Questions and Observations

Free Markets, Free People

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

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Egypt’s Morsi grants himself new powers – So much for Arab Spring

It’s a bit of “meet the new boss, same as the old boss” but with an Islamist slant:

Egypt’s president on Thursday issued constitutional amendments that placed him above judicial oversight and ordered the retrial of Hosni Mubarak for the killing of protesters in last year’s uprising.

Mohammed Morsi also decreed immunity for the Islamist-dominated panel drafting a new constitution from any possible court decisions to dissolve it, a threat that had been hanging over the controversial assembly.

Liberal and Christian members withdrew from the assembly during the past week to protest what they say is the hijacking of the process by Morsi’s allies, who they saw are trying to push through a document that will have an Islamist slant marginalizing women and minority Christians and infringing on personal liberties. Several courts have been looking into cases demanding the dissolution of the panel.

The Egyptian leader also decreed that all decisions he has made since taking office in June and until a new constitution is adopted and a new parliament is elected — which is not expected before next spring — are not subject to appeal in court or by any other authority. He also barred any court from dissolving the Islamist-led upper house of parliament, a largely toothless body that has also faced court cases.

In essence he has declared himself (by issuing his own handy “constitutional amendments”) supreme and above the law.

I’m not sure why anyone is particularly surprised.  He promised no one from the Muslim Brotherhood would run for president and then ran for president.  He claimed that they’d do the will of the people and now he’s actively making women and religious minorities into 2nd class citizens.  And his government will have a pronounced Islamic theocratic slant all written into law.

He also supports the terrorists in Gaza.

Yup, that “Arab Spring” thing is just working out about as well as one could hope, huh?

Forward.

~McQ

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Union chooses to try to ruin holiday for travelers at LAX

Of course we’re talking about a government union, the SEIU, which plans today, from 11am to 4pm (PST), to put 1,000 protesters on Century Blvd. near LAX to, one assumes, “persuade” harried and pissed off travelers that the SEIU’s cause is just.

Or something.

So to do that they choose peak time on the busiest travel day of the year to protest a company that decertified them by claiming that safety at the airport has been compromised (because, you know, only union companies have the inside on “safety”), that the company isn’t paying a “living wage” (according to other new reports, the employees of this particular company have gotten wage increases since decertification) and that the employees are being denied health care coverage (the same news reports claim these employees now have a number of health care insurance choices).

Or to put it another way, this is a fairly typical propaganda driven and thuggish union tantrum and they’re planning on screwing over travelers to make whatever point they are trying to make.

Which brings us to a graphic I found interesting.  Now granted, in the case of the graphic we’re talking about private unions.  But it still make a powerful statement about unions overall:

Of course, given the demise of Hostess, I’d guess that last number is just a touch higher.

So, if you were looking at this graphic and considering what the SEIU planned for today given the fact that it is likely to cause some people to miss flights etc., what would your overall impression of unions be?  And how relevant would you consider them in the 21st century?

~McQ

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Economic Statistics for 21 Nov 12

The following US economic statistics were announced today:

Initial claims for unemployment fell 41,000 last week, to 410,000. The 4-week moving average rose to 396,250. Continuing claims fell 30,000 to 3.337 million. The huge swings of the past couple of weeks are clearly related to Hurricane Sandy, so getting any handle on the fundamentals of the labor market are impossible with the current weekly volatility.

The MBA reports that mortgage applications fell –2.2% last week, with purchases up 3.0% and refinancings –3.0%. Despite an overall decline in applications, purchase applications are trending up, which is a positive trend for the health of the housing market.

The Bloomberg Consumer Comfort Index fell –0.8 points to –33.9.

The Reuter’s/University of Michigan’s consumer sentiment index fell more than 2 points to 82.7.

The Conference Board’s index of leading economic indicators rose 0.2% in October.

The Markit Economics PMI Manufacturing Index Flash rose more than a point to 52.4 for the mid-month flash. Anything over 50 generally indicates economic growth.

~
Dale Franks
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Economic Statistics for 20 Nov 12

The following US economic statistics were announced today:

In weekly retail sales, Redbook reports a lackluster 1.8% increase from the previous year. ICSC-Goldman reports a weekly sales decline of -0.3%, and a weak 2.5% increase on a year-over-year basis.

Housing starts rose 3.6 percent in October to an annual pace of 894,000. Building permits, an indicator of future construction activity, fell 2.7% to an annual pace of 866,000.

~
Dale Franks
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So what would happen if Dems got all they want?

California, of course:

“The California Republican Party is functionally dead. And how is California doing, now that liberals have successfully terminated the state’s remaining conservatives?” #1 in debt, #1 in welfare, #1 in taxing the rich. And hoping for a federal bailout, I suspect. As is Illinois, which is in similar straits for similar reasons. “One-third of all the nation’s welfare recipients live in the state, despite the fact that California has only one-eighth of the country’s population. That’s four times as many as the next-highest welfare population, which is New York. Meanwhile, California eighth-graders finished ahead of only Mississippi and District of Columbia students on reading and math test scores in 2011.”

You can warn people till you’re blue in the face (no pun intended) how the blue state model is going to end up, but sometimes it is instructive to just let it happen.  Of course that assumes that those observing the train wreck try to understand how it happened and work to avoid it elsewhere.  I’m not so sure that’s the case in this nation.  But fair warning, given the fiscal road we’re on California is as much in our future as Greece:

“For a century or so, guided by brilliant private sector leadership, California was a beacon to the world, a land of opportunity such as never had existed in human history. Unimaginable wealth was created. Yet it required only 40 years of liberal governance to bring the whole thing crashing down. Today, California is the most spectacular failure of our time. Its government is broke. Productive citizens have been fleeing for some years now, selling their homes at inflated prices (until recently) and moving to Colorado, Arizona, Texas and even Minnesota, like one of my neighbors. The results of California’s improvident liberalism have been tragically easy to predict: absurd public sector wage and benefit packages, a declining tax base, surging welfare enrollment, falling economic production, ever-increasing deficits. Soon, California politicians will be looking to less glamorous states for bailout money. Things have now devolved to the point where California leads the nation in poverty.”

California is a state which has modeled blue government for decades, despite warning of where it’s continuance would lead.

And, shockingly to the left, it has ended up right where it was predicted it would end up.  Yet, they blindly and willfully continue to march along as though the reality will change and economic laws will disprove themselves if they just persist in their actions.

California is our future.  Our near future.  See, it’s pretty much as simple as this:

If a country runs a deficit (as a percentage of GDP) that is equal to its growth rate, the debt level will remain constant. This year U.S. GDP will be a little less than $16 trillion, and its historical growth rate is 3.25%. That works out to what we might call a “safe” deficit of $520 billion, or even $600 billion if you allow for a little inflation. Last year, however, the U.S. deficit was $1.1 trillion — or roughly $500 billion too much.

That gap could be closed by ending all tax cuts, tax breaks and stimulus payments for everyone, according to the Tax Policy Center. But two-thirds of the burden would fall on the middle class — something both political parties want to avoid. All the proposed tax increases on the wealthy, however, even combined with the end of the payroll-tax cut, would raise only $295 billion. So unless there were spending cuts twice as big as the ones currently scheduled, the deficit would still be too large.

Those sorts of cuts aren’t even being discussed.  Imagine, if you would, radical cuts in the size and scope of our current federal government.  Imagine subsidies of all sorts being eliminated.  Imagine backing government out of many of the areas it has no business.  Imagine simplifying the tax code and giving business a warm fuzzy feeling about the business atmosphere by freezing regulation and in some instances rolling them back.  Imagine all of that, because none of it is going to be done.

Instead, the solution is to “tax the rich”.

So let ‘em have it (only if they repeal the Hollywood tax cut).  Tax the rich.  And when it doesn’t work, and it won’t (in fact, I’m not sure what “work” means in this particular case since the amount to be collected is a mere drop in a 1.6 trillion dollar ocean of debt that’s planned each year for the foreseeable future), they’re left with a lot fewer excuses, huh?

Not that they won’t try to point fingers when their grand plan crashes.

Yup, in the end it all looks like we’re headed to California.  Apparently we’re going to have to recreate that debacle on a national level before the blinders come off of the public and the realization that you can’t spend more than you have forever finally sinks in.

Whether or not it will too late to salvage the country at that point, remains to be seen.

~McQ

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Well, this is sure to help: Turkey calls Israel a “terrorist state”

I know, like me, you’ve been watching with some wonder as Israel gets called everything but a child of God for defending itself from hundreds of rockets being fired into its country and then having the unmitigated temerity to strike back. Now we have a member of NATO upping the tensions just a bit more:

Turkish Prime Minister Tayyip Erdogan described Israel on Monday as a “terrorist state” in carrying out its bombardment of Gaza, underlining hostility for Ankara’s former ally since relations between them collapsed in 2010.

His comments came after nearly a week of Palestinian rocket attacks on Israel and Israeli air strikes on the Gaza Strip. An Israeli missile killed at least 11 Palestinian civilians including four children in Gaza on Sunday.

“Those who associate Islam with terrorism close their eyes in the face of mass killing of Muslims, turn their heads from the massacre of children in Gaza,” Erdogan told a conference of the Eurasian Islamic Council in Istanbul.

I’d go through the litany of the whys and wherefores that detail why there are “civilian” casualties when Israel strikes back (hint: because that’s part of the plan when Hamas does these sorts of things as a means of swaying the ignorant and those who tend buy into the “poor, wronged victims” they love to portray themselves as), but you know them as well as I do.

We’ve talked about Turkey’s inexorable slide toward radical Islam for quite some time, so in reality, this doesn’t come as much of a surprise.  Turkey, which once looked west has turned its view to the east and is eyeing regional power.  Turkey knows that there’s one requirement to admission to power in that region, and that’s embracing and touting Islam.  In fact, it is about embracing a radical form of Islam that refuses to recognize Israel or it’s right to exist.  This is just another shot among many that Turkey has taken.  The NATO reference just reminds us of the possible difficulties their membership could pose in a situation like this.

And speaking of the present situation, as soon as Israel strikes back we begin to hear the false arguments about “proportionality” begin to surface.  No one mentions that 750 to 1,000 unanswered rockets and mortars have flown disproportionally into Israel, it’s always about those 100 air strikes the Israelis put into Gaza that are condemned as violating this new law of proportionality.  Yes, proportionality is only a concern when Israel acts, not when the terrorists attack.

The real reason that it comes up at all is because Hamas surrounds its launchers with civilians and are lousy shots and Israel isn’t.

It’s just not fair.

~McQ

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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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