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After Amazon Increases Worker Wages, Whole Foods Responds By Cutting Worker Hours (theguardian.com)
schwit1 shared this article from the Guardian:
In response to public pressure and increasing scrutiny over the pay of its warehouse workers, Amazon enacted a $15 minimum wage for all its employees on 1 November, including workers at grocery chain Whole Foods, which it purchased in 2017... But since the wage increase, Whole Food employees have told the Guardian that they have experienced widespread cuts that have reduced schedule shifts across many stores, often negating wage gains for employees.
"My hours went from 30 to 20 a week," said one Whole Foods employee in Illinois... "We just have to work faster to meet the same goals in less time," the worker said. An internal email shared by the employee from their department manager cited the across-the-board shift cuts as "the direct result of guidance from our regional team". In Maryland, another Whole Foods worker said their regional management is forcing stores to cut full-time employee schedules by four hours, to 36 hours a week. "This hours cut makes that raise pointless as people are losing more than they gained and we rely on working full shifts," the worker said...
In September 2018, several Whole Foods workers organized the group Whole Worker, with the goals of forming a union and providing workers a resource to organize since Amazon took over... "There are many team members working at Whole Foods today whose total compensation is actually less than what it was before the wage increase due to these labor reductions," said a Whole Worker spokesperson in an email to the Guardian.
Neither Amazon nor Whole Foods responded to requests fo a comment, the Guardian reports -- while the workers that they interviewed "were reluctant to speak on the record for fear of retaliation."
"My hours went from 30 to 20 a week," said one Whole Foods employee in Illinois... "We just have to work faster to meet the same goals in less time," the worker said. An internal email shared by the employee from their department manager cited the across-the-board shift cuts as "the direct result of guidance from our regional team". In Maryland, another Whole Foods worker said their regional management is forcing stores to cut full-time employee schedules by four hours, to 36 hours a week. "This hours cut makes that raise pointless as people are losing more than they gained and we rely on working full shifts," the worker said...
In September 2018, several Whole Foods workers organized the group Whole Worker, with the goals of forming a union and providing workers a resource to organize since Amazon took over... "There are many team members working at Whole Foods today whose total compensation is actually less than what it was before the wage increase due to these labor reductions," said a Whole Worker spokesperson in an email to the Guardian.
Neither Amazon nor Whole Foods responded to requests fo a comment, the Guardian reports -- while the workers that they interviewed "were reluctant to speak on the record for fear of retaliation."
What did people think would happen?
I think people think higher wages means getting paid more for the same amount of productivity, which would simply translate to higher prices and inflation. What good is your new higher wage if you have to pay more for your food and living expenses more? I don't think higher inflation is what the people who fought for higher minimum wage wanted, was it?
This simply illustrates the obvious reason why minimum wage is not a good form of welfare. Universal basic income combats the same problem (workers without the economic value being able to earn a living wage) but without fighting against the supply/demand curve. It has been obvious for at least a century that market forces are insufficient to promote the general welfare of all citizens, but the answer is not to combat market forces. Just let wages fall where they may and provide for general welfare in another way.
The economic value of any individual is exactly what they would be paid without any minimum wage. That is fine. Just make sure society is providing basic means for all citizens without relying on wages. Minimum wage is a very poor way of doing that.
-- All that is necessary for the triumph of evil is that good men do nothing. -- Edmund Burke
Where did people really think that new wage money would be extracted from? Profits?
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Those who fight for raising the minimum wage are consistently ignoring the "what happens then" aspect of their idea.
As you point out, when you up the minimum wage in situations where it actually matters (i.e. when the minimum wage is actually not already exceeded by market forces) you start a cycle of inflation pressure. More dollars are casing the same amount of goods and EVERYBODY pays more for stuff. The problem here is that although the minimum wage workers do see a pay increase dollar wise, they eventually see a cost of living increase and fall back to their existing standard of living.
But we are beating a dead horse anyway. Very few people actually get paid minimum wage anyway. At this point, the market price for labor has out stripped the federal minimum wage almost everywhere.
"File to fit, pound to insert, paint to match" - Aircraft Maintenance 101
I'm betting on the latter, personally.
I'm betting one of the choices you left out: not enough profit means the business will close
There is certainly some truth to that but, on the flip side if you raise wages then job expectations also rise because you can attract better people. This means that those less competent workers are going to be let go and replaced with fewer, more effective workers.
The end result may not actually affect a companies bottom line much but it will mean that those less capable workers are going to find it harder and harder to find jobs as they are squeezed out by automation and higher job expectations. So while raising wages may reduce the number of people in poverty for some it is likely to make things a lot worse.
Socialism is fine until you run out of other people's money. A retail worker is not worth $30,000/year. When politicians, who hypocritically tout the wants of "the people" for their own purposes pass legislation purporting to seek a higher wage floor, corporations have no choice but to respond by slashing hours and benefits.
so Amazon increased wages for the company they owned but didn't increase labor budget?
Something doesn't add up here. There's one of two possibilities.
a. Amazon didn't increase labor budgets, in which case raising their employees wages was a cynical PR stunt pulled specifically so they could then point to and say "See, we tried to help, but minimum wage just doesn't work".
b. Amazon _did_ increase labor budgets, in which case these are just asshat managers exploiting the raise to cut hours without taking the blame for it. If you've ever worked a low wage manager job you know your bonuses are tied to costs.
Either way somebody is blowing smoke up our asses.
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because when poor people have money they spend it.
The reason why trickle _down_ doesn't work is that no matter how greedy you are there's only so many hours in the day to spend money, and only so many yachts to buy.
Give a rich man money and he sits on it to use it as a power broker tool to get what he wants. Give a poor man money and he spends it. Multiple studies have shown that demand side economics works. That a dollar given to a poor person circulates far, far more than even two given to a rich man.
The other way minimum wage "trickles up" is that it sets a floor nobody can fall below, reducing desperation. Desperate people will struggle. Most will collapse under the weight of those struggles, but a few will make it. Those few will compete with you for your jobs, putting pressure on your wages. The guy what would have been happy in life at $20/hr in a factory is now gunning for your $90k/yr job because that's what it takes to get by. Sure, he'll fail, but there's a million guys behind him. If even 1% make it into your industry you wages will go down.
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Actually, pretty much always. The answer to complex problems is "to leave it alone and hope it sorts itself out."
Well I just used your phrasing here, but let me walk you through it.
How do you know which of the million proposed solutions to any complex problem will work? You don't. That's why it's a complex problem. You probably risk making things worse by thinking you can make a solution.
So, your best bet is to actually leave it alone and know that many people will get off their butts and try and do something about it. Generally speaking, when that happens, good solutions emerge.
For example, when the colonial British had to deal with the Native Indians, they saw a problem. How do you integrate this vastly different culture and people with the more modern British one? They could have just left it as is and let culture and society progress as it may. Instead they decided, let's solve this problem by making Native children into British people. Let's remove them from their parents and educate them in residential schools and that will solve the problem. The result was worse than if they had just left them alone.
That's an example of screwing it up.
Here's a successful example.
Drug prices are a thing.
Certain generic drugs were not readily available or priced reasonably. This is as true in Canada as in the US. I'm in Canada, and it is still a problem here. Here's what some US hospitals did:
https://civicarx.org/about/
They created a non-profit generic drug manufacturer so they could solve that problem. They got off their butts and solved the problem. Best of all their way of solving the problem doesn't prevent or short change anyone else from trying to solve it either.
That's actually what people do. No one likes to sit around doing nothing. People solve problems. For the person who opens a pizza store to the guys who founded Google who saw the a chance at the Internet when Microsoft was slacking, to the guy who decided to try and clean up the ocean with that ocean cleaning floating device.
As it is with the minimum wage. You have no idea what to do with the minimum wage. How does that affect local wages? How about your ability to compete with India/China/Mexico. How does that all play out? I don't know and no one really knows either.
So best to let them play it out. If you really believe in good wages, please get off your butt and start a company and try it out. Just a pizza store, nothing complex.
Even your cat example. I don't know the exact organization you speak of, but no doubt it was a grass roots effort by some people who got off their butts and did something. Not just complain to the government to solve the problem. They might be getting some government aid now or cooperation with the government, but chances are they started out just trying to solve a problem and doing it.
and when something doesn't work you take a step back, research and learn from your mistakes. In other words, you apply the scientific method.
If you want a fantastic example of what happens when you leave shit up to chance take the entire first half of the 19ths century. The Great Depression and both World Wars were basically people letting stuff happen.
Post Great Depression, for example, we heavily regulated banks and had no major crashes for decades. Then we started deregulating things and blamo, Savings and Loan scandals. Same thing happened with the 2008 crash where we let Main Street and Wall Street banks interact (we didn't used to). And then there's stock buy backs. They are absolutely wrecking our economy as businesses pour capital into them instead of investments. Pre-Reagan they were illegal market manipulation, now they're standard practice.
Yes, Human beings can solve our problems. If we couldn't we'd still be at the mercy of the elements. But the thing is, we have to try. And we can't just throw up our hands and say "Welp, that didn't work, I guess we'll never solve that". That kind of defeatism is what gets us the Dark Ages all over again. Thousands of years with no progress.
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And how do you propose to do that when you work full time but earn $20 a week? Or two full time jobs - for a whole $80! Or less! Since there's no minimum wage!
The minimum wage exists as a floor. If your business doesn't pay a living wage, your business doesn't deserve to exist.
Suuuuuure. But I ask again: why don't you Randians put your home economics where your ideology lies? Back in 2001, Nickel and Dimed was written by Barbara Ehrenreich, on what a rotten existence it is to try and get by on the minimum wage. Which hasn't been increased since Bush was president.
So why don't any of you show us all how it's done. Show us how awesome it is to live under a bridge and eat potatoes because that's all you can afford. You Randians are real big on advocating starvation-level wages for other people, but never try doing it yourselves.