Sunday, February 22, 2015

[NJFAC] Walmart pay increase: So what has changed?

Back in its 2007 fiscal year, before the recession, Walmart reported $183,500 in revenue per employee and $5,938 in profit. Not bad, but by 2014 those numbers had risen 18 percent and 22 percent. The company's sales and profits rose nicely in that time while the company kept a lid on its payroll. Gains went to Walmart shareholders, not Walmart workers.

So what has changed? The simple answer is that the world for employers is very different with a 5.7 percent unemployment rate (the January level) than it was five years ago, at 9.8 percent. Finding qualified workers is harder for employers now than it was then, and their workers are at risk of jumping ship if they don't receive pay increases or other improvements. Apart from pay, Walmart executives said in their conference call with reporters that they were revising their employee scheduling policies so that workers could have more predictability in their work schedules and more easily get time off when they needed it, such as for a doctor's appointment.

The giant question now is not whether there will be some meaningful wage gains in 2015; beyond the anecdotal evidence from Walmart and Aetna, the collapse in oil prices means even modest pay increases will translate into quite large inflation-adjusted raises. The question is whether wage gains will be strong enough to create a virtuous cycle in which rising pay for the workers at the bottom three-quarters of the income scale, who are most likely to spend the money and get it circulating through the economy, will spur more investment and hiring.

To the degree their logic was, "We think we're going to need to raise wages this much in the next couple of years anyway to retain good workers and maximize profitability, so we may as well get ahead of the curve and get a public relations bump out of it and announce the plans in a big splashy way," that would be the best news for American workers. Because that would imply that it won't just be Walmart workers getting a raise in 2015.

"Walmart's Overdue Pay Raises, Neil Irwin, NY Times, Feb. 22, 2015 http://www.nytimes.com/2015/02/20/upshot/as-walmart-gives-raises-other-employers-may-have-to-go-above-minimum-wage.html

Obviously somewhat tighter job markets help workers. What could a decent job for anyone who wants one do? j

National Jobs for All Coalition
http://www.njfac.org/

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Thursday, February 19, 2015

[NJFAC] 2014 Continues a 35-Year Trend of Broad-Based Wage Stagnation; but Walmart workers' activism wins higher pay

from EPI http://www.epi.org/publication/stagnant-wages-in-2014/

Wages grew at the 10th percentile because of minimum-wage increases in 2014 in states where 47.2 percent of U.S. workers reside. This illustrates that public policies can be an important tool for raising wages.

EPI

From Demos:

America's largest private employer just took a modest step to improve the lives of a lot of workers. Following years of concerted protest by frontline workers and their communities, Walmart's CEO Doug McMillon announced that Walmart will raise wages to $9 an hour in April and $10 an hour by February next year, as well as creating more stable and predictable schedules.

This is a huge win—and it's about time. Our research, which has pointed the way forward for retailers like Walmart, shows that Walmart's low wages and unpredictable schedules disproportionately hurt women and people of color, and are holding our economy back. We've also shown how a raise and predictable hours would lift Walmart workers out of poverty, help Walmart's bottom line, and boost economic activity overall.

This raise would never have happened without the courageous action of thousands of Walmart workers. It is an important blow to the outdated, low-wage business model that Walmart pioneered.

Despite the good news, Walmart can easily do better. Last year Walmart spent more than $6.6 billion repurchasing shares of its own stock, bumping up earnings per share and consolidating ownership among the Walton family heirs. If that money were spent on low-wage workers instead, Walmart could raise pay by over $5 an hour.

As Walmart employee Emily Wells put it after hearing today's decision:

"Especially without a guarantee of getting regular hours, this announcement still falls short of what American workers need to support our families. With $16 billion in profits and $150 billion in wealth for the owners, Walmart can afford to provide the good jobs that Americans need—and that means $15 an hour, full-time, consistent hours and respect for our hard work."

A full-time associate making $9 an hour still makes a little less than $19,000 a year. Next year's wage of $10 an hour is worth less than the minimum wage was 50 years ago. It's not just history that shows that a higher wage at Walmart is possible—employers like IKEA and Gap have already recently announced similar raises, and high-road employers like Costco and Trader Joe's have demonstrated that Walmart can raise pay higher and still be a leader in the retail market.

Today, let's celebrate this important blow to the low-wage business model while we keep the momentum going by pushing employers to treat their employees with the pay and respect they deserve. I hope you'll join us.

National Jobs for All Coalition
http://www.njfac.org/

Thursday, February 12, 2015

[NJFAC] The Effect of Rising Inequality on Social Security

The Effect of Rising Inequality on Social Security

By Rebecca Vallas, Christian E. Weller, Rachel West, Jackie Odum February 10, 2015

Our analysis demonstrates that the rise in earnings inequality, which has led to an upward redistribution of income, has taken a significant toll on our nation's Social Security system. If wage increases had kept pace with workers' productivity gains over the past three decades, the OASDI trust funds would be $753.8 billion larger today, which would have reduced the expected 75-year shortfall by 6.8 percent.** If policymakers had acted to freeze the cap on taxable earnings at 90 percent of covered wages after 1983, the trust funds would be $1.1 trillion larger today, and the shortfall would be smaller by 10.1 percent. Looking ahead, that one action would on its own close more than one-quarter of the projected 75-year shortfall. While policymakers cannot undo the past, they can take action to improve Social Security's fiscal outlook by implementing policies that boost wages, combat rising inequality, and modernize the program's revenue structure to reflect today's economy.

https://www.americanprogress.org/issues/economy/report/2015/02/10/106373/the-effect-of-rising-inequality-on-social-security/

Thanks to NJFAC Executive Com. member, Marguerite Rosenthal, for the reference.

National Jobs for All Coalition
http://www.njfac.org/

Thursday, February 5, 2015

[NJFAC] “The Big Lie: 5.6% Unemployment” [Gallup].

The Big Lie: 5.6% Unemployment by Jim Clifton

Here's something that many Americans -- including some of the smartest and most educated among us -- don't know: The official unemployment rate, as reported by the U.S. Department of Labor, is extremely misleading.

Right now, we're hearing much celebrating from the media, the White House and Wall Street about how unemployment is "down" to 5.6%. The cheerleading for this number is deafening. The media loves a comeback story, the White House wants to score political points and Wall Street would like you to stay in the market.

None of them will tell you this: If you, a family member or anyone is unemployed and has subsequently given up on finding a job -- if you are so hopelessly out of work that you've stopped looking over the past four weeks -- the Department of Labor doesn't count you as unemployed. That's right. While you are as unemployed as one can possibly be, and tragically may never find work again, you are not counted in the figure we see relentlessly in the news -- currently 5.6%. Right now, as many as 30 million Americans are either out of work or severely underemployed. Trust me, the vast majority of them aren't throwing parties to toast "falling" unemployment.

There's another reason why the official rate is misleading. Say you're an out-of-work engineer or healthcare worker or construction worker or retail manager: If you perform a minimum of one hour of work in a week and are paid at least $20 -- maybe someone pays you to mow their lawn -- you're not officially counted as unemployed in the much-reported 5.6%. Few Americans know this.

Yet another figure of importance that doesn't get much press: those working part time but wanting full-time work. If you have a degree in chemistry or math and are working 10 hours part time because it is all you can find -- in other words, you are severely underemployed -- the government doesn't count you in the 5.6%. Few Americans know this.

There's no other way to say this. The official unemployment rate, which cruelly overlooks the suffering of the long-term and often permanently unemployed as well as the depressingly underemployed, amounts to a Big Lie.

And it's a lie that has consequences, because the great American dream is to have a good job, and in recent years, America has failed to deliver that dream more than it has at any time in recent memory. A good job is an individual's primary identity, their very self-worth, their dignity -- it establishes the relationship they have with their friends, community and country. When we fail to deliver a good job that fits a citizen's talents, training and experience, we are failing the great American dream.

Gallup defines a good job as 30+ hours per week for an organization that provides a regular paycheck. Right now, the U.S. is delivering at a staggeringly low rate of 44%, which is the number of full-time jobs as a percent of the adult population, 18 years and older. We need that to be 50% and a bare minimum of 10 million new, good jobs to replenish America's middle class.

I hear all the time that "unemployment is greatly reduced, but the people aren't feeling it." When the media, talking heads, the White House and Wall Street start reporting the truth -- the percent of Americans in good jobs; jobs that are full time and real -- then we will quit wondering why Americans aren't "feeling" something that doesn't remotely reflect the reality in their lives. And we will also quit wondering what hollowed out the middle class.

Jim Clifton is Chairman and CEO at Gallup.

National Jobs for All Coalition
http://www.njfac.org/