Wednesday, October 31, 2012

So, I'm still wondering....

If the new museum is to attract all these people why hasn't a savvy restaurant owner snatched up either of the vacant ICONs, the River Station or Old Chicago spaces?  Seems like one would have a lot of potential customers.  Hmmmm...maybe the museum's hours aren't conducive to restaurant business?  Or the customers (kids on field trips) aren't their clientle?  There isn't a skywalk to the restaurant which is deemed a necessity for success in another downtown venture?  Or maybe a savvy restaurant owner doesn't believe the projected numbers.

Monday, October 22, 2012

Does This Person Live In The Real World?

http://business-news.thestreet.com/pjstar/story/3-ways-raising-the-minimum-wage-will-help-the-economy/11742927


Really?  Three Ways Raising The Minimum Wage Will Help The Economy.  I'm not an Economy Major.  I don't have degrees in this stuff.  But I've been there, done that, live in the real world and don't have to dig for other articles, research or reports to support my theories...I've lived them.

First, minimum wage was developed to keep companies from paying their employees ultra low wages.  I don't believe that the minimum wage enactment was ever meant to be a living wage.  If the government, etc. wants to keep raising the minimum wage to keep up with inflation, etc., maybe the should name it to what they really want to make it:  A Living Wage.  Maybe they should initiate the "Living Wage Act" and dump minimum wage unless they reserve that for part time students living at home or seasonal positions. 

In point 1 from the article, the author states that raising the minimum wage to $9.80/hr. will help eliminate poverty in this country.  Does this mean that it will lower the number of people living below the poverty level or does it mean that people will not live in poverty?  And will it do either?  Ok, I know that there are people who will put the extra to good use.  However, I've witnessed more often than not (and have done so myself) the increase goes to frivolous things like new TVs (or other electronics), tattoos, new clothes, phones, etc.  Little goes to reduce debt, save for rainy days, fix the car, etc.  While this may help the economy (as stated in the article and further addressed below) who is it helping?  Other minimum wage employees or the owners for which they work?  While it might bring them out of the poverty level, does it bring them out of poverty?

Point 2.  I've worked for independents to multi-billion dollar corporations and if the author really believes what she wrote....  A LOT of businesses base their labor on percent of sales.  The last time min. wage went up, the managers of said multi-billion dollar corporation for which I worked were told that we had to cut hours to bring the "labor dollars to sales" ratio back to where the company wanted it.  I've worked for small businesses that have done the same thing.  Neither wants to raise their prices to lose out to the competition.  Now the business runs with less people...and you wonder why customer service sucks.  Dollar per hour employees are worked harder and are more stressed.  Salaried employees are asked to pick up the slack.  And who benefits?  The person who has to work harder to receive a paycheck that is now basically the same as it was before the increase...or the corporation/owners?  And when the corporations/stockholder pockets are lined, where do they spend their money?  At places where all these minimum wage people work or at the Mercedes dealership?  Who does that help in this economy?

Point 3.  Is the author serious?  I couldn't quit laughing.  Because minimum wage goes up, people above the new minimum wage get a raise, too?  In what world?  I've rarely, if ever, have seen this happen.  It never happened to me.  It pisses those people off, their output decreases, attitude sucks and the start looking for a different job.  If someone has been a great employee, they have worked for years to make enough in raises (that started at a lower minimum wage level) to still be above the new minimum wage and get nothing, yet the newbie who is barely a decent employee now makes $1.00 an hour less than they do, what do you think happens?  How about the person who just got a raise, but makes less than the new minimum, get bumped to minimum just like the person who walked in the door?  I wonder how long it took the author to find that study that supported her claim.  Did she even leave her desk to talk to REAL people from dollar/hour workers to management to owners to corporate CFOs?  As this, in my experience, rarely happens, how again does this help the economy in a significant manner?

And it isn't just an increase to $9.80.  The business also has to pay in extra to match FICA, etc. I was once told by my business accountant that by the time you figure in all the matching FICA, etc. plus other things like unemployment insurance and the like, you are really paying the $10/hr employee $17.50/hr.  Yes, it is all part of doing business and should be reflected in the businesses pricing.  Yet those "behind the scenes" costs aren't realized by most people and they don't see how a $1.55/hr (in Illinois) should make that much difference.

Are the minimum wage employees going to be better off?  For the few that don't get their hours cut and do something productive with their new found earnings, most likely so.  But how many people will that represent?  Half?  Third?  Fourth?  Tenth?  1 in 100?  1 in 1000?


What I see happening from my experience:  Less employee hours.  Higher prices.  Small business closing down.  I don't see the cup getting fuller like the author does.  I see more internet trade for those businesses that can use that function which will probably end up with less sales tax paid in which makes states receive less money (did you report unpaid internet sales tax on YOUR return last year???) and this helps the economy how like the author is claiming? 

Solution?  I think since this appears to be a federal issue, to make a federal standard.  Each business keeps mandated semi-yearly job performance/wage reviews on file for each employee.  Those performing admirably receive federally mandated wage increases, those who do minimal or are lacking do not.  Step up your game or don't get paid.  Records are kept on file at the business and not sent to the government but can be requested or provided by the business at any time to the employee or government.

Ok, I know I'm going to get blasted by comments.  But before you start typing, consider two things:  To whom are corporations responsible?  Shareholders...not their employees (well unless they are employee owned).  Owners/upper management's jobs are to ensure this happens.  Independent owner/operators, like their employees, are dependent upon the profitability of their business which are often times the mainstay of their livelihoods.  If they don't make it, neither does their business and people are out of work.  This isn't of MY doing.  But from my view and since I've worked my way up through it, it is the way it is; I don't make the rules.