The case for higher wages: It's smart business
latimes.com
latimes.com
This is an attitude I've seen in 90% of the bosses I've ever had. Workers were seen as easily replaceable, and therefore not worth a penny more than absolutely necessary.
The standard riposte to arguments like the one in the article is "well, then someone would pay their workers better and make more money, and those firms would come to dominate."
The response to the response is something like, "managers are being paid in non-pecuniary status benefits via underpaying their underlings, in a way that reduces total firm output, and there are coordination & principal/agent problems in getting management to agree not to be compensated in this way".
Not only would they, they do. Google, Apple, Facebook, Wall St etc pay people well, and are very profitable. However, paying more allows an employer to hire different workers.
Paying the same people more is completely different.
The American variant of classism is more amusing than average to be sure.
Your intentional exaggeration aside, I would be very surprised if most Trader Joe's and Starbucks employees didn't have some college.
To the extent that there is classism, it is in the people at Trader Joe's and Starbucks doing hiring, and the customers that these companies cater to when they making these hiring decisions. Not me for documenting the facts.
If you hire knowledge workers and pay them the bare minimum living costs, they will struggle in their personal lives.
They'll have to do things themselves that they could otherwise pay professionals to do, they'll have longer commutes, or if they're a miserly type they'll be dissatisfied with the feeling of 'working to live' rather than to build for the future.
That holds whether they're rockstars or barely capable of doing the job. Up to a point, paying too little is like running your car with diluted fuel.
In the past I've had jobs with a low salary that were fine until the workload increased.
When that happens, the shortcuts that you could take on a high wage (flat instead of house share, living closer to work, paying for lunch rather than making it, owning and running a car, laundry/ironing in a customer facing environment, etc ...) are not possible. Sleep, diet, exercise start to suffer.
That's the real issue in my mind - some employers just seem blinded to the fact that they're pushing people away. It doesn't matter how loyal an employee is - humans have running costs (both in terms of time and money), and employment adds to those running costs.
That may be true, but managers are also paid in a way that hurts them directly if they reduce the firm's value like that (options, equity). So then it becomes a question of which effect dominates, and it seems like a highly extraordinary claim to say that the "non-pecuniary status benefit" comes out on top.
Perhaps there's a systematic bias that causes managers to think they're maximizing value by underpaying workers, even if they aren't really.
Software patents, non-competes and NDAs often prevent this. I suppose that is the point of all of them.
This assumes that workers, firms, and managers are all economically rational agents. Doing so not only overlooks all the findings of behavioral economics and social psychology, but also ignores the major role of ideology in shaping the modern workplace. People mistreat workers because they take their thinking on labor relations from an ideologically-tinted worldview in which you have to mistreat workers to make the economy go -- whether it's conforming to the archetypes has nothing to do with whether it's economically rational.
http://www.foodchainsfilm.com/
The National Restaurant Association (dubbed "the other NRA") is responsible for lobbying for keeping tipped minimum wage under $3 an hour !
But I think the robot labor force is upon us no matter what, and delaying it by using extremely underpaid wage labor doesn't seem to be doing anyone any favors.
If a living wage forces automation, then it's better to force that and deal with that reality (with social programs, education, basic income, anything), that tilt at windmills.
Sometimes I wonder if people being on welfare and having 40 extra hours a week to figure out what they're doing with their life is better than people working 40 hours at a week at a stressful, useless "job"... and still being on welfare because it pays barely anything.
My pie-in-the-sky ideal would be if Corporate America (tm) decided that getting enough out of employees was better in the long run than getting the most out of them to make this quarter.
This argument was conceived precisely so wages could be pressured downward. It becomes patently obvious when you dig a little into the writings by economists who make these predictions - they are typically absolutely clueless about technology.
I really have to ask at what point people started thinking that reducing total productivity in order to increase the supply of menial toil is a good idea.
However living wages suffer from the problem that they only benefit people with jobs. Even if they didn't increase unemployment, I would not support them because I don't think a person deserves more than their employer is willing to pay. However, I do think that all people below a certain income should have their income supplemented by the government (what we call welfare in the UK/Aus/NZ, US welfare is much more complex).
I think one problem is that the left has encouraged people to think in terms of rights and justice, when the problems around poverty are really problems of redistribution and charity. Saying that you want to help poor people because they need help and can't provide enough income for themselves sounds arrogant, but it's the truth.
Also, I didn't get very good tips compared to some of the attractive and personable young women I worked with. Generally we did make more than minimum wage after tips, especially if you considered a weekly or biweekly average.
If I ever got stiffed on a table that would come out of my check, so my worst night was where I only had a few tables and got stiffed on a big one. I ended up paying to work that night since I needed to keep the job.
The ruthless MBA short term metric builders and long term value destroyers are still at it. People having money to buy is a good thing, not constant cutting back.
Quality work suffers as there is less money to do it, meaning quality products suffer, eventually there is no product and no need for sales/marketing or the CEO because all the grace of current/old innovation dies out. It is very hard to find quality these days except at companies that do somewhat value employees and/or engineering/product over finance (as the product brings the revs, not the revs and cutting).
One day we will return to the value of building quality products and value the people that do it as the engine rather than the financial part of the company as the engine. You can't have financial success without happy workers and thus good products being produced. After globalization is more baked in, it won't be as easy for companies not valuing quality work. We don't want to finish that stage with a depleted consumer base.
The minimum wage also should be locked to inflation in some way. Minimum wage triggers raises throughout the market. Eventhough it just rises all boats, it sends ripples through the economy from the bottom up when there are downturns. In downturns there is too much money locked up in the 1% backdrift as it has to hit rock bottom for investment to start again. Minimum wage auto increases every 3-6 months would keep a consistent lower end ripple that would eventually make it up to everyone. If you want a raise, support minimum wage. When you give to the rich they keep it, when you give to the poor they give it right back but at least you have money moving.
This is relevant today: http://www.theonion.com/articles/company-to-experiment-with-...
I'm not seeing this. Cars, for example, are enormously better than they were in the 60's and 70's. They are far, far more reliable, and the fit & finish is much better.
This is certainly what drives real economic growth (as opposed to that phony stuff caused by ramping up consumer debt to heady levels).
However, I don't think that the "MBA short term metric builders" (as you put it) are at all concerned with real growth. I think they would far rather see steady and slow stagnation of their companies and the economy as a whole where their position in the hierarchy is kept intact rather than fast growth where their position is more uncertain.
This is why I'm not so optimistic that valuing quality work is a state that the country will naturally return to driven by market forces. I think the decline will continue unabated until there is some kind of enormous keynesian kick from the government (in the past it was war and a federal public works program).