Minimum Wage

jack_n_box_copy_1Last time I looked the Federal minimum wage was $7.25 an hour. In some localities it’s higher. Federally, the Democrats want to raise it to $10.10 and in Seattle they’d like to raise it to $15.00 and hour. You’re not going to do a decent job of raising a family on any of those numbers.

But then, in the real world, minimum wage jobs are either for kids learning about having a job, both the good and bad, or for people who are losers for one reason or another (no judgement implied here, it really isn’t always their fault).

In this economy there are also a lot of people with real world skills working at 1, 2, or 3 of these jobs trying to keep their heads above water. But as long as Washington goes ahead with their plans for Obamacare, overregulation of industry, green energy boondoggles, lying about inflation and all the rest, we’re going to stay stagnant at best. Welcome to Great Depression 2.0.

But that first paragraph is also a lie. Why? the minimum wage cannot be set by government fiat. The minimum wage is and always has been $0.00. That’s what you get paid when you don’t have a job. And that category has grown since the recession of 2007, it’s higher now than it ever has been

The primary supplier of those minimum wage jobs for the last half century has been fast food, McDonald’s and the like. They’ve trained entire generations of workers in the basics of having a job, and done it well. But that’s ending.

Why? Very simple, the government meddling is pricing entry-level employees out of the market. In France, where the minimum wage is $12.22 and hour (and it’s nearly impossible to fire people) every single McDonald’s has a kiosk taking the place of the cashiers. Where is the point where in America it become more economical to replace cashiers with machines? I don’t know but I’d bet McDonald’s does. They aren’t successful because of the gourmet food, they’re successful because they’re efficient.

And it not just cashiers either. Take a look at this: From the manufacturer’s website:

Our alpha machine frees up all of the hamburger line cooks in a restaurant

robotIt does everyting employees can do except better:

  • It slices toppings like tomatoes and pickles immediately before it places the slice onto your burger, giving you the freshest burger possible.

  • Our next revision will offer custom meat grinds for every single customer. Want a patty with 1/3 pork and 2/3 bison ground to order? No problem.

  • Also, our next revision will use gourmet cooking techniques never before used in a fast food restaurant, giving the patty the perfect char but keeping in all the juices.

  • It’s more consistent, more sanitary, and can produce ~360 hamburgers per hour.

The labor savings allow a restaurant to spend approximately twice as much on high quality ingredients and the gourmet cooking techniques make the ingredients taste that much better.

 

What they don’t say is that it doesn’t take sick days, doesn’t come to work stoned, or not show up, doesn’t need health care, and is perfectly happy to work 24/7/365, or at least close. No, I don’t know what it costs but I’d bet the payback is less than 5 years now, and if you raise wages, it gets shorter.

I didn’t look around but I’m betting somebody has a machine that does french fries too.

At that point we have an unmanned open 24 hours a day hamburger joint. Think about that. Send somebody around every day or so to refill the machines, and maybe do a little cleaning, and that’s it.

Where I come from it’s called pricing yourself out of the market, and it is nearly always fatal. Ask a buggy whip manufacture, if you can find one.

Think going to college will fix your (un)employment problem? It might, although your doctorate in gender studies isn’t going to help much. The easy days of surplus money all over the place are gone. America is going to go back to basics or starve, that means you need to be able to do something that will both earn your salary (+ benefits, if any and taxes) and return a profit on the investment your employer is making in hiring and training you. If you can’t do it, those of us who are productive, aren’t going to feel very sorry for you.

Why? Simply because we warned you.

 

 

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Lying Liars Who Lie

I haven’t talked much about Obamacare. It’s a charlie fox that will mess up the economy for years to come. It was also passed by deception, and fraud. Which is about par for the course in Washington DC anymore. The days of honest civil servants let alone elected officials seem to be far behind us.

If we think about it though, the web site is only important as an indicator of the competence of the government. As such, I would not call it a good omen. It can presumably be fixed, although I have noted a story the other day that the British NHS figured out they weren’t going to make it work, Here’s part of the article

After blowing $17.6 billion on a massive IT project to track all of the transactions in its National Health Service, the UK government has terminated the project. Obama, though, still isn’t sure what’s going on with his Obamacare IT project. He thought he could just snap his fingers, give a speech or two and it would all happen. He says he’s decided to ask his HHS secretary Sebelius for an update, as though she has a clue.

These arrogant clownish politicians in Washington need to take London’s lead and stop throwing good money after bad on the Obamacare debacle and before people die as a result of the administration’s incompetence.

A plan to create the world’s largest single civilian computer system linking all parts of the National Health Service is to be abandoned by the Government after running up billions of pounds in bills. Ministers are expected to announce next month that they are scrapping a central part of the much-delayed and hugely controversial 10-year National Programme for IT.

Continue reading Cancelled. It’s not an entirely fair comparison though to my mind. The Brits wanted to track all healthcare transactions, not all healthcare insurance transactions, but when you tie it into IRS, HHS and who knows how many other databases, private and government, it may be fairly comparable. You notice the Brits bailed out after only $17.6 Billion dollars.

But in truth project management is a fairly simple thing, the other day a commenter over at Ace’s ran through the process, and it describes life as I know it better than I can.

Sebelius Baby–in the world of private enterprise, you’d be fired so fast that your skirt would fly up over your head as you were thrown out the door.

Yes, you want to blame the contractors. But you picked the contractors.
I spent a good part of my work life writing capital construction contracts in the petroleum refining industry. I worked on the owner side as in house counsel. My clients were in house project managers. Like Obamacare, many of these contracts had a four or five year time horizon from the time you hired the contractor; they did their engineering design work and testing, and new vessels and reactors had to be ordered, built and delivered–frequently from Japan or Korea.The contractors themselves frequently had multiple subcontractors that they had to coordinate and manage. Installation of the finished work frequently took place in a very short time window–10 days to 20 at the most during a refinery turnaround. So the work had to be ready to install on a very specific date; and if the contractor screwed up or didn’t deliver on time, great financial losses occurred.

So the rule was no fuckups. You selected your engineering contractor carefully. You interviewed the people who the contractor would have manage his work. You made them lay out a detailed time table and schedule for how they would complete the work; they also laid out an estimated cost to do the job or project budget; and you monitored the snot out of their project progress. If they couldn’t keep to the planned schedule–and couldn’t give you a contingency plan as to how they would get back on schedule, you fired them. I’ve been in several meetings where nonperforming contractors had their contracts cancelled, and got thrown off the job.

Now if you were the owners’ project management team–and you let a contractor get off schedule or over budget (these were time and materials contracts with a negotiated overhead and profit percentage) you’d better fix the situation–and get the contractor back on schedule and back on the previously agreed on budget. If you couldn’t do it, you just didn’t manage any more projects for the company; your career was blighted. And if you really screwed up in your oversight, well you left the company shortly afterwards.

It’s not hard—we had a lot of successful project managers. You just have to pay close attention. Over the course of a dozen years, I probably wrote six or seven billion dollars in project contracts. And at my project managers direction I terminated several of those contracts when the situation was appropriate. We got ourselves another boy to do the job on time, and hopefully on the original budget.

But you have to pay attention. And you didn’t, and as a result, in the real world, you would have been out on your ass in six month’s time.

So wake up and do your damned job–although I sincerely doubt that you’re capable of it. Ignorance can be fixed–but stupid and incompetent is forever.

Now if you were the owner’s project manager
Posted by: Comanche Voter at October 29, 2013 08:36 PM

That’s life; it’s hard and unforgiving of failure. Unless you work for the government, then you get a pass, and your project fails.

But the real damage of Obamacare isn’t the website, or really even the degradation of American’s health insurance, although that’s bad and going to get worse. The real damage is to the economy, in several ways.

First: the number of people being moved to part-time to avoid having to insure (at ridiculous levels) their health. As an example, say you own a McDonald’s and you have 60 full time employees. On average, if your lucky these employees make you about $12 an hour, and you pay them on average $8 an hour. I don’t know much about fast food but that’s an informed guess. In my field I won’t hire anybody unless I can bill double their gross pay rate, that is the rule of thumb, for breaking even. but fast food is quite competitive so I assume the ratio is lower there. From what I’ve seen the mandated plans for employers are going to cost probably a couple to three bucks an hour, while the fine is a couple of thousand a year per employee. What would I do? Cut back to 30 or less full time employees, it’s really the only solution because it’s the only way to save the business. But traditionally part-time employees aren’t as efficient as full timers so my costs will still go up, as will my accounting costs. Automation will help, so you can expect to see more automation being installed, which will cost more employees their jobs. Also, no matter how good they are, part time employees almost never get promoted, which is part of the reason they arre not as efficient, there’s no rational reason they should be, cause there no upward mobility in their job.

But that affects all employers really. I’m in a business where part-timers are of very limited use, and while I’m nowhere near that big. There is no way that I would break that barrier, unless I was able to go from  say 40 employees to about 150-200, and I’m unlikely to have enough project managers to make that viable, even if I could get the contracts, which I couldn’t. And that’s likely true for all contractors of every kind, whether they did ditches or write software.

It doesn’t help that American business is fixated on the (at best) quarterly bottom line, anymore, everything seems to be ‘get it done fast, correct or not’ and work to the print no matter if it will work or not, but that’s a different problem, Just as serious but different.

We’ll no doubt be continuing this, when I’m a bit less depressed.

“Living Wage” According To Guest Columnist MAJORDAWG!!! – Chicks on the Right – Chicks on the Right

English: The Real Wage in the Public and the B...

English: The Real Wage in the Public and the Business Sector (Photo credit: Wikipedia)

I suspect my regular readers have noticed that I seldom reblog from the big blogs. There is a reason for that. to me, and its personal, I feel that I don’t give them enough return value by reblogging their work, it almost feels like stealing their content. But sometimes…

This is one of those times. This article is one of the most cogent, clear, and accurate description of why and when employers hire, and even more has the best description of how pay scales are arrived at. I’ve been a fan of Chicks on the Right for several years, I occasionally comment there and I have watch them become conservative stars, with a big blog, a radio show and the whole nine yards. They are a big blog because they deserve to be a big blog.

And so here is a guest columnist, Majordawg, from Chicks on the Right.

Liberals love the phrase “a living wage”.  They seem to see worker compensation as some sort of birthright.  It’s as if they think the money that workers are paid springs up out of the ground with that money they use on everything else they love to spend on.  They don’t see the connection between wages and business owners.  If I had a nickel for every time one of my liberal friends or, sadly, uninformed former students posted something brilliant about how people need to make more in order to have “enough” money, well, I’d be able to pay everyone “a living wage”.

But business owners will only run their own businesses and employ people if they can earn a living that is (controlling for a few other factors) better than the one they can earn working for someone else.  When it becomes less profitable to own your own business, the jobs go away and wages go to zero.  But unions always want workers to make more, always.  They see business owners as an unlimited source of income and expect them to pony up for the livelihood they believe their members deserve.  However, there is truly only ONE way to approach this.  Does the worker generate enough revenue to justify the wage he seeks?  If not, the business owner is reducing his own income to favor the worker.  That’s a charity and that’s not what business owners are doing.

In May, in several major cities, fast food workers went out on strike.  In this example, McDonald’s workers walked out of a Detroit location asking for an increase in pay.  Not surprisingly, they were organized by Charles Williams II, the Michigan leader of Al Sharpton’s National Action Network, because of course Al has to put his finger in everyone’s eye at some point.  The article, though poorly written, makes a great example of what happens when there are such work stoppages and demands made in low skill industries.  Two workers were still inside this McDonald’s busting their humps to fill as many orders as they could, but the strike and slow service cut traffic for the business.  And here’s the ringing indictment of the organizer’s intellect from his own lips; “I think everybody realizes it’s important for people who are at the bottom.. to get a raise because it helps everybody and it grows the economy,” Williams said.

No!!!!  Holy crap, NO, you gigantic moron, or liar…whichever.  What WILL happen is, this firm will give raises to their best employees and demand greater production from them while they’re on the clock, there will be no overtime, they’ll can some of the most recently hired, least skilled workers at the restaurant or they’ll close the place altogether.  Why?  Because: REALITY!  If every other aspect of the business continues to function just as it does now and pay for workers is increased, something has to give.  And when you expand that reality to multiple businesses (this little strike took place in a lot of cities) you can be damn sure that all of those things will happen in various locations.

Continue reading “Living Wage” According To Guest Columnist MAJORDAWG!!! – Chicks on the Right – Chicks on the Right.

And a note as well, Chicks on the Right has one of the best commenter goups in the entire internet, and this article is exception, Read the Comments too.

Hard Truths

English: Adam Smith statue in Edinburgh's High...

English: Adam Smith statue in Edinburgh’s High Street with St. Giles High Kirk behind. (Photo credit: Wikipedia)

 

 

Today, I’m not in the mood to mince words, so I’m going to give you a dose of unvarnished truth. I, more and more, have come to the conclusion that much of what we call PC is nothing other than an attempt to obfuscate the truth, so if you want PC, or the easy way out, well, I hate to say it but, you’ve come to the wrong place.

 

We’ve got problems in this country, serious problems, and if we don’t start figuring out what to do about them, the Great Republic will be gone. So buckle your seat belts because increasingly as we try to define the problems, the road is going to get rougher, and soon not everyone will like us.

 

And here’s the first piece of that truth, we are not going to fix it in 2014 or 2016 at the polls, our problems are systemic not electoral. Dan Miller in Panama wrote about them yesterday, I strongly suggest you read his article here.

 

In addition, Jessica’s co-author on her site wrote, shortly after our election an article that has resonated with me since, I believe he is completely correct. That article is here. In truth, I think he expected better of us, so did I.

 

Yesterday I ventured off into the culture wars. Because if we don’t win there, we are not going to win anyplace. My comment stream sums up part of the trouble on that front:

 

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the generations behind me not so much. I know engineers in their late twenties and thirties who want a video of how to do things rather than an instruction book.

Pure old-fogeyism.

Youtube videos are an invaluable educational resource and more clearly demonstrate certain technical concepts than any dense manual.

Adapt or die.

I’m glad you posted this at the beginning of the article, as I stopped reading right there.

 

I have no idea if he quit reading or not, and in a way it doesn’t matter. He made my point, if he had kept reading, he would have found that I agree with his comment. I was brought up in a world of ink on paper, 3 maybe 4 TV stations, Top 40 AM radio stations and that was about all of our culture. I suspect many of you reading this could say the same.

But, the generations behind me are different, in truth so are we, I’m on Facebook, Google +, Twitter, Linked In, here, and comment on other blogs as well. My co-writer lives in England, I live in Nebraska, and we can work on the same document at the same time, and video chat as well from our local McDonalds. Think about that for a while because it really is a different world.

I couldn’t have dreamed when I was growing up that I would be inspired daily by a British academic or an American lawyer living in Panama or any of the rest of what we take for granted today. The other thing about all of these things is, we have them because of American free market capitalism. We have them because people like Bill Gates, Steve Jobs, Mark Zuckerberg and many others had a dream and part of that dream was getting rich.

And that is exactly what we are losing. When we are supporting half of our population and demonizing those that produce the  wealth and spend most of our time talking about how much of it the government can steal, sooner or later the producers are going to say the heck with it.

Something I’ve noticed in the reporting from Greece by the way, maybe you have too. Who is rioting in the streets? As near as I can tell, it’s the public employee unions. Well, I’ve also seen reports that as much as half (or more) of the Greek economy has gone underground. I’d bet that Greek grocers, plumbers and everybody else that produces something of value is doing OK, maybe not great, but OK.

What I think is happening is that they just aren’t cooperating with the government anymore, sort of a form of “going Galt”. All government employees from the President on down are in some ways parasites, they may do something for us better than we could ourselves, but we could do it ourselves, we’ve delegated the job to them.

Think that can’t happen here? You’re a fool, then. You think I couldn’t find a plumber that would replumb my house if I rewired his. They’re called 50¢ dollars. They’re called that because the government takes roughly half of every dollar I make. It happens. Churchill said it best when he said, “Destroy a free market and you’ll create a black market.” I know perfectly well who to call if I want to trade a couple of weeks of my time for a half a cow, butchered and dressed, so does every other tradesman out here. Finding him in New York, or Washington might be a bit more difficult.

What’s that fiscal cliff talk all about? This, it’s about the government and the big banks failing, I have enough skills, and most everyone around me does, that we’ll be fine, maybe not as good as now, but possibly, better. I also have, or friends have, enough equipment to defend ourselves against most threats. If you happen to be in government, think about that. You need us a lot more than we need you. It’s more convenient to have you (and money) around, to a point, but you’re in the final analysis, unnecessary. Are we unnecessary to you? A bit of Kipling might be in order here.

In the Carboniferous Epoch we were promised abundance for all,
By robbing selected Peter to pay for collective Paul;
But, though we had plenty of money, there was nothing our money could buy,
And the Gods of the Copybook Headings said: “If you don’t work you die.” 

Then the Gods of the Market tumbled, and their smooth-tongued wizards withdrew
And the hearts of the meanest were humbled and began to believe it was true
That All is not Gold that Glitters, and Two and Two make Four
And the Gods of the Copybook Headings limped up to explain it once more.

As it will be in the future, it was at the birth of Man
There are only four things certain since Social Progress began.
That the Dog returns to his Vomit and the Sow returns to her Mire,
And the burnt Fool’s bandaged finger goes wabbling back to the Fire;

And that after this is accomplished, and the brave new world begins
When all men are paid for existing and no man must pay for his sins,
As surely as Water will wet us, as surely as Fire will burn,
The Gods of the Copybook Headings with terror and slaughter return!

I urge you to think carefully about this before you start raising tax rates very far, because if in our judgement we are not getting some semblance of value for what we spend on you, we have other options. Do You?

On a related note, I hear a lot of conservatives whining about the 47% or whatever that makes up the dependent class. Why? They know their Adam Smith perfectly. If you were raised with no moral code, as they were because we took it away from them by paying them to have babies and paid them more if they didn’t have a father, if you were given just enough education to endorse and cash your welfare check, and earned less if you worked. If you were told, “vote for us and you’ll have a good life”, and you did, and do. So what’s our problem with them? They are acting in their rational self-interest, if we want them to act differently, we need to change the paradigm.

So there’s a start in defining some of our problems, add your thoughts.

 

 

Thanksgiving

English: Seal of the Massachusetts Bay Colony

English: Seal of the Massachusetts Bay Colony (Photo credit: Wikipedia)

First of all I want to give thanks to Jessica, who is doing such a wonderful job of filling in for me, I hope she will keep on. I find that her viewpoint is unique and very useful.

I was digging around this afternoon and found one of our old toughbooks, it’s slow and ungainly but you can park your truck on it, and I managed to borrow a wireless connection from a friend so while, I’m here sort-of, I’m very limited, although not as much as my document reader.

But today is Thanksgiving and while things are not as good as they could be they could surely be worse. If you’re poor in America, it means that you only have one car, and can only afford McDonald’s. Poor in America is richer than probably 99% of the people who ever lived, so we all have things to be thankful for.

We are seeing a preview in the Middle east of what the world will be like after America, “Wars, wars, and lechery, nothing else holds fashion.” A reasonably peaceful world is one legacy that will not outlive America.

Thanksgiving is of course at it most basic a religious holiday, for the Massachusetts Bay colony that gave it to us was very much a theocracy, I’ve heard Puritanism described as “the haunting fear that someone, somewhere may be happy.” But those Puritans knew a good thing when they saw it, and America was a very good thing, and it just kept getting better.

So the basis of this day is that it is the day when Americans eat far too much, watch football (the real kind, Jess), :-) and give thanks to God above for the bounty that America has brought to the world.

My heritage is the German Evangelical and Reformed Church and now the Lutheran Church, in both churches, although not used as much now, many of us remember when the program read “Doxology” with no other information. In many of our families it is still used as table grace, I commend it to you.

Dumbing Down of America

I stole the picture below from the Mad Jewess, the point she was making is the horrendous English in this sign. I quite agree but, there is more here.

Picture stolen from the http://themadjewess.com/

From her article this is from Chicago, which matters little. But really bothers me is that a franchisee of a major restaurant chain would employ a store manager so lacking in management skill as to run out of hamburger. Obviously, I don’t know the hourly sales of this store but given general knowledge I would suspect that it is in the thousands per day. A Burger King franchise is not cheap either, and they enforce their quality standards, although apparently not in speaking English and inventory management.

Personally, if I had a store whose sole purpose was to sell hamburgers and my job depended on it, I would be pretty darned careful not to run out of hamburger. So, if I was this franchisee I’d be looking for a new store manager (preferably one who can spell).

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