Category: Wages

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Three 16 year old boys died in the past 5 weeks while working with big machinery.

One company explained that “the child ‘should not have been hired’ and that his age and identity were misrepresented on his hiring paperwork with an outside staffing company.” You don’t say. How innocent the company is acting? We were lied to and this poor unfortunate 16 year shouldn’t have been hired, we wouldn’t have hired him if only we had known his correct age.

For some reason I don’t believe it. Every employee has to provide proper documentation in order to work. The company has a responsibility to examine this documentation for validity. This is standard practice in place for some years. I used to do it in the 1980’s. HR departments should have this down. But OK, mistakes happen, perhaps a 16 year old was able to get a hold of a convincing fake document but a quick glance at the prospective employee might have set off some alarms. Somehow these boys with peach fuzz as beards were able to pass themselves off as older. Even if you accept that they are telling the truth, there is a frightening level of incompetence within the management of the company.

But I think this more than just an accident. One of the more illuminating giveaways that this is something more nefarious, is that it happened 3 teenagers at different companies and in different parts of the company met the same fate. This also might explain why Republican governors and legislatures, those champions of the working class, are loosening child labor laws. Companies are complaining that they are having trouble filling their open positions. Something must be done, so teenage labor is the solution to their problem.

Unfortunately, teenagers are banned from hazardous labor. No problem. These companies did a risk assessment about hiring underage employees. They figured out how much potential fines would be and then compared this to the price of raising wages and decided that paying the fines was the better deal. Higher wages are a sure thing while fines need only be paid if they get caught. Now that is a risk worth taking. They would probably have gotten away with it if nothing had gone wrong. This suggests that fines are too low. Fines should discourage companies from breaking the law, not be a factor in whether they are going to break the law or not.

But, saying that they can’t attract workers is misleading. These companies are having problems filling positions at the wage they want to pay. The wage isn’t enough to attract adults to perform an obviously hazardous job. When labor is scarce and the job is hazardous, the company needs to pay wages that attract the best workers. It is basic capitalism. They can’t just expect workers to risk life and limb for nothing. But, of course, these companies do.

What I find particularly irksome here is that these so called Capitalists only like Capitalism when it is to their advantage. When it isn’t, they moan to government for help — make the laws easier so we can hire people who will take the jobs at the rate we want to pay. Let in qualified immigrants who will take the lower wage. Hire teenagers who will take the lower wage. Boo hoo. Whatever they are, they aren’t good Capitalists.

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Our refrigerator, after 23 years of faithful service, died the other day.

Needing a replacement, Bob immediately found a new one. It’s a complicated and boring story but the crux of the matter is we can’t install the new one until we can detach our old one from the water system. A plumber has to do this and he needs a part. The installer said he can return when we know a date when this is completed. Bob has confirmed a date for the plumber.

All we need now is for the delivery people to come hook up the water for the new refrigerator and take the old one. The delivery man gave us a phone number and email address where we could contact them. Bob tried via email. No response. Bob then tried to call customer service. The recorded message informed him that he would wait an hour a customer service agent would answer. Thinking it had something to do with customer service being short staffed due to the 4th of July Holiday, he decided to wait until after the holiday. He called today very early in the day, and, received the same hour wait for an agent message. Customer Service doesn’t have enough agents when you start the day an hour behind. Given that we have heard nothing via email, I am willing to bet that no one is responding to emails and that our best bet is to wait an hour to speak with someone.

I recently had a similar experience while renting a car. We had to wait an hour and half in a line of more than 30 people to see a rental agent. There were two at the desk. Once we got our contract we went into another line to get our car. This desk had one person. We waited for 30 minutes in that line. At first, I thought a bunch of planes must have landed thus causing the long lines, but the line never got smaller, it had, in fact, got larger.

Of course, it isn’t the company’s fault. There aren’t enough good employees to do the job. They claim to be trying, but really are they? Management is always blaming labor for the lack of good employees. I invite you to look at this in a different way. Companies’ can’t find workers who are will do the job at the wage you are offering. They might have better luck if they paid more money.

Indeed, this is the way the market is supposed to operate. If something becomes more expansive to deliver, say oil for the sake of argument, then the market price goes up. So, when there is war in the Middle East or hurricanes in the Gulf of Mexico preventing the refining of oil, everyone accepts that prices of oil will go up. This is what we are told anyway.

Then doesn’t the same theory applies to wages. If it is difficult to find employees at a certain wage, then you need to raise the wage until you can acquire the number and quality of employees where you can deliver the product or service you are selling. American business is, for some reason, resistant to learning this simple straightforward lesson of Capitalism. If forced to choose between higher wages or delivering bad service, they will choose bad service every time in hopes that if they hold out long enough, the labor market will change in their favor.

In the mind of Business Managers, Labor is the whipping boy for all the failures of American Capitalism. If there are problems, it was bad employees. If budget cuts are necessary, where do you think they cut first. Cut the number of staff while trying to maintain the same workload. Cut benefits, raise deductibles on health insurance, do away with sick days. They brag about profits, they brag about price shares but rarely, if ever, do you hear them brag about paying the best wages in the industry. Which is odd because a customer might infer that by paying the best wages, your company also has the best people.

I can’t tell you how many Rah Rah end of the year speeches I’ve listened to where the corporate heads are blathering on about all the successes the company experienced — profits are up, share prices are up, efficiency is up, automation is up. They claim how they are the best in the industry for this and that. Then some brave employee broaches the subject of wages. The talking head has a ready answer. The company pays wages that are in line with the labor market. This sounds like collaboration to me. If they all know the standard wage, they can gauge their salaries appropriately. I thought this was illegal but never mind. For some reason this stops all conversation about wages.

Employees buy it. Until recently, I always did. I thought well what can I say to that — the company pays what is in line with every other company in the industry. But, wait, doesn’t the company want to be best at everything? Why wouldn’t the company want to have the best wages as well? In almost 40 years of working, I have never heard a company head brag that they offer the best wages in their industry. They may say a lot of wonderful things about their employees, they may even believe what they say but they rarely brag about the wages. they are paying. Curious that, don’t you think?

Which brings me back to the extra refrigerator clogging up our kitchen. This effects customer service. Because lower paid employees are the most likely staff to work with actual customers, this lack of good employees has a detrimental effect on a customer’s experience. If you can’t afford to pay good employees you are also ensuring that, at least some of your customers, will have a bad experience. Companies are hoping that most of this will be handled through better automation, the problem is that if any hiccups occur and a human needs to get involved, the company almost guaranteeing a bad experience. Let me tell you if I have to wait an hour when I call a customer service department, I have already had a bad experience. I have had to wait an unreasonable amount of time. By the time the poor customer service agent answers, I am fuming and ready to quarrel. So, the underpaid sap might begin to think — I don’t get paid enough to this crap.

And around and around she goes.

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The New York Post is complaining that people get too much money in unemployment benefits so they opt for these benefits over working an actual job. Boo Hoo. Let me try to shed a tear.

First, and most importantly, I don’t know where the Post is getting its statistics but they are both wrong and misleading. As a recent recipient of unemployment insurance, I can assure you that it is nowhere as large as the Post is stating. I received the maximum benefit for unemployment which was all of $450.00 a week which is $11,700 in a six month period. When I reached the six month limit, I was immediately cut off.

How the Post got $71,063 as the maximum benefit for the state of California is wrong. The statistics that the Post provided base there numbers on both adults in a family of four (2 adults and 2 dependent children) being unemployed. Highly unlikely but OK for the sake of argument lets go with it. Using California as a measurement this means $23,400 is the maximum benefit they would receive. The average cost of the Obamacare Health benefits for a family of 4 without subsidy is $1,403. I doubt that the government subsidized $38,000 for a benefit that only costs $1,403. The Post’s numbers just don’t add it.

Then, there is that the Obamacare subsidy is based on a person’s last year of income tax statement. When I was investigating whether to take Obamacare when I became unemployed I learned that I was ineligible for the subsidy because I worked a complete year and thus made too much money. I would become eligible for the subsidy only after I filed for income tax in the next year. By this time, I lost my unemployment benefits so coupling Unemployment and Obamacare benefits is misleading. The unemployed rarely, if ever, receive both benefits at the same time.

The Post also uses the maximum benefit as its benchmark. What the Post failed to advise its readers is that only the highest paid earners received the maximum. People who made lower salaries, received a lower level of unemployment insurance benefits. Yet, the way the Post frames their case, every unemployed person is making $71,063 (at least in California) on Unemployment Benefits and Obamacare. This sum isn’t even close to the truth. Most people aren’t receiving the maximum benefit and are not receiving it in conjunction with Obamacare subsidies.

Finally, and most damning of all, the present unemployment rate for nation is 3.7%. There isn’t a lot of unemployed people to get back into the workforce. Cutting Unemployment Benefits isn’t going to change this.

So what is a poor businessman to do? The answer, rooted in Capitalism, is he should raise wages so he can attract workers. Perhaps stay at home mothers, retirees and students might be enticed into the workforce with higher wages. Why not give it a try and see what happens? But, no, the Post would rather complain about the lazy nature of the American Worker instead of recommending that businesses adapt to the present economic situation and pay higher salaries.

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Business managers are complaining about how people won’t work like they used to in the good old days. As the linked Los Angeles times article points out, this is a complaint as old as the Republic. The problem isn’t the workers, it is the wages.

I once worked at a call center. I supervised workers who made hotel reservations and they, on a busy day, may receive 20 or more calls in an hour. Having performed the job as an employee, I can assure you it was boring job full of mindless tasks. It did pay the bills. Barely. Call center operators are taking calls pretty much the whole time they are on the clock. This is the way companies want it. They want just enough operators to make sure that they only lose a small percentage of incoming calls. That’s right, they would rather their employees are always working than all of their customers get served.

The call center’s biggest problem was employee turnover. Because the pay was low and there was rarely any employee commitment to do anything other than an all right job, and, if they lost their jobs that could easily replace this job with one making the same wage, people quit or lost their job on a fairly regular basis. This meant that management generally was in a hiring and training mode most of the time.

Sometimes, the Uppity Ups would wonder why we couldn’t slow employee turnover. I’m sure my bosses, who were all a pretty smart lot and knew the answer to the problem, would suggests more money for labor. It was a dance that everyone knew had to be danced but that never really changed anything. Because more money for lower level employees is always off the table. The Uppity Ups received the truth and then acted as if it was never proposed. More money for lower level employees is a budget buster. Strangely, more money for higher level employees is not.

The Uppity Ups that counter the idea that more money will make lower level employees happier in their job. They have read some article in a business management magazine which site scientific studies that say people don’t just work for money. Money isn’t even one of the top reason that people work. Try to work on these other non-money reasons to bring down worker turnover because these studies prove that more money isn’t the answer. Employees want recognition, they want challenges, they want better jobs, and then they want money. So we would go off and see how we could improve those other areas.

We found that we were just as restricted in improving employees work life in those other areas as we were in more money. We needed employees on the phones not at the better jobs. This being the fact. We had significantly more entry level jobs than upper level jobs. Once anyone managed to get one of the upper level jobs, they stayed forever. So these better jobs rarely became available and just as a side note that me be obvious but I feel compelled to mention, a better job meant more money. The reason many people go for better jobs is they get more money. Regardless, this option was off the table as well.

Challenges. The job was answering the phone and booking hotel reservations. Almost every call was exactly the same. Different cities, different dates, maybe but there were no challenges except getting the customer off the line quickly and making no mistakes. The company already had a negative incentive on those two tasks — if you failed to meet standards after a three month period, you were fired. There was no challenge we could add to the job and there was no incentive in doing either task much better than you were. There, also, was an amazing disincentive to getting better at either task. If you worked faster, you made more mistakes. Which could put you on warning. If you made less mistakes, you talked too long. This too would put you on warning. Once you found the right balance, you maintained it. All management was left with was recognition and there are only so many pats on the backs a person can take before it looses its effectiveness.

In reality, all we could do was give them recognition. Everything else was off the table. Recognizing good work without spending a dime. More money isn’t the answer says the uppity ups. But it is and they know it is because this, of course, is their defense of the income imbalance between the top wage earners and the bottom. You have to pay top management top salaries in order to interest them and keep them in the job. Why doesn’t that same philosophy work for lower wage workers?

But I never stopped believing that if low level employees got more money for their jobs and, because they received more money, these jobs might be something they value and would want to keep, that there would be less employee turnover. The Uppity Ups refuse to believe this. They just can’t believe that people don’t value the crap wages they are paid. Herein lies the problem.

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I accidentally got involved in Facebook argument the other day.  I know better than to argue with people who disagree vehemently with my position as I can never change that person’s mind. NEVER. If a person is passionate about an issue they are committed. They do, however, think that they can change yours. The argument will begin with the pretense of reasoned argument and end with taunts and name-calling.  I avoid these types of arguments as much as I can.

I stepped into this particular pile of shit because I thought I was replying to someone I knew, and probably agreed with. The post had the following statement: Why do you hate the rich? I answered the question with another question: Why do the rich hate us? There are billionaires out there that make more money than they know how to spend, why don’t they give this money to the poor and middle class so that everyone can enjoy a better life.  Today’s rich live in the greatest luxury known to humanity so even if they were taxed more, they would continue to enjoy the good life with little, if any, discernible change in how they live.

As I thought I was talking to my largely liberal friends, who would disagree? Yet, the disagreeing comments came.  When I checked the names of my opponents, I realized these were not people I knew and I should move on without comment.  I need to make a small confession here. I like to argue politics.  It is fun.  Or it used to be. I remember in college that I would go to a bar with people of varying political beliefs. We would drink and argue, but even though drink was involved we were mostly respectful of other people’s opinion, we listened and occasionally minds were changed.

Facebook arguments, if you haven’t been in one, aren’t friendly bar room arguments.  And that alone is saying a lot. I would rather argue with blind drunk political partisan in a bar than a completely sober person on Facebook.  Facebook arguments are savage hand-to-hand combat followed by the full nuclear arsenal raining down on the wounded bodies strewn across a bloody battlefield. It is bloody to participate in, impossible to win and thus pointless to respond.

But if I were to respond this is what I would say.

The crux of their argument wasn’t even an argument, it was a question: why did I care about how the rich spent their money.  It was their money and they earned it. This is where I disagree. What happens is that a company receives profit and the leaders of the company decide to divide the money between the people who are employed at the company.  The people who divide the pot are also the big wage earners. Low income earners are not invited to this particular table.   

It should be no surprise to anyone that the people dividing up the pie are the same people taking the biggest slice of the pie. The perverse side effect of this type of distribution is that high earners demand more and more money because their wages keep increasing and in order for companies to stay competitive they must pay their top earners more while the lower income earners wages are stagnant and there is little pressure to give this group more money. In fact, the top wage earners have abandoned their low wage-earning peers by putting more and more pressure on the lower income earners through automation and out-sourcing. So, while everyone at a company contributed to creating the profit, the top wage earners decided to take the lion’s share of the money claiming that the market made them do it. They personally had nothing to do with this skewed distribution, we are only following the dictates of the market.  If it was up to us, we would happily pay more money to low wage earners but, the market, you know must have its way.

Which brings me back to my question: Why do the rich hate us.  They take an unequal portion of the profits. They drive down global wages. They allow low income earners, people who by the way work a full-time job, to live in precarious economic situation while they live in luxury. They work to limit access to good public services for low income people. They are contemptuous of everyone who makes less money than them. Why do they hate us so?