Free Markets, Free People

Business

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What is the worth of a job?

Well that’s determined by all sorts of variables – how much the person seeking the job is willing to take, how much the person wanting the job done is willing to pay, the scarcity or abundance of labor, etc..  And so in a free market, when a job is open it is up to the person seeking to have the work done and the person seeking a job to decide what it is worth to each of them.  If they can reach agreement, then the job is offered to the person seeking the job.  If agreement can’t be reached, then the job goes unfilled.

The bottom line is that no outside party can decide what that job is worth – in that mythical free market, that is.  However, we don’t have a free market and legislators, trying to buy the good will of voters with other people’s money, often decide they know what every job is worth at a minimum.  Thus the minimum wage.

Well this is anecdotal, I know, but it certainly seems to support every negative we here at QandO have been talking about for years.  In the long run raising the minimum wage only raises the cost of labor.  It does not change the worth of a job.  Ever.

SeaTac workers are learning that the hard way:

Last January, SeaTac implemented a $15 per hour minimum wage for hospitality and transportation workers. The consequences to the drastic hike in wages are just beginning to be realized—and it’s not pretty.

A writer for NW Asian Weekly recently blogged about her experience attending an event at a SeaTac hotel. She asked employees if they were “happy with the $15 wage.” The ensuing conversations,

“It sounds good, but it’s not good,” the woman said.

“Why?” I asked.

“I lost my 401k, health insurance, paid holiday, and vacation,” she responded. “No more free food,” she added.

“The hotel used to feed her. Now, she has to bring her own food. Also, no overtime, she said. She used to work extra hours and received overtime pay.

“What else? I asked.

“I have to pay for parking,” she said.

“I then asked the part-time waitress, who was part of the catering staff.

“Yes, I’ve got $15 an hour, but all my tips are now much less,” she said. Before the new wage law was implemented, her hourly wage was $7. But her tips added to more than $15 an hour. Yes, she used to receive free food and parking. Now, she has to bring her own food and pay for parking.”

SeaTac is a small city—10 square miles in area and a population of 26,909—with an economy almost exclusively defined by the Seattle-Tacoma International Airport. Five months into the implementation of a $15 minimum wage and it appears that a deep sense of regret has already flooded the city and workers who should have “benefited” from the terrible economic policy.

Meanwhile, as the largest city in the Pacific Northwest and one of the fastest growing major cities in America, Seattle is on the verge of following in SeaTac’s woefully unfit footsteps. Seattle Mayor Ed Murray’s $15 minimum wage plan includes a phase-in period of three to seven years and makes no exception for business type or size. Murray’s plan elicited back-lash from prominent Seattle businesses owners and economists alike.

Like we’ve said, increased costs associated with the job will likely be passed along to either the customer or the worker or both.  Here you have two perfect examples of how perks that helped workers and were of value to them (and for which they didn’t have to pay taxes) fell victim to some interfering government body unilaterally raising the cost of labor.  The worth of the job done didn’t increase at all.  Consequently, businesses looked at ways to compensate for the increase in labor cost.  As for the decrease in tips?  Well people tip well because they know most waiters and waitresses don’t make much for a wage.  However, when they’re making $15 an hour, suddenly there isn’t a great or compelling reason to “help them out”.  Tips decrease.  Why tip someone for doing their job when they’re making that kind of money hourly.  And, just as likely, prices have gone up to cover this expense.  Consequently, overtime is limited, etc.

Its not that this is something hard to figure out.  But the socialists among us never get past the feelgood part of it, because, well, because math is hard and economics is absurdly hard … or something..

~McQ


More business busting regulatory abuse by the imperial President

Market?  What market?  We haven’t had a free market for much of anything in at least the last 75 years:

Business groups and congressional Republicans are blasting regulations President Obama will announce Thursday that could extend overtime pay to as many as 10 million workers who are now ineligible for it.

While liberals lauded the plan as putting more cash in the pockets of millions of workers, business groups warned it would damage the economy and Republicans said it was another example of executive overreach.

That’s right friends, now it appears that the Obama administration has decided … that’s right, “decided” … that in addition to the increase in the minimum wage, now it needs to redefine who is eligible for overtime. And, of course, that redefinition is going to negatively impact who?  Businesses.  And if they have to live with the changes, who then will it effect?

Oh, yeah, those that can least afford it.  Why?  Because it will increase the cost of doing business.  And what do businesses do when their costs increase?  Pass it on to the consumer.

Now, I ask, was that so hard to spell out?  No.  And is it hard to understand?  Again, no.

So why is it liberals can’t follow the logic train to its final destination?

Well that’s fairly simple, they don’t think, they emote.  The bureaucrats, who’ve never had to run a business or turn a profit in order to meet a payroll are experts in what others “need”.  And they’re convinced those who are involved in running a business are just greedy.

“What we’re trying to take a look at is how we can make the labor force as fair as possible for all workers and that people get rewarded for a hard day’s work with a fair wage,” Betsey Stevenson, a member of the White House Council of Economic Advisers, told reporters Wednesday.

Right.  Because, you know, the guy who risked everything and has succeeded to the point that he can hire others and thereby give the abysmal unemployment numbers some relief aren’t “fair” – by definition I guess.

“Changing the rules for overtime eligibility will, just like increasing the minimum wage, make employees more expensive and will force employers to look for ways to cover these increased costs,” said Marc Freedman, executive director of labor law policy at the U.S. Chamber of Commerce.

Meanwhile in fantasyland:

Stevenson, however, contended that there would likely be an increase in employment as a result of the change, with companies deciding to hire more employees rather than paying existing workers at a higher rate.

Really?  Or perhaps they’ll hire less and use technology to fill the bill.  Technological answers don’t ask for raises, don’t require health care coverage, don’t need overtime, etc.  In fact, it is likely to lead to less employment and more mechanization.

But we should understand the BIG reason:

Proponents say the regulations are an issue of fairness.

“I think that if you put in a full week’s work and you end up being asked by your employer to work longer hours, you deserve to be paid a little extra,” said Rep. Xavier Becerra (D-Calif.).

Is that right?  Well, frankly, Rep. Becerra, that’s none of your freakin’ business.  But, I assume you can point out the Constitutional basis for your “thought”, right?

Bunch of idiots.  They are bound and determined to destroy the golden goose because they’re are woefully ignorant of the goose’s anatomy and how it works.

~McQ


Here we go again …

The cult of the vicitim is alive and well in the US.  It’s been fostered by politicians and lawyers who are open to the idea that one’s problems, whatever they are, are the fault of someone else.
And, given that doing so gives the pols more power (and the lawyers more money), the field is open for exploitation.  Remember the tobacco settlement?  Well guess who is next and why:

Lawyers are pitching state attorneys general in 16 states with a radical idea: make the food industry pay for soaring obesity-related health care costs.

It’s a move straight from the playbook of the Big Tobacco takedown of the 1990s, which ended in a $246 billion settlement with 46 states, a ban on cigarette marketing to young people and the Food and Drug Administration stepping in to regulate.

Yes, getting fat is the fault of “big food”.  Being obese is just not your fault.  So lets soak “Big Food” (and raise already high grocery prices through the roof, shall we?):

“I believe that this is the most promising strategy to lighten the economic burden of obesity on states and taxpayers and to negotiate broader public health policy objectives,” said Paul McDonald, a partner at Valorem Law Group in Chicago, who is leading the charge.

McDonald’s firm has sent proposals to AGs from California to Mississippi explaining how suing “big food” could help their states close budget gaps as billions in Medicaid expenditures eat a growing share of tax revenues.

In a letter to Pennsylvania Attorney General Kathleen Kane last year, McDonald noted that the state faced a $3.7 billion budget shortfall in 2012 and had to cut back on certain services. The state’s total Medicaid burden that year was $10 billion — and getting a piece of that back could help close the gap.

Yes friends it is the “most promising strategy to lighten the economic burden on the states and taxapayers” … say what?  Taxpayers?  Aren’t they the one’s who will foot the bill for the “Big Food” pass-through of cost to litigate this idea and then, if the lawyers are successful, pay the settlement?

Name someone you know who isn’t a “food adicit” and doesn’t buy food from “Big Food”, will you?  I’d be interested to meet them.

In the meantime, if this guy is successful in selling this to state AGs (and I’d not be surprised if they bit), the cost of food will go up as the cost of litigating this nonsense rises.  After all, Big Government is now in charge of health care costs (something they’ve actually driven up) and are desperate for ways to make it cheaper.

You’re just a victim, slugger.  And these guys have your best interests at heart, don’t you know?  Let the demonization of Big Food begin.

As an aside, it is a bit ironic that the laywer pushing this full employment for lawyers scheme is named McDonald, no?

~McQ


Arrogance and ignorance on display on D.C. City Council

What they’ve done is pretty typical of liberal governments everywhere.  They are arrogant with their power and totally ignorant of the economic impact their decision will have on the city.  But boy did they strike out at big box stores and do they feel good about it:

D.C. lawmakers gave final approval Wednesday to a bill requiring some large retailers to pay their employees a 50 percent premium over the city’s minimum wage, a day after Wal-Mart warned that the law would jeopardize its plans in the city.

That’s right, the hated Wal-Mart must pay more because retailers with corporate sales of $1 billion or more and operating in spaces 75,000 square feet or larger will be required to pay employees no less than $12.50 an hour.

No arbitrary or capriciousness there, huh?  Not a discriminatory law at all.  And who cares, right, because as one of the council members says:

“The question here is a living wage; it’s not whether Wal-Mart comes or stays,” said council member Vincent B. Orange (D-At Large), a lead backer of the legislation, who added that the city did not need to kowtow to threats. “We’re at a point where we don’t need retailers. Retailers need us.”

Yeah, retailers need them.

Really?  That’s what he thinks.  What if retailers decide they don’t need them?  Not only do the goods go away, but so do the jobs.  So $12.50 times zero gives you what?  It gives you this:

“Nothing has changed from our perspective,” Wal-Mart spokesman Steven Restivo said in a statement after the vote, reiterating that the company will abandon plans for three unbuilt stores and “review the financial and legal implications” of not opening three others under construction.

So 6 stores and the jobs that go with them … poof, gone.  Oh, and this is gone as well:

Well before it had any solid plans to open stores in the District, Wal-Mart joined the D.C. Chamber of Commerce and began making inroads with politicians, community groups and local charities that work on anti-hunger initiatives.

The campaign was matched with cash. Through its charitable foundation, Wal-Mart made $3.8 million in donations last year to city organizations including D.C. Central Kitchen and the Capitol Area Food Bank, according to a company spokesman.

Yeah, there you go.  That’s worth it isn’t it?  6 x no jobs and about $4 million in charitable contributions to help those in need in the area … gone.  Just to make a political statement and display for all their insufferable arrogance and their economic ignorance.

Of course, all of these unintended consequences will likely go unnoticed by the usual suspects while they cheer the council slapping Wal-Mart around.

~McQ


Don’t drink “the employment picture is much better” Kool-aid

Why?  Because it isn’t really better.  Oh, it may be marginally better than it was a year ago but that’s not saying much at all.  In terms of real progress?  Yeah, not so much.  The National Journal says:

The U.S. jobs picture is bleaker than the most recent jobs reports may make you think. The economy added 175,000 jobs last month, but at the rate things are going, it would take almost a decade to get back to prerecession employment levels. A Job Openings and Labor Turnover Survey report released Tuesday by the Bureau of Labor Statistics digs in on the bad news: The number of job openings in the U.S. actually fell by 118,000 in April to 3.8 million.

How bad can 3.8 million job openings be? The Economic Policy Institute looks at the number and sees that “the main problem in the labor market is a broad-based lack of demand for workers—and not, as is often claimed, available workers lacking the skills needed for the sectors with job openings.”

Here’s a chart they put together to visually make the point:

An economy on the mend is generating jobs at such a pace that it is competing for workers.  As is obvious, that’s not the case in this economy, nor has it been the case for quite some time.

In a word, the employment picture sucks.  Anyone pretending otherwise is doing exactly that – pretending.  And they can toss around all the numbers they like, the bar charts above tell the real picture – business is not hiring and the reasons are multiple, most having to do with government intrusion (see ObamaCare for one example).

~McQ


US average marginal effective tax rate about 40%?

So tell me again why the government can’t seem to get along with what it already gets?

Taking into account all taxes on earnings and consumer spending—including federal, state and local income taxes, Social Security and Medicare payroll taxes, excise taxes, and state and local sales taxes—Edward Prescott has shown (especially in the Quarterly Review of the Federal Reserve Bank of Minneapolis, 2004) that the U.S. average marginal effective tax rate is around 40%. This means that if the average worker earns $100 from additional output, he will be able to consume only an additional $60.

And yet the prevailing political attitude seems to be that of France’s “leadership”, i.e. government, has first claim on all your earnings and if you protest you’re “greedy”.

Who’s greedy?

Speaking of France, California seems bound to duplicate its latest tax scheme:

Consider California, which just enacted higher rates of income and sales tax. The top California income-tax rate will be 13.3%, and the top sales-tax rate in some areas may rise as high as 10%. Combine these state taxes with a top combined federal rate of 44%, plus federal excise taxes, and the combined marginal tax rate for the highest California earners is likely to be around 60%—as high as in France, Germany and Italy.

Yet they wonder why people are fleeing the state.

Impact and implications?

Higher labor-income and consumption taxes also have consequences for entrepreneurship and risk-taking. A key factor driving U.S. economic growth has been the remarkable impact of entrepreneurs such as Bill Gates of Microsoft, Steve Jobs of Apple, Fred Smith of FedEx and others who took substantial risk to implement new ideas, directly and indirectly creating new economic sectors and millions of new jobs.

Entrepreneurship is much lower in Europe, suggesting that high tax rates and poorly designed regulation discourage new business creation. The Economist reports that between 1976 and 2007 only one continental European startup, Norway’s Renewable Energy Corporation, achieved a level of success comparable to that of Microsoft, Apple and other U.S. giants making the Financial Times Index of the world’s 500 largest companies.

Yet we continue to try to recreate Europe’s debacle here.

The economy now faces two serious risks: the risk of higher marginal tax rates that will depress the number of hours of work, and the risk of continuing policies such as Dodd-Frank, bailouts, and subsidies to specific industries and technologies that depress productivity growth by protecting inefficient producers and restricting the flow of resources to the most productive users.

If these two risks are realized, the U.S. will face a much more serious problem than a 2013 recession. It will face a permanent and growing decline in relative living standards.

These risks loom as the level of U.S. economic activity gradually moves closer to that of the 1930s, when for a decade during the Great Depression output per working-age person declined by nearly 25% relative to trend. The last two quarters of GDP growth—1.3% and 2.7%—have been below trend, which means the U.S. economy is continuing to sink relative to its historical trend.

But your political and financial lords and masters know best, don’t they?  Just ask them.  They continue down this road despite the fact the destination is in plain sight in Europe and it isn’t pretty.

Occam’s Razor states “entities should not be multiplied unnecessarily.” Said another way, the simplest explanation is usually the most likely explanation. In this case the simplest explanation is incompetence.  But is it really incompetence?  With the European example staring them right in the face it’s hard to believe anyone is that incompetent.  The conclusion to their policies have already been proven to be a disaster.

So one has to being to consider other possibilities when those who are pushing the policies seem oblivious to the obvious.

You have to begin to wonder if it is a problem of hubris.  I.e. “the only reason it hasn’t worked before is we weren’t in charge”.  We’ve seen that in any number of instances throughout history where discredited or obviously illogical ideological ideas were tried and they again failed.

Or you have to consider the words “by design”.  But then you’re stuck with trying to come up with a valid reason “why”.  Recreating Europe’s debacle, or Japans’s or, for heaven sake, our’s in the ’30s would seem to be something smart politicians would attempt to avoid.

But here we are.

Economic growth requires new ideas and new businesses, which in turn require a large group of talented young workers who are willing to take on the considerable risk of starting a business. This requires undoing the impediments that stand in the way of creating new economic activity—and increasing the after-tax returns to succeeding.

And yet, we see a government bent on erecting even more impediments via increased taxation, costly new laws and onerous regulation.

Isn’t it about time we demanded to know “why?”  More importantly, maybe we should ask whose side they’re on.

~McQ


But remember, government knows best …

And if you need an example of why you should always rely on government to get it right, well, just consider the latest concerning the mandated use of food ethanol for fuel:

The AAA says the Environmental Protection Agency and gasoline retailers should halt the sale of E15, a new ethanol blend that could damage millions of vehicles and void car warranties.

AAA, which issued its warning today, says just 12 million of more than 240 million cars, trucks and SUVs now in use have manufacturers’ approval for E15. Flex-fuel vehicles, 2012 and newer General Motors vehicles, 2013 Fords and 2001 and later model Porsches are the exceptions, according to AAA, the nation’s largest motorist group, with 53.5 million members.

“It is clear that millions of Americans are unfamiliar with E15, which means there is a strong possibility that many may improperly fill up using this gasoline and damage their vehicle,” AAA President and CEO Robert Darbelnet tells USA TODAY. “Bringing E15 to the market without adequate safeguards does not responsibly meet the needs of consumers.”

Ya think?

Hey look buddy,  the ideological agenda waits on no one and if you’re among those driving the 228 million “other” vehicles, tough nuts.

The government has said 15%.  Nuff said.

BMW, Chrysler, Nissan, Toyota and VW said their warranties will not cover fuel-related claims caused by E15. Ford, Honda, Kia, Mercedes-Benz and Volvo said E15 use will void warranties, says Darbelnet, citing potential corrosive damage to fuel lines, gaskets and other engine components.

Gee, I wonder if anyone will question the “fairness” of this.

Anyone doubt who will pick up the tab for this, Mr. and Mrs. Consumer?

~McQ


Wal-Mart protest a flop

So how did the great Wal-Mart protest go?

According to the Bentonville-based company, roughly 50 people who are actually on Walmart’s payroll joined today’s “walkout” nationwide. The protest organizers say “hundreds” participated. Even if 1,000 took part, that’s still less than 1/10 of 1% of Walmart’s 1.4 million associates.

If you can’t find 50 disgruntled employees in an organization of 1.4 million, well, you’re a refugee from the real world.

But look at that last number.  1.4 million people have jobs because of Wal-Mart.  Then there’s the downstream effect – suppliers, etc.  My guess is you’re looking at an organization responsible or at least partially responsible for 3 to 5 million jobs in this country.

And yet it is under attack.

Now, there were protests at Wal-Mart stores.  But what should be clear is they weren’t protests by Wal-Mart’s vast majority of associates.

The “organization” which organized this flop,  “OUR Wal-Mart”,  is calling it a clear success.  I mean what else would they call it?  The fact that it only drew 50 employees in protest (50 who I assume are now ex-employees) seems to have been waived away for the fact that there were some protests.

Woo – hoo.

So who were the protesters?  You’ll enjoy this:

Seems strange then that, according to organizer OUR Walmart’s website, the group speaks for actual Walmart employees. In the “About Us” sectionof its website, this not-for-profit describes its mission as follows: “We envision a future in which our company treats us, the Associates of Walmart, with respect and dignity. We envision a world where we succeed in our careers, our company succeeds in business, our customers…” (Italics mine.)

OUR Walmart was listed as a subsidiary of the United Food and Commercial Workers Union (UFCWU) in a 2011 Department of Labor filing. While the union disputes that the two organizations are one and the same, one thing is certain: The organizers of today’s protest represent not Walmart employees, but employees of grocery stores that compete with Walmart.

Oh, I’m shocked, shocked I tell you.  Members from a union that represents the workers of stores that compete with Wal-Mart?  Ah, of course – OUR Wal-Mart.

[W]hile the anti-Walmart movement claims to be about helping Walmart employees get better health care, improved working conditions, higher pay–not to mention preventing our children from the temptation of petty thieveryit’s really primarily about stopping the threat of cheap groceries–the same ones that go a long way towards helping cash-strapped Americans put food on the table.

Emphasis mine … and the reason, as mentioned yesterday, is this model works.  It appears, at least superficially, that all but 50 Wal-Mart employees agree.  Given the consumer reaction to the protests (uh, nil, nada, zip – didn’t slow down sales a bit), it’s rather hard to understand how any sane person could call the protests a success.  But then no one said those who put together OUR Wal-Mart are sane, did they?

Not surprisingly, a union’s hand is found in a movement deceitfully claiming something that isn’t true and trying to cause problems for a company that employs a huge number of Americans and is responsible, at least partially, for the jobs of a huge number more.

And, watching these shenanigans, you can’t help but believe that unions are desperate – very desperate.  Here’s a company which is offering the same products as their union stores offer at significant discounts and that’s an obvious threat to their continued employment.  So they think nothing of starting a “movement” that is union backed and likely union financed to undermine that company by enticing workers, who apparently aren’t at all as disgruntled or as upset as this group has claimed, into a job action that’s guaranteed to be against their best interests and that would likely get them fired.

50 heeded the siren song and are likely now trying to figure out how to claim unemployment compensation.

And, they have the UFCWU and their apparent inability to think critically to thank for their folly.

Hey, maybe they can go apply at the union stores.  I’m sure they’re hiring, huh?  I’m equally sure they’re more than eager to hire someone who walked off their last job.

~McQ


Hey consumers, it’s your fault if Wal-Mart strikes

Jordan Weissmann has a piece in The Atlantic entitled “Who’s Really to Blame for the Wal-Mart Strikes? The American Consumer.”

Balderdash.

While I will admit that the demands of the American consumer being partly responsible for the wage scale paid by Wal-Mart, I frankly see no consumer liability in that responsibility.  Wal-Mart saw a need, constructed a model and has successfully fulfilled that demand.   And last I checked, no one has twisted anyone’s arm or marched them into Wal-Mart and made them take a job.

The American consumer’s role?  It is like us saying “you can have open borders or you can have a welfare state, but you can’t have both”. You can demand the lowest prices or you can demand “mom and pop” be saved and pay their workers more (but then you have to commit to voluntarily doing business and paying higher prices) but you can’t have both.

Weissmann is essentially claiming that the consumer is to blame for impending strikes by demanding lower prices. Lower prices mean lower pay and because Wal-Mart isn’t paying a “living wage”, it’s employees are striking. Again it’s a part of the left’s disingenuous”fairness” argument.

But by now, that low-price, low-wage model has become the industry standard among discount retailers, or at least close to it. The median retail worker earns $14.42 an hour, but at big box chains, the pay is significantly lower (the notable exception being Costco, which commendably pays its employees a living wage). Walmart, for instance, says it pays full time sales associates $11.75 an hour on average. But independent analysis peg the figure much lower, closer to $9. According to IBISWorld, that puts it a bit behind companies like Home Depot and Lowes, but ahead of its nearest competitor, Target, which has managed to put a more fashionable face on the same abysmal pay for its workers.

First a “living wage” is different for different people. If husband and wife are both working, the one working at Wal-Mart may be supplementing the higher wage of the other spouse. Who is to say what the Wal-Mart employee earns isn’t sufficient to live quite well on?  If it is a teenager living at home, what’s a “living wage” to him or her?  What, in fact, the Weissmann’s of the world are claiming is that any wage paid to anyone should be sufficient to “live on” based on whatever arbitrary standard they choose to apply.  My reaction?  None of your business – everyone goes to work and accepts the wages they do for their particular reasons.  If they aren’t satisfied, then they can leave.

That brings us to point two, if you don’t like the pay at Wal-Mart, seek a job at another employer. I doubt that most “big box” companies look at their employees as permanent. Wal-Mart and others are, for many, a stop on the way (for experience) to higher paying jobs. If it’s not, if it is all someone is qualified to do, then that’s their problem, not Wal-Mart’s and not the shopping public’s.  My suggestion is to seek out further training or schooling elsewhere.  But it isn’t the job of the public to subsidize your wages just because you think you’re worth more than you really are.

Wal-Mart doesn’t exist to pay a “living wage”, whatever that is. It exists to serve it’s customers and turn a profit. It is that profit that allows them to provide what is demanded by their customers and to pay their employees. If  wages are too low, workers will likely look to an alternative for employment. Yet, somehow, Wal-Mart remains fairly consistently fully staffed.

Like it or not (and the complainers usually don’t) that’s the model. It works. It provides consumers what they demand.

But that’s not what the fair police want, you see. And that’s where you see this sort of an argument:

There are many reasons why pay in retail is often paltry. Among them, it’s a low-skill industry with high turnover and a lot young workers. But the sector’s utter lack of of union presence certainly plays role. And for that, we can thank both Wal-Mart and Washington. From its earliest days, Wal-Mart has taken fiercely antagonistic stance towards organized labor, keeping its stores union free by using every ounce of leverage Congress has given employers — so much so that, in 2007, Human Rights Watch called the company “‘a case study in what is wrong with U.S. labor laws.”

In essence what Weissmann is arguing is workers should be paid more than their worth in a competitive labor market  (low-skilled young workers with little experience).  It’s a matter of “social justice” – that nebulous term used to justify intrusion into markets because they “care” (with your money, usually).  And their go-to vehicle for achieving this “social justice” and upsetting a business model that favors the consumer is the union.  Other than grow fat and demanding, that’s what unions are there to do.

See Hostess and GM for how that usually ends up.

But to his point, there’s a reason Wal-Mart is “fiercely antagonistic” toward unions. That’s because unions would wreck the model they’ve so painstakingly put together over the years, the one which their customers demand. Customers don’t show up there because they love Wal-Mart.  They show up because they get more for their hard earned money.

Unionize, demand wage and pension increases and all the other concessions that put GM in the poor house and Hostess out of business and you’ll find one thing to be true – Wal-Mart’s customers will go to Target.  Or Kohls or some other “big box” retailer.

But they’re not going to pay higher prices.  They like the model.  It works for them and their situation.  And they will seek out the next best alternative when and if they see prices go up at Wal-Mart.

So, perhaps it is time for those like Weissmann to figure out what Wal-Mart is – it is a store that offers deep discounts on thousands of items that its customers demand.  Oh, and by the way, it also has employees who are paid according to that customer driven model.   The  workers have choices, if they’ve prepared themselves – work at Wal-Mart to gain experience and move on, or go do something else.  For those who haven’t prepared themselves for anything else, it isn’t the customer’s job to subsidize their wages just because they believe they should get more even if they haven’t earned it.

But for those who can’t let this go, I have an idea.  Each and every Wal-Mart store ought to establish at least one check-out line which is for those who want to pay the highest retail price found for the items they’re going to purchase.  Wal-Mart could research that, have the cash register price the items according to that research and at the end the Wal-Mart associate could say to the person, “and you over-paid by $53.00, have a nice day.”

Wal-Mart would then promise to take the difference between their prices and the premium prices and apply it to the pay of all Wal-Mart associates.

How’s that for fair?  And people in that line wouldn’t have to feel like hypocrites when they diss Wal-Mart for it’s presumably low pay while they continue to buy at the store.

Of course, that particular line would likely to look like something out of a Halloween display, all covered in cob-webs and the like.

~McQ


Would you hire these people?

Amazing, but not atypical of a lot of thinking in this country these days:

The union that brought the 85-year-old baker of Twinkies and Wonder Bread to its knees is holding out hope that a buyer will salvage chunks of the company and send the union’s members back to work, even as Hostess Brands Inc. gears up for a fire sale.

[...]

While Hostess has said the shutdown would result in the loss of more than 18,000 jobs and place the fate of more than 30 American brands in jeopardy, union President Frank Hurt said he believed there was “more than a good chance” that a buyer quickly would swoop in to buy the profitable parts of the company and give his union’s members their jobs back.

Give them “their” jobs back?

See, if I was a buyer, the last people I’d hire are those whose inability to think beyond what the union demanded they do that caused a company to liquidate and “their” jobs to go away.  Because I’d not want to give them the chance to gum up the works at my company.   So I’d ensure that they understood that “their” jobs went with Hostess.

By the way, Frank Hurt isn’t hurting.  He’s still got his six-figure job with the union that “their” jobs, since gone, helped pay for.

Said Teamster Luigi Peruzzi, a Hostess driver in Detroit for 25 years:

“I think they [the Baker's union]made a terrible choice based solely on terrible information from their leadership.”

Not that their “leadership” will suffer for it or anything.

~McQ

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