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It's fairly safe to say that the one attribute all workers share is that they feel like they should earn more for what they do. I base this on an assumption that if you walked up to any given person on the street and asked them "Would you take more money for doing the same job?" The answer would certainly NOT be "Oh no, I couldn't think about taking any more money for this job, I'm completely satiated and would absolutely REFUSE to take one cent more!" Conversely, I doubt the same person would respond with a proposal to do the same job for less money with "Oh thank heavens, I'm so ridiculously overcompensated, I've long hoped someone would come and relieve me of this terrible burden of prosperity and indulgence!"
If the above is true, we can then simplify the argument to say that most people would consider themselves underpaid (or at best, fairly compensated), while nobody would truly consider themselves overpaid. So why do stories like the "America’s List of Companies With the Most Low-Wage Workers Will Piss You Off" continue to see the light of day?
My personal theory is that too many people don't realize that wages, prices, and the lot are nothing but NUMBERS, and like all quantifiable data; they are relative to the time and place around them.
Two quick and dirty examples:
1) In Mad Men, Don Draper writes a check for $6,000.00 to facilitate the test drive of a top of the line Jaguar Convertible sans escort. This pays for the car's $5,600.00 sticker price in full. A similar vehicle today would start at $79,000 according to Jaguar's US website.
2) I recently found myself pondering why a friend in the service industry would consider earning $200 a "good night" (admittedly, I wasn't the most mentally sharp fellow this weekend). After all, a lot of paychecks for people who make "good money" can be anywhere from $1,200 - $2,000. But then I realized that 200/8 = 25. So yeah, $25 per hour is a job I would happily sign on for. In fact, it's the possibility of these kinds of earnings that keep just about every current sales job (servers, waitresses and bartenders included) staffed.
So great, prices and wages are relative and not fixed concepts; why does that mean that companies like the twenty listed above can have so many people working for so little cash?
The answer lies in skillset. Of the twenty companies listed; only ONE (19: Sodexo) has even the possibility that the work staff might need some form of specific training or skillset to acquire employment. The rest literally have the base level of qualifications of essentially be an average human being with basic communication and survival skills. You need only be a fresh glob of human clay that can be molded into whatever the company want's you to be.
Let's start with number 1: Wal-Mart Stores. Now Wal-Mart is patient zero in a lot of people's minds about what is wrong with just about everything in America. I've long been putting off writing a blog specifically ON Wal-Mart just because it's such a quagmire of confusion that what comes out is a gigantic word salad that doesn't heighten the thinking of anyone. However, for the purposes of our discussion, let's focus on what most of us consider to be a "Wal-Mart Employee", the cashier.
What particular skills does one need to be a cashier at Wal-Mart? Having problems thinking of any? How about this; what separates one particular Wal-Mart cashier from another? Yeah, that didn't help either. One last factor may provide some insight; if a cashier quits and storms out of the store in frustration, what is the impact on the operation? That one is at least easy to answer. . . minimal. There might be longer lines for the rest of that shift until another cashier can be hired from the very limited population of "Everyone" but at the end of the day the cashier is nothing more than a cog in the machine. I don't know much about machinery or moving parts but I do know one thing about cogs. . . you don't want to pay very much for them. The reason being is because the more it costs to OFFER something, the more the end customer will be expected to PAY for it.
To illustrate this point even further, let's delve into the title of this blog; "Graveyard Economics" I came up with this idea while discussing the minimum wage with a friend. The idea works something like this:
Let's say I own a cemetery, this means digging graves is my primary order of business. As such, I'm going to need to hire grave diggers. What criteria do I need in my candidates for grave digger? Pretty much I just need you to be able to use shovel to dig a hole in the earth that meets standard dimensions. For the sake of our purposes, lets assume that grave diggers are amazing with shovels and can dig one complete grave per day. Thusly, my ratio of graves dug per day to grave diggers is a simple 1:1. In this circumstance, it is in my best interest to hire as many grave diggers as needed to meet the current mortality rate; or at a minimum, my average burial rate in a given season.
Now should I pay my grave diggers? Just to keep the math simple, let's say I have a need for 8 graves dug per day and current minimum wage is 7.25/hour. Well, if I have to pay each grave digger 7.25/hour and I need 8 of them; then I need to charge at least 58.00/grave to break even on my labor costs.
Now let's make two small adjustments to our environment; both of which will result in price decreases:
1) The elimination of a minimum wage. Instead of being forced to pay $7.25 for each worker required; I can pay my workers as little as $0.01. Let's say the caliber of digger I'm working for cannot be hired for less than $2.00/hour. (That is to say that I can hire workers at $0.01/hour, but the decrease in productivity I'd experience would outweigh the savings I'd receive in wages). So, now instead of my 8 workers costing me 58.00, they now cost me 16.00, thusly my minimum price to charge for graves is now $16.00
2) The implementation of technology. Let's say instead of investing in more guys with shovels, I buy an earth mover, and hire one man to operate it. A skilled machine operator can dig a standard sized grave in about 45 minutes. So instead of hiring 8 guys to dig one grave each, I now have one guy with a machine who is capable of digging up to 8 graves per day. Because he does the job of 8 people with a job description of $2.00/person, he can realistically demand $16.00 per hour and I as an employer will gladly pay it because I can hire one guy to do the job of 8. Also, in this instance, my price again drops to $16.00
The bottom line is that low wages don't "piss me off" because they are a factor of life. Free Market Capitalism will justify what workers can and should be paid for their individual skillset. Concepts like the "living wage" have no place in pure capitalism. Our wages and prices have increased drastically over the last half century because there has been entirely too much tinkering and crony capitalism taking place across our nation. The world doesn't owe anyone anything, and it's long time we all realized that wages and prices are just numbers, and while deflation is TERRIBLE for us internationally, domestically it is LONG overdue.
