Date: 2024-10-19 Page is: DBtxt003.php txt00016381
Economics
Minimum Wages Debate
ECONOMY ... The Minimum Wage Costs Jobs – Amazon’s Whole Foods Cuts Hours For Higher Wage
There is a major problem in the modern economy ... massive inequality ... and a popular response to this is the idea of increasing the minimum wage. I have never been enthusiastic about this approach because many of the companies paying minimum wage are also earning minimal profits. That is not true of Amazon as a whole, of course, but probably exists in various parts of their brick and mortar subsidiary Whole Foods. I am sure that Amazon has pretty detailed profit performance analysis for all its units, and these managers are going to have to respond to an hourly wage increase by a number of hours decrease. I argue that companies should be held to account for their payroll performance and publish what I refer to as a 'payroll profile' ... how does the remuneration at the top compare with the remuneration at the bottom, and where on the planet are the people living and working. How does this payroll profile compare to a (decent) living wage in the places where the people live? How does the payroll of most of the people compare to the remuneration of the few people at the top? Based on this consumers and investors can start to make decisions about what to buy and where to invest!
Peter Burgess
A major contention abut the minimum wage is that it doesn’t particularly do anyone any good. Sure, people gain more pay per hour worked. But they then get their hours cut. Some get their hours cut to zero. On the very simple indeed basis that we humans tend to use or buy less of something the more expensive it becomes. So, raise wages and we’ll buy less labour.
As appears to be happening here with Amazon and Whole Foods. Famously, Amazon decided to pay a $15 minimum wage to everyone who worked for the company. Whole Foods, the supermarket chain, was and is a part of Amazon. Thus all those supermarket workers now gain a $15 minimum.
Well, how excellent. So, we can now see what it would be like with that national $15 minimum that the Fight for $15 has been going on about. And the result isn’t pretty:
But since the wage increase, Whole Food employees have told the Guardian that they have experienced widespread cuts that have reduced schedule shifts across many stores, often negating wage gains for employees. “My hours went from 30 to 20 a week,” said one Whole Foods employee in Illinois. Workers interviewed for this story were reluctant to speak on the record for fear of retaliation. The Illinois-based worker explained that once the $15 minimum wage was enacted, part-time employee hours at their store were cut from an average of 30 to 21 hours a week, and full-time employees saw average hours reduced from 37.5 hours to 34.5 hours.
Of course, all those who argue in favour of the minimum wage rise insist that such a thing will never happen. No one will cut hours just because more has to be paid for each hour. Obviously, that’s wrong in theory but here we’ve the evidence that it’s wrong in reality.
So, minimum wage rises cost jobs, cost hours for workers. Just as all us right wing neoliberal types have been shouting for years. And the apologies are going to come in thick and fast now, aren’t they?
Sure…. There is a major problem in the modern economy ... massive inequality ... and a popular response to this is the idea of increasing the minimum wage. I have never been enthusiastic about this approach because many of the companies paying minimum wage are also earning minimal profits. That is not true of Amazon as a whole, of course, but probably exists in various parts of their brick and mortar subsidiary Whole Foods. I am sure that Amazon has pretty detailed profit performance analysis for all its units, and these managers are going to have to respond to an hourly wage increase by a number of hours decrease. I argue that companies should be held to account for their payroll performance and publish what I refer to as a 'payroll profile' ... how does the remuneration at the top compare with the remuneration at the bottom, and where on the planet are the people living and working. How does this payroll profile compare to a (decent) living wage in the places where the people live? How does the payroll of most of the people compare to the remuneration of the few people at the top? Based on this consumers and investors can start to make decisions about what to buy and where to invest!
Peter Burgess
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Andrew Carey PeterBurgess • an hour ago should be held to account Is that a personal moral view which means that you're fine with it being voluntary on employers, or are you arguing that it needs to be compulsory, which means that employers get taken to court if they do not comply?
PeterBurgess For about the last 150 years the corporate community has been self-reporting their performance to attract investors. Initially they were completely free to lie and eventually the authorities mandated that there should be 'audit' of their financial reporting so that they were no longer free to iie with impunity. A possible solution that is increasingly possible with ubiquitous technology is for society to report on the behavior of the corporate world in a well structured manner. Companies know that reputation matters, and they do PR to make sure that is what we see ... but the technology tools are emerging that could enable reality to be in play and not under the control of the subject company. I see consumers as the key to change much more than getting the courts to be in this loop. BarksintheCountry PeterBurgess • 19 minutes ago So, no answer to the original question then? PeterBurgess BarksintheCountry • a few seconds from now Sorry you thought I was dodging the question. I was trying to answer the question in a more nuanced manner. There is a school of thought that wants the government and law to be the solution to corporate behavior. I see this as a last resort because it is usually far too slow, expensive and cumbersome. On the other hand, if data can be used to change consumer behavior, companies respond extremely fast when they are in danger of losing their customers ... at any rate, that has been my experience. I hope this helps.
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Quentin Vole PeterBurgess • an hour ago Lots of people like to claim that inequality is a major problem, but I've never been able to understand how the ability of a premier league striker to buy a new Ferrari every month makes anyone else's life any worse. Perhaps you can explain it to me?
PeterBurgess Quentin Vole • a few seconds ago At some level there is a constant amount of economic money in circulation. When someone gets paid a huge amount, this money comes from somewhere and in the case of the highly remunerated premier league striker is is coming from either the owners of the franchise or the fans of the franchise. Most of the very wealthy people on the planet are wealthy in large part because they created a profitable company ... and profits come from the price of the product less the costs to make the product ... and in many cases the product price was excessively high and the product cost was minimized either by offshoring (making in a low cost country) or by underpaying workers. There is another mechanism in play as well and that is that owners of stocks in companies get leverage from the idea that stock value rises when the future looks good ... even if it never materializes. Cutting wages sends a message to investors that future profits are going to go up ... and the stock market usually does go up in response . PeterBurgess