Companies to Workers: Start Saving More—Or We’ll Do It for You – By KIRSTEN GRIND Oct. 15, 2015 5:33 a.m. ET

Bosses are turning to a new way of convincing employees to save more: make them do it.

Companies from Apache Corp. to Google Inc. to Credit Suisse Group AG have boosted the percentage of worker paychecks automatically diverted to 401(k) plans well above the long-held standard of 3%.

Some are setting aside as much as 10% of their workers’ money or automatically increasing the amounts by 1% a year unless employees opt out. But not all are matching the increased savings with company contributions.

The moves are the latest attempt by companies to transfer the burden of retirement costs to workers. Millions of Americans aren’t putting enough money aside, despite reforms designed to bulk up nest eggs and encourage employees to sock away more.

There are incentives for companies to urge more-aggressive savings. They want to ensure they can make room for younger employees and aren’t left with an aging workforce that doesn’t have enough money “to retire and move on,” said Douglas Fisher, Fidelity Investments’ head of policy development on workplace retirement.

Houston oil producer Apache was among the companies to test out higher rates. It boosted its automatic employee contribution to 8% in 2012 as it tried to attract new workers. Its 401(k) costs have increased by between $4 million and $5 million annually as Apache matched the full amount for employees, executives say, but roughly 97% of its employees now participate.

“If I put in less than 8%, I’m throwing money away,” said Chris Lurix, a 44-year-old Apache systems analyst in Houston, who cited the company’s willingness to match the higher savings rate as a partial reason why he took a job there three years ago.

About 40% of working households with those aged between 25 and 64 have no retirement savings, according to a study released last spring by the nonprofit National Institute on Retirement Security. For those that do, the median balance for households with workers approaching retirement age is $104,000, a rate that experts say is one-fifth of an ideal balance, based on a retirement age of 67.

“The typical American household has almost nothing saved for retirement,” said Nari Rhee, manager of the retirement-security program at the Institute for Research on Labor and Employment.

Many employers in recent decades shed costly retirement obligations by eliminating traditional pensions that guarantee a set payout for life and replacing them with tax-deferred 401(k) plans where employees are largely responsible for saving and investment choices.

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One of America’s Most Famous Restaurateurs Is Getting Rid of Tipping – By Jordan Weissmann OCT. 14 2015 2:23 PM

Danny Meyer, founder of the Union Square Hospitality Group and Shake Shack, is preparing to eliminate tipping at his full service restaurants. Photo by Nicholas Kamm/AFP/Getty Images

Danny Meyer, founder of the Union Square Hospitality Group and Shake Shack, is preparing to eliminate tipping at his full service restaurants.
Photo by Nicholas Kamm/AFP/Getty Images

Forcing waiters and waitresses to survive on tips from customers rather than normal wages is a pointless, gross, and uniquely American custom that, in the past several years, a handful of progressive restaurant owners have attempted to do away with, often with positive results. On Wednesday, one of the most famous names in the dining business says he’s about to join their ranks. Danny Meyer, CEO of Union Square Hospitality Group, has announced that he plans to gradually eliminate tipping at the company’s 13 restaurants and charge higher menu prices in order to pay staff fairly. Diners won’t simply be discouraged from leaving a gratuity; their checks won’t even include a line to write one in.

Meyer is perhaps best known today as the founder of Shake Shack, now an independent public company. But he has long been one of the most prominent and influential restaurateurs in New York City, the force behind celebrated establishments including Gramercy Tavern, Union Square Cafe, Blue Smoke, and the Modern at the Museum of Modern Art. If anybody is capable of turning the tide against tipping, at least in the upper echelons of the restaurant world, it may be him.

What, exactly, is wrong with tipping? As Brian Palmer has explained at Slate, more or less everything. To start, leaving a waiter’s pay in the hands of fickle customers reeks of classism. But in theory, handing restaurant patrons the power to tip is at least supposed to motivate better, more attentive service. This fails in practice because humans turn out to be pretty arbitrary about their tipping behavior. Research has shown that, overall, the amount diners leave has very little to do with their level of satisfaction, but can be influenced by things like whether they’ve had a bit to drink or a waiter draws a smiley face on their check. Some people vary uptheir tips a little based on their experience. Some vary them up a lot. And some don’t vary them at all. All of this creates little incentive for waiters and waitresses to do anything but turn over as many tables as possible with the hope of lucking into someone who will generously tack a bit more onto their bill.


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“Employees Are Bitter” as Whole Foods Chops Jobs and Wages – —By Tom Philpott | Sat Oct. 3, 2015 6:00 AM EDT

Apple: JensGade/istock

Whole Foods Market co-CEO and co-founder John Mackey has never hidden his disdain for labor unions. “Today most employees feel that unions are not necessary to represent them,” he told my colleague Josh Harkinson in 2013. That same year, Mackey echoed the sentiment in an interview with Yahoo Finance’s the Daily Ticker. “Why would they want to join a union? Whole Foods has been one of [Fortune‘s] 100 best companies to work for for the last 16 years. We’re not so much anti-union as beyond unions.”

On September 25, the natural-foods giant gave its workers reason to question their founder’s argument. Whole Foods announced it was eliminating 1,500 jobs—about 1.6 percent of its American workforce—”as part of its ongoing commitment to lower prices for its customers and invest in technology upgrades while improving its cost structure.” The focus on cost-cutting isn’t surprising—Whole Foods stock has lost 40 percent of its value since February, thanks to lower-than-expected earnings and an overcharging scandal in its New York City stores.

Supervisors “in all departments were demoted…and told they were no longer supervisors, but still had to fulfill all of the same duties.”

Sources inside the company told me that the layoffs targeted experienced full-time workers who had moved up the Whole Foods pay ladder. In one store in the chain’s South region, “all supervisors in all departments were demoted to getting paid $11 an hour from $13-16 per hour and were told they were no longer supervisors, but still had to fulfill all of the same duties, effective immediately,” according to an employee who works there.

I ran that claim past a spokesman at the company’s Austin headquarters. “We appreciate you taking the time to reach out and help us to set the record straight,” he responded, pointing to the press release quoted above. When I reminded him that my question was about wage cuts, not the announced job cuts, he declined to comment.

Another source, from one of Whole Foods’ regional offices, told me the corporate headquarters had ordered all 11 regional offices to reduce expenses. “They’ve all done it differently,” the source said. “In some regions, they’ve reduced the number of in-store buyers—people who order products for the shelves.”

I spoke with a buyer from the South region who learned on Saturday that, after more than 20 years with the company, his position had been eliminated. He and other laid-off colleagues received a letter listing their options: They could reapply for an open position or “leave Whole Foods immediately” with a severance package—which will be sweetened if they agree not to reapply for six months. If laid-off employees manage to snag a new position that pays less than the old one did, they are eligible for a temporary pay bump to match the old wage, but only for a limited time.

Whole Foods has “always been an 80/20 company” in its ratio of full- to part-time workers, but managers are now “incentivized to bring down that ratio.”

Those fortunate enough to get rehired at the same pay rate may be signing up for more work and responsibility. At his store, the laid-off buyer told me, ex-workers are now vying for buyer positions that used to be handled by two people—who “can barely get their work done as it is.”

My regional office source told me that the layoffs and downscaling of wages for experienced staffers is part of a deliberate shift toward part-time employees. Whole Foods has “always been an 80/20 company,” the source said, referring to it ratio of full- to part-time workers. Recently, a “mandate came down to go 70/30, and there are regions that are below that: 65/35 or 60/40.” Store managers are “incentivized to bring down that ratio,” the source added.

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Big Retailers, Delivery Firms Face Struggle to Find Holiday Workers – By LAURA STEVENS and LORETTA CHAO Updated Sept. 15, 2015 8:21 p.m. ET

E-Commerce Boom, Low Unemployment Expected to Force Increases in Starting Pay

UPS said during its most recent earnings call that it would better control holiday costs this year.

UPS said during its most recent earnings call that it would better control holiday costs this year. Photo: REUTERS

For the past two years, Inc., Wal-Mart Stores Inc., Target Corp.and other big retailers have been flinging up warehouses and distribution centers across the country to get their online orders to customers faster.

In the coming holiday sales season, that building spree could come back to bite them—and the companies that deliver their packages.

With the nation’s unemployment rate at a seven-year low as holiday hiring begins to pick up, some retailers and logistics contractors are already struggling to find enough seasonal workers to keep their new facilities humming. Soon, United Parcel Service Inc., FedEx Corp. and smaller regional delivery firms will be facing the same problem.

Employment agencies for retailers and logistics companies say they are having trouble finding warehouse workers to stock early holiday inventory and employees to train for work in fulfillment centers, where holiday orders will be packed and shipped.

Few could have predicted the nation’s unemployment rate would fall to 5.1%, as it did last month, amid such red-hot growth in e-commerce. As a result, retailers and delivery companies expect to have to raise starting pay in some places.

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