John Stossel is the dumbest guy on the "news." I like to watch the clip of him being knocked out.?
The flaw in their argument is that it's NOT KIDS earning the minimum wage....it's adults with families.
The Trader Joe's Lesson: How to Pay a Living Wage and Still Make Money in Retail
Companies that invest in higher salaries for low-level employees find success in a competitive market
The average American cashier makes $20,230 a year, a salary that in a single-earner household would leave a family of four living under the poverty line. But if he works the cash registers at QuikTrip, it's an entirely different story. The convenience-store and gas-station chain offers entry-level employees an annual salary of around $40,000, plus benefits. Those high wages didn't stop QuikTrip from prospering in a hostile economic climate. While other low-cost retailers spent the recession laying off staff and shuttering stores, QuikTrip expanded to its current 645 locations across 11 states.
Many employers believe that one of the best ways to raise their profit margin is to cut labor costs. But companies like QuikTrip, the grocery-store chain Trader Joe's, and Costco Wholesale are proving that the decision to offer low wages is a choice, not an economic necessity. All three are low-cost retailers, a sector that is traditionally known for relying on part-time, low-paid employees. Yet these companies have all found that the act of valuing workers can pay off in the form of increased sales and productivity.
"Retailers start with this philosophy of seeing employees as a cost to be minimized," says Zeynep Ton of MIT's Sloan School of Management. That can lead businesses into a vicious cycle. Underinvestment in workers can result in operational problems in stores, which decrease sales. And low sales often lead companies to slash labor costs even further. Middle-income jobs have declined recently as a share of total employment, as many employers have turned full-time jobs into part-time positions with no benefits and unpredictable schedules.
QuikTrip, Trader Joe's, and Costco operate on a different model, Ton says. "They start with the mentality of seeing employees as assets to be maximized," she says. As a result, their stores boast better operational efficiency and customer service, and those result in better sales. QuikTrip sales per labor hour are two-thirds higher than the average convenience-store chain, Ton found, and sales per square foot are over 50 percent higher.
Entry-level hires at QuikTrip are trained for two full weeks before they start work, and they learn everything from how to order merchandise to how to clean the bathroom. Most store managers are promoted from within, giving employees a reason to do well. "They can see that if you work hard, if you're smart, the opportunity to grow within the company is very, very good," says company spokesman Mike Thornbrugh.
The approach seems like common sense. Keeping shelves stocked and helping customers find merchandise are key to maximizing sales, and it takes human judgment and people skills to execute those tasks effectively. To see what happens when workers are devalued, look no further than Borders or Circuit City. Both big-box retailers saw sales plummet after staff cutbacks, and both ultimately went bankrupt.
As global competition increases and cheap, convenient commerce finds a natural home online, the most successful companies may be those that focus on delivering a better customer experience. Ton's research on QuikTrip and other low-cost retailers--now a Harvard Business School case--is applicable across a variety of industries, she says. Toyota's production system, for example, gives all employees--including workers on the assembly lines--a voice in improving products.
But for a publicly traded company under pressure to show quarterly earnings, it's tempting to show quick profits by cutting labor costs. The bad economy has also made workers willing to take lower-paid positions rather than join the ranks of the unemployed. New employer-sponsored health insurance requirements under the Affordable Care Act are only going to give employers an additional incentive to shift workers to a part-time schedule.
There are also trade-offs to investing in employees. Businesses that spend more on their workers have to cut costs elsewhere. Trader Joe's streamlines operations by offering a limited number of products and very few sale promotions. Costco stocks products on pallets, as a warehouse would. And the QuikTrip model requires investors to have the fortitude to accept possible short-term drops in profits. "You have to take a loss for a little bit," says Maureen Conway, executive director of the Economic Opportunities Program at the Aspen Institute. "You have to pay above market. You have to change how you do business."
Says Oregon’s high minimum wage is the reason why "by 2011, Oregon's restaurants employed an average of only 13.8 workers, or 2.6 fewer employees than they did before the state's minimum wage began rising above the federal level in 1997."
Melvin Sickler on Thursday, March 14th, 2013 in a U.S. Senate hearing
Has Oregon's higher minimum wage hurt our restaurant industry?
Melvin "Mel" Sickler, a representative of the National Restaurant Association, recently told a U.S. Senate committee to put the brakes on a bill that would increase the federal minimum wage and tie it to inflation.
Why? Boosting the hourly minimum wage from $7.25 to $10.10 would reduce the number of jobs in the food service industry, Sickler said.
[...]
The ruling: Sickler wants to connect the shrinking size of restaurants on average in Oregon to the state’s minimum wage being higher than the federal minimum. In a vacuum, his data seem to suggest that link.
But when we looked at data from other states, the correlation just didn’t work. And putting employment and the number of restaurants into context, as Lehner did, we can see that restaurant jobs rise and fall with the health of the national economy, not the state’s minimum wage. Oregon’s per capita restaurant employment is higher than the national average, in spite of having a higher minimum wage.
The Most Rigorous Research Shows Minimum Wage Increases Do Not Reduce Employment
The opinion of the economics profession on the impact of the minimum wage has shifted significantly over the past fifteen years. Today, the most rigorous research shows little evidence of job reductions from a higher minimum wage. Indicative is a 2013 survey .. http://www.igmchicago.org/igm-economic-experts-panel/poll-results?SurveyID=SV_br0IEq5a9E77NMV .. by the University of Chicago’s Booth School of Business in which leading economists agreed by a nearly 4 to 1 margin that the benefits of raising and indexing the minimum wage outweigh the costs.
[SS, in your video Stossel said, '2/3 of labor law [OOPS! he corrected himself as i blinked] economic experts say a higher minimum wage kills jobs' .. Stossel is a liar]
This page reviews the most widely-cited and influential studies on the impact of minimum wage increases on employment, and examines the primary reasons why low-wage employers can afford higher wages today.
Source: Doucougliagos and Stanely, “Publication Selection Bias in Minimum Wage Research? A Meta-Regression Analysis,” British Journal of Industrial Relations, 2009. (with NELP annotations) Source .. http://ideas.repec.org/p/dkn/econwp/eco_2008_14.html
Summary: Reviews the past two decades of research on the impact of minimum wage increases on employment: this study concludes that the weight of the evidence points to little or no effect of minimum wage increases on job growth. The study also finds that a review of the minimum wage literature commonly cited by minimum wage opponents is flawed because it is subjective, relies in large part on studies of wage increases in foreign countries, and fails to consider the most sophisticated and recent minimum wage studies.
Paul Krugman, Princeton University, February 2013: “Now, you might argue that even if the current minimum wage seems low, raising it would cost jobs. But there’s evidence on that question — lots and lots of evidence, because the minimum wage is one of the most studied issues in all of economics. U.S. experience, it turns out, offers many ‘natural experiments’ here, in which one state raises its minimum wage while others do not. And while there are dissenters, as there always are, the great preponderance of the evidence from these natural experiments points to little if any negative effect .. http://www.cepr.net/documents/publications/min-wage-2013-02.pdf .. of minimum wage increases on employment.” (Source .. http://www.nytimes.com/2013/02/18/opinion/krugman-raise-that-wage.html?_r=0 )
Bloomberg News, April 2012: "[A] wave of new economic research is disproving those arguments about job losses and youth employment. Previous studies tended not to control for regional economic trends that were already affecting employment levels, such as a manufacturing-dependent state that was shedding jobs. The new research looks at micro-level employment patterns for a more accurate employment picture. The studies find minimum-wage increases even provide an economic boost, albeit a small one, as strapped workers immediately spend their raises.” (Source .. http://www.bloomberg.com/news/2012-04-16/u-s-minimum-wage-lower-than-in-lbj-era-needs-a-raise.html )
Yeah, that’s right: doubling — from a poverty-level $7.25/hour to a living wage of $15/hour. Salmon is seconding the suggestion by millionaire capitalist Nick Hanauer .. http://www.bloomberg.com/news/2013-06-19/the-capitalist-s-case-for-a-15-minimum-wage.html , who points out that “If the minimum wage had simply tracked U.S. productivity gains since 1968, it would be $21.72 an hour — three times what it is now.”
John Stossel’s poor logic on minimum wages and jobs
06:50 AM - July 30, 2013
Fox host fails to explain away Australia’s high wages and low unemployment
By Ryan Chittum
Fox Business’s John Stossel is a long-time opponent of the minimum wage.
I don’t mean he opposes raising the minimum wage, something that puts him decidedly out of the mainstream .. http://www.gallup.com/poll/160913/back-raising-minimum-wage.aspx . I mean he opposes any minimum wage, which puts him roughly in Ayn Rand/WSJ editorial page territory.
The idea being that a minimum wage causes mass unemployment, particularly amongst young and/or unskilled workers who would be profitable employees at $5.25 an hour, say, but who aren’t at $7.25.
In Australia, for instance, the minimum wage is more than twice ours, at $15 an hour (adjusted for exchange rates). But the unemployment rate there is just 5.7 percent .. http://www.abc.net.au/news/2013-07-11/unemployment-figures-for-june/4813876 — nearly two full percentage points less than it is here.
----- Most people who earn minimum wage are young, unskilled workers. How are they doing in Australia?
In June, Australia’s unemployment rate for workers age 15 to 19 was 16.5%. -----
If that seems like a compelling argument, note that Stossel fails to report what the American youth unemployment rate is: 24 percent. Youth unemployment is always much higher than adult unemployment, for a variety of reasons .. http://www.bls.gov/opub/mlr/1984/10/art4full.pdf :
One thing the anti-labor types like Stossel never imagine is that higher wages incentivize work and lower wages disincentivize it. I recall my own miserable days as a teen worker making $4.25 an hour at hamburger joints, grocery stores, and for three glorious days—Chuck E. Cheese. A few days in, after visualizing my dickhead boss flicking me a quarter every five minutes (roughly my take-home rate) to shovel up cheeseburgers, I realized my youth was better spent elsewhere.
But when I got a job in the lucrative newspaper industry (those were the days!) helping deliver a commercial route, the $8 or $10 an hour I netted made the 2:30 a.m. start times and 100-degree Oklahoma summers spent in the back of a truck covered in ink and news dust quite tolerable.
Unlike us, though, Australia’s minimum wage is tiered by age, something Stossel completely misses:
You’d think, using Stossel’s logic, that since the minimum wage for 16-19 year olds ranges from $7.10 an hour (U.S. dollars) to $12.38 an hour, the kids’ unemployment rate would be lower than the adults’.
Stossel also says Australia’s unions support higher minimum wages because it “reduces competition from unskilled labor.” In other words, those dastardly unions want poor, young kids out of work!
----- When the Wall Street Journal reported the minimum wage increase in Australia, it called the law “a victory for unions.” But that seems strange because union workers normally make more than minimum wage.
But it is a victory for unions because union bosses know that raising the minimum wage reduces competition from unskilled labor. Union support for minimum wage laws is entirely self-serving. -----
Stossel doesn’t understand that unions want higher minimum wages because they put upward pressure on wages for union workers. It trickles up, so to speak.
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