business

Wages rise in U.S. as companies scramble for staff

44 Comments
By Delphine TOUITOU

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An acute labor crunch amid the coronavirus pandemic is boosting U.S. wages, with many large chains now paying $15 an hour, a minimum level long sought by Democrats and labor activists.

Why did it take a pandemic and the temporary introduction of a UBI to come to this? Business and government have both done the minimum in reacting to current trends. Next up: disruptions due to climate change engendered disasters and mass automation of occupations :lawyers, accountants, truck drivers, some service industries.

1 ( +3 / -2 )

"The structures of the U.S. economy that have suppressed wage growth ... for decades haven't changed," Cooper said. "We should be careful not to conclude that this will be a long-term permanent change."

Exactly. It is the neo-liberal model of extractive wage labor that has led to a race to the bottom which is where we are now. Time to turn it around.

0 ( +4 / -4 )

More evidence of coming inflation? Never mind, the Fed is on top of things.

-2 ( +5 / -7 )

Businesses are funny. They pay as low as possible and when no one wants the job due to that factor, they become outraged and blame people for being lazy. Give me a break.

12 ( +16 / -4 )

Positive trend. I hope it carries over to Japan.

9 ( +10 / -1 )

Supply and demand actually work. Who'd a thunk it?

I walked away from a nice consulting gig in 2008 to start my own company. I'd never go back to work like that again. I'd rather never have another client again. It is about control and setting my own work levels, time off. Pay is not nearly as important, unless you are unskilled.

$15/hr is more than I was paid with an engineering degree fresh from college. It boggles my mind.

6 ( +7 / -1 )

Labor shortages and commodity prices on the rise in the UK mean inflation ahead

3 ( +4 / -1 )

Brace yourselves, inflation is coming.

3 ( +5 / -2 )

Wages have not been linked to inflation for decades. In fact, inflation has risen faster than wages for the last 50 years. Wages have yet to catch up and may not ever within our lifetimes.

It's about time workers got a break. Glad to hear this. Japanese workers deserve raises as well.

6 ( +6 / -0 )

Inflation will increase ... and in any case in a couple of years everything will return to the optimal levels (for companies).

1 ( +2 / -1 )

So companies are paying $15/hour? That can’t be possible. I just checked outside and the sky hasn’t called, the sun hasn’t consumed the earth, and America hasn’t descended into a Mad Max style post apocalypse where everyone worships Karl Marx. Are you telling me conservatives lied to me??

3 ( +5 / -2 )

Businesses are funny. They pay as low as possible and when no one wants the job due to that factor, they become outraged and blame people for being lazy. Give me a break.

Can't blame a business for wanting to pay as low as possible. Don't you?

-5 ( +2 / -7 )

Can't blame a business for wanting to pay as low as possible. Don't you?

Which, sadly, is why you very often need a regulatory body to step in and force them to pay a living wage. Cuz you know that if given the freedom to do so, companies would pay far less than they were paying even before the pandemic.

4 ( +6 / -2 )

Which, sadly, is why you very often need a regulatory body to step in and force them to pay a living wage. Cuz you know that if given the freedom to do so, companies would pay far less than they were paying even before the pandemic.

Wanting to pay as low as possible does not conflict with rules stipulating a minimum pay.

-2 ( +1 / -3 )

Pay people $15 and hour who are inept at doing a job at $9 an hour; we suddenly are going to get a smile with our fries?

But actually this is a good thing; let the market decide the wages instead of having the government impose a minimum wage of $15 an hour, which would be just nuts,

2 ( +4 / -2 )

I will boycott any place that pays $15 an hour and doesn't guarantee a smile with my milkshakes.

-1 ( +3 / -4 )

Jeez is $15 an hour a decent pay? I remember many years ago back in down under my lowest ever wage was like 23 bucks and hour and the minimum wage, I believe, was like 16. Plus I had 4 weeks paid holidays a year and like 10 sickies (mainly used on Mondays, after hitting the clubs on Sunday) and free medical care through Medicare. You Americans are being scammed by the system.

3 ( +6 / -3 )

I will boycott any place that pays $15 an hour and doesn't guarantee a smile with my milkshakes.

It's probably a lot easier to smile when you're making enough money to pay your rent, and don't have to work 2-3 jobs at $5/hr to get by.

4 ( +6 / -2 )

Inflation is coming you say?

April 2020: container rate from Shenzhen $1700.

today: $20,000

inflation is devouring wage gains.

2 ( +3 / -1 )

That would be Shenzhen to Los Angeles

1 ( +1 / -0 )

Awesome! Biden is doing great raising low income workers wages. BIDEN 2024!

0 ( +2 / -2 )

I walked away from a nice consulting gig in 2008 to start my own company. I'd never go back to work like that again. I'd rather never have another client again. It is about control and setting my own work levels, time off. Pay is not nearly as important, unless you are unskilled.

I thought of doing the same but for me with prior injuries suffered in the military and later in the private sector, health insurance is unobtainable. I know a lot of small business owners in the same situation. They are younger and take the chance of living without heath insurance. If something bad happens they are out of luck. Even with health insurance and full time jobs we have struggled with some of the co-pays and our share of the costs of expensive treatments. The majority of personal bankruptcies in the US are caused by unpaid medical bills and about 80% of the bankruptees had an employer health insurance plan. I cannot imagine living without health insurance so I have to work for someone on top of owning my own little business. In the US at least where we have no universal health care it is a real barrier to starting ones own business.

3 ( +4 / -1 )

April 2020: container rate from Shenzhen $1700.

today: $20,000

That is temporary, driven by port closures in China and people shopping on line instead of in person. The world's third largest container port, Ningbo just closed a quarter of its terminal space over a single Covid-19 positive. On top of that they won't let a loaded can into the port sooner than 48 hours before the scheduled arrival of the ship it is to be loaded on. Shippers are backed up with full cans at their loading docks unable to fill more until empties arrive but the empties are sitting out in the harbor waiting for a berth to be unloaded. These delays will not persist into the indefinite future. Give it a year and shippers will be scrapping ships for lack of cargos (just two years ago shippers were scrapping box ships less than ten years old and freight rates were rock bottom) and there will be a glut of empty containers. Both steel and wood prices in the US have returned almost to their 2020 prices in the past week as supply problems for those commodities worked themselves out.

2 ( +3 / -1 )

Can't blame a business for wanting to pay as low as possible.

Nope, but the problem is that so many of them start crying to the politicians and media about a "labor shortage" when they should know that paying salaries or giving raises in line their earnings growth would quickly and magically end whatever "shortage" they supposedly suffer from.

4 ( +4 / -0 )

I was paid 11€ per hour as fresh graduate 20 years ago, with 8 weeks off (40 days), wit full healthcare for me and my family, and a company car that I could drive for personal use (2 seats only).

I wonder how can people get so low to accept being slaves.

Maybe they just realized for many of them that saying no (like metoo effect) works wonders.

My believed truth is that with less international move, you don't get parasitic employees filling holes for always lowest paying jobs. At least, that is what I see in France.

0 ( +1 / -1 )

I would argue that long term trends are mostly deflationary. You can see spikes in the money supply metrics from various stimulus but growth in the long term is steady but slow. Meanwhile the velocity of money, the measure of how often a unit of currency changes hands, has been in long term decline in the US for over two decades. That indicates that wealth is accumulating and not being spent. It is therefore not surprising that 15 companies are sitting on an aggregate of over $1 Trillion in unspent cash. In total US companies are sitting on $2.7 trillion in unspent cash balances. That is a staggering sum of money held by a very small number of firms and not circulating in the economy. This is also an example of the degree of wealth transfer from consumers to producers due to the great prevalence of oligopolies in major consumer markets. In fully competitive markets such stockpiles of cash should not exist. With more competitors prices would be lower, profits would also be lower and consumers would have more money on hand. Until that problem is remedied deflationary pressures will remain as oligopolies suck up consumer cash, often to pay their senior executives multi million dollar annual salaries while their workers scrape by living paycheck to paycheck.

0 ( +2 / -2 )

StrangerlandToday  01:05 am JST

It's probably a lot easier to smile when you're making enough money to pay your rent, and don't have to work 2-3 jobs at $5/hr to get by.

It's probably a lot easier to run some small companies or businesses when you are not forced to pay $15 an hour, and thereby be able to pay rent(s).

2 ( +4 / -2 )

I thought of doing the same but for me with prior injuries suffered in the military and later in the private sector, health insurance is unobtainable. I know a lot of small business owners in the same situation. They are younger and take the chance of living without heath insurance. If something bad happens they are out of luck. Even with health insurance and full time jobs we have struggled with some of the co-pays and our share of the costs of expensive treatments.

What? the ACA is available to every American, regardless of pre-existing conditions and you can keep your old doctors. Obama promised that.

After all, it is "Affordable" to all.

-1 ( +1 / -2 )

"There was so much opposition to a $15 minimum wage but companies have no choice right now but to pay up to attract/retain workers."

The opposition is because there is a big difference between having some third party authority decree to you how much you may offer to work for , or offer to hire for, versus free parties voluntarily cooperating together as they see fit for a mutually agreeable price. Authoritarian types need to stay out of other people’s affairs.

The only good thing about minimum wage laws is that inflation tends to render them irrelevant before long. At worst they discriminate against those with skills that are not worth the arbitrarily decreed wage level, keeping them poor and without work opportunities from which to grow and develop. Anyone who thinks they are a good idea really needs to take a deep breath and stay out of other people’s business.

-2 ( +0 / -2 )

you know that if given the freedom to do so, companies would pay far less than they were paying even before the pandemic.

Not at all. Suppliers to the labor markets - aka workers - have a say in that. That’s exactly what this story is about. It is free market forces that led companies to hike pay levels, in order to attract takers.

It is only when terms are agreed as mutually beneficial that contracts are entered into. So your claim that companies would pay less than before is bunk, because at too low a wage level they would attract no workers.

Freedom doesn’t apply to just employers, but employees as well.

Freedom is good, freedom is just. Freedom should not be taken away with an idea to playing god with other people’s lives.

-1 ( +1 / -2 )

Biden is doing great raising low income workers wages. BIDEN 2024!

Coupled with the elevated levels of price inflation, it looks like he has cracked the virtuous cycle that Abenomics was to achieve! How do them Americans like their higher prices?!

-2 ( +0 / -2 )

the problem is that so many of them start crying to the politicians and media about a "labor shortage" when they should know that paying salaries or giving raises … would quickly and magically end whatever "shortage" they supposedly suffer from.

That is symptomatic of the problem of a central government with too much power, that everyone thus tries to manipulate for their own benefit (because that is the self interest of anyone).

If government took a strictly hands off approach and made it clear that there is to be a free market system, the rest of us would quickly get the message.

But in Japan the government would have to scratch a whole bunch of bad schemes and programs to get that message across, and Japanese voters seem well indoctrinated to such schemes of centralized power, rather than decentralized, free markets and enterprise.

-2 ( +0 / -2 )

$15/hr is next to nothing in NYC or SF, but it is enough to buy a home in parts of Mississippi, Arkansas, Nebraska, Texas, Alabama, ... you know, the 35 fly-over states not full of ex-Californians trying to spend their house proceeds in a new location to avoid tax stuff or over-reaching state govts with expensive mandates on new homes like mandating electric ovens.

A slight inflation is the target for US economists, always. Deflation scares them.

0 ( +1 / -1 )

theFu, $15 is not enough to buy a home anywhere in the U.S. Not even a shed. You might, just might, be able to rent a studio apartment. Your information is very out of date.

-1 ( +0 / -1 )

That is symptomatic of the problem of a central government with too much power,

Eh, no not really. It is a symptom of something James Madison warned about over two centuries ago. Power accrues to wealth and if you allow too much wealth to accumulate in too few hands that wealth will be used to turn government policy towards the ends of those holding that wealth. In Madison's and Thomas Jefferson's writings they argue forcefully for breaking up land holdings among as many heirs as possible upon the death of the owner so wealth, which was land ownership in their time, was not allowed to concentrate in fewer and fewer hands. Both argued for making primogeniture, where the eldest son inherits the entire estate, illegal and for large inheritance taxes. They rightly feared the possibility of a class of idle wealth developing and wanted each generation to earn their wealth through their own hard work and not through inheriting it from their parents. In the US and much of the west today we allow wealth to accumulate in the hands of a few very wealthy companies and individuals, then scratch our heads in confusion when those same wealthy entities use that wealth to turn government policy towards what benefits them. I would argue many of these big firms urgently need to be broken up into many smaller firms and the wealthy subject to very large inheritance taxes and their estates broken up upon their deaths.

1 ( +2 / -1 )

The only good thing about minimum wage laws is that inflation tends to render them irrelevant before long

Consider this please. When a minimum wage is insufficient for full time workers to food, housing and even minimal health care at the price level prevalent in the economy, workers usually end up relying on various forms of public assistance. We as caring humans do not want to see people starving on the streets unable to afford a place to live while dying of preventable illnesses. But too many companies leverage this compassion to pass a part of their wage costs off to the public at large. They realize they can pay a wage that doesn't really allow their workers to afford food and housing at the prices of the day knowing public assistance will pay their workers what their employer should pay them. In effect the public is expected to subsidize part of their labor costs. I would argue that firms should be give a choice of either paying their workers a wage sufficient to disqualify their employees from public assistance or be forced to pay taxes equal to the amount of public assistance their employees are drawing plus all the costs to the various government agencies providing that assistance.

1 ( +2 / -1 )

I should have said: "When a minimum wage is insufficient for full time workers to afford food, housing and even minimal health care at the price level prevalent in the economy" My bad.

1 ( +1 / -0 )

wealth will be used to turn government policy towards the ends of those holding that wealth

Hence the need for constraints on the size and scope of centralized government, exactly back to my point.

and for large inheritance taxes

In Sweden the government unanimously voted to eliminate their inheritance taxes, because in practice such policies are not worth the trouble they bring. This is a trend that is seen throughout the world and one day even the US will catch up.

And the richest people in the world today typically built their billions themselves (rather than inherit it one generation after the next), bringing benefits to society in the process.

workers usually end up relying on various forms of public assistance. 

Better not to deny them the dignity of having a job at all, by having some authority decree them unemployable at a rate commensurate to what someone is prepared to pay them for their level of skills. I started out low wage work myself, but I didn’t opt to stay there. Rather it have me the opportunity to show what I’ve got and my employers sent me on my way with a letter of recommendation when I decided it time to move on.

This is how it works through the free market system of voluntary exchange in the real world.

0 ( +0 / -0 )

theFu, $15 is not enough to buy a home anywhere in the U.S. Not even a shed. You might, just might, be able to rent a studio apartment. Your information is very out of date.

$15/hr is at least $30K/yr, not counting overtime, which is extremely common for hourly employees (1.5x). A common rule of thumb is to buy a home less than 3x your gross salary - that would be $90K. There are lots of $90K homes.

Here's one for $80K https://www.zillow.com/homedetails/60196-Cotton-Gin-Port-Rd-Amory-MS-38821/78070180_zpid/ 4 bdr/2 bath on 5 acres of land. This is walking distance (little over a mile) to a McDonald's.

Here's one in MS, https://www.zillow.com/homedetails/209-S-Wells-St-Kosciusko-MS-39090/194413971_zpid/

The US has huge differences in pricing. People who live on the coasts have no idea.

0 ( +0 / -0 )

What? the ACA is available to every American, regardless of pre-existing conditions and you can keep your old doctors. Obama promised that.

I gave up on being a business owner before ACA was passed. In any event my disabilities suffered during my time in the Navy and subsequently in private industry make me expensive to insure. I have even been refused coverage by an employer's health care, which is illegal but try to find an attorney willing to take such a case. There is no money to be made for them and I could not begin to afford the full cost of a civil suit against my employers health insurer. This is real life. Regardless of what the laws may say, they can only be enforced if you have enough resources to sue the law breakers. The Federal Government doesn't have the resources to enforce its laws. The "starve the beast" Republicans have made certain of this.

0 ( +0 / -0 )

wealth will be used to turn government policy towards the ends of those holding that wealth

Hence the need for constraints on the size and scope of centralized government, exactly back to my point.

That is completely backward. Constraining government in the face of ever increasing wealth concentrated among fewer owners guarantees government is captured by the wealthy and used to protect their wealth, not for the benefit of the nation as a whole and most often at the expense of the nation as a whole. Madison was very clear on the subject, if a nation means to be self governing then wealth, and by extension political power, must be spread out as broadly and thinly as possible. Even Adam Smith understood this when he wrote: "*A criminal is a person with predatory instincts who has not sufficient capital to form a corporation. Most government is by the rich for the rich. Government comprises a large part of the organized injustice in any society, ancient or modern. *Civil government, insofar as it is instituted for the security of property, is in reality instituted for the defence of the rich against the poor, and for the defence of those who have property against those who have none."

0 ( +0 / -0 )

Low end market scramble, not middle to upper. But never-the-less good for all who want/need to work.

0 ( +0 / -0 )

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