[Speed Gibson,
Saturday July 29, 2006 at 10:13pm]
Who's the real winner?
ACORN, in its press release, was overjoyed in its victory in passing a living wage bill in the city of Chicago, targeting Wal-Mart and other huge big-box retailers.
In the local paper, this made page one, with a picture showing two jubilant people. Don't count your chickens just yet, folks.
Yes, there is the obvious reality that Wal-Mart probably won't expand beyond its current single location in Chicago. It may even close that one. Presumably, that Wal-Mart will have to raise its prices a bit to cover the increased wages. Why should nearby customers go there if another Wal-Mart is nearby in a suburb as seems likely? Further, this price skew creates return problems for when the goods cross the border. Raising prices throughout the Chicago metropolitan area doesn't work, either, sending your customers to the competition or Gary, Indiana.
Yes, there is the obvious reality that fewer people will be hired. Alternatives will be found for the lowest skill positions, where the gap between what is paid and what the work is worth is the greatest. They might buy a few more shopping carts and collect them from the parking lot less often. Those famous greeters might only be there during prime hours. Some specific departments may be closed, to expand the more profitable areas.
But I'd like to suggest another reality, which I'll state as ACORN's primary unfounded assumption: the people making $8 an hour will be the same people making $10 an hour. Who says?
If you have jobs worth $8 an hour, but now have to pay at least $10 an hour (don't forget the $3 an hour in benefits), these jobs lose money if nothing else changes. One thing you can do is hire "better" people by raising the standards. If you're going to pay that kind of money shagging shopping carts, you can insist on the fast, young kids who don't really need those powered pushers. The slouchers you see all to often today are going to have to step up - or out.
If the benefits are high like this, you're going to shift to full time people over part time people, simply because full time people are usually more productive that the part time equivalents. The snack bar part-time positions could be combined with back-room stocking to make full-time positions, eliminating many after-school and mother-working-half-time jobs.
Wal-Mart could also insist on more education even if not needed. We see this already in employment, where many jobs require degrees however unrelated to be considered. It's a screening process that has crept in to offset the induced costs of our overly-invasive hiring (and especially firing) laws.
Seniors, single mothers, kids seeking part-time jobs, and the unskilled are all going to find the bar a little higher at this Wal-Mart or any other employer saddled with these unjustly imposed costs.
But ACORN knows best, that they're better off unemployed at $10 an hour than start at $8 an hour with a company that truly wants them to succeed.
The ordinance will require a $10 minimum hourly wage and $3 an hour in fringe benefits, with annual indexing for inflation, for big box retail stores that are at least 90,000 feet and have gross annual sales of $1 billion.
"When you work for the people doing God's work - fighting to give working families a fair chance to succeed - you're going to win," said ACORN community leader Toni Foulkes after learning about the victory.
In the local paper, this made page one, with a picture showing two jubilant people. Don't count your chickens just yet, folks.
Yes, there is the obvious reality that Wal-Mart probably won't expand beyond its current single location in Chicago. It may even close that one. Presumably, that Wal-Mart will have to raise its prices a bit to cover the increased wages. Why should nearby customers go there if another Wal-Mart is nearby in a suburb as seems likely? Further, this price skew creates return problems for when the goods cross the border. Raising prices throughout the Chicago metropolitan area doesn't work, either, sending your customers to the competition or Gary, Indiana.
Yes, there is the obvious reality that fewer people will be hired. Alternatives will be found for the lowest skill positions, where the gap between what is paid and what the work is worth is the greatest. They might buy a few more shopping carts and collect them from the parking lot less often. Those famous greeters might only be there during prime hours. Some specific departments may be closed, to expand the more profitable areas.
But I'd like to suggest another reality, which I'll state as ACORN's primary unfounded assumption: the people making $8 an hour will be the same people making $10 an hour. Who says?
If you have jobs worth $8 an hour, but now have to pay at least $10 an hour (don't forget the $3 an hour in benefits), these jobs lose money if nothing else changes. One thing you can do is hire "better" people by raising the standards. If you're going to pay that kind of money shagging shopping carts, you can insist on the fast, young kids who don't really need those powered pushers. The slouchers you see all to often today are going to have to step up - or out.
If the benefits are high like this, you're going to shift to full time people over part time people, simply because full time people are usually more productive that the part time equivalents. The snack bar part-time positions could be combined with back-room stocking to make full-time positions, eliminating many after-school and mother-working-half-time jobs.
Wal-Mart could also insist on more education even if not needed. We see this already in employment, where many jobs require degrees however unrelated to be considered. It's a screening process that has crept in to offset the induced costs of our overly-invasive hiring (and especially firing) laws.
Seniors, single mothers, kids seeking part-time jobs, and the unskilled are all going to find the bar a little higher at this Wal-Mart or any other employer saddled with these unjustly imposed costs.
But ACORN knows best, that they're better off unemployed at $10 an hour than start at $8 an hour with a company that truly wants them to succeed.