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Retail's Hidden Potential: How Raising Wages Would Benefit Workers <abridged>
Demos.org ^ | 11/19/2012 | Catherine Ruetschlin

Posted on 11/20/2012 9:52:05 PM PST by mykroar

With more than 15 million workers in in the sector, and leverage over workplace standards across the supply chain, retail wields enormous influence on Americans’ standard of living and the nation’s economic outlook. It connects producers and consumers, workers and jobs, and local social and economic development to the larger US economy. And over the next decade, retail will be the second largest source of new jobs in the United States.

Given the vital role retail plays in our economy, the question of whether employees in the sector are compensated at a level that promotes American prosperity is of national importance. According to the Bureau of Labor Statistics, the typical retail sales person earns just $21,000 per year. Cashiers earn even less, bringing home an annual income of just $18,500.

(Excerpt) Read more at demos.org ...


TOPICS: Business/Economy; Editorial; Government
KEYWORDS: economy; minimumwage; wages
Full Title: Retail's Hidden Potential: How Raising Wages Would Benefit Workers, the Industry and the Overall Economy

I heard a clown from this "think tank" on Money with Melissa Francis tonight. Article is long, but essentially an argument for raising the minimum wage. One of the arguments was that the workers will turn around and spend the money in the store they work for, so it's no big deal to the company. Laughably ridiculous arguments - had to find the report (but I'll admit I couldn't make it through the whole thing).

1 posted on 11/20/2012 9:52:14 PM PST by mykroar
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To: mykroar

The writer must have flunked Econ 101.....communism has NEVER worked


2 posted on 11/20/2012 10:00:24 PM PST by Nifster
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To: mykroar

Artificially raise labor costs for retail workers and Internet shopping will get an unneeded shot in the arm. The trend to self-checkout will accelerate, and customers will be assisted by remote shopping assistants in India — or robots.

The market will figure out how to do without overpaid workers.


3 posted on 11/20/2012 10:01:40 PM PST by AZLiberty (No tag today.)
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To: mykroar

I was going to say Catherine needs to quite writing and go find someone with some brains who’ll be able to take care of her the rest of her life but, I’m single. I don’t want her mucking up the dating pool.


4 posted on 11/20/2012 10:06:14 PM PST by Psycho_Bunny (Thought Puzzle: Describe Islam without using the phrase "mental disorder" more than four times.)
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To: Psycho_Bunny

That sounded dangerously close to calling her incompetent. Careful, don’t want to get branded a sexist.


5 posted on 11/20/2012 10:10:57 PM PST by mykroar (BAD-ANON: One Game At A Time)
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To: mykroar

The Henry Ford school of thought. Instead of trying to produce the best product possible at the lowest price, hobble yourself by overpaying your employees. Ford rapidly became number 2. I have to wonder whether its stupid pay policies made it the benchmark for the UAW’s shakedown artists, thereby ensuring that all of Detroit became a life support system for the UAW instead of businesses run for profit. I suspect Detroit’s fall from grace - in large part caused by insane UAW pay and benefits packages as well as featherbedding work rules - was postponed for decades because of the complete destruction wreaked upon its foreign competitors and their domestic markets by WWII.


6 posted on 11/20/2012 10:11:10 PM PST by Zhang Fei (Let us pray that peace be now restored to the world and that God will preserve it always.)
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To: mykroar; Nifster; AZLiberty; Psycho_Bunny

Check out their “tag line” and you’ll know all there’s need to know about what “Demos.org” is about.

“IDEAS AND ACTION TO PROMOTE THE COMMON GOOD”

Anytime I see someone promoting the “common” good I think collectivism and marxism.


7 posted on 11/20/2012 10:15:53 PM PST by aquila48
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To: aquila48

and your thinking is exactly correct.


8 posted on 11/20/2012 10:18:10 PM PST by Nifster
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To: mykroar

Just as a “gold standard”, minimum wage imposes a “mundane labor standard” on money.

Labor has inherent value. Goods/services have inherent value. Money, however defined, is just a way of normalizing the exchange thereof. Basic labor which pretty much anyone can do with nigh unto no training has an inherent value which we currently peg at $7.25/hour. Two gallons of gasoline cost about the same. It’s not the pegged value that creates this equality, it’s that an hour of floor sweeping, burger flipping or gas clerking is worth about two gallons of gas - change that pegged minimum wage value to 10x that, and you’ll see gas prices soon increase tenfold to match.

The only benefit increasing minimum wage has for the poor is that there is a delay between the increase in wages and an increase in prices charged. During that brief delay, mundane workers enjoy a bump in buying power ... then prices again normalize, ends aren’t met, and the demand for increased minimum wages resumes.

Fact is, regardless of imposed wages, 8 hours of floor sweeping isn’t worth 12 meals and 1000 sq ft of urban real estate daily.


9 posted on 11/20/2012 10:21:22 PM PST by ctdonath2 ($1 meals: http://abuckaplate.blogspot.com)
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To: mykroar
One of the arguments was that the workers will turn around and spend the money in the store they work for....

This person is delusional. Reminds me of a song "I owe my soul to the company stoooooo"

http://www.youtube.com/watch?v=jIfu2A0ezq0

10 posted on 11/20/2012 10:22:40 PM PST by TruthWillWin (The problem with socialism is that you eventually run out of other peoples money.)
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To: mykroar

“the typical retail sales person earns just $21,000 per year. Cashiers earn even less, bringing home an annual income of just $18,500.”

Would it be fair to suggest that, say, an iPhone app developer’s labor has an inherent value of about 4x that much? As an example of highly trained & skilled & specialized work, vs what pretty much anyone can just walk in and do with an hour of orientation?


11 posted on 11/20/2012 10:25:52 PM PST by ctdonath2 ($1 meals: http://abuckaplate.blogspot.com)
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To: mykroar
Won't work because the employer will raise the price of the products to cover the raise plus overhead and profit!

The employee will not be able to purchase as much as he could before the raise!!!

The only reason to be in business is profit, employees are a commodity and worth only as much as the labor supply demands.

Wages raise with the scarcity of employees in a given field.

Only government is stupid enough to set pay by compassion!

12 posted on 11/20/2012 10:31:39 PM PST by dalereed
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To: mykroar

The author is a fool! Here is how it works in fast food, first the number of employees on any given shift are cut and the remaining workers have to pick up the slack. The reason for this is of course that the operators can only raise prices so far before sales drop. Now that the employees that are left get a small increase in income in return for a large increase in work load. On top of all this they get a lesson in economics when they see increased prices across the board to pay for it. Yet they never learn, they always believe they will come out ahead.


13 posted on 11/20/2012 10:32:13 PM PST by Mastador1
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To: mykroar
One of the arguments was that the workers will turn around and spend the money in the store they work for, so it's no big deal to the company.

Well this is true. Wal-Mart, for example, is well aware that its employees are its best customers. However, it doesn't at all support her argument.

14 posted on 11/20/2012 10:37:02 PM PST by Rightwing Conspiratr1
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To: mykroar

This is a setup for sympathy for the coming Walmart walkout.

Let’s make a long story short shall we? Lower taxes == an across the board pay raise for the entire workforce. Mission accomplished.


15 posted on 11/20/2012 10:40:50 PM PST by Usagi_yo
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To: Zhang Fei
I suspect Detroit’s fall from grace - in large part caused by insane UAW pay and benefits packages as well as featherbedding work rules - was postponed for decades because of the complete destruction wreaked upon its foreign competitors and their domestic markets by WWII.

I suspect the same. The '50s and '60s are said by some to have been booming because of unions that created the middle class. I believe that the boom could only humor the union excess because all of our competitors had been bombed to rubble in the '40s. Once Europe and Japan rebuilt the unions made us uncompetitive. And we have slowly lost the "arsenal of democracy".

16 posted on 11/20/2012 10:42:38 PM PST by MileHi ( "It's coming down to patriots vs the politicians." - ovrtaxt)
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To: mykroar

Hey, Mr. Think-Tanker, I have a cunning plan:
I’ll trade my hat for a pair of pants; then trade the pants for shoes; and then trade the shoes for another hat!
Pretty soon, I’ll have cornered the market on hats, pants, and shoes, and retire in style.
Retail will make us all rich!


17 posted on 11/20/2012 10:44:15 PM PST by ApplegateRanch (Love me, love my guns!©)
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To: Nifster

These idiots think that the purpose of a company is to create jobs, or better yet, good paying jobs.

It is incredible that these “think thank geniuses” can’t fathom the following simple facts:

1. No one starts a business because they want to create jobs, good paying or otherwise. The only reason an entrepreneur starts a business is to make money, i.e. a profit.

2. The only reason a business will hire someone is if that someone helps him make MORE money.

3. If the business becomes very profitable other entrepreneurs will notice and they will start similar businesses, possibly creating more jobs, and also reduce prices for the consumer via competition.

4. Wages for the employees will go up if there’s a scarcity of people willing to and capable of doing that work. That will only happen if society provides a business climate that encourages entrepreneurs to start new business (hence new employment), which means a climate that regards profits as a good thing rather than demonizing them.

5. Creating more labor regulations and setting labor costs will only hurt the people that these “do-gooders” are supposedly trying to help. And they want to go beyond that - they also want to tell the company how to run its business, basically take over the business. If this isn’t stealth marxism, I don’t know what is.


18 posted on 11/20/2012 10:45:06 PM PST by aquila48
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To: mykroar

They already spend the money in the store they work in. My daughter used to work at Gap and she had to wear the Gap’s clothes while you were on the floor and you had to purchase them.


19 posted on 11/20/2012 11:15:58 PM PST by funfan
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To: mykroar

Well when you bring in 1 million legal immigrants a year and countless illegal ones. It does tend to suppress the price of labor. Especially for the low skilled and entry level jobs.

20K a year would be pretty hard to live on.


20 posted on 11/20/2012 11:17:14 PM PST by desertfreedom765
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To: mykroar

Someone should explain to this guy that all future money that could have been used for raises is now going to go to Obamacare and the millions of bureaucrats that will have to administer it.


21 posted on 11/20/2012 11:20:36 PM PST by kaehurowing
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To: mykroar

http://mjperry.blogspot.com/2011/08/obamas-chief-economic-advisor-made.html

See above link by economist Mark J. Perry for a classic debunking of a 1994 study claiming that minimum wage hikes result in GREATER employment. That study was conducted by two lefty economists, David Card and Alan Krueger, and is still often cited today by those unaware that it has already been refuted. Alan Krueger, by the way, now chairs Obama’s Council of Economic Advisors, having replaced Christina Romer.


22 posted on 11/20/2012 11:26:14 PM PST by GoodDay
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To: mykroar
Wow. Someone this economically illiterate (who doesn't work for MSNBC) gets paid to write about economics?!
23 posted on 11/20/2012 11:28:48 PM PST by piytar (The predator-class is furious that their prey are shooting back.)
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To: mykroar

Oh dear gawd. Please FO and die.

These retail workers better count themselves darned lucky they have a job running a cash register.

It takes no skill to punch some buttons on a register, scan a product for sale or wait for the buzzer to go off telling you it’s time to flip the burgers .

All jobs I held early in my life. one because my family owned a string of convenience spires and others I had in college and when I was trying tofsure out what to do before I found sales and eventually running companies.

Increasingly retail operations are adding self checkout and you know what? I use that before I go to a clerk. I’m way faster and not chatting with everyone as they pass by.

Self checkout will replace 75% of checkers in the next 7 years.

When I worked as a checker/burger flipper the job paid what it paid. I didn’t pretend it was worth more than what it was. I knew better, I knewte cost for operations and what the total cost of an order was(parts and pieces) I also knew the burdened cost. That is the cost of everything and labor + keeping the lights on.

If people running registers want better pay “Yo! Babes! Hub gotz to get sumb skills”

If I have to pay the burdened cost of $15 per hour for a hamburger you better believe I’ll be eating them at Smith and Wollensky since the cost will essentially be the same but I’ll get something that is fatter and juicier than your McD or InandOut.

Get a life people and get a better having job.

As it is because you voted for your vaunted and hailed master you are going to lose hours. Which means you are now going to waste hours and hours as you travel for two jobs.

Jack wagons....


24 posted on 11/21/2012 12:23:36 AM PST by Vendome (Don't take life so seriously, you won't live through it anyway)
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To: mykroar

Does this writer have any idea at all of how a market economy works?
I doubt it.

She seems to have overlooked the fact that an increase in wages without an increase in productivity will force prices up.

Once the repercussion of the unearned wage increase works its way through the economy, workers will just be paying more for the same quantity of goods.

The only entity to benefit will be the government:

- Higher wages mean higher income taxes.
- Higher wages means higher FICA and Medicare taxes paid by employer and employee.
- Higher prices means higher sales taxes paid on the same item.


25 posted on 11/21/2012 2:16:45 AM PST by Iron Munro (Robbing From The Hood and Boy Blunder - Our New Queen and King)
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To: Vendome
Self checkout will replace 75% of checkers in the next 7 years.

I agree. The minimum wage workforce will be cut drastically in the next few years due primarily to Obamacare, but any other regulation will just add to the pile.

Cutting work hours to part time is just a stop gap until companies can implement technological solutions which will eliminate whole classes of jobs.

McDonald's has already worked out outsourcing their drive through operators to India. JC Penny has already announced plans to go with self check out. All retail that competes with Amazon has just been hobbled, and so they will have to adopt Amazon's business model to compete, which will close many mall and big box stores. There are already vending machines which can make pretty sophisticated items like pizzas, just scale it up and you can eliminate many fast food jobs.

The Internet revolution changed the workforce, and got rid of many jobs, like travel agents. It accomplished this using one trick, by outsourcing the work to the customer. People adopted it because they see it as more convenient, but they are unpaid travel agents or insurance agents when they go online and do their own work. This will speed up to include more functions in the near future. For instance, many fast food places have the coke machine out in the eating area, and the paid employee just hands the customer a cup. The customer is the one who does the work getting themselves a drink. Expect more to be moved into the customer domain as self service, sold to the customer as more convenience.

26 posted on 11/21/2012 5:01:24 AM PST by Vince Ferrer
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To: aquila48

It is still amazing to me that the obvious seems to elude the commies


27 posted on 11/21/2012 8:34:42 AM PST by Nifster
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To: mykroar

“...the question of whether employees in the sector are compensated at a level that promotes American prosperity is of national importance.”

And the author, being so wise, knows exactly what that level is. He can justify it such that no reasonable person would disagree with him.

Alternatively, “my WAG is better than the market.”


28 posted on 11/21/2012 5:34:07 PM PST by ModelBreaker
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To: mykroar

Workers should be paid according to value produced!


29 posted on 11/21/2012 8:49:08 PM PST by upcountryhorseman (An old fashioned conservative)
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To: upcountryhorseman

How do you determine what that value is?


30 posted on 11/21/2012 8:51:10 PM PST by dfwgator
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