7 ms·

The case for higher wages: It's smart business

65 points by kungfudoi 12y ago

SixSigma 12y ago
The food sector is particularly aggressive on wages. There is quite a movement trying to push back. http://www.foodchainsfilm.com/ 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 !
- michaelchisari 12y ago
  One of the arguments against raising the minimum wage is that it incentivizes automation and robot labor to replace it. 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.
  - deleted 12y ago
    [deleted]
  - itgoon 12y ago
    I generally agree. If a job is so close to being marginalized that it would be eliminated by an increase in the minimum, then the cost of that automation is already pretty close to replacing that job, anyway. 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.
  - crdoconnor 12y ago
    >One of the arguments against raising the minimum wage is that it incentivizes automation and robot labor to replace it. 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.
  - eli_gottlieb 12y ago
    > One of the arguments against raising the minimum wage is that it incentivizes automation and robot labor to replace it. 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.
  - swatow 12y ago
    The fundamental problem is the low market price of unskilled labor. A living wage is one a way to deal with it, along with social programs, education and basic income. 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.
- swatow 12y ago
  Any idea what the typical wage for workers who get the tipped minimum wage is, after tips? I don't see a problem with the "NRA"'s position if those end up the same as others after tips.
  - orangecat 12y ago
    Right, my understanding is that they have to receive at least minimum wage when tips are included, and if not the employer has to make up the difference. Tipping as it's practiced today is awful for many reasons, but the minimum wage isn't one of them.
    - arghnoname 12y ago
      This is strictly true, but when I waited tables I was told that if I ever claimed to make less than minimum wage with tips included (and thus force them to pay me more) I'd be fired. On more than one occasion, as a result, I made less than minimum wage. Paying taxes on income you didn't even get is especially awesome in that case.
      - swatow 12y ago
        When you say one occasion, do you mean one night, or one week, or longer? I ask because one possibility (and if I had to guess, I'd say this is the case), is that the vast majority of workers on the tipped minimum wage actually make more than the minimum wage after tips.
        arghnoname 12y ago
        I was referring to single shifts where they overstaffed on a light afternoon so I didn't get many tables. 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.
- sethrin 12y ago
  I wonder if they're getting what they think they're getting out of that deal. Servers are already getting 10-20% of the top, while the restaurant itself is probably only making 2-3% after expenses. Right now everyone tips their server because that's where their wage comes from. If that started to not be the case, perhaps restaurateurs could keep more of the money that's coming in the door. Food for thought.
Riseed 12y ago
> Miners, who were paid based on how much coal they dug, were seen as expendable. If one died in a rock fall, another could easily replace him with no additional cost to the company. But if a mule died, the owner would have to buy another one. Thus mules were considered more valuable to the mine than the men who did the dangerous work. 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.
- adekok 12y ago
  I'd agree, except that the replacement cost of a worker is usually pretty high. The bosses are really making a statement that maintaining their power is worth the extra cost of replacing a worker.
fiatmoney 12y ago
I've found it helpful (both for convincing, and for clarifying your own thoughts) to phrase things like this in ways that are compatible with "mainstream economists" view of how things work. 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".
- kevin_thibedeau 12y ago
  The same can be said for getting lobbyist money out of Congress. Letting the fox mind the hen-house is a horrible way to run a society.
- owen_griffiths 12y ago
  "well, then someone would pay their workers better and make more money, and those firms would come to dominate." 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.
  - swatow 12y ago
    Even within a job class, there is a lot of variation in workers. E.g. I don't think most Walmart workers would have a shot at a job at Trader Joe's or Starbucks.
    - patio11 12y ago
      The notion that employees at Trader Joes are different than employees at WalMart is the curiously American breed of classism, where the poor people get their groceries bagged by poor people but the rich people get their groceries bagged by temporarily embarrassed millionaires with art degrees.
drawkbox 12y ago
> Globalism, the casualization of labor (replacing full-time employees with contractors and part-timers) and a zealous fixation on profits above all else have left the American middle class in shambles. That's a dangerous thing for a consumer economy. 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-valuing-employees,37947/ http://www.theonion.com/articles/company-to-experiment-with-...
- WalterBright 12y ago
  > It is very hard to find quality these days 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.
  - jdmichal 12y ago
    I think the mistake being made is that people continue to expect the same quality at the same price and ignore inflation. So they complain that the $100 bookshelf they buy in 2015 is nothing like the $100 bookshelf they bought in 1960. Well, thanks to inflation that $100 in 1960 is actually about $800 in 2015, and that $800 bookshelf in 2015 likely is a better quality. In 2015, for $100 you are buying a product that didn't exist in 1960: a bookshelf for $12.50. Technology has raised the quality at the same inflation-adjusted price point, but has also introduced new items at lower price points.
analog31 12y ago
I wonder if the sudden discovery that higher wages are a good idea coincides with people beginning to drop the hint that maybe businesses should be taxed up the wazoo.
- eli_gottlieb 12y ago
  IMHO, it probably mostly coincides with the immense capital glut that has pushed rates of return on speculative financial investments to almost nothing, forcing investors back to making their money off actual industry, at the same time that globalization is forcing up wages even in the Third World. Industry requires either cheap labor to exploit or skilled labor to use to raise its rate of profit... and that means that slowly, the tide is turning towards actually building stuff and selling it to people, which requires that the workers who do the job be able to think for five minutes at a time rather than just nail Thing A to Thing B.

65 points by kungfudoi 12y ago

The food sector is particularly aggressive on wages. There is quite a movement trying to push back. http://www.foodchainsfilm.com/ 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 !

michaelchisari 12y ago
One of the arguments against raising the minimum wage is that it incentivizes automation and robot labor to replace it. 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.
- deleted 12y ago
  [deleted]
- itgoon 12y ago
  I generally agree. If a job is so close to being marginalized that it would be eliminated by an increase in the minimum, then the cost of that automation is already pretty close to replacing that job, anyway. 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.
- crdoconnor 12y ago
  >One of the arguments against raising the minimum wage is that it incentivizes automation and robot labor to replace it. 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.
- eli_gottlieb 12y ago
  > One of the arguments against raising the minimum wage is that it incentivizes automation and robot labor to replace it. 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.
- swatow 12y ago
  The fundamental problem is the low market price of unskilled labor. A living wage is one a way to deal with it, along with social programs, education and basic income. 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.
swatow 12y ago
Any idea what the typical wage for workers who get the tipped minimum wage is, after tips? I don't see a problem with the "NRA"'s position if those end up the same as others after tips.
- orangecat 12y ago
  Right, my understanding is that they have to receive at least minimum wage when tips are included, and if not the employer has to make up the difference. Tipping as it's practiced today is awful for many reasons, but the minimum wage isn't one of them.
  - arghnoname 12y ago
    This is strictly true, but when I waited tables I was told that if I ever claimed to make less than minimum wage with tips included (and thus force them to pay me more) I'd be fired. On more than one occasion, as a result, I made less than minimum wage. Paying taxes on income you didn't even get is especially awesome in that case.
    - swatow 12y ago
      When you say one occasion, do you mean one night, or one week, or longer? I ask because one possibility (and if I had to guess, I'd say this is the case), is that the vast majority of workers on the tipped minimum wage actually make more than the minimum wage after tips.
      - arghnoname 12y ago
        I was referring to single shifts where they overstaffed on a light afternoon so I didn't get many tables. 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.
sethrin 12y ago
I wonder if they're getting what they think they're getting out of that deal. Servers are already getting 10-20% of the top, while the restaurant itself is probably only making 2-3% after expenses. Right now everyone tips their server because that's where their wage comes from. If that started to not be the case, perhaps restaurateurs could keep more of the money that's coming in the door. Food for thought.

Riseed 12y ago

> Miners, who were paid based on how much coal they dug, were seen as expendable. If one died in a rock fall, another could easily replace him with no additional cost to the company. But if a mule died, the owner would have to buy another one. Thus mules were considered more valuable to the mine than the men who did the dangerous work. 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.

adekok 12y ago
I'd agree, except that the replacement cost of a worker is usually pretty high. The bosses are really making a statement that maintaining their power is worth the extra cost of replacing a worker.

fiatmoney 12y ago

I've found it helpful (both for convincing, and for clarifying your own thoughts) to phrase things like this in ways that are compatible with "mainstream economists" view of how things work. 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".

kevin_thibedeau 12y ago
The same can be said for getting lobbyist money out of Congress. Letting the fox mind the hen-house is a horrible way to run a society.
owen_griffiths 12y ago
"well, then someone would pay their workers better and make more money, and those firms would come to dominate." 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.
- swatow 12y ago
  Even within a job class, there is a lot of variation in workers. E.g. I don't think most Walmart workers would have a shot at a job at Trader Joe's or Starbucks.
  - patio11 12y ago
    The notion that employees at Trader Joes are different than employees at WalMart is the curiously American breed of classism, where the poor people get their groceries bagged by poor people but the rich people get their groceries bagged by temporarily embarrassed millionaires with art degrees.

drawkbox 12y ago

> Globalism, the casualization of labor (replacing full-time employees with contractors and part-timers) and a zealous fixation on profits above all else have left the American middle class in shambles. That's a dangerous thing for a consumer economy. 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-valuing-employees,37947/ http://www.theonion.com/articles/company-to-experiment-with-...

WalterBright 12y ago
> It is very hard to find quality these days 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.
- jdmichal 12y ago
  I think the mistake being made is that people continue to expect the same quality at the same price and ignore inflation. So they complain that the $100 bookshelf they buy in 2015 is nothing like the $100 bookshelf they bought in 1960. Well, thanks to inflation that $100 in 1960 is actually about $800 in 2015, and that $800 bookshelf in 2015 likely is a better quality. In 2015, for $100 you are buying a product that didn't exist in 1960: a bookshelf for $12.50. Technology has raised the quality at the same inflation-adjusted price point, but has also introduced new items at lower price points.

analog31 12y ago

I wonder if the sudden discovery that higher wages are a good idea coincides with people beginning to drop the hint that maybe businesses should be taxed up the wazoo.

eli_gottlieb 12y ago
IMHO, it probably mostly coincides with the immense capital glut that has pushed rates of return on speculative financial investments to almost nothing, forcing investors back to making their money off actual industry, at the same time that globalization is forcing up wages even in the Third World. Industry requires either cheap labor to exploit or skilled labor to use to raise its rate of profit... and that means that slowly, the tide is turning towards actually building stuff and selling it to people, which requires that the workers who do the job be able to think for five minutes at a time rather than just nail Thing A to Thing B.