“Higher Wages Are Good For Companies Too”: The Intellectual Rigors Of Low-Wage Work Are Too Frequently Dismissed
Barbara Gertz is 25 and works at a Walmart in Aurora, Colorado, stocking shelves on the overnight shift. She and her husband, a cement mason, can get by most months, but there have been days Barbara has called in sick because she can’t afford the gas to drive to work.
Higher wages would obviously benefit Barbara and her colleagues at Walmart who protested last Friday. They would also benefit fast food workers striking tomorrow in 100 cities across the country who earn, on average, $11,000 a year.
But according to Zeynep Ton, an adjunct professor at MIT Sloan School of Management, higher wages are better for companies, too.
Ton’s book, The Good Jobs Strategy: How the Smartest Companies Invest in Employees to Lower Costs and Boost Profits, comes out in January and in it, she describes how large retail companies like Mercadona, Trader Joe’s and Costco have been able to invest in workers without raising prices. “These companies think about employees not as costs to minimize but as capable human beings with the potential to generate sales and profits,” Ton recently wrote on her blog. “Doesn’t all this cost a lot? Of course it does. But that’s only part of the strategy. These companies also design and manage work in a way that makes their employees more productive and takes full advantage of a committed, motivated, and capable (that is, well-paid, well-trained, and well-treated) workforce.”
Here’s one of Ton’s favorite examples of why the so-called Good Jobs Strategy works: During the recession, both Walmart and Mercadona, Spain’s largest supermarket chain, had to cut costs and did so by reducing the variety of products they carried. Walmart customers were annoyed when their local store stopped carrying their favorite brand of potato chip, or toilet paper or T-shirt. Sales dropped; Walmart’s chief merchandising officer had to leave the company. At Mercadona, customers were unfazed if an item they wanted was out of stock because workers, who as a matter of company policy are trained in every department, were able to recommend a replacement. Sales figures increased, even after Mercadona reduced its prices by 10 percent. Workers would let management know if there was a particular product that too many customers seemed to miss. “They could do this because they are empowered, cross-trained and have the time to engage the customer,” Ton writes. By comparison, Barbara told me that “there’s just a total lack of respect” for associates at Walmart. She mentioned a friend who politely pointed out an inventory problem to her supervisor and was fired the next day for the very mistake she tried to correct.
Ton’s argument is that workers who are paid fairly and treated respectfully are more productive and more innovative, across industries and on all salary levels, at Google or at Walmart. “Low-cost retail work is not trivial and how you perform that work makes a big difference for the company’s bottom line,” Ton has written. Retail work requires intuition and charm, quick decision-making, a good memory. As Mike Rose, an education professor at UCLA, has eloquently written the intellectual rigors of low-wage work are too frequently dismissed.
Ton’s Good Jobs Strategy also applies to fast food industry. In-N-Out Burger, the cultishly beloved West Coast hamburger chain, is a good example. The starting wage is $10.50 per hour, significantly higher than at McDonald’s. They have the lowest turnover rate in the fast-food industry. Like Mercadona and Trader Joe’s, In-N-Out keeps overhead low by limiting their offerings, by doing just a few things—hamburgers, cheeseburgers, milkshakes—really, really well.
With more than half of fast food workers on public assistance, costing taxpayers an estimated $7 billion a year, the demands of Thursday’s strike is in the public’s best interest as well. On Tuesday, the Washington, DC, Council voted to increase the minimum wage to $11.50 per hour and to extend paid sick leave to tipped workers, having found, despite theories to the contrary, that such a policy does not discourage new businesses from opening or cause preexisting businesses to relocate. President Obama recently endorsed raising the federal minimum wage to $10.10 an hour.
If political pressure and public protest don’t cause McDonald’s and Walmart to increase worker pay, perhaps pure profit-driven thinking will. After all, what if Barbara had to call in sick on one of the busiest days of the year?
By: Jessica Weisberg, The Nation, December 4, 2013
“Inequality And Self-Righteousness”: President Obama Challenges The Emotional Heart Of Conservative Politics
Here’s a passage from the president’s speech at CAP yesterday, which was a bit of a watershed, consolidating his varying perspectives on inequality and government’s role in the economy:
[W]e need to set aside the belief that government cannot do anything about reducing inequality. It’s true that government cannot prevent all the downsides of the technological change and global competition that are out there right now — and some of those forces are also some of the things that are helping us grow. And it’s also true that some programs in the past, like welfare before it was reformed, were sometimes poorly designed, created disincentives to work, but we’ve also seen how government action time and again can make an enormous difference in increasing opportunity and bolstering ladders into the middle class. Investments in education, laws establishing collective bargaining and a minimum wage — (applause) — these all contributed to rising standards of living for massive numbers of Americans.
Likewise, when previous generations declared that every citizen of this country deserved a basic measure of security, a floor through which they could not fall, we helped millions of Americans live in dignity and gave millions more the confidence to aspire to something better by taking a risk on a great idea. Without Social Security nearly half of seniors would be living in poverty — half. Today fewer than 1 in 10 do. Before Medicare, only half of all seniors had some form of health insurance. Today virtually all do. And because we’ve strengthened that safety net and expanded pro-work and pro- family tax credits like the Earned Income Tax Credit, a recent study found that the poverty rate has fallen by 40 percent since the 1960s.
What he’s doing here is challenging the idea that you can defend the “good” government interventions in the economy that are now part of the national landscape while opposing contemporary efforts to expand opportunity and reduce inequality. This strikes directly at the politics of selfishness and self-righteousness that is at the emotional heart of conservative politics at present.
The opportunity gap in America is now as much about class as it is about race. And that gap is growing. So if we’re going to take on growing inequality and try to improve upward mobility for all people, we’ve got to move beyond the false notion that this is an issue exclusively of minority concern. And we have to reject a politics that suggests any effort to address it in a meaningful way somehow pits the interests of a deserving middle class against those of an undeserving poor in search of handouts.
This can’t be said too often.
By: Ed Kilgore, Contributing Writer, Washington Monthly Political Animal, December 5, 2013
“Mandela Taught A Continent To Forgive”: Despite The Divisiveness, Compassion And Forgiveness Must Play A Role In Governance
For years, it seemed as though only one photograph of Nelson Mandela existed. It showed him with bushy hair, plump cheeks, and a look of serious determination. But it was a black-and-white shot, so grainy it looked ancient — a visual documentation of an era and an individual whose time had long passed.
In the early 1960s, fed up with the systematic oppression and inhumane treatment of indigenous Africans, Mandela successfully proposed a plan of violent tactics and guerrilla warfare, essentially forming the military wing of the African National Congress. Within a few years, this martial division, aptly named Umkhonto we Sizwe or Spear of the Nation, was discovered and its leadership detained. In 1964 Mandela was found guilty of sabotage, and ordered to serve a life sentence.
During his trial, in lieu of testimony, he delivered a speech from the dock. “I have cherished the ideal of a democratic and free society in which all persons live together in harmony and with equal opportunities,” he said. “It is an ideal which I hope to live for and to achieve. But if need be, it is an ideal for which I am prepared to die.”
I was 5 years old when Nelson Mandela became prisoner number 46664, and was banished to spend the remainder of his years on Robben Island, five square miles of land floating just north of Cape Town. Robben Island had been the site of a colony for lepers, a lunatic asylum and a series of prisons. It was a place of exile, punishment and isolation, a place where people were sent and then forgotten.
But the haunting image in that photograph did not let us forget. In the 1970s, I was a member of the African Youth Command, an activist group that protested against social and political injustices. We idolized Mandela. We hung posters of that photograph in our dormitory rooms; we printed it on pamphlets. We refused to let Mandela fade into irrelevance; we marched, held demonstrations, staged concerts and boycotts, signed petitions and issued press statements. We did everything we could to decry the evils of apartheid and keep his name on people’s tongues. We even burned effigies of John Vorster, Jimmy Kruger and other proponents of that government-sanctioned white supremacy.
Freedom on the African continent was a reality for which we were willing to fight. Nevertheless, I think we’d resigned ourselves to the likelihood that Mandela would remain a prisoner until his death, and South Africans would not experience equality until well after our lifetimes. Then on Feb. 11, 1990, the miraculous happened; Mandela was released.
The world was spellbound. We wondered what we would do if we were in his shoes. We all waited for an indescribable rage, a call for retribution that any reasonable mind would have understood. Twenty-seven years of his life, gone. Day after day of hard labor in a limestone quarry, chipping away at white rock under a bright and merciless sun — without benefit of protective eyewear — had virtually destroyed his tear ducts and, for years, robbed Mandela even of his ability to cry.
Yet, the man insisted on forgiveness. “To go to prison because of your convictions,” he said, “and be prepared to suffer for what you believe in, is something worthwhile. It is an achievement for a man to do his duty on earth irrespective of the consequences.”
By the time I finally came face to face with Nelson Mandela, he had already been awarded the Nobel Peace Prize and elected president of a land in which he and all other black people had previously been refused suffrage. He had become an icon, not only of hope, but also of the possibility for healing.
I was relatively new to politics then, a member of Parliament and minister of communications. It was my first time in Cape Town. I had stayed out late with friends and was waiting to take the lift up to my hotel room. When the doors opened, there was Mandela. I took a step back, and froze. As he exited, Mandela glanced in my direction and nodded. I could not return the gesture. I couldn’t move, not even to blink. I just stood there in awe, thinking: here was the man for whom we had marched, sung and wept; the man from the black-and-white photograph. Here was the man who had created a new moral compass for South Africa and, as a matter of course, the entire continent.
It is no coincidence that in the years since Mandela’s release so much of Africa has turned toward democracy and the rule of law. His utilization of peace as a vehicle of liberation showed Africa that if we were to move beyond the divisiveness caused by colonization, and the pain of our self-inflicted wounds, compassion and forgiveness must play a role in governance. Countries, like people, must acknowledge the trauma they have experienced, and they must find a way to reconcile, to make what was broken whole again.
That night, as I watched Mandela walk past me, I understood that his story, the long walk to freedom, was also Africa’s story. The indignation that once permeated our continent has been replaced by inspiration. The undercurrent of pessimism resulting from the onslaught of maladies — wars, coups, disease, poverty and oppression — has given way to a steadily increasing sense of possibility.
It wasn’t just Nelson Mandela who was transformed during those years of his imprisonment. We all were. And Africa is all the better because of that.
By: John Dramani Mahama, President of Ghana; Op-Ed Contributor, The New york Times, December 5, 2013
“Treading Carefully”: Paul Ryan’s Big, Tricky Budget Moment Is Here
Congress has been historically inactive this year. But with the clock winding down on 2013, there is still a glimmer of hope that bicameral negotiations could produce a modest budget deal that would replace some of the sequester cuts.
For Rep. Paul Ryan (R-Wis.), the House GOP budget guru and potential presidential aspirant, that presents both an opportunity and a challenge. A bipartisan deal could serve as a rare (for him) legislative achievement that pads his credentials and charts the GOP’s course heading into the next election cycle. Yet at the same time, Ryan would risk spurning the GOP base — and its vocal Ted Cruz types — if he’s perceived as bending too far to Democratic demands.
Ryan and his Senate counterpart Sen. Patty Murray (D-Wash.) are believed to be close to a very small deal that would eliminate some of the automatic budget cuts scheduled to go into effect over the next two years. Though nothing is finalized, the deal would reportedly nix about one-third of the sequester-mandated cuts, splitting the reinstated funds between defense and non-defense spending.
Since Republicans won’t go for tax increases, and Democrats won’t tackle entitlement reform without also touching revenue, Murray and Ryan have been reduced to “pulling together odds and ends to make a deal, including non-tax revenue like auctioning broadband spectrum and airport security fees, as well as increasing employee contributions to federal workers’ retirement programs,” wrote MSNBC’s Suzy Khimm.
In short: The negotiators are looking at a tiny deal, far less than the sweeping budget overhaul Ryan has famously proposed before in his spending blueprints.
Still, a deal would be a success for a Congress so dysfunctional it triggered a two-week government shutdown and flirted with debt default. Republicans would love to roll back some of the cuts to defense spending. And Democrats are eager for a deal that would wipe out some of the cuts to cherished domestic programs like Head Start.
Such a deal, if passed, would also be a significant accomplishment for Ryan to add to his otherwise unimpressive legislative record.
Though a noted policy wonk, none of Ryan’s radical budget bills have gone anywhere in Congress. In fact, only two Ryan-drafted bills, neither of which were anything truly groundbreaking, have become law in the congressman’s entire House career. One bill named a post office; the other amended a tax on arrows.
A deal would thus “burnish an image of someone willing to find — and tout — common ground in a historically divided Washington,” wrote Politico’s Jake Sherman and John Bresnahan. “It’s a credential that could serve him well as he looks to grab the chairmanship of the Ways and Means Committee or run for his party’s nomination before the 2016 presidential contest.”
Still, an agreement almost assuredly wouldn’t do anything about long-term GOP priorities Ryan has championed before, like cutting entitlement spending.
And there’s the rub for Ryan: A small deal could turn off both conservative lawmakers and voters.
Conservative House members dug in on their impossible demands during the shutdown even as it obliterated the party’s approval rating. Those same members could balk at a proposed deal that doesn’t cut deeper. And though a deal could still pass with the help of Democratic votes, Speaker John Boehner (R-Ohio) would risk further splitting his fragile caucus by cobbling together a Democratic-heavy coalition.
A mini-deal could also be problematic for Ryan’s perceived presidential ambitions if it causes the party’s right flank, which plays a disproportionately large role in the primary nominating process, to sour on him.
“If the Tea Party turns up the rhetorical heat, would Ryan risk a presidential bid to rescue the country from another government shutdown?” wrote Salon’s Joan Walsh. “I’ve never seen him stand up to that kind of ideological pressure from the right, but there could be a first time.”
If he’s keen on keeping his conservative hero status and pursuing a 2016 run, Ryan really ought to tread carefully.
By: John Terbush, The Week, December 4, 2013
“We Are All Fragile Beings”: Obamacare Saved My Family From Financial Ruin
House Speaker John Boehner and his tea party friends shut down the U.S. government because of people like me. I am the mother of an insurance hog, someone who could have blown through his lifetime limit of health coverage by the time he was 14. My son has managed to survive despite seemingly insurmountable challenges, and he wears his preexisting condition like a Super Bowl ring.
Mason, now 16, was probably born with his brain tumor. We discovered it six years ago. Biopsies showed a slow-growing mass, which was the good news. The bad news was that the tumor could not be removed because it had grown around essential structures in his brain. Under the care of some of the country’s finest specialists, Mason had frequent scans. There was little we could do between tests but hope for the best. Like other children his age, Mason played basketball, argued with his siblings and avoided cleaning his bedroom. He managed to undergo chemotherapy for eight months without getting too sick. He insisted on finding ways to laugh, saying things like: “I have brain cancer. What’s your problem?” It was an uneasy peace — until the tumor ruptured in December 2010, three years after his initial diagnosis, and Mason suffered a massive cerebral hemorrhage.
Mason spent most of eighth grade in the hospital. In the six months he was hospitalized, he spent 65 days in the pediatric intensive care unit. He underwent four brain surgeries. Halfway through his hospitalization, the Affordable Care Act was passed, alleviating lifetime limits on coverage and saving us from the financial abyss. Mason moved to a rehabilitation hospital where he was retaught the most basic skills — sitting up, eating and standing. We faithfully paid the premiums on the employer-sponsored plan through which our family is covered, along with the rest of our bills, thanking God and whoever else would listen for our good fortune to have coverage.
The biggest fear for families such as mine is that we will lose our health insurance and be rendered uninsurable because one of us has been sick. The Affordable Care Act does away with dreaded clauses barring preexisting conditions. It also enables us to keep Mason on our insurance until he is 26; then, he will be able to purchase his own coverage on an insurance exchange. At least, that was the plan until last Tuesday, when the government was shut down in protest of such excesses.
As far as the brain tumor goes, our family might have drawn the short straw. Maybe our story lacks a certain universal appeal. People might be thinking to themselves, “I’m so sorry that happened to you, but odds are it won’t happen to me.” I hope it doesn’t, really.
But having lived in hospitals with Mason for months, I have seen that bad things — accidents, freak illnesses — happen to smart, cautious and otherwise undeserving people. It’s one thing we all have in common. We are fragile beings. So what is wrong with allowing us to purchase a financial safety net? What’s so un-American about that?
If I could get John Boehner and Ted Cruz on a conference call, I would explain this to them. I would tell them that, while they were busy trying to derail the Affordable Care Act over the past two years, Mason has again learned to walk, talk, eat and shoot a three-point basket.
By: Janine Urbaniak Reid, a writer in the San Francisco Bay Area, is working on a memoir about her son’s diagnosis; October 9, 2013; Published in The Washington Post Opinions Section, December 4, 2013
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