First, why isn't it redistribution when labors share of income (with regard to 74% of the economy) declined from 65% to 57% . The government chooses policies and the policies selected have resulted in labor losing 8% of the pie. The gap is a good indication that businesses could afford to pay workers more money without having to fire people.

Of yeah, let's rely on Mr. Worstall for a discussion on low-wage workers. He talks about the food prep industry and then tries to imply that those are mostly bartenders and servers. No they're not! They work mostly at fast food restaurants at or near minimum wage. I don't know why there don't seem to be concrete estimates, but I have seen estimates at 2.5 to 3.5 million workers in fast food. Anyway, there's a lot of them and they don't make anything and fast food restaurants are very profitable.

Look at where the jobs are going. Here are the the eight lowest paid jobs you can get. http://www.msnbc.msn.com/id/38168029/ns ... Kwq4GeHPGg

Notice how many jobs there are and how many people make just over the minimum wage. Mr. Worstall just counts the people making minimum wage. However, it is misleading just to count those jobs. Let's say you raise the minimum wage a $1; everyone who is making above the minimum wage and under the new minimum wage will get a raise. Not only that it is probable that there will be workers making close to the minimum wage who will get a bump as well. And heck why worry about it if it doesn't effect that many people.

And the reality is, regardless of what kind of skills or education people have, there have to be jobs for them to get. We have lost a ton of manufacturing jobs and it is not like we're doing that much to secure jobs in high-tech fields. So it is not a problem, where, our people became lazy and did not want to work as compared to earlier eras. No, there aren't as many good paying jobs for them to fill. That is one of the reasons why educational costs have skyrocketed in the U.S., because there is a huge demand to get a slot in the right university to get the right job.

Ricky:

ray

No, it's to point out that Alberta has a lower minimum wage than some U.S. jurisdictions on a purchasing power basis

There's nothing in there about Alberta... Where, by the way there's a dearth of employees in the oil sands region. And to compensate Tim Hortons (fast food & coffee) pays employees a $10,000 retention bonus if they stay a year.

I did point to a Wikipedia entry on Canada. I figured you would be curious enough to look at the chart accompanying the entry.

Your story about Alberta supports the conservative point very well. It is similar in North Dakota. The point is that allowing the private sector to do what it does is a more effective solution than raising the minimum wage. (In the US we have the technology, we just restrict drilling for oil.)

Here are a couple of charts to go along with the discussion. The first is employment by country. Just looking at unemployment rate doesn't fully capture the dynamic.
http://en.wikipedia.org/wiki/List_of_co ... yment_rate

The second shows population growth over the last 50 or 65 years if you are willing to squint (figuratively, not literally). For example, you can see that between 1950 and 2000 the US population increased by about 80% whereas Sweden's population increased by about 20%. I wanted to find employment growth over that period, which would be even more relevant. But the presumption is that the US has had job growth of about 1% (or thereabout) per year over those years whereas Sweden has had job growth of about 0.25% (or thereabout) per annum over that same period. The US cannot maintain itself with that kind of job growth.

In other words, when evaluating best practices in other countries, you have to account for varying dynamics. You cannot just say that Sweden is doing better than the U.S.; therefore the US should emulate Sweden's policies. It's not clear that Sweden's policies are appropriate for a country that is 3% as big and growing 25% as fast, not to mention all of the historical, cultural, and geographical differences. http://www.photius.com/rankings/world2050.html

freeman2 wrote:
And the reality is, regardless of what kind of skills or education people have, there have to be jobs for them to get. We have lost a ton of manufacturing jobs and it is not like we're doing that much to secure jobs in high-tech fields. So it is not a problem, where, our people became lazy and did not want to work as compared to earlier eras. No, there aren't as many good paying jobs for them to fill. That is one of the reasons why educational costs have skyrocketed in the U.S., because there is a huge demand to get a slot in the right university to get the right job.

The conservative case should not be based on the notion that our people have become lazy. The case is that we need to look at our own actions to solve our problems and not think of more ways for the government to help us. (Yes, I know that some people cannot solve their problems. I just don't know that you have considered all the unintended consequences in your approach.)

Do you really think that demand for the right job is the reason (or even the main reason) that education costs have skyrocketed?

It has gotten incredibly competitive to get into top schools.Harvard's acceptance rate is 6 percent and the acceptance rate at other top schools is comparable. UCLA accepts about 20 percent. My (dim) recollection is that when I was applying to college that the acceptance rate at top schools was somewhere around 15-20 percent. Given the huge demand for certain schools, wouldn't supply and demand theory indicate price would go up(everything from facilities to administration costs to salaries would rise quickly at schools that are in such great deman). There are bunch of other reasons, but I think that is one of them
There has to be a reason that it has become so competitive to get into top schools and I think the reason is that because people in top 5 or percent 10 percent have done very well over the past 30 years (while the rest of the country has lagged well behind them) and a degree from a select school is the best chance to make it into the top ten percent. And a college degree in general has become necessary to a large degree to make it into the middle or upper middle class

freeman2 wrote:First, why isn't it redistribution when labors share of income (with regard to 74% of the economy) declined from 65% to 57% . The government chooses policies and the policies selected have resulted in labor losing 8% of the pie. The gap is a good indication that businesses could afford to pay workers more money without having to fire people.

I'm sure you can show causation--from government policy to outcome? There are no other factors? Foreign competition depressing wages? Healthcare taking money out of everyone's pocket? Who gets the other 43%?

Of yeah, let's rely on Mr. Worstall for a discussion on low-wage workers. He talks about the food prep industry and then tries to imply that those are mostly bartenders and servers. No they're not! They work mostly at fast food restaurants at or near minimum wage.

He used actual statistics. Did you?

What percentage of those at fast food joints are college graduates? I suspect many are either students or dropouts.

Again, whose fault is it that the only job one can get it fast food? And, if you make fast food restaurants pay "living wages," what will happen to their prices? When those prices go up, will demand not go down? Will that not result in fewer jobs?

(As an interesting note, you should check out how In-N-Out treats their employees. (Hint: very well). Not every business can do this, but they do.)

I don't know why there don't seem to be concrete estimates, but I have seen estimates at 2.5 to 3.5 million workers in fast food. Anyway, there's a lot of them and they don't make anything and fast food restaurants are very profitable.

Again, what's the demographic breakdown? What percentage of the workforce is this? How many remain in fast food for more than 3 or 4 years? You need to make this case before you suggest the entire system must be overthrown in their favor. If it's 19-20 year olds, is the cost worth the solution?

Look at where the jobs are going. Here are the the eight lowest paid jobs you can get. http://www.msnbc.msn.com/id/38168029/ns ... Kwq4GeHPGg

Notice how many jobs there are and how many people make just over the minimum wage. Mr. Worstall just counts the people making minimum wage. However, it is misleading just to count those jobs. Let's say you raise the minimum wage a $1; everyone who is making above the minimum wage and under the new minimum wage will get a raise. Not only that it is probable that there will be workers making close to the minimum wage who will get a bump as well. And heck why worry about it if it doesn't effect that many people.

Right, but these are all jobs that take virtually no training, skill, or education. Supply and demand. When you make yourself of little value, it is no surprise you are not rewarded.

Not everyone has the wherewithal to be skilled/educated labor. However, many could and simply do not apply themselves. Should we subsidize the "X-Box experience" further? I know a kid who is living at home, could be in college, but won't go. He works at a game store, will have healthcare until he's 26, and now you demand he receive a living wage? Really?

It's hard to know what the breakdown is without a comprehensive study, but I think there are as many "won'ts" as "can'ts" if not more.

And the reality is, regardless of what kind of skills or education people have, there have to be jobs for them to get. We have lost a ton of manufacturing jobs and it is not like we're doing that much to secure jobs in high-tech fields. So it is not a problem, where, our people became lazy and did not want to work as compared to earlier eras. No, there aren't as many good paying jobs for them to fill. That is one of the reasons why educational costs have skyrocketed in the U.S., because there is a huge demand to get a slot in the right university to get the right job.

And yet, we have many people in college, majoring in fields in which they can have no expectation of meaningful employment. Here's a great degree that's sure to get one a job! And, there are many other universities and colleges offering similarly "valuable" degrees. Furthermore, you can bet the Federal government is helping these students based on their financial need.

Thanks for reminding me about me about In-N-Out, a fast food place that pays above minimum wage and offers benefits Starbucks is another example. Part of that is taking care of employees (and I salute them for that) and part of that is marketing strategy, I think. (paying more to get an employee that you may not otherwise see in a fast food place or low-end retail--young, going to college, from the local community, etc)

I am not going to deny that in a culture where kids get so many material things when they are growing up ( and not to sound old but that wasn't true in my middle-class family when I was growing up), that some kids are going to get a sense of entitlement. But people are also dealing with economic conditions beyond their control. Wal-mart may offer low prices, but it also causes a lot of small retail businesses to go out of business. A lot of cashier jobs in unionized grocery stores that used to provide union jobs no longer do. There is also a process by which industry converts a skilled job into low-skilled jobs. What has the food industry done to make employees low-wage industry. The McDonalds brothers were frustrated having to replace line cooks so they used in essence assembly-line concepts to break down what a line cook did into simple steps that could be replicated by low-skilled labor. Meat producers hire immigrant labor and instead a butcher they have essentially an assembly line where each worker has two or three cuts to make. Of course auto workers work on assembly lines but they have unions.
Mr worstall manipulated the statistics in a deceptive way--I guess you can call that relying on statistics...

ray

In other words, when evaluating best practices in other countries, you have to account for varying dynamics. You cannot just say that Sweden is doing better than the U.S.; therefore the US should emulate Sweden's policies

I agree. The study I've linked prosperity.com is evaluating about a dozen different metrics to make its analysis... I only noted that in all of the nations rated more prosperous than the US three things were common. 1) A higher minimum wage 2) universal health care, 3) much less expensive secondary education. I could have also added more generous benefits in social safety net.

I realize that by itself a minimum wage increase isn't solving all of the problems of poverty in the US.
However, it is a step in the right direction. And if those other nations can afford higehr minimum wages the question has to be why can they, with smaller GDP per capita, manage this and manage to have healthy competitive sectors that depend on minimum wages ?
The exisitence of US based companies like Starbucks and N-Out who can generate comfortable profit margins, yet still compete within their market successfully puts lie to the notion that busineses in the US in those categories cannot prosper unless they secure labour at rates of pay that people have trouble living upon.
The fundamental difference between those nations considered more prosperous than the US is the way the working poor are treated. In those nations where a worker can be comfortable, and where their children can reasonably hope to learn their way to higher achievement, there is less crime, social unrest, greater levels of health etc. Social mobility is much higher.
The fundamental difference is that the poor aren't an under class who's existence is vital to the profitability of a certain level of employer. If a business can't exist paying a living wage (and as said the companies that do so contradict the notion that it can't be done), maybe they shouldn't exist. If the profitiability of a food chain really revolves around minute differences in food costs the idea that the business model is sound must be challenged.
We are frequently reminded that the US is the greatest nation on the earth. If the greatest nation on the earth needs to continue to have an underclass that can't earn a living wage, is in constant threat of medical crisis, and has difficulty raising its children due to these two things... you have to wonder about the claim.
Not trying to take a shot here Ray. Its just that conservatives line up to sustain myths about things like minimum wages causing unemployment without considering the benefits to society at large. And, it must be noted, They readily accept the notion that a minimum wage is unsustainable, just because business men who have exploited the low minimum wage tell them its so.....
The whole question isn't about eliminating poverty. You cannot, because poverty is a relative condition. There will always be those who make less than others. The question is how does that bottom quintile get treated? If all they are is a cheap source of labour, then you create an almost permanent underclass. Isn't it desirable to ensure that the nations prosperity is spread enough that those who are working poor have the comforts that other nations seem to afford?
Again, minimum wage is only a small step to dealing with that issue. But if the spectre of your hamburger going up in price a dime in order to accomodate the minimum wage or Obama Care is really that scary .... you gotta reevaluate.
I've been reading a little about the reactions by consumers to the bleatings of the Applebees franchisee and the CEO of something Pizza.... It seems that the chains have seen a drop in busiiness as consumers take their business to competitors who haven't complained....
Perhaps the market will correct this.... if someone decides to promote something like Fair Trade coffee....only in US service industry
.In some areas thats tough, where Walmart is often the dominant and occassionally only significcant retailer for miles.... And Wal-Mart is a notoriously stingy employer until and unless one can reach management level.

How can Starbucks survive in the business environment with greater wages for their employees? Easy, people want to go to Starbucks. (Not me, mind you... I want to go to the Mom and Pop coffee shops.)

The question after that is:
If Starbucks can do this w/o Government intervention mandating them to have a higher wage, what makes every other company mandated to do what Starbucks has done?

To me it appears that a company flourished by doing what the lefties are saying without government mandated minimum wage. That should be good enough for EVERY other business to make a choice the same way. After all, it is good enough for In-N-Out (a good place to eat, btw), and Starbucks, then it should be good enough for every business.

bbauska wrote:How can Starbucks survive in the business environment with greater wages for their employees? Easy, people want to go to Starbucks. (Not me, mind you... I want to go to the Mom and Pop coffee shops.)

The question after that is:
If Starbucks can do this w/o Government intervention mandating them to have a higher wage, what makes every other company mandated to do what Starbucks has done?

To me it appears that a company flourished by doing what the lefties are saying without government mandated minimum wage. That should be good enough for EVERY other business to make a choice the same way. After all, it is good enough for In-N-Out (a good place to eat, btw), and Starbucks, then it should be good enough for every business.

Boom.

Interesting dichotomy too: In-N-Out is pretty cheap, even though everything is fresh. Starbucks? I love it, but . . . the prices! In fact, Starbucks stock went down like a rock even after the downturn was complete. Only bringing back the founder brought back profitability.

Btw, it's easy to take a potshot at the article I posted, as freeman2 did, it's harder to actually disprove what he said.

bbauska
[quote]To me it appears that a company flourished by doing what the lefties are saying without government mandated minimum wage. That should be good enough for EVERY other business to make a choice the same way. After all, it is good enough for In-N-Out (a good place to eat, btw), and Starbucks, then it should be good enough for every business.[/quote

And yet it isn't. Why are you surprised that some business place their own compensation (short term profits) over the long term health of their companies.? There is long history of this. hell, as long as there is an imbalance between the bargaining relationship between employyes and employers this will always be the case.

Take it away from a "living wage" for a second and consider what you are saying in relationship to work place safety. Lets say work place safety wasn't mandated by specific standards. Some companies might morally decide to be sure their employees weren't regularly losing hands or dieing in work place accidents. Some employers wouldn't care... They skimp on safety measures and dodge the legal consequences, if any occur.
It was only by outside regulation, and enforcement that work places became reasonably safe.
You can find examples all over the place. After the defanging of the MMM, where mine and oil rig safety became basically self regulated, most mines and rigs maintained standards. Some took the opportunity to start skimping on safety regulations. Amongs them BP and Massey Energy. Between them they killed about 40 workers between 2004 and 2010

Somehow Conservatives think the existence of strongly moral companies is the norm. Historically, It isn't. At one time, if a steel worker fell to his death off a building in New York, the company stopped paying his widow at the moment he hit the ground. Not even to the end of his shift, the second he died.
If human nature was, as you imagine it would be, a constant drive by everyone to conform to our better angels .... that situation would never have occurred. And Starbucks and N and Out wouldn't be notable exceptions ....they would be the norm.

Its the same with compensation. Some employers don't understand or perceive the benefits from happy, healthy employees who show up every day. Or are so short focussed they don't care. Or, they do business in China where the pay and working conditions are more like what would happen in the US, if there hadn't been interventions to protect workers in the past.

frankly Bbauska, China is going through what the US did from 1880 through 1950 .... Increasing protections for workers.... An increase in minimum wage to a livable minimum is really just the extention of those reformations... Eventually society reaches out to help those who are in an exploited situation. And the most efficient way is through the state institutions...

Lets examine the logic of your arguement.
If Starbucks can make a profit paying better than minimum wage, with good benefits .... it proves that it can do that.
But another company already knows it can make massive profits without doing so .... Do they look on Starbucks as suckers? Or do they say, hey why don't I clean up my act?
If they haven't arrived at the decision to compensate employees generously on their own, no example is going to shake their own experience of generating great profits with exploitative compensation plans.

Extreme comparison: Slaveholders could have set their slaves free of their own accord. One or two did. Mostly they didn't. It took Lincoln.

.

Was there an answer to what makes Starbucks different than other companies?

Otherwise, nice diatribe. (Full of sound and fury, signifying nothing)

Regarding slavery... It did not take Lincoln. It took states making the choice on their own.

http://en.wikipedia.org/wiki/Abolition_of_slavery_timeline

bbauska

Regarding slavery... It did not take Lincoln. It took states making the choice on their own.

But to be sure of what you've just said. It was the state governments, and not the individual slave holders who made that happen?

Yes. Not the Federal, but State. Also notice it was a change in the State's Constitutions, and eventually the US Constitution that made the change. Perhaps that is a direction that could be adopted to effect such change? (Or does your "esteemed" use of the Commerce Clause cover this as well)

Now that I know you read at least part of my post, what makes Starbucks different?

Even before the States began to change there was Abolitionist Societies. They came first.

bbauska said this

If Starbucks can do this w/o Government intervention mandating them to have a higher wage, what makes every other company mandated to do what Starbucks has done?

To me it appears that a company flourished by doing what the lefties are saying without government mandated minimum wage. That should be good enough for EVERY other business to make a choice the same way. After all, it is good enough for In-N-Out (a good place to eat, btw), and Starbucks, then it should be good enough for every business.

and yet you've admitted that it took state intervention to end slavery...
Your revisionist history aside (It was after all the federal government that suppressed the secessionists and imposed federal laws on the secessionist states)

The point is, the good behaviour of one entrant, (business or state government) doesn't necesarily lead to others deciding to do the same...
And sometimes it requires the state to ensure a standard. In the case of slavery, a standard of human dignity and freedom. In the case of a minimum wage, a living wage.
The living wage, not just because of the issue of a just wage, but also because the effects on society by poverty are large.

Why is Starbucks different? The quality of their management, probably. Not just in determining that a happy employee contributes to the atmosphere of their shops, but that employee loyalty leads to a secure, trained and interested work force and that generally results in increased sales and profitability.

More importantly B, why can other nations with lower GDPs, provide a level of minimum wage, and social benefits - and yet still have the same retail and service industries (the main place for minimum wage in the US) operately succesfully? Why can't the US afford to have a lower class with the same securities as other western nations?
And if you little want to narrow down, But what makes Applebees different from Starbucks? Why do they require a work force that works for so little compensation?
Because if these business models are actual, then there's a serious structural problem in the US economy. It says that unless you maintain a permanent group as poorly compensated, (wages and benefits) entire sectors will shut down.
Do you believe that is real? For some reason we still manage to have Applebees in Canada. So I don't think it is true.