They're Crappy Jobs, But Someone Has to Do Them

The push has been on of course, for some time, to hike the minimum wage, and in many states, they've done exactly that. The most recent one in California, where the state's minimum wage was raised to $20 an hour, has made quite a lot of news— for a variety of reasons, and not all of it good.

Most states will have their minimum wages set at around $15 an hour, with my own state, Illinois, being at that rate by next year.

Honestly, I come from a couple of sides on this idea. As most things tend to be, it's a more complex issue than most people realize. It's easy for me to blanketly say, "I am opposed," and generally I am. Because it is a complex issue.

There's more to consider than just the quality of life for the employees who are impacted by lower wages. Because there's one underlying thought here. Does a higher wage actually have a positive effect on the quality of life for the employees?

I contend that it doesn't, because more often than not, financial woes are the result of personal choices and lack of financial education than it is the result of how much one makes. In order to improve the quality of life for these people, you have to first change the habits that are the root of their problems. 

But of course, no one is going to do that. It's much easier to just hand someone a few more bucks and wash your hands of any future dirt.

The biggest consideration is where the money comes from. Because money doesn't grow on trees and it has to come from somewhere, and unfortunately, the pockets of the businesses aren't as deep as many people tend to think they are.

It's mostly going to come from consumers. Or, in some cases, it's going to come from businesses pulling back on their labor. Either they will find more ways to automate and reduce staffing, or they'll close locations altogether to make up the difference.

At the same time, I do fully recognize that the difference between the wages earned, and basic needs being met have to come from somewhere as well.

Taxpayers will have to pony up on that one.

It used to be that jobs like retail and fast food were secondary jobs or entry level jobs, or just simply jobs that older people used to supplement their retirements. They were never intended to be careers. I think they probably still shouldn't be.

That being said, there is some truth to the idea that these jobs now make up a large number of all jobs, and so it becomes a question of whether or not we should consider these occupations similarly to other ones. 

Between Walmart, McDonald's, Burger King, and Target, they employ around 2.6 million people combined, in the United States. But consider that in the entire restaurant industry in the U.S., 12.5 million people hold these kinds of jobs. 9.8 million people work in retail.

The labor participation rate as of April of 2024 was roughly 62.7%, meaning that fast food and retail jobs account for around 11% of the total workforce.

But there are many other types of jobs such as secretarial work, certain manufacturing jobs and receptionists and call center workers who are also paid close to, or slightly higher than, these state minimum wages. So, the actual number of employees in this wage range are actually representative of a much higher percentage of the total participating workforce.

A full-time worker at these wages will earn somewhere around $31,200 a year, which is $28,028 below the average per worker income of $59,228. Median household income is roughly $78,238, meaning a household with two workers in fast food or retail would pull in roughly $62,400 or $15,800 less than other average households per year.

Raising the minimum wage even higher than $15 could help to at least close the gaps. But again, at what cost? Right now the average cost of living in the U.S. is just under $70,000 a year. It can be presumed that higher wages would lead to higher costs, and thus, closing the gap would be a moot point because the cost of living would raise proportionate to the cost of the higher wages.

So, what do you do? Frankly it becomes sort of a damned if you do, damned if you don't kind of a situation.

I think the emphasis should be on financial education so that any working American is afforded not just an opportunity to earn a wage, or even a livable one, but can actually grow financially. Because it goes back to a saying I cite often, that it doesn't matter as much how much you make as it matters what you do with what you make.

While I am not for arbitrarily raising wages, I do take into consideration that just because these jobs require very little in terms of actual skills, they are still jobs we need to be able to fill. We have to have these workers if we want our lattes and doughnuts and Whoppers—or if we want to have more than two or three lanes open at checkouts.

Someone has to do these jobs, and perhaps working in them should not be a sort of punishment.

But going back around full circle, we also cannot expect the money to simply materialize out of thin air. We have to consider the actual balance sheets of the businesses impacted by paying the higher wages. If they can't function, or go under, no one benefits. Not the workers, and certainly not the consumers who want to be able to patronize these businesses.

When we consider wages, we have to be cognitive of all of the impacts of it. On workers. On consumers. On the businesses. And on the taxpayers. Because when we raise wages, it impacts everyone.

Everyone deserves a good quality of life if they are putting in the work. But you can't take from Peter to pay Paul in order to do it. You can't just pick a number off the top of your head and say, "Okay, we'll pay that." And you also cannot assume that the wage is the only problem to solve.

Because again, it's complicated.

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© 2024 Jim Bauer

Democrats Don't Have to Own the Consequences of $20 Minimum Wage

Even though the reality is that it's mostly the Democrats who hold most of the wealth, they are always trying to paint themselves as "for the working class." When it comes to the $20 an hour wage hike in California for fast food workers with some exceptions, of course all of the things we said would happen are happening.

Layoffs, reduced hours, and price increases.

There's a reality in all of this, as there always is, that you simply can't get blood out of a stone, the money is not there that everyone believes is, and you can't just make up a number and say, "Everyone can afford to pay that."

It's just not how it works in the real world. In order to determine an appropriate wage, you must first evaluate the books to see if you can afford it.

Most of the time when it comes to the majority of things Democrats do, I tend to believe they simply want what they want, and they don't think things through. They never consider the consequences of what they do or evaluate the impact. In this case, I am inclined to wonder, "Are they doing this quite on purpose. Is it part of a larger picture strategy?"

The Democrats want you to hate the rich. They want you to think that these companies and business owners only care about their bottom lines and themselves and couldn't care less about their workers on the front lines.

As people are laid off, hours are cut and prices rise, the Democrats can go before the American people and proclaim, "We've got your back, and look at what they do in response? They don't care about you." In other words, even though to any thinking person the blame lands squarely on the Democrats who raised the wage to cause the problems, they can pretend it's all the mean, greedy corporation's fault.

The Democrats can simply wave their magic wand and whatever happens, they don't have to own it. Just like they mostly did with regard to inflation. "It's not our fault. These businesses are simply gouging you, and that's why prices are higher."

It's those evil rich that are at it again, taking your money and exploiting their workers for their own gain.

It's patently untrue. We, on the conservative side, know it. But there are a good many people who will fall for the narrative and completely believe it and that is what the Democrats are banking on. When someone gets laid off or has their hours cut due to the $20 an hour wage hike, who will they blame? Gavin Newsom? Or the business owner?

Most likely they are going to blame the business owner. The Democrats get to look like they are doing all the right things and when things don't happen as expected, they can blame someone else for what happens.

Everyone wants people to make more money and have more opportunities. The difference lies in how we accomplish that best. Because the commonsense thing is that in order for people to really realize these opportunities, it has to be a win, win situation. If the businesses are the source of the opportunity, and they are, then their health and well-being is just as important as the health and well-being of the workers. 

I often say to beware of someone who offers "help." Because all too often there's an ulterior motive to it, and it's going to come with a catch. While it may all look and sound good on paper, the reality is that it will probably do more harm than good. Especially if it it's coming from a Democrat.

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© 2024 Jim Bauer

More Employees Should Be Encouraged to Own the Companies They Work For

At a time when there are more and more pushes happening to raise wages and a stock market that continues to perform well, I think more employees should be encouraged to invest in the very companies that they work for and participate in the opportunities for creating wealth that exists as a result of that.

Granted, many people will say that the stock market is too risky and that with inflation still at decades high levels, the path to entry for most lower-end spectrum earners is still a difficult challenge.

Education is key, I think, when it comes to promoting these ideas, because as I have long believed, it's these lower-end spectrum earners who are missing out the most and have the most to gain from being invested—not only in the companies they work for, but in the markets as a whole.

Beyond simply creating wealth, and even having employees share in the wealth created by these businesses, there is something to be said about employees having a sense of ownership and being partners with their bosses.

It actually helps the businesses.

Especially when it comes to workers who are on the front lines, directly interacting with customers, customer service could be greatly improved if workers have a sense that when they promote good practices that reflect well on the company, they have something personal to gain from offering a good experience.

When you have a personal stake in the business, you have a different attitude as to who gains financially through your own efforts. It's not just the boss. If you leave customers satisfied and happy when their experience is done, you're going to gain a little something from that as well.

But again, in order for an idea like this to work, employees need to be educated not only on the benefits of investing, but they need to be pulled away from commonly held beliefs among lower-end spectrum earners who have been led to believe that wealth opportunities and the stock market are only for the rich.

They need to know that the markets are for everyone, and everyone can share in the wealth generated by these businesses. It's not just a rich man's game. 

Beyond just investing, if companies could invest in their employee's knowledge regarding financial matters, it could also help them to become more satisfied with the wages they earn. Because the catalyst for wanting more money is typically because many people believe their financial troubles are the result of simply not making enough.

Offering regular financial advice such as on budgeting and planning, retirement, and the benefits of investing could go a long way in making employees smarter about their money and have a more positive attitude toward business in general, as well as their own financial futures.

Right now, when it comes to many fast food and retail workers, for example, there's a general belief among employees that they are simply being paid bottom dollar wages and being exploited so that rich fat cats can simply become richer and fatter, while they continue to be worked hard and can never seem to get ahead.

Walmart recently did a 3 for 1 stock split, and part of their aim in doing that, according to the company, was to make buying shares easier for their employees by lowering the cost per share. Chipotle followed suit and will be doing a 50 for 1 stock split in June and have expressed similar sentiments in their reasoning.

Whether or not these are actually interests these companies have can be debated. But I do think having lower points of entry does make it easier for employees to participate. But ultimately it won't accomplish the goal if the stigma among lower-end spectrum earners that markets are too risky, rigged, or only for the rich can be removed.

Regardless of the real motivations behind the stock splits, which ultimately offer no real gain to the companies themselves, I do think that now is a good time, more than ever, to fix some of the issues we have with workers demanding more in terms of wages, as well as to address some of the underlying reasons why customer service has suffered serious setbacks.

Companies need to understand that if workers feel like partners instead of just numbers or pawns in a game, they will be more encouraged to work more efficiently, and will have better interactions with the customers who ultimately pay their salaries and keep the companies running.

In other words, the more skin one has in the game, the more they are going to strive harder to win. On top of that, especially when a company pays a dividend, if employees have a sense that every dollar they collect means something will be shared with them as a result, they are going to be more encouraged to improve bottom lines for the company, because they know some of that money will also be passed down to them to more of a degree than simply receiving their paycheck.

I think more companies need to rethink their employee relationships and change attitudes from simple workers to partners. And if they do that, I think everyone has a better chance of ultimately succeeding in the primary goal.

Everyone makes more money.

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