverty level (70% according to the government definition, but according to actual accurate data it is less than 50%). If minimum wage is supposed to provide enough to live on, why has it not been raised sooner?
The Republican Party is largely to blame, along with many large businesses. The claim is that raising minimum wage will put more people out of work. This is probably true. So, I guess they think it is better to let most of the population starve than to make businesses pay fair wages and have less workers but with fair pay. Really, this is an unsolvable problem from this point of view. I have already shown how a basic income would solve this problem, so I am not going to harp on that, but I would like to discuss how some large businesses are actually trying to do something about this problem.
I just read this article. It discusses how some businesses are voluntarily raising their minimum wage. (I would like to point out how absolutely disgusting it is that self interested businesses have recognized this problem before our government, which is supposed to be paying attention to our needs.) Ikea recently announced an internal minimum wage of $10.76 an hour (to be implemented soon). Gap is raising their minimum to $9.00 an hour and already has plans for increasing it to $10.00 an hour in the near future. Costco already pays a minimum of $11.50 an hour, but the article says that bonuses bring it up to an average of $21 an hour. Whole Foods also pays $10.00 minimum (with an average of almost twice that). The last two mentioned in the article are fast food places. Shake Shack and In-N-Out pay a minimum of $10.00 and $10.50 an hour respectively, with In-N-Out also providing vacation and retirement benefits.
None of these companies are doing poorly. Costco says the higher wages pay off in productivity and lower employee turnover, and compared to Sam's Club, which does not pay fair wages, the evidence supports that claim (also note that Costco still manages to charge very low prices despite paying their employees around twice what Sam's does). As far as claims that raising minimum wage will hurt businesses go, the evidence seems to prove the exact opposite.
It is probable that raising minimum wage will make unemployment worse. This is a natural effect of the law of supply and demand. When supply and demand are not a matter of life and death, it might be ethical to consider their impact before raising the cost of such an essential commodity as labor. When it is a matter of life and death, it is not ethical to consider the problem entirely from an economic point of view. Minimum wage is exactly one of these life and death cases. Due to a number of different factors, our economy is incapable of providing enough work for everyone who wants it, and the consequence is that the U.S. is slowly sinking into widespread poverty. There are many solutions to this problem, but they all require more than just changing minimum wage. Businesses should be required by law to pay fair wages, and a minimum wage that pays $15,000 a year is not fair wages. We need a minimum wage that pays more than the poverty level to have a sustainable economy. Raising minimum wage should not even be a question, and if our government cannot see that, then they are not qualified to rule anything, especially not a large country. Bickering about minimum wage and unemployment is a waste of time. Once minimum wage is taken care of, we can start looking at other options to take care of the larger problem. So long as people are relying on minimum wage as their primary form of support though, businesses and the government are morally obligated to make sure it is high enough to provide sufficient support.
I have multiple suggestions to solve the worst of our economic problems, and a basic income is at the top of that list (a basic income would also obviate the need for any minimum wage). A wage cap would help take care of the supply and demand problem inherent in a minimum wage. Even a more robust welfare system would help, though it would cost far more than it is worth, with the current needs based system. Ultimately, we really are living in an unsustainable economy. It is impossible for a business to survive when it pays less for its resources than they cost to produce. Minimum wage was designed to solve that problem for labor. It currently does a very poor job.
Minimum wage is starting to become a big deal again, as Obama pushes to have it raised by around 33%. Fast food employees have started a movement to have minimum wage, at least for fast food jobs, raised by almost 100%. Current minimum wage is almost half the poverty level (70% according to the government definition, but according to actual accurate data it is less than 50%). If minimum wage is supposed to provide enough to live on, why has it not been raised sooner?
The Republican Party is largely to blame, along with many large businesses. The claim is that raising minimum wage will put more people out of work. This is probably true. So, I guess they think it is better to let most of the population starve than to make businesses pay fair wages and have less workers but with fair pay. Really, this is an unsolvable problem from this point of view. I have already shown how a basic income would solve this problem, so I am not going to harp on that, but I would like to discuss how some large businesses are actually trying to do something about this problem.
I just read this article. It discusses how some businesses are voluntarily raising their minimum wage. (I would like to point out how absolutely disgusting it is that self interested businesses have recognized this problem before our government, which is supposed to be paying attention to our needs.) Ikea recently announced an internal minimum wage of $10.76 an hour (to be implemented soon). Gap is raising their minimum to $9.00 an hour and already has plans for increasing it to $10.00 an hour in the near future. Costco already pays a minimum of $11.50 an hour, but the article says that bonuses bring it up to an average of $21 an hour. Whole Foods also pays $10.00 minimum (with an average of almost twice that). The last two mentioned in the article are fast food places. Shake Shack and In-N-Out pay a minimum of $10.00 and $10.50 an hour respectively, with In-N-Out also providing vacation and retirement benefits.
None of these companies are doing poorly. Costco says the higher wages pay off in productivity and lower employee turnover, and compared to Sam's Club, which does not pay fair wages, the evidence supports that claim (also note that Costco still manages to charge very low prices despite paying their employees around twice what Sam's does). As far as claims that raising minimum wage will hurt businesses go, the evidence seems to prove the exact opposite.
It is probable that raising minimum wage will make unemployment worse. This is a natural effect of the law of supply and demand. When supply and demand are not a matter of life and death, it might be ethical to consider their impact before raising the cost of such an essential commodity as labor. When it is a matter of life and death, it is not ethical to consider the problem entirely from an economic point of view. Minimum wage is exactly one of these life and death cases. Due to a number of different factors, our economy is incapable of providing enough work for everyone who wants it, and the consequence is that the U.S. is slowly sinking into widespread poverty. There are many solutions to this problem, but they all require more than just changing minimum wage. Businesses should be required by law to pay fair wages, and a minimum wage that pays $15,000 a year is not fair wages. We need a minimum wage that pays more than the poverty level to have a sustainable economy. Raising minimum wage should not even be a question, and if our government cannot see that, then they are not qualified to rule anything, especially not a large country. Bickering about minimum wage and unemployment is a waste of time. Once minimum wage is taken care of, we can start looking at other options to take care of the larger problem. So long as people are relying on minimum wage as their primary form of support though, businesses and the government are morally obligated to make sure it is high enough to provide sufficient support.
I have multiple suggestions to solve the worst of our economic problems, and a basic income is at the top of that list (a basic income would also obviate the need for any minimum wage). A wage cap would help take care of the supply and demand problem inherent in a minimum wage. Even a more robust welfare system would help, though it would cost far more than it is worth, with the current needs based system. Ultimately, we really are living in an unsustainable economy. It is impossible for a business to survive when it pays less for its resources than they cost to produce. Minimum wage was designed to solve that problem for labor. It currently does a very poor job.
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