February 15, 2019

Horse 2512 - A Company Pays A Living Wage - Oh Der!

One of the things that happens a fair bit on Facebook, is that when people post links to things, they will often tag their friends and family in posts; in what I can only imagine is an attempt to get a huge internet pile-on of likes. As someone who uses Facebook primarily through browsers and almost never on the app, I imagine that my user experience of the platform is significantly different to most people. I imagine that most people get their likes and hearts and then move on; whereas I on the other hand will tend to stew on something for far longer, and want to pick apart the things posted.
Ah yes, Facebook, that bastion of news outlets, that is always at the cutting edge with the greatest and latest news, except when it is not; which is most of the time.

In my Facebook feed this week, a tangential article about the fast food restaurant chain Chick-fil-A, was praised as though it were doing something noteworthy:

The owner of a Chick-fil-A location in Sacramento, California, calls it a "living wage." In Eric Mason's view, that would be $17 or $18 an hour, which is what he vows he'll be paying his workers, starting Monday, June 4. The rate represents a sizable increase for employees now making $12 to $13 an hour. 
"As the owner, I'm looking at it big-picture and long-term," Mason told a local news station. "What that does for the business is provide consistency, someone that has relationships with our guests, and it's going to be building a long-term culture."
The idea, Mason said, is to hire workers -- he prefers "hospitality professionals" -- who will stick around, a worthwhile goal for a brand known for its customer service that's in an industry that had a 73 percent turnover rate in 2016, according to the Bureau of Labor Statistics. 
- Kate Gibson, CBS News, 1st June 2018

The idea that an employer would pay their employees more, in an effort to reduce turnover is hardly a new one. Reknowned anti-Semite and industrialist Henry Ford famous paid his workers $5 a day in 1914, not because if the alturistic notion that his employees would be able to afford one of his flivvers but rather, Henry started paying a more livable wage because of simple economics. High employeer turnover kills productivity. The obvious solution is that if you pay the workers more, they won’t quit. It is an entirely rational and logical decision; made with cool brute logic.
I have no doubt that Eric Mason probably looked through his accounts and came to that same conclusion. Pay them more and they won’t quit. Incidentally, at 4% inflation (which has been the historial average since the beginning of the Roman Empire), Henry Ford's $5/day or 62.5c/hour, works out to $38.40/hr now.

The truth is that workers who supply their labour, do so for a pretty pragmatic reason - they need to eat and sleep somewhere. Abraham Maslow in his 1943 paper "A Theory of Human Motivation", proposed a theory called the "hierarchy of needs"; which is mostly so obvious, you wonder why anyone needed to write a paper on it at all.
It's like the concept of physiological needs is one of the Great Ders of History  and the fact that it needs repeating, makes me want to cry "Oh Der" repeatedly.

But when it comes to how individual businesses should decide what to pay, my economic logic is simple. You — and many employers — have already discovered it, even if you all pretend otherwise: Nobody’s going to work for you because it costs more to live than the peanuts you’re paying.
You cannot — or you refuse to — pay fair-market compensation. That’s why you can’t hire the workers you need, no matter what your rationalization is. As I explained last week, the “talent shortage” is a creation of employers’ own making.
Fair-market compensation is an amount people need for shelter, food, transportation and other basics of life. That’s more than $70 a day where most people live.
- Nick Corcodilos, 12th Feb 2019

Oh Der!

The problem is that throughout history, people need to repeatedly yell "Oh Der" because it's almost as if everyone who becomes an employer and would like to pay their employees absolutely nothing if they could get away with it (that's why we have unpaid internships in the 21st Century), instantly forget that people need to eat and sleep somewhere. Oh Der!

"The right to a useful and remunerative job in the industries or shops or farms or mines of the nation;
The right to earn enough to provide adequate food and clothing and recreation;
The right of every family to a decent home;
The right to adequate medical care and the opportunity to achieve and enjoy good health;
The right to adequate protection from the economic fears of old age, sickness, accident, and unemployment;
The right to a good education."
-  Franklin D. Roosevelt, proposed Second Bill of Rights,  State of the Union Address (1944).

Oh Der!

Bear in mind that FDR is speaking from the midst of a war here. One of the things about wars is that it suddenly dawns on the people who have power and control, that the people who are out on the battlefield actually have value. You do not win wars unless the people who do the fighting, believe that there is a thing worth fighting for. FDR also realised that wars do not last forever and unless the country recognised the value of its citizenry, then winning a war was pointless if you then do not win the peace.
FDR's proposal for the Second Bill of Rights never materialised because ultimately, it has been consistently proven that the people who own capital and by extension who own the systems which run democracies, do consider the general public as expendable. America has ultimately decided that people really only have value when they are actually fighting wars, because as soon as veterans get home, they are all too frequently discarded by the nation; as a practical demonstration of the value that they no longer have.

In principle, America thinks so little of the value of its people that not only did it not accept the Second Bill of Rights but it also refuses to be a signatory to the Universal Declaration Of Human Rights as well as other statements and commitments to the value of people, such as the 1967 Protocol to the Refugee Convention. Speaking of the Universal Declaration Of Human Rights, it contains the following article:

"Everyone who works has the right to just and favourable remuneration ensuring for himself and for his family an existence worthy of human dignity."
- Article 23, Universal Declaration of Human Rights (1948).

Oh Der!

This sentiment echoes on and on throughout the centuries.
Adam Smith, the father of economics, had this to say in his 1776 work "An Inquiry into the Nature and Causes of the Wealth of Nations":

"No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable. It is but equity, besides, that they who feed, clothe, and lodge the whole body of the people, should have such a share of the produce of their own labour as to be themselves tolerably well fed, clothed and lodged."
- Adam Smith, The Wealth Of Nations (1776).

Oh Der!

Paul had to write to Timothy in the early days of the church:

"Elders who lead effectively are worthy of double honor, especially those who work hard at preaching and teaching. For the Scripture says, “Do not muzzle an ox while it is treading out the grain,” and, “The worker is worthy of his wages.”
- 1 Timothy 5:17-18

Oh Der!

And just to prove this sentiment is as old as dirt, we find it repeated again and again in the old testament:

"Do not defraud or rob your neighbor.
Do not hold back the wages of a hired worker overnight."
- Leviticus 19:13

Oh Der!

"Pay them their wages each day before sunset, because they are poor and are counting on it. Otherwise they may cry to the Lord against you, and you will be guilty of sin."
- Deuteronomy 24:15

Oh Der!

Time and time again, it seems that people need to be told again that you really do need to pay people a proper wage because they need it to be able to put food on the table and a roof over their heads. How hard is that to understand? Seriously?

Okay, the owner of one Chick-fil-A restaurant realised that people need a proper wage in order to have a decent life; but what about everyone else? The multi-billion and possibly trillion dollar company Wal-mart pays its workers so very very little that it estimated that it costs U.S. taxpayers $6.2 billion in public assistance including food stamps, Medicaid and subsidized housing. How 80% of the employees of a company with turnover of more than $125bn can not still manage to pay a living wage is beyond me.

This is not the sort of thing which should be praiseworthy. You shouldn't be praised for doing a thing which everyone should already be doing. It really just makes me want to yell "Oh Der!" again; which as shown has to be yelled again and again and again.

Oh Der!

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