Thursday, August 27, 2015

More Minimum-Wage Backfires

More Minimum-Wage Backfires - WSJ:
"The campaign for higher minimum wages continues to inflict damage on business employees and owners.
About the only ones not feeling the pain are the labor unions that back this movement. 
Meanwhile, in a growing number of U.S. jurisdictions, unions are succeeding in exempting themselves from the laws they seek to impose on everyone else.
Wal-Mart announced last week that second quarter operating income was down 10% compared to the same period last year, even as revenue was slightly higher.
Wal-Mart, a non-union shop under relentless media pressure to boost compensation, increased its minimum starting wage to $9 per hour in April, $1.75 above the federal minimum.
This amounted to a raise for more than 500,000 workers. The company says it is a worthwhile investment that is creating a better, happier workforce and a better customer experience.
But—minimum-wage activists, take note—increased compensation costs cannot simply be passed along to consumers at the whim of the company.
In conference calls with securities analysts and reporters, company officials made clear that wage hikes are among the factors exerting a negative impact on Wal-Mart’s profits.
Asked if the company would look to automation to offset the effect of higher wages, CFO Charles Holley reiterated that the company views the wage hikes as valuable investments and “exactly the right thing to do” but also noted that Wal-Mart “will always look for more efficiencies in our stores and in our supply chain and in our costs.”
Sounds like Wal-Mart workers should be as concerned as McDonald’s and Wendy’s employees about being minimum-waged out of a job.
But don’t expect pity from the leaders of organized labor, who are busy making sure they don’t have to play by the rules they’re demanding for everyone else. 
Cities including Chicago, Milwaukee, San Francisco and San Jose have exempted union contracts from laws mandating higher minimum wages.
Union chiefs say the laws unduly limit their flexibility to negotiate labor contracts, which are governed by federal law.
And perhaps they don’t care what the wage is so long as they can collect dues.
Or maybe they want the ability to give higher wages to longtime union members while dictating lower pay for new members.
Flexibility on wages could also be a useful tool to persuade management to accept a unionized workforce, with a demand for higher pay coming later.
But why shouldn’t workers who choose not to join a union enjoy the same freedom?
Too many of our media brethren continue to portray mandated wage hikes as a gift to workers, but it’s increasingly clear that such laws threaten the jobs of unskilled workers in order to benefit a special interest."

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