By Robert Field
As consumers interacting every day with people in the service industry, we are often impressed with their knowledge and service above what would be required.
We also note that our hotel employees earn significantly less than those in comparable positions at our apartment complexes. .
We feel shame about this.
Economics teaches that when the proportion of the cost of labor to the amount of investment is low, wages will be higher. Apartment complexes require at least as much capital as do hotels, but there are less than a fifth as many jobs. Paying more to apartment employees does not have much effect on the bottom line. Paying more to hotel workers would unless the added labor costs could be passed through in room rates, which is seldom the case.
But we also note that when work forces are unionized throughout an industry, wages increase from 50% to over a 100%.
The key, of course, is “throughout an industry”. Over time, unions cannot long find work for their workers if high wages would prevent the employer from being competitive.
There is nothing natural about the fast food industry paying $10 or less to employees. It is simply that there is no industry wide force working on behalf of workers.
This has to be accomplished either through unionization or minimum wage increases. Just about every employer would prefer the latter.
In fact, many employers would be happy for a higher minimum wage because this would put all of the competition on a level playing field and allow the higher wages to be reflected in higher prices for their product and services.
For more on the subject of current historic low wages, we recommend “The Mystery of the Vanishing Pay Raise” in today’s New York Times.
A liberal! Someone with no training, no measurable skills, no responsibility and no high school diploma should get $15. While someone with training, high school diploma, responsibility is only worth $10. Sounds about right!
EDITOR: Many of the people in our apartment division earning $15 or more do not have a college education. Some of the people at our hotels making $10 to $11 per hour do have some post high school education. Moreover, some low paid hotel employees are working their way through colleges.
It has to do with the relationship of capital investment to labor, whether labor is organized, or a higher minimum wage law is enacted. When minimum wages go up to $15 an hour, little will change except consumers will have to pay a bit more.
On the hand, they as tax payers will save because at $10 an hour the government has to pick up much of the slack with food stamps, Medicaid and other social support programs.
There are people out there that are not worth $1.00 an hour.
EDITOR: True. But the don’t need to be hired and, if so by mistake, they can be fired. The system will still work.
Except that isn’t how the world works, I’ve worked many years managing a warehouse and had employees who had been with us for years (who were highly skilled at their jobs) that made less than newer hires. It wasn’t about productivity, it was about keeping the bottom line as low as possible, which meant hiring at the lowest wage that would attract decent help. The acceptable standard went up, so our hiring wage did too… But did the hard working people with seniority see their pay boosted? Not until I got into a shouting match with the owner, and even then begrudgingly… Had it been a larger corporate entity there’s no way I could have even fought to give those people raises.
That’s exactly how the world works. You were managing a warehouse….what’s the production difference between new hires and old hires…I worked in a warehouse as a kid…and it’s not much. Go out into the skilled trades or any commission based jobs…actually any performance based job. Let’s see if new hires with no experience can build that house as fast, put that roof on as fast, sell it as fast Come on with this bullshit ..it is about the bottom line because if the company go under… who will be the ones who lose money? Not the people stocking shelves…. and for all the raises they want…if the company does go under because of poor performance… will they help the owners out and give back some of the money the owners couldn’t afford to give them in the beginning. If your in management… Then you should know it’s about supply and demand. The wage is met where the two lines intersect.
EDITOR: Unionization or a higher mandated minimum wage moves the line and thus the intersection up the scale to higher wages.
I want people who are working 40 plus hours a week to at least be able to put a roof over their head, and have the basic necessities to survive without the help of government. That is not happening right now in many parts of the country. Wages are far too low. If that makes me ignorant..so be it. I and people like me are not the ones ruining America. Favoritism to the very wealthy is what has ruined America.
There are people that make $10 who should be making $15 s long time ago. And there are people that are making $10 that should of been fired a long time ago..
If you don’t pay a living wage how do you expect people to spend beyond bare necessities?
Does anyone know what the cost to an employer is for a new hire?
Why not all minimum wage workers stop working for one week. Then ask the same question. No one wants to clean a bathroom and no one wants to use a bathroom that has not been clean. Without the worker you have no profits.
Most economist say this country did much better as a whole when people at the top were paying more taxes. They are getting by super easy now. Even if they had to pay more, they would still be living high on the hog. Did you listen to Ben Stein on Fox News? He agrees with what I just said. The richest Americans are hoarding all the money and paying far below what they use to pay when we had a thriving economy.
Why do some people hate the poor so much?
If minimum wage was never meant to be a living wage then why did the President that signed it into law say that is exactly what it was supposed to be. Nor everyone can do my job either and I make a good living. But when the largest employer in the country is Walmart and they pay slave wages to about 80% of their employees and then we have to supplement them with food stamps. I don’t see how anyone in their right mind thinks this is ok.
Walmart makes millions and my taxes go to make up for the fact that they don’t pay a living wage that is just more of my money going to corporate welfare. Also if minimum wage increases other wages follow that is the way it works that’s how it has always worked.
Now people will say it will create a great amount of inflation if it was almost doubled immediately that may happen but no one is talking about doing that they want the first move to go from 725 to 9 something an hour. This does not always cause inflation because the fast food restaurant or Walmart will have higher labor cost and smaller margins but they can make up for that with increased sales because people have more to spend.
NO ONE living in this rich country, AND working 40 hours a week should have to rely on gov. to make ends meet. NO ONE!!!!! The reason this is happening is all because of greed. Why should middle class tax payers have to kick in and help feed people who are working already. It’s because their employers are greedy and won’t pay them enough to survive on. That is WRONG! Not everyone can afford to go to college, and even if all could, we still need people to work the lower paying jobs. But, we should still pay them enough to live a decent life. We have so many young people in this country who are working, but still can’t afford to live in their own. COL is way more than they’re making…WRONG!!! THIS SHOULD NOT BE HAPPENING.
An increase in wage increases an items cost.. it’s why purchasing power is virtually the exact same and has never changed since it’s emplimentation.. you can survive on it but that is all. raise min wage you raise the price of goods.
It’s why Seattle lost so many min wage jobs to automatic tellers. when paying a person costs more than automating that position the job no longer exists.
Listen, I come from the east side of buffalo ny… the average income in that area is 15000 a year. I know what poor is… and I know what kept me and keeps these people poor.
It’s not some rich person who doesn’t even know them. I worked the same dead end jobs that you speak of and had the belief that it wasn’t my fault….the man was holding me down. Until one day I put in the effort to get better skills…and you know what happened? I made better pay It’s all about decisions.
If people decide to work for minimum wage…that’s all they will make… if they decide that’s not good enough for them and do what it takes to make more…get a different job, skill, move to a better area…it will happen…trust me, I’m living proof of that.
You can’t legislate personal drive. …but you can create programs that decrease it and make people content with bare survival…. we have housing projects across the country that show proof of that
When there are no full-time jobs for HALF the working age population, and half of those jobs pay less than $38K/year, obviously getting better “skills” &/or more education is not going to help.
I believe wages should coincide with profits. All of our huge corporations can and should be paying higher wages. A livable wage should place people far enough above the poverty line to enable them to take care of themselves without the help of government.
Actually, i had kept up with gains made in productivity, it should be around $21.72/hour (in 2012 dollars)…which might actually be a living wage…
I am not talking about just raising taxes. You said 50% of taxpayers are paying 97% of all the taxes. Wouldn’t it be great if the other 50% of people made enough money to pay taxes too. They never will be able to under the corrupt system we have now.
Also, like most people with you’re views, entitlements are always brought up. Did you ever stop to think, maybe if people were paid an actual “living wage” we could eliminate a lot of people from needing help.
We can’t eliminate entitlements altogether, but we get many off the dole just by fair wages. I don’t see how you can possibly say we are punishing the producers…have you checked out their bank accounts lately. They are living the life of kings and queens.
Companies don’t seem to have any problem increasing their prices on everything. Even when they are making record profits they still don’t give raises to most of their employees. Some do, but not near enough. If you want to shrink entitlements then you should be for wage increases, otherwise stop complaining. By the way..that article you posted about Seattle restaurants and job losses is totally false. That is why I don’t like right wing sites at all…they lie constantly!!