Friday, October 09, 2015

Do We Need to Raise the Minimum Wage so "People Who Work Full Time Don't Live in Poverty"?

From the Foundation For Economic Education:
Critics of the minimum wage used to be able to respond to arguments for raising it by stretching the logic to its extremes. If $10 is so great, why not $20 or $50 an hour? The reductio ad absurdum should cause even the staunchest minimum wage advocate to ponder the potential unintended consequences of their ideas.
Unfortunately, we now live in a world where caricatures have become reality. Sen. Elizabeth Warren wonders why we don’t have a $22 minimum wage (I explain why she doesn’t have much to ponder here), and Sen. Bernie Sanders has now joined the “Fight for Fifteen.”
For the moment, let’s set aside the economic debate over whether the minimum wage costs jobs. (The CBOmajority of economists, and majority of empirical studies pretty much say it all.)
Instead, let’s address Sanders and Warren's moral argument for hiking the minimum wage to such levels: that “no one who works full time should have to live in poverty.” 
Article here:

Sunday, October 04, 2015

When Work Is Punished: An Analysis Of Increased Minimum Wage And The Welfare Cliff

Wage growth - or a persistent lack thereof - has become something of a hot topic in America. 
Thanks to the nationwide push for a higher pay floor (personified by mobs of angry fry cooks demanding $15/hour and Democrats on Capitol Hill who are pushing hard for "$12 by ‘20") and wage growth’s role as an input in Janet Yellen’s mental "liftoff" model, everyone from Main Street to Wall Street feels compelled to weigh in. 
The standard criticism of hiking the minimum wage is that forcing employers to pay more will simply result in layoffs and/or a reduced propensity to hire, but as we saw with Dan Price and Gravity Payments, there are a whole lot of other things that can go wrong. For instance, higher paid employees may not understand why everyone under them in the corporate structure suddenly makes more money and if people who are higher up on the corporate ladder don’t receive raises that keep the hierarchy proportional they may simply quit. 
But while politicians, pundits, and economists run in circles perpetuating a debate that’s better suited for an undergrad introductory economics course than it is for the national stage (it’s really quite simple, as New York Burger King franchisee David Sutz made clear when he told CBS that "businesses are not going to pay $15 dollars an hour [because] the economics don't work in this industry [given that] there is a limit to what you're going to pay for a hamburger"), there’s a far more troubling situation unfolding behind the scenes and it harkens back to an issue we discussed at length almost three years ago. 
In short, the welfare system punishes work and incentivizes dependency. More concretely, the structure is such that rational actors will eschew hard work, because the more they earn, the poorer they will effectively be in terms of total resources (calculated as welfare benefits plus earnings). 
In the simplest possible terms: for many Americans, wage growth is a very, very bad thing.

Friday, October 02, 2015

Today's (Ficitional) Jobs Report

The 5.1 percent reported unemployment rate is inconsistent with the collapse of the labor force participation rate (which is at a 40 year low) and is "accurate" only because it includes not a single one of the millions of discouraged workers. The way BLS gets a low and comforting rate of unemployment is not to include most of the unemployed.
Were were the new jobs? If you can believe the numbers, despite the absence of retail sales growth, retail stores hired 23,700 new workers. Ambulatory health care services and hospitals hired 28,400, and 20,700 jobs were created for waitresses and bartenders. 
None of these jobs produce exportable goods and services.

Monday, September 28, 2015

Do You Know What Is Expected Of You At Work? Most Don't.

Via the Gallup Organization . . . 
Do you know what's expected of you at work? One of the most startling findings I've seen over the years is that only about half of employees strongly indicate that they do.
We recently reviewed data from 550 organizations and 2.2 million employees during their first companywide measurement of employee engagement. Even more surprising than the above finding is that the managers of these employees are equally unclear on what is expected of them. And while there is some variance across industries and job types, teams within organizations vary the most.
How is this possible, you might ask, in a business world of increased focus on job descriptions and competency models that outline the tasks and behaviors necessary for each role?
In our worldwide study of great managers, we've learned that clarity of expectations is more than a job description. Rather, it is a detailed understanding of how each person's role relates to the roles of his or her coworkers and the overall organization -- and how expectations change as circumstances change. What's more, clear expectations are central to fair and useful performance management.

Monday, September 21, 2015

Millennials Surpass Boomers: Why are They Still in the Basement? Eight Reasons; Attitudes and Pendulums

Eight Reasons Millennials Living With Parents 

An interesting discussion and some fascinating conclusions by economist Mish Shedlock at the link below.  

  1. Student debt
  2. Soaring Tuition Costs
  3. Unaffordable home prices
  4. Shrinking real earnings
  5. Participation rate of those aged 25-34
  6. Demographics of aging 
  7. Changing attitudes towards debt
  8. Changing attitudes towards family formation


Tuesday, September 08, 2015

Bad Bosses Are The Primary Causes Of Turnover

Hlupic argues that the common business focus on processes, procedures and results ignored the human dimension of work and productivity. “We are, after all, social beings with the need for soft skills such as encouragement, appreciation and achievement. If a boss denies these fundamental needs – even if the financial rewards are great – most employees will be quick to look elsewhere.”

It’s not that employees don’t want to get along with their boss either. The survey found that nearly three-quarters (74%) said getting along with their boss helped boost their motivation and a third said a good relationship with their boss was even more important than job satisfaction.

Unfortunately for those poor employees who lack a good relationship with their line manager or section head, bosses are unlikely to improve anytime soon. A 2014 report from the Chartered Institute of Personnel and Development revealed that the quality of managers had not improved over the last decade.

Also see the book "Why Work Isn't Working Anymore," by Karger and Aldrine, 2004.

Saturday, September 05, 2015

The Failed Moral Argument For A "Living Wage"

Excellent article at link below, I commend to your review . . .

A “living wage” is a function not just of wages, but also the cost of living. So why aren’t living-wage advocates picketing grocery stores, home sellers, and gas stations demanding they slash prices? 

Why are employers solely responsible for making everything affordable?

Article here: