In a post on worker exploitation a week ago, I quoted one restaurant veteran saying, “The entire industry preys upon desperation.”
“They call us essential, but the reality is they treat us like we’re disposable,” said Cris Cardona, a shift manager at an Orlando McDonald’s. “They like to say that no one wants to work, that they’re having trouble finding workers and they blame this on unemployment benefits, but the problem is no one wants to work for a poverty wage, to risk their lives for $7.25 an hour.”
I also mentioned last week seeing a local fast food joint offering $12/hr for new hires. Since then, I saw this tweet.
Be very, very careful about that asterick in the sign above. As a Guardian article last week indicated, workers are finding that signing bonuses and promises of higher wages sometimes don’t pan out. The sign, however, suggests that employers are now experiencing a little desperation of their own.
David Leonhardt writes in a New York Times newsletter that “the labor shortage is more myth than reality.” In fact, capitalism has an answer for shortages. It’s a simple matter of supply and demand:
When a company is struggling to find enough labor, it can solve the problem by offering to pay a higher price for that labor — also known as higher wages. More workers will then enter the labor market. Suddenly, the labor shortage will be no more.
One of the few ways to have a true labor shortage in a capitalist economy is for workers to be demanding wages so high that businesses cannot stay afloat while paying those wages. But there is a lot of evidence to suggest that the U.S. economy does not suffer from that problem.
If anything, wages today are historically low. They have been growing slowly for decades for every income group other than the affluent. As a share of gross domestic product, worker compensation is lower than at any point in the second half of the 20th century. Two main causes are corporate consolidation and shrinking labor unions, which together have given employers more workplace power and employees less of it.
Just as telling as the wage data, the share of working-age Americans who are in fact working has declined in recent decades. The country now has the equivalent of a large group of bakeries that are not making baguettes but would do so if it were more lucrative — a pool of would-be workers, sitting on the sidelines of the labor market.
Corporate profits, on the other hand, have been rising rapidly and now make up a larger share of G.D.P. than in previous decades. As a result, most companies can afford to respond to a growing economy by raising wages and continuing to make profits, albeit perhaps not the unusually generous profits they have been enjoying.
Sure enough, some companies have responded to the alleged labor shortage by doing exactly this. Bank of America announced Tuesday that it would raise its minimum hourly wage to $25 and insist that contractors pay at least $15 an hour. Other companies that have recently announced pay increases include Amazon, Chipotle, Costco, McDonald’s, Walmart, J.P. Morgan Chase and Sheetz convenience stores.
Capitalism is catching up with capitalists. They won’t like it.
(h/t TJ)