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Considering that McDonalds and Walmart are #1 and #2 employers in America (after the federal government), this isn't surprising. > Sanders accused companies su

by bko 5y ago

Considering that McDonalds and Walmart are #1 and #2 employers in America (after the federal government), this isn't surprising. > Sanders accused companies such as Walmart and McDonald’s of relying on “corporate welfare from the federal government by paying their workers starvation wages.” This relies on a mistaken theory on how wages get set. No one gets paid based on what they need. If that were true, lottery winners would continue to work for free. If federal benefits to their employees were cut, the employees wouldn't have any more bargaining power to demand higher wages. On the contrary, they'd probably be inclined to work longer or take on additional work to make up for the loss in benefits, pushing wages further on. You saw exactly that relationship when unemployment benefits were extended during the pandemic and many people chose not to work because it would cut off their benefits or they had enough in benefits to not work for the time being.

exogenousdata 5y ago
The notion that extended benefits during a pandemic to unemployed workers caused greater/continued unemployment in the US service industry is a theory that has yet to be proven. Some early data[0] suggests that the theory fails to accurately predict behavior. [0] https://www.cnbc.com/2021/08/04/early-end-to-federal-unemployment-pay-in-26-states-not-getting-people-to-work.html https://www.cnbc.com/2021/08/04/early-end-to-federal-unemplo...
- bko 5y ago
  There are definitely cases where the benefits are greater than the pay for many employees. > The enhanced payments create a tricky situation for restaurant owners, especially in states such as Georgia and Alaska that are looking to restart businesses in the coming weeks. Nationally, median hourly pay in food-service occupations was $11.65 in 2019, or $466 for a 40-hour week. In some states, restaurant workers could be receiving double their usual pay on unemployment benefits. Natural experiments and studies are very difficult and easy to manipulate. So I think we can use first principles to tell us that if you pay people not to work, they will be more inclined to not work. I think you would need to definitively prove this not to be the case https://www.wsj.com/articles/coronavirus-relief-often-pays-workers-more-than-work-11588066200 https://www.wsj.com/articles/coronavirus-relief-often-pays-w...
  - deleted 5y ago
    [deleted]
- nickff 5y ago
  There was a great deal of study on the effect extended unemployment benefits during the great recession, and that seemed to show that it reduced people's propensity to apply for (and get) jobs. It would seem that the effect will be similar in this episode, though it certainly warrants further examination.
Sohcahtoa82 5y ago
> Considering that McDonalds and Walmart are #1 and #2 employers in America (after the federal government), this isn't surprising. Indeed. This article says nothing about the total number of employees McD's and Walmart have. It's committing the same error as heat maps that aren't adjusted for population (See https://xkcd.com/1138/ https://xkcd.com/1138/) > This relies on a mistaken theory on how wages get set. No one gets paid based on what they need. If that were true, lottery winners would continue to work for free. IMO, every for-profit corporation bases pay on one thing: How easy you are to replace. Unless you work a job that pays commission, you are not paid based on the value and profit generated by your work. Software engineers don't have high salaries because their work is profitable, they have high salaries because finding good SEs is difficult. > If federal benefits to their employees were cut, the employees wouldn't have any more bargaining power to demand higher wages. Workers that are easily replaced will always have zero bargaining power. Unionizing may help, but they still won't have much. > On the contrary, they'd probably be inclined to work longer or take on additional work to make up for the loss in benefits, pushing wages further on. More likely, they'd be looking for a second job. But that's hard, since a lot of retail and fast food jobs try to keep people under 30 hours/week so they don't have to pay benefits, while also expecting full-time availability, with a schedule that changes every week. > You saw exactly that relationship when unemployment benefits were extended during the pandemic and many people chose not to work because it would cut off their benefits or they had enough in benefits to not work for the time being. And some are quitting because they're tired of being treated like garbage. https://pdx.eater.com/2021/9/1/22652642/portland-restaurant-workers-harassment-2021 https://pdx.eater.com/2021/9/1/22652642/portland-restaurant-...
- coolgeek 5y ago
  Not disagreeing with most of your points, but: > This article says nothing about the total number of employees McD's and Walmart have. It's committing the same error as heat maps that aren't adjusted for population If you have evidence that the percentage of employees on government assistance in WM and McDs is lower than that for other large employers (or even the same), I'd very much like to see it. I strongly suspect that the evidence will show the opposite - that it will confirm the rankings
patrickthebold 5y ago
Regarding the last point, if you're a taxpayer paying for these benefits it certainly feels unfair that you are paying for the workers benefits. I'd rather pay people to not work, personally.
fallingfrog 5y ago
This comment made me think a bit. There is some minimum level of wage + benefits that a worker needs to survive. And the tendency is for wages for unskilled workers to fall to exactly that level. In other words wages + benefits = bare minimum living expenses. So that supports sanders statement. In that case, if you start giving people benefits, they will just displace wages. BUT, your statement that increased benefits give leverage to workers to demand more pay also rings true. If the worker can simply quit, and go looking for a new job, without becoming homeless, then that’s leverage. So that would increase wages. I think maybe both are true but in different situations: if you start at zero benefits, and start adding benefits, at first wages will decrease in equal measure. But then once the benefits become great enough that the worker can live on them alone for some period of time, it starts to push wages back up again. That would be my guess as to what’s going on.
black_13 5y ago
“Choose to work” what planet are you from no one chooses work its like “choosing to breath” or “choose to eat”
- rufus_foreman 5y ago
  How long does early retirement from breathing or eating generally last?
  - coolgeek 5y ago
    (That's the point)
    - rufus_foreman 5y ago
      Still not getting it. I eat, I breathe and I work. If I stop eating, I die. If I stop breathing, I die. If I stop working...life goes on the same as before. I currently live off of 4% of my net worth per year. If I decide not to go back to work on Tuesday, I could live for another year, or another decade or another half century. How is that the same as eating and breathing?
      - coolgeek 5y ago
        > I currently live off of 4% of my net worth per year What percentage of the population do you think can do that? This thread is about WalMart and McDonalds employees. The vast majority of them can't go a month without an income source (a paycheck). Zero percent of them can live off 4% of their net worth per year
        rufus_foreman 5y ago
        I was one of those type of employees, worked fast food jobs for years, did manual labor for half a decade. To go from that to where I am now is hard, but it is not "learn to live without food or air" type hard.
esarbe 5y ago
> the employees wouldn't have any more bargaining power to demand higher wages. That's what you get for demolishing every ounce of bargaining power of the unions. Corporate overlordship where workers are exploited like it 1870. (Slight hyperbole, of course.)
anemoiac 5y ago
>> Sanders accused companies such as Walmart and McDonald’s of relying on “corporate welfare from the federal government by paying their workers starvation wages.” >This relies on a mistaken theory on how wages get set. No one gets paid based on what they need. Is that what Sanders' statement implies - that wages are set based on worker needs? I don't think he needs to be interpreted that way.
JoeAltmaier 5y ago
That's deliberately disingenuous. We've had a minimum wage in the US for decades. It hasn't tracked worker productivity in years (if it did, it would be over $21 and hour). When we allow the minimum wage to stagnate, we indeed make a national decision to absorb the impact with federal programs.

by bko 5y ago

exogenousdata 5y ago

The notion that extended benefits during a pandemic to unemployed workers caused greater/continued unemployment in the US service industry is a theory that has yet to be proven. Some early data[0] suggests that the theory fails to accurately predict behavior. [0] https://www.cnbc.com/2021/08/04/early-end-to-federal-unemployment-pay-in-26-states-not-getting-people-to-work.html https://www.cnbc.com/2021/08/04/early-end-to-federal-unemplo...

bko 5y ago
There are definitely cases where the benefits are greater than the pay for many employees. > The enhanced payments create a tricky situation for restaurant owners, especially in states such as Georgia and Alaska that are looking to restart businesses in the coming weeks. Nationally, median hourly pay in food-service occupations was $11.65 in 2019, or $466 for a 40-hour week. In some states, restaurant workers could be receiving double their usual pay on unemployment benefits. Natural experiments and studies are very difficult and easy to manipulate. So I think we can use first principles to tell us that if you pay people not to work, they will be more inclined to not work. I think you would need to definitively prove this not to be the case https://www.wsj.com/articles/coronavirus-relief-often-pays-workers-more-than-work-11588066200 https://www.wsj.com/articles/coronavirus-relief-often-pays-w...
- deleted 5y ago
  [deleted]
nickff 5y ago
There was a great deal of study on the effect extended unemployment benefits during the great recession, and that seemed to show that it reduced people's propensity to apply for (and get) jobs. It would seem that the effect will be similar in this episode, though it certainly warrants further examination.

Sohcahtoa82 5y ago

> Considering that McDonalds and Walmart are #1 and #2 employers in America (after the federal government), this isn't surprising. Indeed. This article says nothing about the total number of employees McD's and Walmart have. It's committing the same error as heat maps that aren't adjusted for population (See https://xkcd.com/1138/ https://xkcd.com/1138/) > This relies on a mistaken theory on how wages get set. No one gets paid based on what they need. If that were true, lottery winners would continue to work for free. IMO, every for-profit corporation bases pay on one thing: How easy you are to replace. Unless you work a job that pays commission, you are not paid based on the value and profit generated by your work. Software engineers don't have high salaries because their work is profitable, they have high salaries because finding good SEs is difficult. > If federal benefits to their employees were cut, the employees wouldn't have any more bargaining power to demand higher wages. Workers that are easily replaced will always have zero bargaining power. Unionizing may help, but they still won't have much. > On the contrary, they'd probably be inclined to work longer or take on additional work to make up for the loss in benefits, pushing wages further on. More likely, they'd be looking for a second job. But that's hard, since a lot of retail and fast food jobs try to keep people under 30 hours/week so they don't have to pay benefits, while also expecting full-time availability, with a schedule that changes every week. > You saw exactly that relationship when unemployment benefits were extended during the pandemic and many people chose not to work because it would cut off their benefits or they had enough in benefits to not work for the time being. And some are quitting because they're tired of being treated like garbage. https://pdx.eater.com/2021/9/1/22652642/portland-restaurant-workers-harassment-2021 https://pdx.eater.com/2021/9/1/22652642/portland-restaurant-...

coolgeek 5y ago
Not disagreeing with most of your points, but: > This article says nothing about the total number of employees McD's and Walmart have. It's committing the same error as heat maps that aren't adjusted for population If you have evidence that the percentage of employees on government assistance in WM and McDs is lower than that for other large employers (or even the same), I'd very much like to see it. I strongly suspect that the evidence will show the opposite - that it will confirm the rankings

patrickthebold 5y ago

Regarding the last point, if you're a taxpayer paying for these benefits it certainly feels unfair that you are paying for the workers benefits. I'd rather pay people to not work, personally.

fallingfrog 5y ago

This comment made me think a bit. There is some minimum level of wage + benefits that a worker needs to survive. And the tendency is for wages for unskilled workers to fall to exactly that level. In other words wages + benefits = bare minimum living expenses. So that supports sanders statement. In that case, if you start giving people benefits, they will just displace wages. BUT, your statement that increased benefits give leverage to workers to demand more pay also rings true. If the worker can simply quit, and go looking for a new job, without becoming homeless, then that’s leverage. So that would increase wages. I think maybe both are true but in different situations: if you start at zero benefits, and start adding benefits, at first wages will decrease in equal measure. But then once the benefits become great enough that the worker can live on them alone for some period of time, it starts to push wages back up again. That would be my guess as to what’s going on.

black_13 5y ago

“Choose to work” what planet are you from no one chooses work its like “choosing to breath” or “choose to eat”

rufus_foreman 5y ago
How long does early retirement from breathing or eating generally last?
- coolgeek 5y ago
  (That's the point)
  - rufus_foreman 5y ago
    Still not getting it. I eat, I breathe and I work. If I stop eating, I die. If I stop breathing, I die. If I stop working...life goes on the same as before. I currently live off of 4% of my net worth per year. If I decide not to go back to work on Tuesday, I could live for another year, or another decade or another half century. How is that the same as eating and breathing?
    - coolgeek 5y ago
      > I currently live off of 4% of my net worth per year What percentage of the population do you think can do that? This thread is about WalMart and McDonalds employees. The vast majority of them can't go a month without an income source (a paycheck). Zero percent of them can live off 4% of their net worth per year
      - rufus_foreman 5y ago
        I was one of those type of employees, worked fast food jobs for years, did manual labor for half a decade. To go from that to where I am now is hard, but it is not "learn to live without food or air" type hard.

esarbe 5y ago

> the employees wouldn't have any more bargaining power to demand higher wages. That's what you get for demolishing every ounce of bargaining power of the unions. Corporate overlordship where workers are exploited like it 1870. (Slight hyperbole, of course.)

anemoiac 5y ago

>> Sanders accused companies such as Walmart and McDonald’s of relying on “corporate welfare from the federal government by paying their workers starvation wages.” >This relies on a mistaken theory on how wages get set. No one gets paid based on what they need. Is that what Sanders' statement implies - that wages are set based on worker needs? I don't think he needs to be interpreted that way.

JoeAltmaier 5y ago

That's deliberately disingenuous. We've had a minimum wage in the US for decades. It hasn't tracked worker productivity in years (if it did, it would be over $21 and hour). When we allow the minimum wage to stagnate, we indeed make a national decision to absorb the impact with federal programs.