Minimum wage: A tale of two companies

posted at 2:01 pm on February 21, 2014 by Ed Morrissey

Should Washington force a hike in the federal minimum wage, or should market forces assess entry-level labor cost? A move by one national retailer to lift its entry wage floor provided some fodder for minimum-wage hike advocates, but the tale of two retailers in this CBS News report shows why that decision is best left to the marketplace. First, The Gap announced that it would adjust its “minimum wage” to the level proposed by Democrats by mid-2015, calling it an “investment” rather than a political issue. Kim Peterson at Moneywatch concludes that The Gap will earn significant rewards for its voluntary decision:

Lowering turnover. It’s harder for employees to leave for better-paying jobs.
Higher-quality workers. By paying more, Gap presumably will attract more qualified employees.
Happier, more committed employees. This is something Costco (COST) says it has experienced by paying a minimum of $11.50 an hour. “Instead of minimizing wages, we know it’s a lot more profitable in the long term to minimize employee turnover and maximize employee productivity, commitment and loyalty,” said Costco CEO Craig Jelinek last year, according to CNN.
Happier customers. “You treat people well, they’ll treat your customer well,” Topeka Capital Markets analyst Dorothy Lakner told Bloomberg.

Yes, yes, yes, and yes. All of these are true — when such a move is made for competitive reasons in a labor market. As a hiring manager myself for years in call centers, I can relate from my own personal experience that businesses have to make this call constantly, especially when jobless rates are low and new hires are hard to find. I spent many an hour over 15 years attempting to calculate means and medians for wages in our general industry in the local market and trying to keep pace with wage growth.

But there’s more to this, too. The Gap is, as Peterson points out, a high-end retailer where price pressures are nearly non-existent. No one shops at The Gap for bargains; they go for high-quality merchandise and extraordinary service. Gap sold $16.2 billion with an estimated profit of ~$1.3 billion for a margin of 8% — not bad in a stagnant economy, but hardly windfall profits for shareholders. They can afford to aggressively bargain for entry-level labor, to a point.

Compare that to the other retailer Peterson uses in the analysis, Wal-Mart. This retailer faces enormous price pressures as a discount store, without the high-quality merchandise in many (but not all) of its departments. What does Walmart want to do about its competitiveness in the labor market? It’s mulling over whether to throw in its support for a national minimum-wage hike:

Raising wages would be a bit harder to do at Wal-Mart (WMT), for example, a company that already operates on thin margins and has struggled to grow even as the economy recovered from the Great Recession. Still, Wal-Mart says it’s looking into supporting an increase in the federal minimum wage, Bloomberg reports.

One retailer can compete for labor. One wants to push rent-seeking legislation to negate that competition. Raising the minimum wage would force The Gap to increase its wages again, which sooner or later will create price pressures from labor cost or the need to reduce staff to meet efficiency and margin requirements. It eliminates the natural competition for that labor and reduces job opportunities that would make the market even more competitive, as the CBO noted in its analysis.

Instead of trying to micromanage compensation in the economy, Congress and the White House should be focusing on reducing regulatory and tax disincentives for investment and job creation. That would actually produce competition for labor that has been left on the shelf in the Obama recovery, rather than stifle it through rent-seeking regulation pushed by the big players who have most to lose from that competition.

Update: Public universities in Illinois can’t unilaterally increase their revenues — and are very worried about the impact of a minimum-wage hike (via NewsAlert):

With lawmakers warning of tough budget times in the fiscal year beginning July 1, the proposal to bump the wage from its current level of $8.25 an hour to $10 or more an hour is raising red flags among university officials.

At Southern Illinois University, for example, President Glenn Poshard said an increase could cost his institution $3.2 million in additional wages at a time when the General Assembly may be considering further cuts in aid to higher education.

“We need an increase in funding in higher education,” Poshard told members of a House appropriations panel Thursday. “We don’t have any extra to run our university.”

Similar scenarios are being played out in Normal, Charleston, Macomb and other university communities.

And guess what happens when those costs go up?

Eastern Illinois University predicts an increase will cost about $940,000. And, because the university has committed to no tuition increase next year, a minimum wage hike likely would trigger a reduction in the number of student workers, said Derek Markley, chief of staff to President Bill Perry.

Funny how that works …

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Something always has to give.

Let it be the CEO and the 1% shareholders!!! – typical lib

22044 on February 21, 2014 at 2:05 PM

So we raise the minimum wage, which means that small businesses and franchisees have to increase their payroll. However, the cost of raw goods continue to go up. Which means that small businesses margin gets even smaller. Which means they hire less people. Awesome.

Alderene on February 21, 2014 at 2:10 PM

The Gap is definitely in a different boat than Walmart. But I would hardly refer to it as a “high end retailer” where “price pressures are non-existent”.

BuzzCrutcher on February 21, 2014 at 2:12 PM

You need obamacare because:

“Well, thanks to the Affordable Care Act, young people can stay on their parents’ insurance until they are 26,” said the first lady of the United States. “But once they hit 26 — they’re on their own. And a lot young people think they’re invincible. But the truth is, young people are knuckleheads. They’re the ones who are cooking for the first time and slice their finger open, they’re dancing on the bar stool.”

http://www.weeklystandard.com/blogs/michelle-obama-young-people-are-knuckleheads-which-why-they-need-obamacare_782766.html

davidk on February 21, 2014 at 2:16 PM

BTW, I read that Costco gets about 600k in revenue per employee, whereas Walmart gets slightly under 200K per employee (becaus i sells more ezpensive products). To be “fair”, and also to “increase employment”, any minimum wage law should also mandate that retailers of a certain size should have to employ at least one person per 300K in revenue. I’m sure Costco (and it’s yuppie customers) won’t mind that one bit.

BuzzCrutcher on February 21, 2014 at 2:18 PM

BTW, I read that Costco gets about 600k in revenue per employee, whereas Walmart gets slightly under 200K per employee (becaus i sells more ezpensive products). To be “fair”, and also to “increase employment”, any minimum wage law should also mandate that retailers of a certain size should have to employ at least one person per 300K in revenue. I’m sure Costco (and it’s yuppie customers) won’t mind that one bit.

BuzzCrutcher on February 21, 2014 at 2:18 PM

Spot on – Costco workers get paid more because each of them is measured to provide more “output” than a minimum wage worker would. I believe their skills are more specialized as well.

22044 on February 21, 2014 at 2:20 PM

The Gap is, as Peterson points out, a high-end retailer where price pressures are nearly non-existent. No one shops at The Gap for bargains; they go for high-quality merchandise and extraordinary service.

While the clientele differs from Walmart and even Target, I wouldn’t call Gap “high end,” but mid-tier, and the target customer would be a 20s & 30s professional or someone with a generous parent. Banana Republic, with the same company, holds that spot. Their quality is slightly better, but the prices-IMO-are outrageous. I shop occasionally at the Gap and never make a purchase unless it’s a bargain or deal. But maybe that’s me.

If the company wants to raise their minimum wage, great. Let it be their choice and not because of some government dictate. I’m curious how much this raise will effect their prices though.

conservative pilgrim on February 21, 2014 at 2:21 PM

Spot on – Costco workers get paid more because each of them is measured to provide more “output” than a minimum wage worker would. I believe their skills are more specialized as well.

22044 on February 21, 2014 at 2:20 PM

I don’t shop at Costco. What sort of specialized skills would they need?

conservative pilgrim on February 21, 2014 at 2:23 PM

You need obamacare because:

“Well, thanks to the Affordable Care Act, young people can stay on their parents’ insurance until they are 26,” said the first lady of the United States. “But once they hit 26 — they’re on their own. And a lot young people think they’re invincible. But the truth is, young people are knuckleheads. They’re the ones who are cooking for the first time and slice their finger open, they’re dancing on the bar stool.”

http://www.weeklystandard.com/blogs/michelle-obama-young-people-are-knuckleheads-which-why-they-need-obamacare_782766.html

davidk on February 21, 2014 at 2:16 PM

So Sayeth Queen Knucklehead I

workingclass artist on February 21, 2014 at 2:25 PM

Some people are simply not worth more than $8/hour. These people, both the young and the unskilled, still need employment. And some of these people will grow their skill sets and be worth more than $8/hour in the labor market. And some of them will not.

Jeddite on February 21, 2014 at 2:28 PM

I love these discussions. I’ll give you one word that throws all those little “niceties” that this is intended to invoke into the garbage can: Teamsters. If you have to ask, then you don’t know anything and might as well go along and drink the Kool-Aid.

el hombre on February 21, 2014 at 2:28 PM

“They’re the ones who are cooking for the first time and slice their finger open, they’re dancing on the bar stool.”

I don’t even know what that could possibly mean. The Ivy League should be really proud of this demented half-wit.

ThePrimordialOrderedPair on February 21, 2014 at 2:29 PM

The US raised the minimum wage just 5 years ago, in July of 2009.

Zero impact.

Del Dolemonte on February 21, 2014 at 2:29 PM

Minimum wage in this country was never intended to be a self sufficient income level, despite socialist jackasses trying to redefine it. Thy need to stop.
Walmart as it turns out doesn’t pay that badly:

http://www.glassdoor.com/Salary/Walmart-Salaries-E715.htm

dogsoldier on February 21, 2014 at 2:31 PM

To Protect and To Serve:

On February 10th, 22-year-old Nadia Malik was reported missing from Marple Township, Delaware County. On Thursday morning, her body was found in the passenger seat of her Nissan. Of the multiple tickets issued by the Parking Authority, police say the first ticket was dated: February 10th at a different location.

“At 23rd and Market outside the PECO building. On the 14th of the month, the parking authority, as part of our snow detail for the emergency plan had towed the car over to where it was found today.

http://philadelphia.cbslocal.com/2014/02/20/authorities-investigating-after-body-found-near-30th-street-station/

davidk on February 21, 2014 at 2:31 PM

Zero impact.

Del Dolemonte on February 21, 2014 at 2:29 PM

One more reason we have no recovery.

dogsoldier on February 21, 2014 at 2:32 PM

I don’t shop at Costco. What sort of specialized skills would they need?

conservative pilgrim on February 21, 2014 at 2:23 PM

I’ve only been a few times, but their electronics, etc. are at a much higher price point than those at Walmart, so they tend to emply peple who are more knowedgable about those products. They also seem to emply a lot (relatively speaking) of forklift drivers, as alot of things are sold directly from pallets.

BuzzCrutcher on February 21, 2014 at 2:32 PM

McDonald’s has been testing computer registers/order takers in Europe for a few years now. Robot lettuce pickers and sorters are testing in farms in California.

Bonus: No need to insure machines…and no worries on Union strikes.

workingclass artist on February 21, 2014 at 2:34 PM

I don’t shop at Costco. What sort of specialized skills would they need?

conservative pilgrim on February 21, 2014 at 2:23 PM

Admittedly this is speculation, but since they typically sell big bulky packages, extra abilities to handle machinery may be required.
I believe some Costco employees work sampling stations, so they need better people/selling skills than the average retail store employee.

22044 on February 21, 2014 at 2:35 PM

Ha. I love examples of cutthroat business practices. Hey Gap. You wanna pay your employees more than the minimum wage? We will too (says Wal Mart).

Rinse and repeat. Let’s see who pulls the (bankruptcy) trigger first in this contest.

I’d wager Wal Mart will win this one in the long run.

Ruckus_Tom on February 21, 2014 at 2:37 PM

workingclass artist on February 21, 2014 at 2:34 PM

A few weeks ago I posted a link to a gourmet burger making robot. You load it up with ingredients and you don’t need ANY employees.

Wal-mart will have robots soon enough and more automated cashiers.

The socialists will be left standing there looking stupid, as always.

dogsoldier on February 21, 2014 at 2:38 PM

They made their own decision with government coercion, that’s TERRIBLE, who the hell do they think they are not getting permission from economic geniuses such as Durbin?

Bishop on February 21, 2014 at 2:41 PM

Actual conversation with a libtard:

Me: “Some effects of rising wages are price increases or reduced profits”

Libtard: “So what. If people were paid $500 per hour, they could afford $300 cheeseburgers. Think of how much money McDonalds could make selling $300 cheeseburgers!”

Me: “If they paid $500 per hour, McDnalds’ cost to make a cheeseburger would go up.”

Libtard: “Not by very much”.

BacaDog on February 21, 2014 at 2:41 PM

“We need an increase in funding in higher education,” Poshard told members of a House appropriations panel Thursday. “We don’t have any extra to run our university.”

Why is it that ‘funding for higher education’ always ends up as MORE money for employee paychecks?

GarandFan on February 21, 2014 at 2:42 PM

Bonus: No need to insure machines…and no worries on Union strikes.

workingclass artist on February 21, 2014 at 2:34 PM

Never underestimate a leftist.

There will eventually be a push to unionize machines and provide them “health” benefits and retirement plans.

Bishop on February 21, 2014 at 2:43 PM

In typical lib fashion, my wife’s step-dad made the claim that the pay of the CEO of Wal-mart would allow them to raise their average wage by something around $2-3/hour. He’d heard that from some talking head, or whatever. I looked it up. Taking the Wal-mart CEO’s total compensation and spreading it to all the employees would give each on about $12. Not per hour. Not per week. Grand total. I might be slightly off on those numbers now, since this was a year or so ago, but not by much. He still wouldn’t give up the point.

sumpnz on February 21, 2014 at 2:45 PM

a minimum wage hike likely would trigger a reduction in the number of student workers

Then BO can loan them tuition money and keep thm on his plantation forever.

SayNo2-O on February 21, 2014 at 2:46 PM

Personally, I would find it cool to eat a burger made by a robot.

Now when they add fries – Idiocracy is here.

22044 on February 21, 2014 at 2:48 PM

Zero impact.

Del Dolemonte on February 21, 2014 at 2:29 PM

One more reason we have no recovery.

dogsoldier on February 21, 2014 at 2:32 PM

Biggest fact the Dems censor is how few Americans actually are impacted by the minimum wage to begin with.

It’s less than 2% of the total population.

Del Dolemonte on February 21, 2014 at 2:49 PM

Well, sure Del, if anyone knew the Dems are FoS they might stop listening to them!!

dogsoldier on February 21, 2014 at 3:08 PM

It all depends on the business model. When will politicos, bureaucrats, and academics who never worked a day in private enterprise stop trying to teach the market how it works?

Viator on February 21, 2014 at 3:08 PM

Never underestimate a leftist.

There will eventually be a push to unionize machines and provide them “health” benefits and retirement plans.

Bishop on February 21, 2014 at 2:43 PM

VW Germany HQ says no more VW plants in the US cause of the latest Union rejection by workers.

Folks better wake up.

workingclass artist on February 21, 2014 at 3:10 PM

A few weeks ago I posted a link to a gourmet burger making robot. You load it up with ingredients and you don’t need ANY employees.

Wal-mart will have robots soon enough and more automated cashiers.

The socialists will be left standing there looking stupid, as always.

dogsoldier on February 21, 2014 at 2:38 PM

Yep!

Personally, I would find it cool to eat a burger made by a robot.

Now when they add fries – Idiocracy is here.

22044 on February 21, 2014 at 2:48 PM

The line must be drawn at Bacon.

Bacon covered in peppered flour before tossing it into a properly seasoned sizzling iron skillet is a southern art for a proper BLT in Hot weather with a sweet tea or cold beer chaser.

A Robot can’t do that…It’s futile to try…

workingclass artist on February 21, 2014 at 3:15 PM

Bacon covered in peppered flour before tossing it into a properly seasoned sizzling iron skillet is a southern art for a proper BLT in Hot weather with a sweet tea or cold beer chaser.

A Robot can’t do that…It’s futile to try…

Of course that goes well with a crisp cold robot picked tomato…

*snicker*

workingclass artist on February 21, 2014 at 3:18 PM

Ha. I love examples of cutthroat business practices. Hey Gap. You wanna pay your employees more than the minimum wage? We will too (says Wal Mart).

Ruckus_Tom on February 21, 2014 at 2:37 PM

Did you miss the point of the post? (It was the difference between Wal-Mart wanting to force *everyone* to do it, and Gap doing it because it wanted to – you know, the market.)

They made their own decision with government coercion,

Bishop on February 21, 2014 at 2:41 PM

Was that supposed to be “without”?

sumpnz on February 21, 2014 at 2:45 PM

Sadly, no, many will not listen to actual facts.

GWB on February 21, 2014 at 3:23 PM

McDonald’s has been testing computer registers/order takers in Europe for a few years now. Robot lettuce pickers and sorters are testing in farms in California.

Bonus: No need to insure machines…and no worries on Union strikes.

workingclass artist on February 21, 2014 at 2:34 PM

They will make that move so fast it will make Nancy Pelosi’s head spin.

The Wawa stores in the mid-Atlantic went to computerized ordering at their food counters 3 years ago. It works great. You only need one cashier, maybe two at peak times.

Panera has developed a strong following despite using a small number of workers in each store. But they could easily go to the computerized ordering system too.

rockmom on February 21, 2014 at 3:23 PM

The Wawa stores in the mid-Atlantic went to computerized ordering at their food counters 3 years ago.

rockmom on February 21, 2014 at 3:23 PM

It was more than three years ago – at least seven, as I was still commuting north of Richmond at the time. And, yes, it’s really efficient and handy.

GWB on February 21, 2014 at 3:26 PM

As usual, Statists cannot think even one full move ahead.

They will cite The Gap’s bottom-line-based decision as proof that the minimum wage should be mandated higher by the Central Committee. Doing so will destroy the competitive advantage gained by The Gap in getting and keeping better employees. The reduction in turnover and improved employee satisfaction they seek, and are able to accommodate at their volume, would be instantly negated if every employer were forced to pay the same amount. Meanwhile, less successful businesses, operating on a smaller margin with a higher employee volume, will cut staff and go through expensive re-organizations, re-trainings, at the government’s whim. More people will end up unemployed.

Quick, you need to feed your family, do you choose no job, or a job below the “living wage” line established by “experts”?

Freelancer on February 21, 2014 at 3:30 PM

This administration doesn’t care what impact it would have on the economy, jobs, or consumer prices. Higher wages = more taxes. Period.

Oxymoron on February 21, 2014 at 3:35 PM

They will make that move so fast it will make Nancy Pelosi’s head spin.

The Wawa stores in the mid-Atlantic went to computerized ordering at their food counters 3 years ago. It works great. You only need one cashier, maybe two at peak times.

Panera has developed a strong following despite using a small number of workers in each store. But they could easily go to the computerized ordering system too.

rockmom on February 21, 2014 at 3:23 PM

Yep!

It won’t be labeled EVIL until it hits the big retailers…Until then the lefties think it’s cute and hip…cutting edge in that special snowflake star trek G2 way…

Because to them…It’s all magical thinking and hive mind manipulation.

They voted in a Reality TV Fascist and everything is like a video game or the movie playing in their heads because everyone is a guitar hero…

Berlin: late second decade of the 20th century

*blech*

workingclass artist on February 21, 2014 at 3:38 PM

Wait till we go full driverless GPS monitored with government installed shutdown button vehicles.

Vehicles deliver goods as well as people.

Great way to siege a city isn’t it?

workingclass artist on February 21, 2014 at 3:42 PM

I’ll give you one word that throws all those little “niceties” that this is intended to invoke into the garbage can: Teamsters. If you have to ask, then you don’t know anything and might as well go along and drink the Kool-Aid.

el hombre on February 21, 2014 at 2:28 PM

I understand what you are referring to with reference to the unions, but you seem pretty well informed. Perhaps you could educate us kool-aid drinking knuckleheads (because readers come and go from day to day) with a brief overview and a couple of links that explain this important aspect of the politics of the minimum wage.

RushBaby on February 21, 2014 at 3:47 PM

It boils down to how much people are willing to work for. If they work for less, they will spend less and invest less and go deeper in debt, and they in turn other concerns will suffer. I think we’ve been seeing this for many decades now and it’s been catching up to us.

Is artificially raising wages via the gov’t the solution? Certainly not.

My take on all this is that it’s just the way it is and it’s not going to get any better and there really aren’t any solutions.

So if that’s true then we’ll just have to deal with the consequences and whoever’s left will have to adjust accordingly to a new way of doing things. Civilizations decay (and we aren’t really sure why in particular) and turn into something else. It’s the way things have been working for thousands of years.

Dr. ZhivBlago on February 21, 2014 at 3:53 PM

I don’t shop at Costco. What sort of specialized skills would they need?

conservative pilgrim on February 21, 2014 at 2:23 PM

They don’t.
My son worked for Costco for a good portion of last year – making pizzas in the food court – at a decent wage though. It’s a bulk item club just like Sam’s Club (the other side of Walmart Corp.) – so they have a few more people driving forklifts – but otherwise it’s all cashiers, stockers, and food court people – just like Sam’s, and pretty much like any other large department store and/or grocery store.

My son got hired away from Costco – back to a small Italian restaurant chain as a salaried Asst Manager – shortly after his boss in the Costco food court took a few months off for a major surgery, and they gave the temporary manager position to a guy from deli who knew nothing about food court, but had seniority – even though the boss recommended my son take over food court while she was out. The guy with seniority took over food court and proceeded to totally fvck it up.

dentarthurdent on February 21, 2014 at 4:14 PM

VW Germany HQ says no more VW plants in the US cause of the latest Union rejection by workers.
Folks better wake up.

workingclass artist on February 21, 2014 at 3:10 PM

You must be a leftist – since you’re misrepresenting what was actually said, and by whom.
The head of the VW LABOR UNION in Germany said he would attempt to block VW from investing more in the US unless the US plants unionized.
http://www.reuters.com/article/2014/02/19/us-vw-usplant-idUSBREA1I0S820140219

Also in that story:

Republican U.S. Senator Bob Corker, a staunch opponent of unionization, said last Wednesday after the first day of voting that VW would award the factory another model if the UAW was rejected.

dentarthurdent on February 21, 2014 at 4:24 PM

The reason you offer more than minimum wage, like the GAP, is because it gives you an edge over your competition. That’s why ANY of us make more than the minimum wage. As soon as you dictate a minimum all of the supposed benefits of raising wages is moot as you have no competitive advantage.

Which is exactly why Walmart would support the move. The GAP now has to raise their wages further, or Walmart will be competing for the same workers. And anyone who might undercut them can’t.

This is why minimum wage has such a devastating effect on the economy, not even so much for the workers themselves as they are actually a very small percentage, but because how rock bottom entry level wages now compare to low pay. Right now there are people making $10-12 per hour, which looks really good compared to the current minimum. But if you raise the minimum to $10.10, where do the $10-12/hr go? And then where do the $15/hr go? Sure, you compress wages, but it messes everything up, all for the sake of forcing employers to pay more for labor that might not be worth it.

MC88 on February 21, 2014 at 4:29 PM

You must be a leftist

dentarthurdent on February 21, 2014 at 4:24 PM

I hope you missed a sarc tag there. I don’t want to have to use that 12ga barrel on you. (wrong =/= leftist, and wca has seemed pretty conservative)

GWB on February 21, 2014 at 4:35 PM

I hope you missed a sarc tag there. I don’t want to have to use that 12ga barrel on you. (wrong =/= leftist, and wca has seemed pretty conservative)

GWB on February 21, 2014 at 4:35 PM

It’s hard to keep track of who’s who any more with all the newbies.
But his comment about VW saying they won’t build more in the US without the union is flat wrong. It’s the German labor union leader who said he would oppose more US investment if we didn’t unionize.

dentarthurdent on February 21, 2014 at 4:41 PM

It’s the German labor union leader who said he would oppose more US investment if we didn’t unionize.

dentarthurdent on February 21, 2014 at 4:41 PM

Who sits on the VW board. It’s a crazy system they got.

GWB on February 21, 2014 at 4:45 PM

MC88 on February 21, 2014 at 4:29 PM

Great point – and hits what I thought about Walmart supporting an increase. If the government forces them to increase the min wage, then they have an excuse for raising their prices as well – can’t help it, government is making us do it. But the kicker is that all their competitors must also increase their wages, and costs, and prices – and then Walmart has the advantage due to their size and large volume purchasing power. Good (but slimy, underhanded) way to put your competition under – and “it’s not Walmart’s fault”.

(Truth in advertising notice – I shop at Walmart because their prices are cheaper for the same stuff elsewhere)

dentarthurdent on February 21, 2014 at 4:49 PM

Yes, yes, yes, and yes. All of these are true

Money is not a motivator.

huckleberryfriend on February 21, 2014 at 4:49 PM

Who sits on the VW board. It’s a crazy system they got.

GWB on February 21, 2014 at 4:45 PM

It is different. As I understand it, in Germany the unions function very different from here – the union understands the company must be successful for the benefit of everyone involved, so they aren’t willing to drive the company out of business. They actually act like they, and the employees, are in a partnership with the company.
In this country the unions don’t seem to give a dam about the company as long as they get what they want.
And based on this story, I’m not so sure the union bosses in Germany understand how different, and destructive, the US unions are.

dentarthurdent on February 21, 2014 at 4:53 PM

Two things missing from the discussion.

Many small businesses bootstrap to get started. Raising the minimum wage will hurt the little guy way more than the big guy.

Some union jobs are minimum wage plus. So when minimum wage goes up, look for a corresponding raise in union pay.

Raising the minimum wage is anti-competitive.

huckleberryfriend on February 21, 2014 at 4:55 PM

Some people are simply not worth more than $8/hour. These people, both the young and the unskilled, still need employment. And some of these people will grow their skill sets and be worth more than $8/hour in the labor market. And some of them will not.

Jeddite on February 21, 2014 at 2:28 PM

That is the point. As early proponents of the minimum wage pointed out in 1912, a minimum wage would effective put low and unskilled poor people out of the labor force. Royal Meeker, labor commissioner for Wilson, suggested at the state care for them…and control their reproduction to nill. The minimum wage was begun as a means to destroy and eliminate an entire socio-economic class, social Darwin-style.

mrteachersir on February 21, 2014 at 5:12 PM

Can’t believe I forgot about this – obligatory!

22044 on February 21, 2014 at 5:15 PM

I love it when idiot liberals are forced to eat their own crap sandwich.

ultracon on February 21, 2014 at 5:16 PM

t is different. As I understand it, in Germany the unions function very different from here – the union understands the company must be successful for the benefit of everyone involved, so they aren’t willing to drive the company out of business. They actually act like they, and the employees, are in a partnership with the company.
In this country the unions don’t seem to give a dam about the company as long as they get what they want.
And based on this story, I’m not so sure the union bosses in Germany understand how different, and destructive, the US unions are.

dentarthurdent on February 21, 2014 at 4:53 PM

Exactly. The employee/employer relations councils are necessarily “unions” per se. They are councils. They don’t belong to a larger, regional or national or even international group of thugs like the UAW. This is why the company left the vote up to the employees.

I’ve worked in places that had an employee/employer relations council. They generally worked pretty decent, because everyone had skin in the game…there is no “boss” for the employees calling the shots.

mrteachersir on February 21, 2014 at 5:17 PM

davidk on February 21, 2014 at 2:31 PM

What is with you and your constant barrage of off-topic posts and (often times, non-working) links?

Are you that desperate for attention?

pain train on February 21, 2014 at 5:31 PM

If VW is so pro-union, why didn’t they build their plant in Michigan, the home of the greedy UAW? Why build in Tennessee at all?

slickwillie2001 on February 21, 2014 at 5:33 PM

dentarthurdent on February 21, 2014 at 4:24 PM

Dude…I’m not a leftist

Sometimes I make lazy mistakes?

I stand corrected.

workingclass artist on February 21, 2014 at 5:37 PM

Dude…I’m not a leftist
Sometimes I make lazy mistakes?
I stand corrected.

workingclass artist on February 21, 2014 at 5:37 PM

Ok – sorry.
I guess I also misinterpreted the direction of your comment.
I thought it looked pro union. My mistake.

dentarthurdent on February 21, 2014 at 6:20 PM

BuzzCrutcher on February 21, 2014 at 2:32 PM

22044 on February 21, 2014 at 2:35 PM

dentarthurdent on February 21, 2014 at 4:14 PM

Thanks.

conservative pilgrim on February 21, 2014 at 6:30 PM

Dude…I’m not a leftist
Sometimes I make lazy mistakes?
I stand corrected.

workingclass artist on February 21, 2014 at 5:37 PM

Ok – sorry.
I guess I also misinterpreted the direction of your comment.
I thought it looked pro union. My mistake.

dentarthurdent on February 21, 2014 at 6:20 PM

It’s all good.

I’m a native Texan…right to work state…so Unions aren’t my thang….Don’t care too much for guilds either…

I just heard the VW blurb on the radio this morning and blabbed my mistake…which you corrected.

And thank you.

workingclass artist on February 21, 2014 at 6:51 PM

Quick question.

What are the odds of getting a job in sales at GAP without ANY sales experience or job history?

None? Thought so. This isn’t a “first” job, but a 2nd job.
And all jobs should pay “2nd job” wages?

So how do you get a first job, when your labor doesn’t warrant those wages; and they’re requiring skills/experience you don’t have?

Short answer: You don’t. You can’t get the first job to move up to the better jobs; so you’re stuck at the bottom and we’re cutting rungs off the ladder to keep you there.

Aren’t we kind and compassionate?

Minimum wages are “first” jobs not “lifetime jobs/careers”… and they’re useful for what they do. They pay low, but therefore don’t require skills/experience to get them. And once you have skills/experience (assuming you did well) you can move on to a better job.

How stopping people at the bottom from getting a first job will help them get the 2nd one requiring something they don’t have is good, I don’t understand.

I guess we should magically create people with job experience and skills so they won’t earn low wages. Anyone know how to implant job experience into someone?

gekkobear on February 21, 2014 at 6:52 PM

Quick question.

What are the odds of getting a job in sales at GAP without ANY sales experience or job history?

None? Thought so. This isn’t a “first” job, but a 2nd job.
And all jobs should pay “2nd job” wages?

Speaking as a former GAP management employee, getting hired wasn’t the problem, retainment was. Lol

BlaxPac on February 21, 2014 at 7:12 PM

McDonald’s has been testing computer registers/order takers in Europe for a few years now. Robot lettuce pickers and sorters are testing in farms in California.

Bonus: No need to insure machines…and no worries on Union strikes.

workingclass artist on February 21, 2014 at 2:34 PM

One of the reasons why so many Mexicans crossed the border is because of improvements in productivity on Mexican farms. There was a surplus of labor.

What do you think will happen when fewer people are needed in the supply chain in in store fronts to make Big Macs? In this case they will become more motivated to vote for Democrats. If there is no work, minorities who lose their jobs by the hundreds of thousands will seek more welfare benefits from the party of government.

Add in the fact Republicans will do whatever they can to limit the number of abortions and that further increases the number of people who have motivation to vote against your interests.

Automating low end jobs is not a winner for Republicans and its constituency, much like moving manufacturing jobs to the third world has hurt the party also.

FrankT on February 21, 2014 at 7:41 PM

Wow, since when is working in retail at the gap some lofty job that requires experience? Have things really gotten that bad?

jhffmn on February 22, 2014 at 3:43 AM

Also, since when is the gap a high end retailer? Its a small step up from Walmart. $20 dollar polo shirts or whatever aren’t exactly high end.

Look, I ain’t rich and I live deep in fly over country and you guys are making me feel like a snob.

Is the economy that dire?

jhffmn on February 22, 2014 at 3:47 AM

Also, since when is the gap a high end retailer? Its a small step up from Walmart. $20 dollar polo shirts or whatever aren’t exactly high end.

Look, I ain’t rich and I live deep in fly over country and you guys are making me feel like a snob.

Is the economy that dire?

jhffmn on February 22, 2014 at 3:47 AM

Who “shops” in a mall? I haven’t been in one since my iphone died on day 367 of ownership and they wouldn’t warranty it. Standing in an Apple store full of narcissistic hipsters waiting to be “helped” by a “genius” is not real life.

“I’m sorry sir, you phone is out of warranty(by 2 days) can I show you the new iphone 4s?”

Murphy9 on February 22, 2014 at 8:34 AM

Costco is going downhill – they are offering many green products at high cost and are no longer a price leader but still better than Sam’s.

Obamatrix on February 22, 2014 at 8:56 AM

Personally, I would find it cool to eat a burger made by a robot.

Now when they add fries – Idiocracy is here.

22044 on February 21, 2014 at 2:48 PM

Actually, fry machines have existed for a long time now… or used to.

Back in the mid 1980′s I used to drive an hour and a half to go to an arcade near the MSU campus. I forget the name of the arcade, but they had the only french fry vending machine in the state.

I used to drop a few quarters into it, play the game next to it for a few minutes, and when I was done, my fries were done. :) They were pretty good too… lots of maintenance needed for it tho.

– Smoov

Smoovious on February 22, 2014 at 9:37 AM

Many small businesses bootstrap to get started. Raising the minimum wage will hurt the little guy way more than the big guy.

huckleberryfriend on February 21, 2014 at 4:55 PM

Exactly. This point gets ignored. The left always claims that McDonald’s or Walmart can “afford it”. Maybe. But what about the little guy who competes with them? Say I own a small burger joint with 5 full-time employees, and manage to establish a nice, but modest, yearly salary for myself of say $60,000. If I have to pay my employees $3 more per hour, that amounts to an increase in labor costs of roughly $30,000 per year (technically the minimum wage might not apply to this business, but the owner would still have compete for labor). Where does this money come from? Could raise prices a little, but still have to compete with McDonald’s, who probably would not have to raise prices quite as much. I may try to get along fewer employees, or decide it’s not worth it and shut down altogether.

Mullaney on February 22, 2014 at 10:12 AM

Sure, WalMart will support a forced minimum wage hike, just like it supported ObamaCare. It is going to act in it’s self-interest to defend itself from the folly of government interference in the market.

sandspur on February 22, 2014 at 10:37 AM

Companies who pay more than minimum wage are stepping stones to individual growth for those who enter the job market at entry level and prove they can find the men’s room. Those who can not perform at entry level are stuck there until they can.

Wade on February 22, 2014 at 11:32 AM

We are already subsidizing Walmart with Obamacard carrying patrons who don’t much care about quality because they aren’t earning what they buy with the sweat of their brows. Remember when the card system broke down one Saturday night and Walmart allowed their customers to just walk out with whatever they wanted.

Wonder if the Gap can survive with only lefty crony capitalists as customers? Those 1%ers don’t shop at the bourgeois Gap and there won’t be any middle class left, so who do they think will be their customers.

erp on February 22, 2014 at 12:31 PM