Obama’s Right

It was a pathetic bit of a pathetic State of the Union address: a call to American business to raise wages so that Americans would have more disposable income.  But for once, President Obama was actually right.

When I entered the working world, my first jobs paid a little more than the minimum wage when I started.  But after a few months’ experience, the pay went up.  At least in the New York metropolitan area, even basic jobs paid more than the minimum wage.  The notion that minimum-wage jobs were for teenagers just starting out in the work world was really true.

And if you earned twice the minimum wage, you could find a modest apartment that you wouldn’t have to share with roommates.  With a little more than that, company-paid health insurance, and a like-minded spouse, you could even start a family.  (OK, now you’re back to having a roommate,  but it really isn’t the same thing.)

All of this was accessible to pretty much everyone, or at least it seemed that way at the time.

In the past weeks, the Daily News has reported on people working for large employers, receiving the minimum wage (or very close) and no benefits.  One woman had worked for McDonald’s for 10 years and was still earning $8.25/hour.  She must be a rotten employee, I thought at first: how do you work for the same place for 10 years without a raise or a promotion?

But she was hardly alone.

There are many other workers, hardly teenagers, toiling year after year for the minimum wage.  Some of them work for contractors to the Port Authority at the airports, cleaning toilets or hauling baggage.  Once upon a time, these jobs might have been unionized, with benefits and a living wage.  But not anymore.

And the employers can do this because there are hordes of unemployed who’ll be happy to clean toilets if you won’t.

Beyond that, employees who aren’t paid a living wage are often eligible for food stamps.  So part of an employee’s food bill is a cost that the business can now externalize onto the government.

If businesses paid their employees more, such that the employees would be able to pay their own food bills, it would indeed help the economy and break the cycle of government dependence.  In this respect, the President, for once, is right.

Unfortunately, the business that does that will find that its competitors–who didn’t raise the wages they pay–are eating its lunch.

6 thoughts on “Obama’s Right”

  1. Someone who worked for McDonald’s for 10 years is probably not someone who unfortunately has the skills to get better. That’s the issue many don’t discuss, not to mention how many employers screw employees. Wal-Mart actually has people that help employees file for welfare. It’s sick when you consider the Walton family are among the richest people and do not give much to charity.

      1. I think it varied but yep that was common. I do remember when I worked at Venture (Wal-Mart clone)in 1991 the home manager was quitting or retiring and the second in the line applied for the job. She had worked there close to 20 years but instead of giving her the job, it went to an outsider who just graduated college. Their thinking was college grads were better. This wasn’t the reality as these managers were lazy. The woman who got passed over was very angry and I believe ended up quitting.

        1. Two Guys.

          They were one of the biggest “over all goods” department stores in this state; they closed somewhere in 1986.

          I remember promotions from within — and I remember that quite a few kids I went to high school with had jobs at that store.

          This is how things used to be done: nearly every company promoted from within — nobody went to college back then — and a company knew that its best brains were the people who were already working there.

          Those days are long over.

          What you get working in stores now is the pits: dumb high school kids and dumb college kids that don’t know what “work ethic” means. You also get English impaired employees! Not everybody is Spanish speaking.

          And some of the employees are dumber than dirt.

          Things are not what they used to be.

  2. There are jobs where there is no such animal as “commensurate with experience” — lab med tech jobs in hospitals fall into that category.

    This means you could be working after 20 years for maybe $22 an hour — and if you want another job, you more or less start over at entry level salary. I think now med techs might make $17 an hour to start.

    I remember our boss would never give us the yearly raise that was determined by the management; the raise might be 4% — he’d tell us “it’s a figure for each person” – could be a dime, 40 cents or nothing at all. The “raise” you got was far below the 4% that was determined by administration.

    There was nothing we could do about it. Nobody to complain to; complaining to HR is useless — they do not determine who gets raises: the administrators do and if you want to try to talk them down, haha — lots of luck. You’ll get nowhere.

    What do we do about decent money and decent raises for people who work for little penny ante hospitals like we worked for?

    ETA: If I was still working as a med tech and “if” I got 50 cents a year — the raises usually did not go much higher than that — I’d be making a whole $25 an hour. Not much money for somebody working in a high stress field for 34 years.

    There are no promotions in a hospital lab, unless you want to be a section head. That’s nothing but a lot of administrative paper work, refereeing employee tiffs and making sure there are no dust bunnies under the Coulter when the inspectors show up to have a look at the lab.

    If you want to be a lab manager? Good luck; you don’t always automatically get the job by seniority. Some places minus unions do that. Usually they’ll bring in some outsider to run the lab if the current manager quits or gets heaved.

  3. A factor that might be underestimated in one’s “failure” to get a better job in ten years are the costs of getting another job, both in time and money. It’s not as if one gets seniority at McDonald’s and gets to pick their shifts, making it harder to go out and apply for jobs. $25 for a drug test would be over 3 hours of her wages.

    Requiring that government contractors pay at least $10.10 an hour to their labor force beginning with the new contract is the easy part. Companies will just increase their bids for the next contract to reflect the higher wages. They will also collect more in fees as a bonus to the company if it is a typical cost plus contract.

    People focus on the fact that many people in minimum wage jobs receive food stamps and other aid. In most cases, these are people with children, not single people or married people without children, so it is an error to believe that food stamps are automatically available to all minimum wage employees. Eligibility for food stamps is determined by income and family size.

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