Image courtesy of the Center for Economic and Policy Research.
I found this interview with economist Dean Baker very interesting. I agree with him that in some cases, a tighter job market can increase pay, it just hasn’t happened yet in Sioux Falls. I think that the work ethic, people holding multiple jobs, high productivity and the wealthy and corporate interests hoarding their profits has contributed to the fact that wages haven’t increased ‘YET’ in Sioux Falls. Workers are starting to become ‘wise’ to the fact that their employers are doing better after the recession and I think if the minimum wage increase passes in November, you will see other sectors raising their wages also;
Baker: This is one of the main points that Jared and I wanted to emphasize in writing this book. For large segments of the workforce, their ability to get pay increases, to share in the benefits of economic growth, really depends on having a tight labor market. And what really opened our eyes on this was our experience in the late 1990s. Jared and I were both working here in Washington at the Economic Policy Institute. At that point, they thought around six percent unemployment was the best we could do. We got down to four and half percent, and then four percent as a year-round average. And then we saw real wage growth up and down the income ladder — even people at the bottom end of the labor force were actually seeing good real wage growth during that period. And the basic story was that in a tight labor market, there was an increase in demand for people to work as checkout clerks at Wal-Mart, or to work at McDonald’s. When there’s tight demand for those people then they’re in a position to actually get wage increases, and that’s what we saw in the late ’90s.
We’ve done a lot of work on this, and you can’t make that result go away. So in this sense, it’s not just the unemployed, or even the underemployed — underemployment is a big deal as well, because a lot of people at the bottom also don’t get as many hours as they want — but it’s also about people who do have a job getting more pay because they’re in a position to bid up their wages.
When you have tight labor markets, Wal-Mart’s going to have to pay people $15 dollars an hour. It’s not a question of them just being nice guys or anything. If they want workers, they’ll have to pay them $15 bucks an hour.
He also brings up the fact that many people are so happy to just have a job, that they will work for crumbs without complaining for a pay increase;
Holland: A few weeks ago, Ezra Klein wrote that inequality isn’t the defining economic issue of our time. He said underemployment and unemployment were, and that launched a big debate. So was that a false choice, if I understand what you’re saying now?
Baker: On my own blog I said it missed the issue to make them separate points, because a big chunk of the story with inequality is the fact that you have so much unemployment. And, again, the reason why people are working at Wal-Mart for $7.25 an hour is because they don’t have alternative employment.
It’s really kind of a striking — if you go back and look from ’38, when we first created the national minimum wage, the Fair Labor Standard Act, until 1968, the minimum wage actually tracked toward activity growth. It didn’t just increase with inflation. Workers at the bottom were getting their share of productivity growth, so they were sharing in the gains of growth over those three decades. If the minimum wage had continued to keep pace with productivity growth from ’68, when it was at its purchasing power peak, until the present, it’d be about $17 dollars an hour today. And it’s not that I think we could raise the minimum wage to $17 dollars per hour tomorrow and not effect employment. Of course it would. But the point is that we had an economy that could support jobs that paid the equivalent of $17 dollars an hour for the person working as a checkout clerk at Wal-Mart.
So you can have a much higher wage economy, and a big part of that story is having low rates of unemployment.
He also brings up a curious, radical approach, to increasing wages and spending by those wage earners-work less hours;
The last point is hugely important. We can control the number of hours people work. The thing people should realize is that the story of unemployment is actually a story of us being too rich. That sounds strange to people, because we know we have an awful lot of people who aren’t too rich and don’t have enough money. But the point is that we’re producing the things that we’re consuming. People for the most part have housing, they have food, they have medical care, and we still have somewhere around 10 percent of the workforce unemployed, underemployed, [or] out of the labor force altogether.
So, in effect, what’s happened is, because we’re so productive, we end up with a situation where we don’t have enough work for people. Rather than that being a source of poverty for those people who are unemployed or underemployed, wouldn’t it be much better if we all just worked fewer hours?
Now, it’s not that easy to get from here to there, but the comparison that we make in the book — and I think it’s worth people keeping in mind — is that if you look at Western Europe — Germany, France, the Netherlands, Denmark, pick a country in that list — they work about 20 percent fewer hours than we do in the United States on average. And if you just snapped your fingers and said, ‘okay, we all work 20 percent fewer hours, it would result in 20 percent more jobs.
Now, in the real world, it will never be that simple, but that’s more or less what we’re talking about. So, to my view, a great way of dealing with unemployment is encouraging people to work fewer hours. It’s a great way to increase employment, and also make people’s lives better. People value having paid vacation, they value having paid sick days when they’re not feeling well or they have a family member who’s not feeling well. They like paid family leave when they have newborn kids or an elderly family member they have to care for. So that’s a really good way to try to deal with the problem of not having enough jobs.
I like this last suggestion the most. I know after I changed my part-time job last month (I work half the part-time hours I did before, make just as much money at my new part-time job, and have my weekends entirely off) that I am happier, less stressed, not as tired, and way more creative. Imagine that, working less would actually help the economy, or at least make happier Americans.
Like Mayor Huether would come out and be for raising the minimum wage.
Unemployment since 1961 has been up and down, up and down, up and down. Meanwhile minimum wage, and middle income wages have gone only ONE direction – DOWN – significantly.
Baker offers only a bit of anecdotal evidence to support his position – BOGUS science. But then – that’s how economists roll.
South Dakota is the kind of place that would have no minimum wage if they could pull it off.
Mughtar you are so right! In the last 2 years the new owner at my place of work has cut 4 holidays, added a 1/2 hr. to the work day and cut my commission in 1/2. I do half of the company’s total business and have increased it 23% over last year. (Other half is only up 8%) Go figure. GREED. 2 years to my retirement and I am gone.
Another option, Robin Hood types to rob from the rich and give to the poor. Loot the big box stores? Make it not safe for the rich to appear in public. Go to a council meeting and throw your shoe at Huether. His bullet proof desk can’t save him from public embarrassment.
MANY TANGENT’S
TLDR ANECDOTAL
Bad formatting punctuation and grammar
also follows!
The less that you make,…the less the no good
bar examined shysters/elite in .gov can take(when did our REPUBLIC change from that those who served as the peoples representation go from farmers or simple merchants maybe they were pillars of their community doing 1 term or 2 and returning to their line of work to friggin dynasties of the same lawyers
or PHD’s AND their unqualified progeny or relatives getting elected).
1)ex Udall/Cuomo/Kennedy
LIFETIME CAREERS!
It is a blessing that someone here in SD can work less
as one of the posters or the original article noted
and come out ahead.
Shoot back before manufacturing (87-91)shifted around because of tif’s (ex.here SF SD) or tax incentives/enterprise districts or some called them business zones I was a Certified Union Leech.
United steelworkers of USALAND!
We made damn good money,(7 days a week more take home pay if you took 1 day off BRACKETING and forget about how people who get paid every 2 weeks get taxed more because the GROSS is more) then some eraserhead geek in corporate figured out they could get the taxpeasants down south to pay for the cost of a new plant and lower the cost per.employee.
So long 100 year old factory!
Back before Clinton and Nafta and all these
trade deals were enacted (southdacolas own rants
on tif’s and all kinds of corporate GIMME DATS duly noted) there were things made in America
Noticed the word consume in the dacola linked text
and the date,it follows that concurs when this unpaid/or gifted to workers and technology segments.
These people and their well heeled ilk need to be shunned/
http://tickerforum.org/akcs-www?post=225217after having served their notice on society
that they are in it just for their own sociopathic benefit.
Power corrupts absolutely!
Sadly this does not prevent them from spending above this formerly great nations means/taxes collected or unending credit card of federal/state/county/city debt.
GO LONG boiled rope and guillotines :>The time is long overdue for many of these types to be hung from every lamp post or their heads displayed on pikes.
Live frugally sure its damn near impossible in this day and age(rent’s too damn high,built in taxes on necessities and so on)but I did it I lived on barely $250 a week in an east coast city nonetheless.
I will tell you when it went bad back on the topic of SPRAWLMART.
I participated in the downfall of our nation
First I used to hump my ass with a beeper and a cell
phone in a van for a printer as a courier with blueprints and specs.to the construction companies trailers that were building these monstrous mom and pop killing BIG BOX effers.
I am probably going to hell because of this.
From the 1992 to 2000 time period lamestream media
always touted these PRODUCTIVITY gains,
none of that trickled down to ordinary workers,
wage gains W/inflation (ignore do not trust .gov
statistics surveys and lies) stopped in 1982.
Then I went to actually work for a company that serviced SPRAWLMART’s fish tank dept..We couldn’t
deal with the training OVER AND OVER of Dept.Mgr’s.
Well I couldn’t.
How they need to keep our fish alive,didn’t matter.
If they killed our fish in 3 days (or fudged the death reports in their favor) they got a full refund/tax writeoff and pocketed the cash for lying about how many fish died.
I only had a few WM#(printed by their loading dock)
where I got a commission on tropical fish they didn’t kill outright from neglect or kill to writeoff within 3 day grace period.
3 out of twenty or more.
They do sell a good atlas so any mother trucker
can find any SPRAWLMART anywhere in CONUS.
END OF LINE,…
OBG
If Walmart could print money they probably would raise wages…
The Federal Reserve created $1 trillion out of thin air last year and will do it again this year, making each and every one of us poorer. But somehow for profit companies are evil and our tax and spend government spewing inequality propaganda is on the right track?
Low interest rates benefit everyone, but obviously benefit businesses and the wealthy even more. How much good does the stock market going up over 20% last year benefit a poor person not invested in the market?
Best Buy lost $498 million last year. Are they supposed to give their employees a $5/hr raise so they can lose another 1/2 billion?
No. But maybe BB needs to concentrate on better customer service and products people want.
Reality check Slewfoot.
Walmart pays it’s employees only what they have to based on regional living wages. Increasing the Walton family trust is priority in the Walmart business model. If Walmart wanted to pay higher wages they certainly could. That’s a fact.
Best Buy has admitted themselves that they have turned into the try it but don’t buy it retailer. Meaning people decide what they want in Best Buy and go home to purchase it off the internet.
We add 1 trillion to the debt each year because of the new morally corrupt concept of what the goverment should provide. I need free healthcare, I need corn subsidies, let the fed pay for storm cleanup, tax breaks for GE and bail outs GM has led us down this path.
Why is the stock market untethered to reality, because the majority of us are buying into it. Over half of US citizens now have some type of investment in the market. When there is this many people in the market the leveraged money in much greater and more eyes are watching returns, therefore businesses like Walmart have to take bigger profits in order to stay in favor with investors. But where do these big profits go, to a few at the top cause they see everybody else is finding ways to screw each other as well.
Vicious cycles.
Bestbuy did something right this year. Sad part is, what happens on Wallstreet does not translate to Joe who works there. Income inequality at its aging best.
http://www.marketwatch.com/investing/stock/bby
The above link means nothing til you click the 3 year history button. I guess BBY employees all over the nation can count on quadrupling their salaries, just like BBY stock did in the last year.
Having been a vendor to CHINA MART I’ve seen firsthand they do not have to shell out a lot to pay their people (showing my age when did “OUR employees” become ASSOCIATES?)I know when,it happened during the age of having to wear pastel colored polo shirts and they have to be tucked in.Swine in the link mentions all the stuff they did in the 90’s.
I didn’t agree with this stuff because I am a hot dude(high blood pressure and I dislike being sweaty as I hump my ass around making money for my employers thus justifying my pay and continuing employment).
The rate of TURNOVER there (remember I mentioned above constantly training NEW DEPARTMENT MANAGERS
how not to kill the fish and maintain their fishtanks?)
means no one attains much more than their starting wage.
Those people are not moving up in the ranks they just
get more and more work piled up on them until they quit.
The funniest thing you will ever see,I swear to God
Is the store managers holding RAH RAH SIS BOOM BAH motivational meetings around 9:30 AM in their stores.
Why these idiots do it in view of the public I have never come to understand.
Yes I believe Slewfoot is wrong on there being a benefit to low interest.Read around on tickerforum by Karl Denninger.
I was VERY frugal now I get dick for having $ in those 2 banks by Washington HS.What I have saved has becomed devalued by near 10% every year of this
“summer of recovery 2009” the media talking heads spout off on.THERE HAS BEEN NO RECOVERY its all a sham.
LIES LIES LIES YEAH (Thompson Twins)
GREAT RECESSION my gay left foot!
Those mealy mouthed teleprompter reading peter puffers
will never spout the words that have true meaning and you know its true DEPRESSION!
Shit now with the FED giving money around to banks so they can just go to their market window
take loans to themselves and get more of an interest rate to themselves than available to the people.
The extra they get over the common man is what propels
the stock market increases.They speculate in commodities with that little extra they get.
JFC already the banker owned media is telling US how
much stuff is going to go UP in price this year (necessities,these GD bankers have turned this former full time carnivore into just about a damn vegan these last 4 years).
I rode past my local shop’n cart (who here finds the name of convenience store chain labeled Cum n’Go disgusting?) and there has been a MAJOR change in the discrepancy of the price of ethanol VS pure gas.Been here 6 years and it always has been 10 cents cheaper for corn gas,now its up to .20 WTF.We are being punished by our owners for not fighting against attempts to curtail
POET’s continuing taxpayer subsidization.
I don’t watch TV since 1995.I remember everything that happens like an elephant since I am not being brainwashed like most of USALAND.
I don’t know I ramble and get sometimes lost in my posts
thanks for having me regardless.
OBG
OBG: You probably have got some really good things there in your post, but it is very difficult to read b/c we are not inside your brain.
I know anon2@ hard to write down a cascade of
thoughts when you actually remember all events in your life since Fonzie jumped the shark.
Wordsmith typist I am not,lets have coffee
OBG
OBG, do you know Eggbert?
http://www.southdacola.com/blog/category/eggbert/
OBG-
Fascinating. The tropical fish department in Walmart has always been an existentialist backwatery eddy of lil’ lopsided critters swimming in tired circles.
Kum n’ Go is more of an Iowa phenomenon. Iowans tend to misspell common words for their businesses because they think it is cute. a lot of K’s where they don’t need to be. My tired memory tells me the creator of Kum n’ Go is so old and righteous he probably never noticed the double entendre. Most midwestern C-store chains have similarly filthy names, however. I never could figure out the ones in southern minnesota that sell huge piles of bananas and gigantic plastic bags of milk. Pump n’ Munch, I believe it was.
I usually munch before I pump, but that’s just my personal preference.
Omg DL!
I’ve never seen milk in a bag but have come to know
our nutty continental neighbors to the north are part of this
devious plot.
I don’t know what an eggbert is will lick the clink.
OBG
(this site rocks btw plan to vote anyone but Huether I moved and am old I may need help making sure I can
I used to vote @st.lamberts on Bahnson anyone help me with that I will post my email in non-harvestable form)
Damn DL,eggbert is pretty close to a brother in arms
regards to how I ramble,except I don’t plagarize.
And to all a good night!
OBG