View Full Version : When the heck did minimum wage jobs get such ridiculous requirements?
oldster
06-21-2015, 07:22 AM
Most jobs paying minimum wage have nothing to do with producing goods that can be imported from other places. We have already lost a great deal of jobs in manufacturing to China etc, but automation actually preserves jobs in manufacturing by making the payroll mostly irrelevant. Many 'Japanese' cars are made right in this country.
As far as actual minimum wage jobs, there is no foreign competition and as to unskilled immigrants, the EU has plenty of those, both from the former soviet bloc and now little boats from Africa.
What the Europeans do have is the intelligence to understand that the top levels of management do not deserve infinite pay. Massive executive pay packages come directly at the expense of the lowest wage earners, and are largely self defeating. When you run a company in the US, you need to have customers, and when no one pays employees enough to buy the goods/services produced, the economy collapses.
What business needs to do is learn for Rotisserie Baseball. What is a given executives WARP [wins against replacement player]? Too many executives in American business gain praise for the stock market increasing, when it had nothing to do with their actions. In fact they get praised for increasing their company's stock by 10 percent when the market gained 12, so in fact, they should be fired. In Europe it is acknowledged that an executive is primarily there to not screw up, and an executive may earn a nice half million a year pay package, where in this country he would earn 10 million. Their workers keep the difference.
Tax policy can easily be formed to allow those with ideas and risk at stake can still earn what they deserve, while making it pointless to pay journeyman executives huge pay. For instance making pay and bonuses not a write off over a certain level. So you can pay anyone anything you wish, but the corporation must pay tax on it, compared to investing in lets say, R+D which is actually useful to the business.
To drift back on topic, high executive pay is just one symptom of the huge disconnect between the one percent and the working person. Not understanding that people with clouds on their background check or a reasonable recreational drug habit are not 'the enemy' and in fact make up your customer base and employee pool is another symptom.
I have to ask myself, between the woman working at McDonalds for 7.50 an hour and the woman working as an escort for 400, which one is really getting fucked by the one percent?
Melonie
06-21-2015, 08:02 AM
I have to ask myself, between the woman working at McDonalds for 7.50 an hour and the woman working as an escort for 400, which one is really getting fucked by the one percent?
Interesting point !!! Arguably, both !!! However, the probability of the McDonalds employee's job being automated out of existence if mandated minimum pay rates are increased substantially is far higher than for the escort !!!
http://bbsimg.ngfiles.com/1/1239000/ngbbs3f2e5546af963.jpg
Of course, future automation of the latter is being worked on as well ...
eagle2
06-21-2015, 11:47 AM
Put bluntly, beyond the initial construction jobs, an beyond the initial manufacturing of the automated mechanisms, no way.
Consider the scenario of a local company 'converting' 12 convenience marts to full automation. That conversion would permanently eliminate 36 unskilled jobs for on-site cashiers. As a trade-off, that conversion would probably add back 3 new semi-skilled jobs for 'restocking' truck drivers, and 3 new semi-skilled jobs for 'security guards' to ride along and also remove cash from the location ATM's ( assuming each of the 3 company trucks could service 4 fully automated locations a day ) plus one additional highly skilled job for a technician to repair / maintain the automated mechanisms at the 12 locations. Other support jobs such as management, stock reordering, payroll / accounting, etc. would be a 'wash' at minimum, and probably capable of additional reductions as the number of total employees has been reduced, the need for physical inventories has been reduced, etc.
At any rate, even in this limited 12 location scenario, you're looking at a trade-off of 36 unskilled jobs versus 6 semi-skilled plus one highly skilled job. If the semi-skilled jobs pay double vs the eliminated unskilled jobs, and if the highly skilled job pays quadruple vs the eliminated unskilled jobs, you're looking at a total payroll reduction on the order of 1 - [( 2 * 6 ) + 4] / 36 or 56% !!! Savings to the 'employer' actually go well beyond the ~$16,000 in annual direct pay to each unskilled worker, and also include reduced costs for 'employer' SSI, reduced costs for unemployment / disability insurance, reduced costs for employee benefits, etc. That magnitude of savings can definitely cover the monthly payments on the $6 million ( or whatever ) of business loans necessary to convert the 12 locations to full automation ... and particularly so with today's historically low interest rates.
As to the potential for robbery / looting of an unattended fully automated convenience store, again no way. As you can see from the picture I posted earlier, the ATM is 'hardened', the merchandise display is protected by bullet-proof glass, the customer product delivery 'hatch' and employee access door are also 'hardened', and the building walls are steel reinforced concrete. This is part of the reason that the construction cost of each fully automated facility might approach $ 1/2 million even though the facility itself only involves a few hundred square feet of floor space ( with the other part obviously attributable to the initial cost of the automation mechanisms ). This is actually the major selling point for fully automated convenience stores to be located in urban areas ... where losses to walk-in robberies can run into the thousands of dollars per location per year, and where losses to ( admittedly rare ) looting / vandalism can run into the tens or hundreds of thousands of dollars.
If the cost of building a facility like this cost 5 -10 times as much as a normal convenience store, it's probably cheaper to build a regular store and hire workers to run it.
The economy has been becoming more automated for decades, yet millions of jobs continue to be created and unemployment continues to fall. Automation has not kept the unemployment rate from going below 6 percent or adding millions of new jobs.
rickdugan
06-21-2015, 12:41 PM
The economy has been becoming more automated for decades, yet millions of jobs continue to be created and unemployment continues to fall. Automation has not kept the unemployment rate from going below 6 percent or adding millions of new jobs.
Eagle, the economy is not exactly booming now. GDP growth continues to be anemic and labor force participation rates are still hovering at rates not seen since the late 70s. Add to that the reality that true cost of living items, such as food, housing and medical costs, continue to rise at rates that far outstrip wage growth. So let's not throw a party for the economy just yet. ;)
But I do not believe that automation is the cause. Automation and technological advancements have been creating and expanding opportunities for many decades now. I won't share what I do believe is causing our current problems in order to avoid the political ban, but IMHO automation isn't it.
Melonie
06-21-2015, 04:20 PM
If the cost of building a facility like this cost 5 -10 times as much as a normal convenience store, it's probably cheaper to build a regular store and hire workers to run it.
My business acquaintances tell me that a major driving force in their decision making is not the costs of operating a business this year, but the unknown future costs involved to continue to run that business over the course of the next ~10 years. Again trying to remain 100% within financial facts, my business acquaintances are concerned about future mandates which would increase the pay rates ( and thus 'employer' SSI taxes and unemployment / disability insurance premiums which are proportional to those employee pay rates ) of unskilled workers by large amounts, are concerned about future new 'employer' costs such as ACA 'penalty' tax, etc. Replacing 50%+ of the present human work force with automation represents a huge reduction in the 'employer's' future financial risk, because automated machinery is exempt from a rising minimum wage, is exempt from future ACA health care 'employer' mandates / penalties, is exempt from rising employer unemployment / disability insurance premiums, etc.
Thus they consider investing $500k or whatever in an automated facility which is 'guaranteed' to remain profitable for the next ~10 years ( and allowing them to also pay off their $500k business loan ) a superior alternative to investing $100k in a conventional facility where the potentially much higher future labor costs, future benefit costs / penalties, future 'employer' taxes etc. could render the conventional facility's business model unprofitable within a couple of years.
The economy has been becoming more automated for decades, yet millions of jobs continue to be created and unemployment continues to fall. Automation has not kept the unemployment rate from going below 6 percent or adding millions of new jobs
That's only technically true if one does not count the jobs which have continued to be 'lost' ... does not count the number of Americans who have 'dropped out of the work force' etc. The following graph showing real net job creation tells a 'truer' story ...
https://plot.ly/~Dreamshot/468/total-us-employment-surpasses-pre-recession-peak-in-june-2014.png
^^^ in other words, between 2008 and the middle of 2014, zero net jobs were added to the US economy. Partway into 2015, a couple of million net jobs have ( finally ) been added. However, that still reflects badly given that somewhere around 8-9 million working age Americans have been added to the population over the same period ... leaving the country about 6-7 million jobs 'short of breaking even' in terms of percent of working age population which actually have jobs in 2015 versus 2008 !!! But if you want to call an additional net 6-7 million unemployed working age Americans since 2008 as a 'drop in the unemployment rate', you're technically correct in doing so based on the very narrow official definition of 'unemployed' which the gov't currently uses.
Kellydancer
06-21-2015, 06:15 PM
If someone who works 40 hours for a billion dollar corporation; they should earn a living wage instead of poverty. I dont care how old they are, what job they do, or if they have a family. It shouldnt matter. That money goes back into the econmy without fail. Yet All these workers qualify for welfare while working because they dont make enough to live on. For someone that hates welfare so much, you should be for the minium wage.
In Europe Walmart and fast food pays a starting wage of $15 an hour. Guess what other jobs pay? Even more!
Personally I think too many in this country care more about looking down on the poor to ever actually want to fix the system. If people arent poor who would be left to look down on?
I never said I'm opposed to minimum wage, I said someone working at McDonald's shouldn't make what an educated person does. Want to make more? Then college, trade or experience is the way to go. I don't look down on people who do those jobs, I've done them myself. However I looked at them as temporary jobs onto better jobs.
As for these big corporations, if one doesn't like them go elsewhere. I don't shop Walmart or most large chains, I prefer when possible to go to small businesses. A friend of mine owns a pet store and I go there instead of chains. Instead of McDonald's I usually go to restaurants owned by families.
eagle2
06-21-2015, 06:27 PM
Eagle, the economy is not exactly booming now. GDP growth continues to be anemic and labor force participation rates are still hovering at rates not seen since the late 70s. Add to that the reality that true cost of living items, such as food, housing and medical costs, continue to rise at rates that far outstrip wage growth. So let's not throw a party for the economy just yet. ;)
But I do not believe that automation is the cause. Automation and technological advancements have been creating and expanding opportunities for many decades now. I won't share what I do believe is causing our current problems in order to avoid the political ban, but IMHO automation isn't it.
We've been having pretty strong GDP growth, except during the winter months because during the past two winters, the weather has been much worse than normal. From q3 2013 to q3 2014, quarterly GDP growth ranged from 3.5% - 4.6%, with the exception of 1q 2014, when GDP growth decrease 2.1% because of the bad winter.
http://money.cnn.com/2014/10/30/news/economy/us-gdp-3-and-half-percent-beats-expectations/
A major factor in the lower level of labor force participation rates is the large number of baby boomers retiring.
I agree there are some areas in the economy that could be doing better. I would attribute the slower recovery to lower consumer spending. Probably some of the members of the forum are seeing this in clubs. Perhaps if lower unemployment push wages up, we could see consumer spending increase.
Melonie
06-21-2015, 06:57 PM
^^^ again, it's inconvenient when actual facts get in the way of the mainstream media 'narrative' ...
From 'Analysis: As Baby Boomers See Job Gains, Millennials See Stagnation' at
(snip)"The 55 and older group is the only age group to increase its labor force participation rate (+1.7 percentage points) and employment-to-population ratio (+.8 percentage points) since 2007. By comparison, Americans ages 25-34 saw a 2.1 and 4.3 percentage point drop in their labor force participation and employment-to-population ratio, respectively(snip)
rickdugan
06-21-2015, 07:10 PM
We've been having pretty strong GDP growth, except during the winter months because during the past two winters, the weather has been much worse than normal. From q3 2013 to q3 2014, quarterly GDP growth ranged from 3.5% - 4.6%, with the exception of 1q 2014, when GDP growth decrease 2.1% because of the bad winter.
You're cherry picking data Eagle. GDP grew a paltry 2.4% in 2014 and even lower for the several years before. It actually contracted in the first quarter of 2015, which doesn't happen in a healthy economy regardless of the excuse. And now current estimates put us at around 2% for this year. Healthy GDP growth has traditionally been north of 3%, which we haven't seen since before the recession. Something is still dragging on the economy.
A major factor in the lower level of labor force participation rates is the large number of baby boomers retiring.
That's a simplistic answer to a complex issue. Labor force participation dropped off a cliff at the start of the recession and has not come back. How many people would come back to the job market if it was in better shape and the rewards were there? Retirement doesn't explain the suddenness of the dive and likely isn't the only reason why the number isn't improving.
I agree there are some areas in the economy that could be doing better. I would attribute the slower recovery to lower consumer spending. Probably some of the members of the forum are seeing this in clubs. Perhaps if lower unemployment push wages up, we could see consumer spending increase.
A smaller % of the population is working and prices for basic necessities like food and housing have been surging. Go figure that consumer spending on non-essential items is depressed. ;)
Kellydancer
06-21-2015, 07:15 PM
I forgot this but the whole "working is better than welfare" is nonsense. None of the people I know working minimum wage jobs would be on welfare. The majority are teens, people working as second income (including stay at home parents) or retired. The single parents I know all have jobs requiring education, like teaching. Where I used to live was a lot of single moms but they didn't work, they were on welfare. Maybe some of them work these jobs but don't know. Of course work is better than welfare but don't know anyone like that.
eagle2
06-21-2015, 07:27 PM
You're cherry picking data Eagle. GDP grew a paltry 2.4% in 2014 and even lower for the several years before. It actually contracted in the first quarter of 2015, which doesn't happen in a healthy economy regardless of the excuse. And now current estimates put us at around 2% for this year. Healthy GDP growth has traditionally been north of 3%, which we haven't seen since before the recession. Something is still dragging on the economy.
No I'm not. You just don't want to acknowledge anything positive about the economy. More jobs were created in 2014 than any years since 1999. The unemployment rate is way down. Wages are going up. The budget deficit is way down. The percentage of Americans without health insurance is way down.
That's a simplistic answer to a complex issue. Labor force participation dropped off a cliff at the start of the recession and has not come back. How many people would come back to the job market if it was in better shape and the rewards were there? Retirement doesn't explain the suddenness of the dive and likely isn't the only reason why the number isn't improving.
It is. Research by the Philadelphia Fed has concluded that since 2011, the reason people have been leaving the labor force is almost entirely due to retirement.
A smaller % of the population is working and prices for basic necessities like food and housing have been surging. Go figure that consumer spending on non-essential items is depressed. ;)
No it isn't. Inflation is practically non-existent. The cost of gas is way down. Health care inflation is way down. The cost of housing fell significantly during the financial crisis. Housing is probably more affordable now than it was before the crisis.
eagle2
06-21-2015, 07:32 PM
^^^ again, it's inconvenient when actual facts get in the way of the mainstream media 'narrative' ...
From 'Analysis: As Baby Boomers See Job Gains, Millennials See Stagnation' at http://www.blackenterprise.com/career/analysis-baby-boomers-millennials-employment-trends-challenges/
(snip)"The 55 and older group is the only age group to increase its labor force participation rate (+1.7 percentage points) and employment-to-population ratio (+.8 percentage points) since 2007. By comparison, Americans ages 25-34 saw a 2.1 and 4.3 percentage point drop in their labor force participation and employment-to-population ratio, respectively(snip)
It's inconvenient when the entire fact contradicts your always negative outlook. The 55 and older group only goes up to age 64. Most of the people leaving the work force to retire are in the 65 and older group. From your article:
It found that the number of jobs held by Baby Boomers (age 55-64) grew 9% from 2007 to 2013, a gain of 1.9 million.
Since once again you're turning this into a political discussion, this is going to be my last comment on this topic.
rickdugan
06-21-2015, 08:01 PM
No I'm not. You just don't want to acknowledge anything positive about the economy. More jobs were created in 2014 than any years since 1999. The unemployment rate is way down. Wages are going up. The budget deficit is way down. The percentage of Americans without health insurance is way down.
Nobody said that there aren't positive components. But unemployment cannot be looked at in a vacuum, especially since it is still higher than healthy norms AND also comes in light of low labor participation rates. And everything else I posted above holds true. The economy is still fragile.
Oh, and of course the number of uninsured people decreased: The government and unsubsidized policyholder are paying for it.
It is. Research by the Philadelphia Fed has concluded that since 2011, the reason people have been leaving the labor force is almost entirely due to retirement.
The dive started in 2008. The Philadelphia Fed itself said: "The number of those who did not look for a job (thus being out of the labor force) even though they wanted a job increased significantly between the fourth quarter of 2007 and the end of 2011." We also have no idea how many people would come back into the job market if it was worth it to do so.
No it isn't. Inflation is practically non-existent. The cost of gas is way down. Health care inflation is way down. The cost of housing fell significantly during the financial crisis. Housing is probably more affordable now than it was before the crisis.
Do you live in the real world? Do you not shop in grocery stores? Pay electric and water bills? Sure houses are cheaper for those who can still buy them, but many of us are still paying mortgages on houses that were purchased at higher prices and rents have gone up sharply in many markets for those who don't own homes. Overall housing is more expensive, especially for those people who do not already own a home.
And the only people who pay less for health insurance now are those receiving subsidies. The rest of us pay more for crappier policies with higher deductibles.
But oh yeah, gas is down a bit. That makes it all better. ;)
rickdugan
06-21-2015, 08:12 PM
Oh, and lest we forget, short term interest rates are still essentially at zero. That is also very unhealthy and definitely a sign of an economy still on life support. This is starting to feel like the lost decade in Japan.
Melonie
06-22-2015, 03:29 AM
The 55 and older group only goes up to age 64. Most of the people leaving the work force to retire are in the 65 and older group.
I have to commend your devotion to mainstream media narratives, but the facts continue to be inconvenient ...
http://www.theblaze.com/wp-content/uploads/2012/10/Jobs-by-Age-Since-June-2009.jpg
^^^ the actual numbers show that the vast majority of all jobs created in the last few years have in fact gone to the age 55 to 69 ( not 64 but 69 ) age group. My business acquaintances tell me that they LOVE to be able to hire Americans aged 65 or older, and especially so for full time jobs. The reason, of course, is that these workers already have ACA compliant health insurance coverage via Medicare ... thus their 'employer' can legally avoid both the cost of providing them health insurance, plus avoid an ACA 'penalty' tax for not providing them health insurance.
My business acquaintances also point out that they also love to hire Americans 55-64 ... for part-time positions. This part-time status allows the 'employer' to side-step health insurance costs ... and also suits those age 55-65 Americans, many of whom are already receiving defined benefit retirement checks from former private / public sector jobs thus are happy to earn just an extra couple of hundred dollars per week via part-time work.
And, like the 65 and older Americans above, these age 55-64 Americans typically also have a well established work ethic and basic job skills, typically also have no desire to 'jump ship' if a different job opportunity offering an extra $1 per hour avails itself, etc. These attributes provide the 'employer' with greater confidence that hiring an age 55 and older employee will result in the job being performed well, little or no employee 'turnover', few complaints from co-workers and customers, etc. than is likely to be the case if the 'employer' were to hire a younger worker.
... and, by seemingly pure coincidence, the attributes stated above - and the consequences to 'employers' if they hire employees that lack those attributes - circles us back to the original topic of this thread ... i.e. the reasons that 'employers' now invest a comparatively large amount of time and effort to investigate the education, job history, personal background etc. of applicants for low paying unskilled jobs.
justanothercamgirl
06-22-2015, 05:33 AM
yet another update on efforts to automate away US jobs ...
(snip)No more long lines at the grocery store – the future of food shopping is getting a high-tech upgrade. Des Moines, Iowa is planning to build a first-of-a kind robotic grocery store as an experiment to offer food and necessities to locals anytime at their convenience. A partnership between the nonprofit Eat Greater Des Moines and the business equipment firm Oasis24seven will see an automated, vending machine-style unit come to the area. “Throughout Des Moines, there are areas of town where access to quality food is limited,” said Aubrey Alvarez, the nonprofit’s executive director. “We would love for a full service grocery store to move into these areas, but until that time the robotic unit will address the gap in in the community.”
She added this “project takes a simple and familiar idea, a vending machine, and turns it on its head. Robotic Retail will be accessible to everyone.”
Oasis24seven CEO David Maurer said the robotic system “works on a conveyor belt system, with an extractor that retrieves the product from the racks and places it on the conveyor for delivery to the customer.” This allows for more fragile items like bread and eggs to avoid being damaged.
Similar stores are gear driven with a drop down delivery, he pointed out, which limits the products it can offer.
The stores are roughly 260-square-foot and are equipped with a sizeable front window so users can view the available products. “Our stores can be anywhere from 200 to 800 items, it’s fully refrigerated, the product can be anywhere from one ounce to ten pounds,” said Maurer.
Customers can pick and choose their items via a touchscreen ordering system that lists all the available products.
As for price, Alvarez explains that, as a nonprofit, “our goal is to keep the prices in line with a grocery store. We are sourcing as many items as possible through a local non-profit partner who supplies food to 12 food pantries. This will help us keep prices as low as possible.”
Beyond this current project, Maurer sees potential expansion for this type of concept. “Whether it is an apartment complex, parking [facility], military base … you could go down the list of the potential business channels for these automated robotic convenience stores.”(snip)
... Add a few gas pumps in front, a lottery ticket vending machine, etc. and you have the 'birth' of the totally automated convenience store with zero on-site employees. Besides the obvious human labor cost reduction, this setup will also potentially make the totally automated convenience store immune from robberies / looting ... thus reducing insurance / repair costs for the owner as well.
The degree that the problem with automation of 'service' jobs will be a threat will depend largely on the rate that it will be embraced by the culture.
I had no doubt that automation will become a huge threat to employment in the distant future but in my experience most people will avoid using kiosks whether it be for airline tickets, checking out books or buying groceries and just walk straight to a human standing at desk for service.
In the IT world, people are now talking a lot about usability and security because we've finally gotten to a point to where a entire generation has grown up knowing how to use a computer. This has changed the way and will continue to change the ways that computers are used and are incorporated into our everyday lives.
In my humble opinion, the automation of services will face the same challenges as the personal computer did because people have a tendency to avoid things that are unknown to them.
I am not saying that we won't get to that place in the future, I am just saying I won't be surprised if getting to that future takes longer then some people think it will. :)
Melonie
06-22-2015, 08:51 AM
The degree that the problem with automation of 'service' jobs will be a threat will depend largely on the rate that it will be embraced by the culture.
I had no doubt that automation will become a huge threat to employment in the distant future but in my experience most people will avoid using kiosks whether it be for airline tickets, checking out books or buying groceries and just walk straight to a human standing at desk for service.
That's true, but what happens when there isn't any human option available at anywhere near the same price point ???
The focus of this collaboration between the Des Moines 'food banks' and the Robotic convenience store developers is specifically meant to address the lack of ( remaining ) conventional grocery stores in inner city areas ... as well as to address the limited selection / high prices conventional inner city convenience stores provide in the way of available groceries. If an inner city resident can put their EBT card into the ATM of a fully automated 'mini grocery store', and walk away with bread, eggs, milk, and other grocery items which the conventional convenience store down the street can't/won't offer, etc. ... at a 20% cost savings versus the conventional convenience store to boot ... that's a fairly strong motivation !!! The other option is to spend an hour ( plus whatever fare is charged ) travelling by bus ( or other mass transit ) to and from a WalMart / Costco located outside the inner city area where they can find a wide selection, low prices, and human attention.
justanothercamgirl
06-22-2015, 09:12 AM
That's true, but what happens when there isn't any human option available at anywhere near the same price point ???
Well, that is how change starts to happen.....in small pockets and groups of people. But it generally takes a while for things to make it into the 'mainstream'.
Eric Stoner
06-22-2015, 11:47 AM
Rather than add any fuel to the fire I will just remind interested readers that unemployment and employment are measured by the DOL in at least FOUR ( 4 ) ways : The Employer Survey; The Household Survey ; The Small Business Survey and the Labor Participation Rate which is also measured in several ways.
The GDP numbers suck. How and why they suck is best left for another forum. The fact is that we have had the WORST post recession GDP and employment numbers. Ever !
Kellydancer
06-22-2015, 11:56 AM
Well, that is how change starts to happen.....in small pockets and groups of people. But it generally takes a while for things to make it into the 'mainstream'.
It's why instead of complaining about things to do something. Most people would rather complain than do it themselves. If corporations or what have you realize something's not working they change. For example, recently Disney decided to fire American workers to bring in foreign workers. This got out and they changed their mind. I hate Walmart so I look for other places to shop. I try to avoid doing business with companies that outsource jobs. Maybe I'm not making much difference but it's a start and if more did it the results would be amazing.
eagle2
06-22-2015, 08:26 PM
I have to commend your devotion to mainstream media narratives, but the facts continue to be inconvenient ...
http://www.theblaze.com/wp-content/uploads/2012/10/Jobs-by-Age-Since-June-2009.jpg
^^^ the actual numbers show that the vast majority of all jobs created in the last few years have in fact gone to the age 55 to 69 ( not 64 but 69 ) age group. My business acquaintances tell me that they LOVE to be able to hire Americans aged 65 or older, and especially so for full time jobs. The reason, of course, is that these workers already have ACA compliant health insurance coverage via Medicare ... thus their 'employer' can legally avoid both the cost of providing them health insurance, plus avoid an ACA 'penalty' tax for not providing them health insurance.
My business acquaintances also point out that they also love to hire Americans 55-64 ... for part-time positions. This part-time status allows the 'employer' to side-step health insurance costs ... and also suits those age 55-65 Americans, many of whom are already receiving defined benefit retirement checks from former private / public sector jobs thus are happy to earn just an extra couple of hundred dollars per week via part-time work.
And, like the 65 and older Americans above, these age 55-64 Americans typically also have a well established work ethic and basic job skills, typically also have no desire to 'jump ship' if a different job opportunity offering an extra $1 per hour avails itself, etc. These attributes provide the 'employer' with greater confidence that hiring an age 55 and older employee will result in the job being performed well, little or no employee 'turnover', few complaints from co-workers and customers, etc. than is likely to be the case if the 'employer' were to hire a younger worker.
... and, by seemingly pure coincidence, the attributes stated above - and the consequences to 'employers' if they hire employees that lack those attributes - circles us back to the original topic of this thread ... i.e. the reasons that 'employers' now invest a comparatively large amount of time and effort to investigate the education, job history, personal background etc. of applicants for low paying unskilled jobs.
Since you're disparaging my sources, the unemployment rate for 25 - 54 year olds is 4.7 percent, just one percent higher than 55 and older.
http://www.bls.gov/web/empsit/cpseea10.htm
Your graph is from 2012. There have been millions of jobs created since then.
I don't understand why you take such delight in posting negative news about the US economy.
eagle2
06-22-2015, 08:33 PM
Oh, and lest we forget, short term interest rates are still essentially at zero. That is also very unhealthy and definitely a sign of an economy still on life support. This is starting to feel like the lost decade in Japan.
No, low interest rates do not indicate a weak economy. The current prime rate is 3.25 percent. The prime rate during the decade following World War 2 was at 3.25 percent or below.
http://www.fedprimerate.com/wall_street_journal_prime_rate_history.htm
Was 1945 - 1955 a "lost decade"?
Melonie
06-23-2015, 02:39 AM
For example, recently Disney decided to fire American workers to bring in foreign workers. This got out and they changed their mind. I hate Walmart so I look for other places to shop
Arguably, both of these situations share a common thread. You are a top 10% earner whose choice to spend an extra $20 a week ( or whatever ) at Whole Foods versus Walmart ( as a partial result of Whole Foods' higher labor costs ) won't force you to 'give up' anything else of importance, and Disney theme parks now appeal to top 10% earners such that Disney charging an extra $100 in park admission fees / ride tickets ( as a result of Disney's higher US IT labor costs ) won't force many would-be Disney vacationing families to vacation somewhere else.
(snip)For America’s middle-income vacationers, the Mickey Mouse club, long promoted as “made for you and me,” seems increasingly made for someone else. But far from easing back, the theme-park giant’s prices are expected to climb even more through a surge-pricing system that could value a summer’s day of rides and lines at $125.
“If Walt [Disney] were alive today, he would probably be uncomfortable with the prices they’re charging right now,” said Scott Smith, an assistant professor of hospitality at the University of South Carolina whose first job was as a cast member in Disney’s Haunted Mansion. “They’ve priced middle-class families out.”(snip)
The key point, of course, is that top 10% earning Americans ... and the businesses like Disney which now cater to them ... can afford to incur higher costs with minimal 'pain'. However, lower earning Americans ... and the businesses like WalMart which now cater to them ... are much more sensitive to higher costs. Or, put bluntly, spending an extra $20 ( or whatever ) per week on groceries is much easier to deal with if the higher cost doesn't also mean not being able to afford to see the dentist or being 'short' on this months rent money !!!
This leads to a logical conclusion that the US economy now really needs to be viewed as two separate economies ... one for the top 10% earners, and the other for everyone else. Indeed customer 'activism'' is still an effective technique in the top 10% economy ... but it is arguably a luxury which those in the 'other' economy can no longer afford.
Melonie
06-23-2015, 02:59 AM
don't understand why you take such delight in posting negative news about the US economy.
I don't know why you think I take 'delight' in reporting economic news that isn't positive. But, unlike mainstream media, I do feel a duty to report economic news which is in fact true !!!
The topic of this thread directly relates to the number of available low skill level minimum wage jobs, versus the number of Americans actively seeking low skill level minimum wage jobs, in turn providing 'leverage' for would-be employers to impose all sorts of screening requirements for minimum wage job applicants. If, as mainstream media attempts to portray, real US unemployment rates were actually approaching ~5% 'full employment' levels, and a healthy real US economic growth rate was creating net new jobs left and right, employers would in fact have far fewer minimum wage job applicants to choose from - thus employers would not / could not be so pre-occupied with screening minimum wage job applicants.
rickdugan
06-23-2015, 05:28 AM
No, low interest rates do not indicate a weak economy. The current prime rate is 3.25 percent. The prime rate during the decade following World War 2 was at 3.25 percent or below.
http://www.fedprimerate.com/wall_street_journal_prime_rate_history.htm
Was 1945 - 1955 a "lost decade"?
As you either know or should know, I am talking about the Fed Funds Rate. The Fed does not set the prime rate - banks do. The Fed Funds rate is the rate at which banks can lend their Fed reserves to each other on an overnight basis to meet minimum reserve requirements. When the Fed sets the Fed Funds Rate low, it is to induce banks to do additional lending and to keep lending interest rates low, since prime rates are often predicated upon Fed Funds rates.
This is the lowest that the Fed Funds rate has been since data was published in 1954 and it is unprecedented to have it jammed in a near zero position for several years. So yes, the economy is still on Fed life support and has been since 2008. The Fed is afraid to raise interest rates for fear of what the economic impact might be.
I don't delight in this Eagle. I own a business and the better the economy, the better things are for me. This so-called recovery has been the worst in terms of economic growth since the Great Depression and it sucks. I am eager to see things go back to what they were for most of the 80s, 90s and even from 2002-2007 and I'll be the first cheering from the rooftops when that happens. But we are far from there yet - it is the simple reality.
Eric Stoner
06-23-2015, 06:37 AM
First, would everyone take a deep breath and try to relax. While this is a perfectly valid topic for discussion it is not necessary for it to get ( God help us ! ) "political ".
I've repeatedly posted that the numbers are the numbers. Accepting things like "GIGO" and other factors that go into compiling and reporting the numbers, it remains true that history always wins out and the REAL numbers become apparent soon enough.
As Mr. Dugan pointed out the Fed can only control two interest rates : The Fed Funds Rate and the Discount Rate. Both are SHORT TERM interest rates that the Fed charges banks that borrow from it and/or from each other. The Fed does NOT control interest rates paid on government debt ( Federal , state and local ) or corporate debt , or mortgages. It has nothing to do with dividends paid on stocks. Or what banks charge on various types of loans.
ONE reason the stock market is booming is because there is nowhere else to go to get a decent return on investment. Unless you want to buy junk bonds. Be they corporate or government issued. A reason why the recovery sucks is the limited reinvestment of corporate profits into such things as new plant and equipment. How and why that is happening is best left to another forum. As is tax policy and a bunch of other stuff best avoided under the current rules for this board.
SOME of us are troubled not by the low interest rates per se but for how long we have had such low rates. Some of us fear that we are in a " lost decade " like Japan of the 1990's which was highlighted by NEGATIVE interest rates. How and why the Fed is doing what it is doing and whether we would be better off with a different policy ( with or without some clear "Rules " like the "Taylor Rule" ) is another subject best left out of these discussions because it is definitely "political ". That does NOT mean that we cannot take note of what The Fed is doing. So long as we avoid "political" commentary.
I don't know of anyone who takes any delight in either the current situation or the long term prospects for our economy. I may not like Obama but I want him to do well so that the country will do well. Regardless of the politics.
Melonie
06-23-2015, 09:36 AM
^^^ again, trying to circle back to the original topic of this thread, historically low interest rates do play an indirect role in regard to minimum wage jobs. This is the case because historically low interest rates make it possible / easier for business owners to consider investing in a $150,000 automatic burger making machine, investing in a $500,000 automated convenience store, investing in any number of automation measures etc. as a more profitable / less risky alternative than hiring low skill level minimum wage workers.
Throwing some numbers around, if average minimum wage over the course of the next 10 years winds up being $10 an hour = $20,800 per year ... and if related employer costs for matching SSI tax, unemployment and disability insurance premiums, and other employee related costs add another 25% = $5,200 per year, the financial advantage for a business to automate away one full time minimum wage job is $26,000 per year. Assuming that automation can run around the clock while human workers cannot, automating one minimum wage job actually replaces 2-3 human workers ... thus an aggregate savings of $52,000 to $78,000 per year.
At historically typical 8% business loan interest rates, the actual costs of taking out a 10 year business loan for $500,000 would involve something like $ 728,000 in total loan + interest payments over the course of 10 years. If this business loan automated away 3 human minimum wage jobs thus providing a $780,000 savings over 10 years, most businesses would NOT choose to make such an investment because the net savings are just ~$5,200 per year. However, at recent record low 3% business loan interest rates, the actual costs of taking out the same 10 year business loan for $500,000 drops to something like $ 579,000 over the course of 10 years thanks to much lower interest charges. Today's lower interest rates for business loans now result in a net employer savings of > $20,000 per year, which makes it far more likely that the business will opt to invest in automation.
Keep in mind that the business owner will really only need to put down 20% or $100,000 not the whole $500,000. Thus investing in the automation example above represents a $20,000+ annual return on the business owner's $100,000 'investment' ... whereas the business owner investing the same $100,000 in CD's with today's historically low interest rates would only return $ 2-3,000 annually.
eagle2
06-23-2015, 05:49 PM
As you either know or should know, I am talking about the Fed Funds Rate. The Fed does not set the prime rate - banks do. The Fed Funds rate is the rate at which banks can lend their Fed reserves to each other on an overnight basis to meet minimum reserve requirements. When the Fed sets the Fed Funds Rate low, it is to induce banks to do additional lending and to keep lending interest rates low, since prime rates are often predicated upon Fed Funds rates.
This is the lowest that the Fed Funds rate has been since data was published in 1954 and it is unprecedented to have it jammed in a near zero position for several years. So yes, the economy is still on Fed life support and has been since 2008. The Fed is afraid to raise interest rates for fear of what the economic impact might be.
I don't delight in this Eagle. I own a business and the better the economy, the better things are for me. This so-called recovery has been the worst in terms of economic growth since the Great Depression and it sucks. I am eager to see things go back to what they were for most of the 80s, 90s and even from 2002-2007 and I'll be the first cheering from the rooftops when that happens. But we are far from there yet - it is the simple reality.
Sorry if your business isn't doing very well, or as well as before. I'm sure some businesses are having a hard time, but overall, corporate profits are way up and so are stocks.
eagle2
06-23-2015, 05:57 PM
^^^ again, trying to circle back to the original topic of this thread, historically low interest rates do play an indirect role in regard to minimum wage jobs. This is the case because historically low interest rates make it possible / easier for business owners to consider investing in a $150,000 automatic burger making machine, investing in a $500,000 automated convenience store, investing in any number of automation measures etc. as a more profitable / less risky alternative than hiring low skill level minimum wage workers.
Throwing some numbers around, if average minimum wage over the course of the next 10 years winds up being $10 an hour = $20,800 per year ... and if related employer costs for matching SSI tax, unemployment and disability insurance premiums, and other employee related costs add another 25% = $5,200 per year, the financial advantage for a business to automate away one full time minimum wage job is $26,000 per year. Assuming that automation can run around the clock while human workers cannot, automating one minimum wage job actually replaces 2-3 human workers ... thus an aggregate savings of $52,000 to $78,000 per year.
At historically typical 8% business loan interest rates, the actual costs of taking out a 10 year business loan for $500,000 would involve something like $ 728,000 in total loan + interest payments over the course of 10 years. If this business loan automated away 3 human minimum wage jobs thus providing a $780,000 savings over 10 years, most businesses would NOT choose to make such an investment because the net savings are just ~$5,200 per year. However, at recent record low 3% business loan interest rates, the actual costs of taking out the same 10 year business loan for $500,000 drops to something like $ 579,000 over the course of 10 years thanks to much lower interest charges. Today's lower interest rates for business loans now result in a net employer savings of > $20,000 per year, which makes it far more likely that the business will opt to invest in automation.
Keep in mind that the business owner will really only need to put down 20% or $100,000 not the whole $500,000. Thus investing in the automation example above represents a $20,000+ annual return on the business owner's $100,000 'investment' ... whereas the business owner investing the same $100,000 in CD's with today's historically low interest rates would only return $ 2-3,000 annually.
You're making assumptions that all of these minimum jobs are going to be replaced by automation, and no other jobs will be created.
There have always been workers being replaced by automation, yet the number of jobs available has always grown over the long term. I remember reading that US Steel produces more steel today than in 1960, with less than half as many workers, yet the number of overall jobs in the economy continued to grow.
eagle2
06-23-2015, 06:10 PM
I don't know why you think I take 'delight' in reporting economic news that isn't positive. But, unlike mainstream media, I do feel a duty to report economic news which is in fact true !!!
[quote]
You're always posting negative news and never anything positive, despite that fact that things are much better today than they were five or six years ago.
[QUOTE=Melonie;2772925]
The topic of this thread directly relates to the number of available low skill level minimum wage jobs, versus the number of Americans actively seeking low skill level minimum wage jobs, in turn providing 'leverage' for would-be employers to impose all sorts of screening requirements for minimum wage job applicants. If, as mainstream media attempts to portray, real US unemployment rates were actually approaching ~5% 'full employment' levels, and a healthy real US economic growth rate was creating net new jobs left and right, employers would in fact have far fewer minimum wage job applicants to choose from - thus employers would not / could not be so pre-occupied with screening minimum wage job applicants.
How do you know employers are any more preoccupied with screening workers in the past, and why wouldn't employers want good employees, regardless of the demand for jobs? With the internet, background checks are relatively quick and inexpensive. Having a bad employee can be worse than not having that employee at all.
If the number of Americans seeking low skill jobs is so high, compared to the number of jobs available, why is Walmart increasing the pay for their employees?
http://money.cnn.com/2015/02/19/news/companies/walmart-wages/
They're voluntarily increasing their workers' pay to $10 an hour as of Feb. 2016, regardless of what the minimum wage is.
Melonie
06-24-2015, 02:28 AM
How do you know employers are any more preoccupied with screening workers in the past, and why wouldn't employers want good employees, regardless of the demand for jobs? With the internet, background checks are relatively quick and inexpensive. Having a bad employee can be worse than not having that employee at all.
^^^ the early pages of this thread are chock full of anecdotal examples of near minimum wage job adverts / interviews imposing 'ridiculous' requirements for applicants to have a serious chance of being hired ... to perform what probably amounts to a menial job which could be successfully performed by just about anyone.
^^^ the middle pages of this thread provide examples of many reasons why an increasing number of minimum wage employers are now going well beyond basic criminal record and legal employability checks which sufficed in past years ... and are now also checking / verifying applicants' education, credit ratings, work / earnings histories, social media presence, etc.
If the number of Americans seeking low skill jobs is so high, compared to the number of jobs available, why is Walmart increasing the pay for their employees?
My business acquaintances speculate that this is happening for three reasons. First, spending money to marginally increase worker pay rates will also allow WalMart to marginally eliminate some employees ... with the higher hourly pay rate serving as justification to require remaining employees to do more work. Second, the 'handwriting is on the wall' that mandated minimum wage pay rates are going to be increased in any case ... thus WalMart voluntarily placing themselves a bit 'ahead of the curve' gives them some ability to influence the amount of future mandated increases. Third, spending money to marginally increase worker pay rates before being mandated to do so has positive PR value for WalMart ... which in turn may take away a common 'excuse' which certain cities have used to deny WalMart permission to build new stores.
One of my business acquaintances even went so far as to speculate that WalMart's 'voluntary' increase in worker pay rates involves some sort of quid-pro-quo arrangement with certain cities / states ... because the pay rate increase will render some of WalMart's employees ineligible for certain social welfare benefits which weigh heavily on city / state budgets. Arguably, WalMart is running out of domestic US expansion opportunities, and the ability to expand into cities where they have previously been prohibited from doing so would provide such opportunities. But that's pure speculation.
despite that fact that things are much better today than they were five or six years ago.
Again we wind up back to the topic of mainstream media narratives and 'official' gov't statistics, Wall St versus Main St. Ask any dancer if things are much better today than they were 5-6 years ago !!! Ask strip club customers if things are much better today than 5-6 years ago. With one general exception, you'll get an emphatic NO as an answer.
The general exception, of course, will be upscale strip clubs which attract 'top 10%' earning customers. It is almost exclusively the 'top 10%' earning Americans who have been able to cash in on the 'financialized recovery' in stock / bond / commodity / real estate markets over the course of the past few years. 'Regular' Americans have instead experienced stagnant paychecks, rising taxes, rising costs of 'necessities' from food to rent to utilities / energy to insurance, etc. during the same past few years. This has been extensively documented.
Admittedly, I have personally profited very nicely from the 'financialized recovery' of the past few years. That was made possible because I had already accumulated a sizeable 'nest egg' of money which could then be invested in stocks, bonds, and other financial assets which were the major 'beneficiaries' of the post 2008 economy. It's easy to understand that when profitable businesses decide to use those profits to buy back their own stock shares and/or pay higher dividends to stockholders, versus using those profits to increase the pay rates for their workers, this will create a 'top 10%' effect !!! From a purely personal standpoint, I could agree with you that 'things are much better'. But I certainly won't tout that point because I know that I am operating in a very different 'economy' than most dancers, who find themselves having to work harder than ever in an attempt to extract money from 'Regular' American strip club customers who have fewer discretionary dollars available to spend than they did 5-6 years ago ... as well as a different economy than virtually all minimum wage job applicants, who face higher employer expectations regarding the amount of work performed, unpredictable / inconvenient shift scheduling, etc. versus 5-6 years ago.
This whole line of discussion is drifting off-topic because it is a virtual certainty that any American seeking a near minimum wage job is not going to be invested in financial assets.
Eric Stoner
06-24-2015, 08:51 AM
Echoing Melonie , my dancer pals uniformly pine for the days of Clinton and even Bush The Dumber. Their earnings are uniformly DOWN with two exceptions. One is a well known Porn Star who almost never feature dances anymore. What she does do is Camming and her loyal custies have enabled her to maintain her lifestyle. The other supplements her dancer earnings with occasional "pay for play " dating. Even most of my "Sugar Baby " gal pals are moaning about the increased competition for arrangements with a member of the " 1 % " that they can stand to be with for more than an hour or two.
As for Walmart they will do what they think is in their corporate interest. Personally I don't shop there and don't understand why anyone else does. The quality of their merchandise is generally poor , their stores are dirty and disorganized etc. but if folks want to shop there it's OK with me.
I've made it clear that I support a reasonable and moderate minimum wage. What that should be exactly is open to discussion. Paying someone $15 an hour to say : " You want fries with that ? " doesn't make much sense to me. Why not $20 an hour ? Or $25 ? These jobs used to be seen as ENTRY Level and/or Part-Time. Now, for reasons which are best left unsaid , many of these jobs have supposedly become the main source of support for parents and children. In NYC , only 1/3 of teens and young adults are even looking for Summer Jobs. That means 2/3 have other plans. They don't need to work ; they don't want to work ; they are going to school ; traveling or whatever.
If I'm an employer and I am mandated to pay my least skilled and least experienced employees $15 an hour I am going to have as few of them as I possibly can. And with the ones I do have to have I would want to get as much work out of them as I possibly could. It would probably be cheaper for me to pay a couple of them $22.50 an hour for 20 hours a week of overtime than to hire additional workers when I consider ALL the other costs and payments for each one. And if they don't like it then it ought to be very simple for me to replace them .
What the original poster and others have highlighted is the Buyer's Market for labor. There is an oversupply of unskilled and inexperienced workers AND a pool of people who are willing to do just about any kind of work , whether or not their unemployment benefits have run out.
To further echo Mel : I just talked to a good friend who owns a state of the art car wash and detailing business. His employees are all ON THE BOOKS and get the N.Y. mandated minimum wage of $ 8.75 an hour plus a cut of the tips. Which is considerable. They each go home with about $100 in tips per day. For toweling off cars ? Not bad if you ask me. BUT if the mandated wage goes up ( and it will ) at what point will it no longer pay for him to hire additional workers ? OR will he be able to replace his Latino workers with native born folks willing to work for what ? $ 12 an hour ? ; $15 ? How much will he have to raise his prices to cover increased labor costs ? A dollar a wash ? Two bucks ? Somewhere there is a tipping point that will cause enough of his custies to cut back on how often they get their cars washed or wash themselves to seriously impact his business.
I can't get much more deeply into this because of the "You Know What " but what we have been discussing is nothing but a symptom of a much larger problem. The economy that Eagle thinks is doing so well has employers doing such things as increasing job requirements for minimum wage workers that have no relation to the work itself. How and why such a situation exists is best left for other forums but it is not a sign of a healthy and growing economy imho.
Melonie
06-26-2015, 03:24 AM
I just talked to a good friend who owns a state of the art car wash and detailing business. His employees are all ON THE BOOKS and get the N.Y. mandated minimum wage of $ 8.75 an hour plus a cut of the tips. Which is considerable. They each go home with about $100 in tips per day. For toweling off cars ? Not bad if you ask me. BUT if the mandated wage goes up ( and it will ) at what point will it no longer pay for him to hire additional workers ? OR will he be able to replace his Latino workers with native born folks willing to work for what ? $ 12 an hour ? ; $15 ? How much will he have to raise his prices to cover increased labor costs ? A dollar a wash ? Two bucks ? Somewhere there is a tipping point that will cause enough of his custies to cut back on how often they get their cars washed or wash themselves to seriously impact his business.
This of course brings to mind another possible analogy ... recent court decisions which have mandated that certain strip clubs treat dancers as employees. The end result has been that the business owner began to 'retain' a ( larger ) portion of dancers' tip / private dance income to enable the business owner to offset the additional costs involved ... i.e. employer's share of employee SSI tax, employer's unemployment and disability insurance premiums, legal and accounting costs, etc.
While many aspects of such an analogy are 'apples and oranges', one aspect is clearly the same. That aspect is precisely what you indirectly point out. Raising employee pay rates, with resulting increases in employer 'costs' relative to those employees, is of zero consequence to customers of that business. The customers are not going to voluntarily pay higher prices for the 'same' services if other alternatives are available. And if all alternatives become more expensive, customers are likely to compensate for rising prices by lowering their number of purchases. If the additional 'costs' of increased hourly pay rates cannot be recouped from customers via price increases, they can only be recouped from two other sources. A - a reduction in business owner profits B - a reduction in some other aspect of employee 'compensation' besides hourly pay ( i.e. tip sharing, cessation of employee benefits, etc. ).
Again circling back on topic, as the total 'costs' to an employer to hire an unskilled near minimum wage worker are increased, that employer has a stronger and stronger incentive to try to hire as few employees as possible. Options regarding automation etc. to eliminate the future need for employees has already been discussed. And in cases where a human worker must be hired, employers have a stronger and stronger incentive to hire the most productive, most capable, least 'problematic', most 'loyal' new employee they can find. This arguably directly translates into those employers conducting more thorough background checks, directly translates into those employers expecting skill / experience levels which might be considered 'ridiculous' relative to the actual job requirement, etc. As was pointed out earlier, as long as a large surplus of willing near minimum wage job applicants remains available, employers have no reason to reduce the scope of their background checks or reduce their skill / experience level expectations.