Posts tagged with: minimum wage

image1We live, work, and consume within an increasingly grand, globalized economy. Yet standing amidst its many fruits and blessings, we move about our lives giving little thought to why we’re working, who we’re serving, and how exactly our needs are being met. Adam Smith’s “invisible hand” feels more invisible than ever.

In response to our newfound economic order, big and blurry as it is, many have aimed to pave paths toward more “communitarian” ends, epitomized by recent waves of “localist consumerism,” “artisanal shops,” and “social entrepreneurship.” Such efforts can be tremendously fruitful, and insofar as they meet real human needs, we should heed their resistance to blind marches toward “progress.”

I only wish that such movements would appreciate the broader range of possible solutions. The slow and local is all well and good, but something as mundane and mainstream as a local McDonald’s can serve community needs just as well as the trendy mom-and-pops of the future. The big and global is not necessarily the enemy of the small and local.

As Chris Arnade demonstrates through a series of stories, for many low- and middle-income areas, “McDonald’s have become de-facto community centers and reflections of the surrounding neighborhood,” offering a hub for the very sort of social fabric-weaving that crunchy communitarians crave. (Note: I was an employee and then shift manager of a McDonald’s during my teenage years.)

One can be resistant to the nutritional risks of the food — just as I remain resistant to the budgetary risks of overpriced “artisanal donuts” — and still perceive the value that such enterprises bring to local communities everywhere: economic, social, and (dare I say) spiritual. (more…)

no-signWhat just happened?

On May 18, the Obama administration announced the publication of a new Department of Labor rule updating and expanding overtime regulations.

Why did the overtime rule change?

Since the 1930s some white collar jobs (i.e., those performed in an administrative setting) have been exempt from the overtime requirement. The white collar exemption salary level was adjusted in 2004 to $455 per week or $23,660 a year. The new rule will entitle most salaried white collar workers earning less than $913 a week ($47,476 a year) to overtime pay.

The rule also updates the total annual compensation level above which most white collar workers will be ineligible for overtime. The final rule raises this level to the 90th percentile of full-time salaried workers nationally, or from the current $100,000 to $134,004 a year

The salary threshold will also automatically be updated every three years, beginning January 1, 2020. Each update will raise the standard threshold to the 40th percentile of full-time salaried workers in the lowest-wage Census region, estimated to be $51,168 in 2020.

How is overtime pay determined?
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chobani-ceoAs politicians continue to decry the supposed “greed” of well-paid investors, business leaders, and entrepreneurs — promoting a variety of reforms that seek to mandate minimums or cap executive pay — one company is demonstrating the value of economic freedom and market diversity.

Chobani, a privately owned greek yogurt manufacturer, recently announced it will be giving a 10% ownership stake to its roughly 2,000 full-time workers, a move that could result in hundreds of thousands, if not millions, of dollars for some employees.

According to the New York Times:

Hamdi Ulukaya, the Turkish immigrant who founded Chobani in 2005, told workers at the company’s plant here in upstate New York that he would be giving them shares worth up to 10 percent of the company when it goes public or is sold.

The goal, he said, is to pass along the wealth they have helped build in the decade since the company started. Chobani is now widely considered to be worth several billion dollars.

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Terminator-2-Judgement-Day-posterI oppose implementing Skynet and increasing minimum wage laws for the same reason: to forestall the robots.

It’s probably inevitable that a T-1000 will return from the future to terminate John Connor. But there is still something we can do to prevent (at least for a time) a TIOS from eliminating the cashier at your local McDonalds.

In Europe, McDonalds has ordered 7,000 TIOSs (Touch Interface Ordering Systems) to take food orders and payment. In America, Panera Bread will replace all of their cashiers with wage-free robots in all of their 1,800 nationwide locations by 2016. There is even a burger-making robot that can churn out 360 gourmet hamburgers per hour.

I, for one, welcome our new fast-food robot overlords. I’m just not ready for them yet.
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outofworkIn almost every long-term clash over a cultural or political policy, there comes a point that I’d call the “comfort-level concession.” If the agenda of one side has been won — or has at least moved sufficiently toward achieving victory — the winning side often feels comfortable making concessions about claims that they may have previously denied.

Initially, they will firmly state, “The claims of our opponents are overblown; the detrimental effect they predict will never happen.” Once they’ve won the public over to their side, though, they become comfortable enough to admit the truth: “Well, maybe our critics were about the detrimental effect. But so what?”

This is where we are in the debate over a $15 minimum wage. For years, critics of wage floors have complained that raising the minimum wage to that level would increase unemployment. And for years supporters of the minimum wage claimed that wouldn’t happen. However, now that the $15 wage has been approved in two of the largest states in the union — California and New York — the advocates are willing to admit, “Yeah, it will lead to increased unemployment. But so what?”

If you think I’m exaggerating, consider a recent headline at the Washington Post: “The $15 minimum wage sweeping the nation might kill jobs — and that’s okay

In the article Lydia DePillis notes the very shift in response I outlined. Step #1: Critics complain about the detrimental impact, and are assured it will not happen:
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minimum-wage-15Since 1938, when President Franklin Delano Roosevelt introduced the first federal minimum wage in the U.S., a debate has raged about whether wage floors help or hurt workers. But thanks to a radical economic experiment in California, we may be only a few years away from having a definitive answer.

California Gov. Jerry Brown and state legislators have reached an agreement to raise California’s minimum wage to $15 an hour by 2022. Under California’s plan, its minimum wage — already one of the highest in the nation at $10 an hour — would rise to $10.50 in 2017, $11 in 2018 and a dollar each year through 2022.

By 2022 we should know for sure how the change will affect California. In the meantime, here are ten things you should know about the ongoing minimum wage debate:

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“The twin tracks of work and wage do not meet, and cannot be scientifically related. They are bridged by morality, not by mathematics.” -Lester DeKoster

executiveLow-wage workers continue to picket and protest around the country, demanding an increased minimum wage, improved access to benefits, and better working conditions. The political rhetoric has followed accordingly, with Bernie Sanders calling for an increase in the minimum wage to $15 per hour, and Hillary Clinton arguing for $12 (due to differing magic potions, no doubt). Simultaneously, widespread angst over “excessive” executive compensation continues to fester.

But alas, prices are not play things, and we do society no favors by trying to distort market signals according to our own arbitrary whims (whether $12, $15, $100, or otherwise). Given the history and trajectory of the American economy, we ought not be stuck in the mire of such minimum-mindedness, seeking to control and micro-manage our way to peace and prosperity through top-down mechanistic means. The path to prosperity is one of creation and contribution, planted with seeds of service and opportunity, where new wealth is a natural byproduct of access to the pond.

Yet throughout all this, “market signals” are simply signals, the discernment of which requires human conscience before and after and throughout. When we think about the intersection of work and wages, “listening to the market” is not where it stops, as critics of the free market wrongly assume. The baseline of actual prices in a complex economy is where things begin, and the Christian wage-setter must be careful and attentive to how things ought to proceed.

In Work: The Meaning of Your Life, Lester DeKoster explores these “twin tracks” of work and wage, noting that the proper bridge will not be built by arbitrary government edict, but by the art of “executive stewardship,” driven by God-given responsibility and God-directed conscience. “Work and wage draw together at the point where conscience functions,” he writes, “that is to say, work and wage tracks coalesce in persons making executive decisions.” When we inhibit the freedom of the human conscience, an inhibition of the economic order is sure to follow.

DeKoster devotes an entire chapter to this topic, an excerpt of which is available at the Oikonomia blog. Those who set wages have an “awesome obligation,” DeKoster writes, and their conscience must balance a host of factors, all pushing toward a variety of goals, including (1) the best product, (2) the best working conditions, (3) the best wage for everyone involved, and (4) “reflecting the best efforts at every job, to be sold at the lowest price compatible with the requirements.” In balancing all of this, the executive also heeds transcendent signals, whether through ethics or spiritual discernment. (more…)