Let’s put this in real life terms. Let’s say you are going on vacation in a week and need a dog sitter. You ask your friends what they pay for dog sitters, and you come up with ~$30/day. So you put the word out that you need a dog sitter, and are willing to pay $210/week.
5 people respond. Two are neighbor kids, one is a retiree, one is a stay-at-home mother, and one is Fred, a recently downsized Chemical Engineer who is also a single dad with two kids. Because you feel badly for Fred, you hire him. He does a fine job, and when you return, you hand him an envelope with $210.
Afterward, he goes onto Facebook and complains: “Just spent the entire week taking care of Kaio’s basset hound. That jerk only paid me $10 an hour or $30/day. How in the world am I expected to raise a family on $30 per day? I have a PhD, for pete’s sake! Hint to Kaio: Chemical Engineers make a minimum of $60 per HOUR! Since he is obviously doing so well that he can take a HAWAIIAN vacation, I assumed that he’d be a nice guy and voluntarily pay me double or triple what he advertised, because of my circumstances. Instead, he paid me $210, which is the same rate he’d have paid to my 10 year old!”
Do you not see how ridiculous Fred is being?
#1) You posted up front how much you paid, and he accepted the job knowing the pay rate.
#2) You had four other people who were willing to work for $30/day. If no one had responded, you’d have raised the rate.
#3) You hired Fred because you thought he needed the money more than the other 4 applicants. Instead of being grateful that you gave him the job, he tried to demonize you. HE’s the jerk, not you.
#4) If he was working as a Chemical Engineer, which is the job he trained for, Fred wouldn’t have even considered taking the dog sitting job.
#5) None of his degrees, or prior jobs, made him any more or less competent to take care of your dog. The fact that Chemical Engineers make $60/hour didn’t enter the equation because you weren’t hiring him to be a Chemical Engineer. You were hiring him to feed your dog twice a day and let him out into the yard to do his business. $10/hour is a decent and fair wage for that job. In fact, it could literally have been performed as well, perhaps even better, by his 10 year old kid.
#6) The fact that he can’t pay his mortgage on your dog sitting job’s is hardly your problem. If he can’t feed and clothe his family on a dog sitter’s pay, he should look for a better, higher paying job. It’s not your fault, or your problem really, that he can’t find one.
#7) How wealthy YOU are, and how much you spent on vacation, is none of his business. Whether you spent the week at a 5 star resort in Hawaii or backpacked in the mountains, you’d have offered the same amount of money for someone to watch your dog, because that’s how much the job was worth.
#8) After being publicly criticized for paying what you thought was a fair wage, you won’t be bullied into doubling your rate. Instead, in the future, you’ll hire with your head instead of your heart and simply not hire overqualified individuals.
The fast food strikes won’t work, there will always be somebody willing to do the job for low amount of money. I think that focusing on consumers might be the right way to go. That said, I don’t think that would change things nationwide, perhaps just regionally. Maybe NW USA or Madison, WI, for example. The strikes aren’t getting the attention and probably never will (thank to the “left wing” media).
“Overqualified” is relative to what the prevailing hiring pool looks like. If most of your job applicants are high school graduates, then having a Bachelor’s degree makes you overqualified.
But if due to the circumstances of the job market, most of your job applicants have some years of advanced education and having a Bachelor’s degree isn’t even remarkable, then the bar for “overqualified” shifts. And so should the wages…unless you’re willing to concede that qualifications don’t mean anything about the quality of employee you’re getting.
I think this is what has people fired up. The economy has changed. Productivity now manifests itself in more wealth at the top, not at the bottom. Simultaneously, it is becoming harder to move from the bottom to the not-so-bottom because there are way more “bottom” jobs than there are “not-so-bottom” one. It’s quite rich to shout at someone that they have a “choice” about what wages they make when all the places that are hiring are only pay minimum wage. And it’s kind of hard to be more ambitious when you’re already invested a ton in an education…one that has only brought you a paper hat and a cash register.
Your illustration shows how unfair it is to single out one employer. Even if McDonald’s raises its wages, it’s not going to fix the economy. So what this says to me is that structural changes are needed. I’d like to have a serious discussion about how to do this that doesn’t blame individuals for their “choices”–and this also included Richie McRicherson at the top.
We all have a vested interest in this discussion. You can “should” people about their “choices” to have families on minimum wage…but the truth is that we need people to have children, regardless what the economy looks like. Not for some theoretical “the children are our future” shit, but because we will eventually get old and decrepit and unable to care for ourselves. I’d like for the people who will one day pushing me around in the nursing home to be able to have a good upbringing (these folks are infants and children now). A good upbringing means they’ll care enough to read the medication labels. They’ll make sure I don’t have bedsores and that I don’t wander away and get lost. And they will diligently pay their taxes so that I can continue to get SS. So I care about their parents’ paychecks because I care about mine. It’s in all of our best interests that the people at the bottom not live in total despair and desperation.
This society talks a good game about caring for children, and compared to developing countries, I guess we’re doing okay. But if we continue to ignore the long-term consequences of a lop-sided economy, eventually we won’t be able to say even that.
<clipped> (bolding mine) And there are enough current employees and potential employees who aren’t troubled enough by the wages & conditions to NOT work/apply there. It’s real-world “Let’s Make A Deal.”
Are you saying the current minimum wage isn’t “sound policy?” Something must be done about it then!How dare a private business abide by the existing sound policy in the form of laws/rules/regulations! Call me a dreamer but if only we had officials, elected ones at that, who were tasked with formulating a sound policy for our society to conduct business in accordance with.
Your fundamentals of Econ101 are sound. The concept of what you are saying is fundamentally true. But with one exception: you pulled numbers straight out of your rectum to support your viewpoint. In reality, if you had taken any upper level Economics classes, taken upper level Maths classes, and graduated with a degree in them, performed your own research and published peer-reviewed papers, then maybe you’d realize that the actual calculated predicted effect of bringing up the bottom are not even remotely close to your stinky numbers. I don’t expect you to go through all that trouble, but there is a much better real world example to study: Japan. Please study the economic and societal situation of Japan. It is not a perfect place, it has its share of problems. But the wealth distribution in that country is much more equitative, having the side effects of having much lower rates of crime, almost nonexistent “ghettos”, an export- and manufacturing-based economy, etc.
This will be solved by cheap labor from Mexico and millions of “new” citizens of the United States. Buffy and Biff can have their 1.5 designer children, Rosa and Roberto will bring their 5 kids with them and have a couple more when they get here.
I can’t tell if you think this is a good thing or not.
Seems to me that conservatives are afraid of this happening. But they aren’t doing anything to prevent it. They don’t like food stamps. They don’t like Obamacare. They don’t like minimum wages or other regulations. And now they want to ban abortion, so that if you are broke and find yourself pregnant, you and your unfortunate child are forced to live with the “consequences” forever and ever. Conservatives don’t seem to have any answers. They’re full of self-righteous judgment, but they lack solutions.
Folks don’t need to worry about brown people coming over here and becoming a burdensome underclass. They need to worry about their own children and grandchildren becoming one.
No. “Overqualified” has nothing to do what the hiring pool looks like. It has everything to do with the skills required to do a certain job. The PhD who I hired to walk my dog is over-qualified because he has additional skills and education that exceed the work I hired him to do.
No. The bar hasn’t shifted at all. The PhD was over-qualified to walk my dog before the market tanked, and he’s still over-qualified today. If the economy is forcing him to take a job that doesn’t fully utilize his skills and education, then he is what economists call “under-employed.”
However, the economy doesn’t exist in a vacuum. There are other forces which can drive up or lower wages. And perhaps this is the point you were trying to make. If, for instance, a company cannot find enough qualified (which, incidentally, includes overqualified) applicants willing to do a certain job for x dollars, then by laws of supply and demand, the wage will increase.
An example of this can be perfectly illustrated by the Williston, N.D. McDonald’s, a town that is currently enjoying an energy boom. Because they couldn’t find enough workers to field all their positions at the going rate, they had to increase the rate to the point where they’re now paying some workers $15/hour. Note that they aren’t paying the higher rate because a vast majority of their applicants are overqualified. They increased the wage because they couldn’t find enough qualified applicants willing to work at that lower rate. Completely different scenario.
A dog walker with a PhD adds no more value to that job than the person without a formal education. I’m not paying him more because he has a PhD, any more than a law firm would pay a lawyer more because he could ride a unicycle.
I honestly don’t think that people are fired up because Walmart greeters aren’t earning a living wage. I think people are fired up because the economy is stalled, and good, quality people are having a hard time finding good, quality jobs-- jobs that they studied and trained for, an education that they paid big money to get. And I have tons of sympathy for them and completely understand their frustration.
What I don’t agree with is that the solution is to force unskilled labor to pay more simply because skilled jobs are drying up. Not only is that a completely unworkable “solution,” but it also squeezes out the people who traditionally took these minimum wage jobs. What are you going to do with those people? What’s below unskilled labor?
I’ve never shouted that someone has a “choice” about what wages they make. Quite the opposite. I’ve said it’s okay for McDonald’s to pay minimum wage because that’s what unskilled jobs are worth.
However, I will say that people have a choice as to what they study or train for. And it’s essential that folks pay closer attention to the job market before shelling out tens of thousands of dollars to get a degree that will only lead to a paper hat and a cash register. It used to be that any degree would eventually land you a job. That’s not the case anymore. It’s way more competitive these days. The good news is that there ARE jobs out there (fracking jobs, HVAC, engineers, nurses, sales) but you need to get the appropriate training to land one of those jobs.
The way I see it, a huge problem is post-secondary education. It’s a mess. First of all, the cost of a college education has outpaced inflation and has increased more dramatically over the last 3 decades than any other sector of the economy, including health care. That’s ridiculous. Congress tried to make things more affordable by lowering the interest rate of student loans. Colleges responded with double digit increases in tuition.
Also, universities are happy to take your money and let a student get, say, a Romance Languages degree, to the tune of $125,000, even if they know perfectly well that your chances of getting a job in that field are very slim. Will a counselor ever sit down with a student and warn him of the realities of the job market? No way. They are there to make money, and they don’t care if you’re wasting yours.
And the biggest problem, IMO, is that there is very little dialogue between the institutions that train people and the businesses who hire people. To me, that’s such an obvious miss that it’s laughable. The businesses cited in the link above are struggling to find qualified frackers. Why in the world, in an economy that sucks this badly, is there ever one single decent job that goes unfilled? As soon as they saw a need, why weren’t businesses talking to trade schools and universities and creating incentives for kids to choose this path?
I’m pragmatic. I don’t believe you should have kids if you cannot support them. If you decide to have them anyway, and you live in a crappy neighborhood because you only make $7.25/hour, then I have very little sympathy for you. I’m most certainly not going to encourage people to have kids they can’t afford, because I’m worried about who will wipe my ass when I’m 90.
I think the disparity between the haves and the have-nots is a horrible thing. I’ve watched my own company, a Fortune 50 company, lay off thousands of breadwinners while simultaneously rewarding its CEO with a $23M package. Why do stock prices tend to go UP after companies announce job cuts? That is so contrary to what intuitively seems good and right and fair.
So my beef is not with McDonald’s paying someone $7.25 to man a cash register. Sorry for the bad pun. If I had to choose one beef, it would be with my Congressmen and their cozy relationship with Wall Street. IMO, there should have been a salary and benefit cap on top officials of publicly traded companies as soon as the evidence was in that they were increasing at an alarming, unprecedented rate. Why is there no labor representation on Boards? Capitalism is sick because the greedy are getting greedier. They don’t seem to care that it’s not good for their company OR their country to have such an imbalance. And it needs to be fixed.
The reason Congress hasn’t taken action is because the very CEOs and Boards that need to be regulated are writing them fat checks to their re-election campaigns. We’ve put the foxes in charge of the hen house. The frustration we all feel by watching what is happening to our companies and our country is what is making us feel so angry.
PunditLisa> Wahoo, just read an article today about poor-shaming, thanks for providing such a brilliant example, and thanks for all the straw men, I guess.
None of it addresses the fact that:
1> minimum wage has not kept up with productivity gains
2> minimum wage has not even kept up with inflation
3> meaning that people are working harder for less buying power, and
4> the work in question (McD’s etc.) is both vital to the success of the company, and physically and emotionally demanding, and therefore has value.
I dispute your assertion that the value, when scaled for productivity, inflation, and the amount of labor involved, is less than $10 an hour. I dispute that it’s worth less than $15, frankly.
Sure, the poor are fighting for scraps so if you wanted to and could get away with a $1/hr job you could probably find someone, even several someones, to take it. That doesn’t mean that that wage reflects the value of the WORK, however – it just demonstrates how bad off many people are, and how many of them are that bad off. It demonstrates how very easy it is to take advantage when the system is rigged to produce a lot of very desperate people.
That doesn’t make it okay to take advantage, however. You can make whatever excuse you want (oh, they’re just kids with after school jobs so the low wage doesn’t matter) but that doesn’t change the fact that the labor has more value than you’re paying for.
At this point I’m just repeating myself, here. If you’re still confused, just re-read any of my posts.
However there is a four year - at least lag between a student choosing a major and getting a job. And things change. Fracking is great now - what if in two years someone proves it is ecologically damaging to such an extent that it is greatly curtailed? CS enrollment boomed during the bubble - and some grads after it burst got screwed. There are tons of examples.
One hopes that a good student choosing a major knows how to research this. Remember, those teaching Romance Languages are those who did make a living with them. And the flip side of this is satisfaction. We have a friend who wanted to major in Art History. Her father pretty much forced her to take business classes. She worked in benefits for 30 years and was miserable, and retired as quickly as she could. Maybe she would be miserable in art history also, but no one majors in this stuff thinking they will make a mint. I’m one of the lucky few who loves a field what actually pays.
There is a big gap between what businesses want and what makes sense for the society as a whole. Today businesses want someone who can start producing immediately. If they can convince a college to do their training for them, they are happy. And if in ten years this person becomes obsolete and does not have the basic skills to move to another field, they will happily throw that person away and hire a new graduate. They are also unlikely to give money to colleges to afford all the expensive equipment needed to teach stuff that could be immediately useful. There are exceptions, bur a lot fewer than 20 years ago.
I used to be involved from the industry side in supporting universities through mentoring students, visiting to show the problems we were having, and even making test cases available so that their research could be more realistic. Companies that could afford this back then no longer can, and everyone who could do it from the industry side are too busy.
There is a simple solution - business should hire student with good backgrounds - the basics which universities are good at teaching - and train them themselves in the details of what they need now. Sure it might take six months but that beats the four years it would take to get graduates they claim to need. I know they are worried that they’ll be training people who jump ship - make the pay and environment good enough and they won’t. If businesses are too cheap to do this, screw them.
Almost every fact I learned when I graduated college 40 years ago is obsolete. But the theory and methods are not. If I had only learned what business wanted me to learn, I’d be in trouble. Thanks to a good background, I’ve never been unemployed. It is surprising how much of that theory can be directly applied. And I’ve always been in industry also. And I’m happy to say that my current company would love to hire people who can start immediately, but we are very willing to train students, and we don’t complain about colleges. We are pretty specialized though.
So let’s raise the rate of McD’s cashiers to $15/hour. While we’re at it, we’ll have to give the tomato and cucumber pickers a raise to $15/hour as well. (I assume you are as concerned for the cucumber pickers as well.) Don’t forget the cucumber picklers, either! (That “L” makes a huge difference.) The bun baker who used to make $12/hour is now making $20/hour because the bakers all threatened to quit and work as cashiers if they didn’t get a raise. Those greedy skilled laborers ALWAYS want to make more than unskilled laborers. Sooo unreasonable!
We’d pay the trucker who ships the buns and pickles and special sauce to each store $15/hour, but he was already making $40/hour + benefits. And now his Teamsters union has threatened to strike unless their wages are doubled.
Oh noes, the price of cucumbers just went from $1 to $2! Tomatoes went from $1.99 a pound to 3.99 a pound. Buns went from .30 to $.45. (The special sauce only increased a nickel because the President of that contracted company invested in an automatic stirring machine that replaced his 10 part-time workers. He laid them off because he couldn’t make a profit paying them $15/hour.)
Meanwhile, back at the ranch, McD’s is discovering that Big Mac sales have plummeted. It seems that very few people are willing to pay $10 for a Big Mac value meal, even though it is nirvana in a bag. Or used to be before they replaced the tallow with vegetable oil. So they have decided to reduce their workforce by 25%.
And it REALLY sucks for those now unemployed cashiers, because as bad as inflation is for everyone, it’s even worse for the out of work poor. Because they used to be able to take a few dog walking jobs and afford to eat, at least. Now they can’t even do that. I mean, look at the cost of a Big Mac. It just went from $2.5 to $7!