259: True, but not as much as the wages—the cost of health insurance, for example, doesn't go up with wages.
Well, unless the employer’s been offloading the cost of healthcare onto the government. In that case…
What you would like is not a wish that just comes true because it sounds good to you. Jobs will only materialize in a different sector for these workers, if the different sector(s) requires them.
More importantly, there is an insurmountable problem in your good wishes logic - given that these workers are already employed in the fast food industry AND are reluctant to leave it, as evidenced that instead of looking elsewhere they are trying to impose a false $15 wage tells you that they already know no others jobs exist for them (at their current skill level) at the present time.
If a comparable job with better working conditions existed, these workers would have already voted with their feet. Instead, they are asking politicians to do what the market clearly knows should not be done.
261: Well, that was pretty much a throwaway line. I'd originally marked it with a smiley, but thought that might appear too flippant—perhaps I should have left it in. The actual proper content came later in the post.
Also, saying people “would have” done something like you say seems a bit off, given that we know the whole idea that individuals are economic rational actors is a huge enough oversimplification to be nearly useless.
So, in your world, all is well if you do not see it.
The issue is not that suddenly all sorts of jobs will vanish; it is all sorts of jobs, which would have would have allowed others to join the workplace and get some skills will not be created. The vanishing jobs is the jobs you would have seen without the increase. The end result of forced wage hike is increased downstream structural unemployment of low-skilled workers - read as, reduced starter opportunities, in the future, for those trying to get a start in the workforce.
Therefore, like a horse with blinders, if the area in front of you looks pretty much the same after a change, then you think nothing else of consequence is happening around you.
As for the idea of replacement jobs, see Post #261.
Wow, you can be snowed this easily if the horse speaks?
A couple points:
Did you not realize that the horse got it wrong the first time and what the horse expected initially did not happen? By this I mean that the horse raised wages to help workers, but the market did not accommodate and instead the horse had to readjust and reduce paid hours. And in reality, this wage increase has reduced the pay of some workers via fewer hours or pay has stayed the same, thereby, no expected wage increase effect. Therefore, what the horse expected with the wage hike did not occur - the outcome was not a good one.
Did you not read the title of the article in my Post #236? – “In economic policy, good outcomes matter more than good intentions.”
Now, let’s dissect part of the horse’s statement:
The fact that the horse says “he expected” is just way of saying this is his good intention. Said another way, he hopes the wage increase has a positive longterm effect. OK, cool, a nice good intention. The problem is his expectation, good intention, and hope have zilch to do with reality, as proved by the first go-round.
So, what he will do if the market does not cooperate with his expectation of a production and sales increase? Well, no need to guess what he will do. Yep, he will reduce hours more and the wage increase will be a net negative for some workers and at best a wash for other workers.
As usual though, people think words from the horse’s mouth matter more than what happens on the ground, and I bet will not be looking back to see if more damage is done than help. But hey, the horse has good intentions so people buy into it instead of judging by the actual outcome - and, as of now, the outcome is not good. But who cares? We are good people and have good intentions and that is all the counts.
And Walmart is also suffering from decreased brand loyalty, a perception that its stores are less pleasant to shop in than its competitors, and so on. Confounds all across the board—but please, don’t let that stop you from saying that every negative economic consequence ever is the result of rising wages, really.
Target has become known as a “higher quality/normal” alternative to the oft-crazy Wal-Mart experience.
“Wow, you can be snowed this easily if the horse speaks?”
Take your argument up with the CFO and CFA of Walmart if you don’t believe them. After reading your post #236 that quoted the National Review, I thought it would be wise to consider the source and read a different point of view. Hmmm.
The same thing happened on post #226 and another earlier one which turned out to also omit pertinent data that readers might want to know. You should start a new thread about Walmart’s dilemma since it is not part of the fast food workers minimum wage increase.
Walmart probably knew they had to raise because of wage pressure. They are not known for a sweat shop for no reason. I mean they are not doing that out of the goodness of their heart, not base on their history.
Maybe, but based on the current data, I do not believe the wage pressure exists, as the driving force way you may think.
The number of able-bodied people who are not working AND not looking for work is now over 93M. The labor force participation rate is at an all-time low. Meaning, there is no employment shortage of any sort that would cause Walmart to need to raise wages. And there also is no major hiring going on either. Well, that is obvious because in a growing economy, the labor participation rate goes up, not down.
A company I invest in now routinely gets applications at a rate of 600 to 1 for $11/hr jobs. It could fire everyone tomorrow and have more than our pick of a full, even more highly qualified replacement force. And since there is no specific longterm acquired skills required at Walmart for $9.50/hr, I believe the unintended consequence of cutting hours and giving more unpaid lunchtime is probably worse than the wage hike at this time.
I can tell you there is no worse message to send any employee than to cut back responsibility and work expectations by telling him you need him less than you did yesterday. Talk about a morale downer. I put money that what Walmart will not disclose is the attrition rate of employees who are put into this reduced workload situation because it is a fact that as one reduces an employee’s production the employee takes that as a negative and often leaves before any turn-around occurs. No one wants to be needed less than he was before.
“The number of able-bodied people who are not working AND not looking for work is now over 93M.”
How many of these people are still in high school or have retired?
This is a nonsensical question based on what is meant by “able-bodied” in economic terms.
The labor force participation rate includes people who meet all three of the following criteria: 1) are able-bodied, 2) are actively in the workforce and currently employed, or 3) are actively looking for employment. The age range is 15 and older. In economic terms, this means it includes only people who desire a paycheck.
If you understand the above definition, able-bodied is linked to and limited to people who work or are looking for work. Therefore, it does not include any high school students (or college students) who do not work and who are not looking for work. And does not include retired people who are truly retired and do not work, but does include retirees who decide to rejoin the workforce to make extra money and are working or looking for work.
The 94M+ (new number came out this morning) I mention is the subset of the potential full labor force participation number and are people who are able-bodied, but no longer work AND are no longer looking for work. This is not because they are in high school or college or retired; it is because they could not find a job and have given up looking for a job. They want to work, but cannot find any.
Thus, it follows that the labor force participation rate only goes down when the economy cannot provide enough jobs for people who actually want them. And the current decrease in the participation rate tracks directly with the increasing number of people on welfare and government assistance - meaning that these people need work, i.e., need a paycheck, but the economy is not growing and thus cannot provide the requisite number of jobs.
However, the government is so duplicitous in making itself look good in a bad economy that when people who are able-bodied and want a job, but have stopped looking for one, they are simply ignored and no longer considered unemployed. Pretty much, the government treats them, for statistical purposes, as if they are a group of 5 year-olds.
That is why today, the government can report a decrease in the unemployment rate to 5.1% and, yet, simultaneously report an increase to 94M+ the number of able-bodied people who want a job, but cannot find one and have given up looking. Those 94M do not exist anymore to be counted as potential workers, according to the government. Sleight-of-hand to fool the uninformed. People see 5.1% and think others are finding jobs and the economy is good, when in fact, the 5.1% actually represents the increase in the number of people who are no longer counted as potential workers, even though those people would like to have a job.
To give a relative data point, throughout the recession of 2008, the labor force participation rate was over three points higher, 66.3% to 65.8% (I think that is correct) vs 62.6 today - think about that for a minute - in the 2008 recession, the rate dropped 0.5%. That is all the decline required to cause a recession.
However, get this big lie, the government wants people to think the economy is growing and improving, even though from 2009 till current day, the participation rate decline has been consistent and ongoing and has never increased back to even the 2008 recession level.
One has to be clueless to think that the universe of jobs for workers wanting a job can be smaller than during the 2008 recession and continuing downwards, yet simultaneously we also have a growing economy in process. Mathematically impossible, but clearly there are enough clueless who believe what they are told. Sadly, they vote to. Yikes!!!
And this is why Walmart did not succeed with its wage increase and had to reduce worker hours. It did a wage increase when the economy could not support it.
DEFINITION: "Who is not in the labor force?
Persons not in the labor force are those who are not classified as employed or unemployed during the survey reference week.
Labor force measures are based on the civilian noninstitutional population 16 years old and over. (Excluded are persons under 16 years of age, all persons confined to institutions such as nursing homes and prisons, and persons on active duty in the Armed Forces.) The labor force is made up of the employed and the unemployed. The remainder—those who have no job and are not looking for one—are counted as “not in the labor force.” Many who are not in the labor force are going to school or are retired. Family responsibilities keep others out of the labor force."
I’m asking you again awcntdb who many high school students and retirees are included in the “not in the labor force” statistic. BTW this definition is also from the horses’s mouth, but feel free to dispute it. I’m trying to educate you and you keep insulting me. 93,000,000 people are nearly one third of the entire population. Think about it.
awcndtb is wrong. 94 million people do not want a job. He doesn’t understand.
@awcntdb, you’re wrong—“able-bodied” is precisely one part of the definition, “able-bodied” does not include the other two parts involved in the labor force participation rate. Now, you may have misspoken and meant that over 93M people who are in the potential labor force aren’t working,* but that’s rather a different thing than what you actually claimed (and what @TonyK questioned). In fact, your own description of the labor force participation rate clearly shows that what you originally stated is incorrect (and thus, I suspect, not what you actually meant).
- Also not true unless you're counting, e.g., college students and those who voluntarily retired early and such.
Using the Bureau of Labor Statistics and US Census data:
US Population = 321,000,000
US People ages 16 to 64 = 215,000,000
US Students between 16 and 25 non-workers = 21,000,000
US Full-time workers = 123,000,000
US Part-time workers = 34,000,000
US Unemployed = 8,000,000
US Disabled ages 16 to 64 = 12,000,000
US Discouraged Workers* = 2,000,000
Adding all of this up I come up with around 200,000,000 people accounted for. That only leaves 15,000,000 people who have no job, are not looking for one, and don’t fall into any of these categories.
- Did not look for work in the last 4 weeks and have been out of work for over 12 months.
It’s looking like the push to raise minimum wages will be led by California. The town of Emeryville, CA, population of only 10,000, passed an ordinance on July 2nd that affects ALL companies within it’s borders.
Small businesses with under 56 workers had to raise their minimum wage to $12.25 on July 2nd. Every year they have to raise the minimum by $1 per hour until it reaches $16.25 in 2019.
Larger companies with 56 or more workers had to raise their minimum wages to $14.44 on July 2nd, and will continue to raise it until it reaches $16.25 in 2019.
A survey indicates that 67% of small business owners are in favor of raising the minimum wage to match the cost of living. 14 million workers in the US earn less than $10 per hour. I wonder how soon this $10 per hour figure becomes the minimum wage just about everywhere?
Treading carefully, because I quite honestly want to avoid this discussion veering into partisan political bickering, but this shows rather a disjunct between the positions of lobbying organizations and politicians that claim to represent business interests and the business interests (or at least small business interests) themselves, no?
I agree. Nobody wants to be a Simon Legree, because that’s not good for their business. It is a hot topic among small business owners who watch the fast food industry deal with the issue.
never mind, found it