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A lower minimum wage = lower (immigrant) labor turnover?
Date: Tue, 31 May 2005
From: denis.drew@netzero.com

I WAS IN MANY unions in the past: Teamsters 804, AFL-CIO, District 37 (NYC
public employees), etc.  Been a cab driver for 29 years in NY, Chicago and
SF, so I haven't been in a union for a long time.

Just about every social problem in this country can be pegged to the
American worker's (maybe you don't know too many workers like this -- but it
is most Americans) notion that the "free market" automatically sorts out a
just labor price for them and that unionizing just adds a little icing on
the cake.  This idea is technical, not ideological.

Anyway, changing everything around is just a matter of making the labor laws
work like they are supposed to -- that's a big deal? -- the current
situation of running the gautlet to organize is not natural (as, again, most
Americans suppose).

Most folks want to be in a union -- someone just has to explain to them it
could be easily done.  Maybe that someone is me.  My back seems permanently
out, now; I seem about to go on disability.  It may be time to do what I
have been getting ready for for 25 years (I'm big on being ready :-]):
running for Congress in New York's 17th Congressional District.  Don't
worry; I can run though on welfare in the Bronx.

BUSINESS WEEK magazine reported, 15 years back, McDonalds suffering 70% employee turnover, every 90 days.  I have looked into the same faces behind fast-food counters in Chicago and San Francisco for several years now - almost exclusively Mexican or Chinese - the more or less, better English speakers being promoted to the cash register (where the more, occasionally, give language hints to the less :-]).

If a giant minimum wage jump destroys half these jobs, today, more native-born Americans might actually end up at work - as they return for "pre-outsource-at-home" wages (just to pry conservatives from harmful anxieties).

Should McDonalds, someday, close numerous restaurants due to a sizable minimum wage jump:

(A) It would be a negative should the blame be on consumer reluctance to fork over higher, hike-induced prices;

(B) It could actually be a positive were newly, better-paid workers eating more upscale more often.  (The going joke being that Wal-Mart wants to keep wages low, so everyone will be forced to buy there.)

Has today's federal minimum wage dropped to nearly half of its, 1968, $9/hour (CPI-U inflation adjusted) high, because today's high tech economy makes low skill work worth relatively less?:

(A) Yes; that would be the case if economic output per capita stagnated for the last four decades (but then, what good high tech?);

(B) No!; definitely not, knowing that economic output per person actually doubled in two generations!  

Unfortunately for American workers, the free market seems to have gauged how much they will work for and they can probably forget significantly better dollar deals for as long as they remain blind en-mass to the indispensability of strong collective bargaining power - in concert with serious union-enabled political power.

$20,000 average lifetime earnings - without average wage indexing -would yield an $875 a month Social Security benefit at full retirement; a $15,000 average only $750 a month; $10,000 just $625.

With average wage indexing these benefits grow by $80, $60 and $40 a month respectively.

Average wage indexing yields an adjustment 22% -- over and above the Federal Reserve inflation calculator read out -- for dollars earned in 1965, 12% over 1975, 15% over 1985 and 11% over 1995: making for a 40 year bump of 15%, replaced at 32%, resulting in the benefit blips above.  (Both adjusters use BLS inflation gauges: CPI-W and CPI-U respectively.)

[Another surprising stat: the cap grew slowly from a tad more than average income, in 1965, to almost triple that, today -- http://www.ssa.gov/OACT/ProgData/nominalEarn.html ]

A livable minimum retirement benefit would be established by any humane (read unionized) society where productivity soared 100% over the previous 40 years - the more urgently when most wages missed out on most productivity gains, most years.  

Denis Drew


Palestinian Post Script: 200,000 people may be causing a "clash of civilizations" all by themselves.  40% of both American and Israeli Jews agree most settlements should be removed from the West Bank - it should not be hard to get 80% of all other Americans and a majority of American Jews behind removing all so-called settlers - if and when our media fully reports the intolerable intrusion daily visited upon Palestinians.

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