President Obama has
called on businesses to act where our busted, dysfunctional Congress will not;
he has taken the lead by offering federal contract workers a raise to $10.10
per hour. Contrast this to the federal
minimum wage of $7.25/hr and it seems like a lot, doesn’t it? In fact, it’s almost a 40% pay increase. Okay.
But let’s be frank: Gross
earnings of $400 a week doesn’t come much closer to putting you in a $700/month
one-bedroom apartment than $290 a week.
Do some simple math,
people: I have 50¢. Dinner costs $1.00. I’m going hungry. Wait…I got a raise! Now I have 70¢. But
dinner still costs a dollar, and I’m still going hungry.
Moral of this
story: let’s not get all puffed up and
proud of these minimum wage hikes “all the way up to” $10 an hour. It’s not enough.
Not enough to put a
decent roof over the heads of your family, or put healthy food in your kids’
mouths. Maybe just enough so that you
don’t qualify for federal benefits anymore…
But beyond the
president and some “brave” retailers getting good press out of a move that
hardly even qualifies as a stop-gap measure, I was interested in what the
retail spokespeople had to say when questioned about the “business sense” of
investing more money in their staff. The
question itself was posed from a position of tacit accusation that paying
people more money was a risky and unsound business practice. That is, after all, the conventional wisdom
upon which our economy has been going to hell in a handbasket since the
union-busting eighties.
In an interview with Marketplace’s Adrienne Hill, Jack Calhoun, global president of Banana Republic,
posited:
“We thought it was a great opportunity to make a strategic investment in our employees. Our front line employees that are really the most important aspect of our business. These are the employees that interact with our customers every day in our stores… It’s about attracting great talent and retaining great talent…because when we do that well we win as a company and our customers win.”
Well. Duh!
Imagine that! A retail mogul at least paying lipservice to
the concept that those who serve the public
in a service business might actually
be an important, if not THE most important, cog in the wheel. That the faces of the men and women behind
the counters are the faces of the company—at least, the faces with whom the
folks who pay the bills (the customers!) will interact and will remember when
they walk out the door. Dare we hope
that a 21st century retailer is actually getting a clue that perhaps
the face of an over-worked, underpaid, undervalued and under-trained cashier
might NOT be the image you would like the public to associate with your brand?
I will cut Mr.
Calhoun a little slack. You won’t hear
anyone at Walmart—the nation’s largest retailer and largest employer—spout this
kind of retail apostasy. (Oh, sure…Walmart
will spend millions on ads to assure the buying public that Walmart associates
are happy, healthy, valued, motivated, and movin’ on up. But they won’t spend those same millions on
the employees themselves. Does anybody
understand this line of thinking?)
But Calhoun’s ah-ha
moment is still only lipservice.
Because a true
philosophy of “investing in great talent” would result in workers being paid
somewhat more than a sub-poverty-level family wage (2014 poverty level for a
family of four is $23,850; raising wages
to $10.10/hr would result in an annual wage of somewhere around $21,000—about $1750/month.) Yeah…you’ve forked over that big, fat 40%
raise. But in a country where rent prices
average over $1200/month, your “great talent” now only has to figure out how to
pay for food, medical care, clothing, auto expenses, utilities and all the
other cash outflow necessary to life in our society, on $18 a day.
Let's all wish them good
luck with that…
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