The Democrats’ wage problem – By TIMOTHY NOAH 11/14/15 07:50 AM EST

Democratic presidential candidate Sen. Bernie Sanders joins low-wage workers, some who labor as cooks and cleaners at the Capitol, as he speaks during a rally. | AP Photo

Democratic presidential candidate Sen. Bernie Sanders joins low-wage workers, some who labor as cooks and cleaners at the Capitol, as he speaks during a rally. | AP Photo

Americans’ incomes have declined during Obama’s presidency.

Democrats were gleeful this week when Donald Trump blurted out in Tuesday’s debate that “wages [are] too high.” But as Hillary Clinton, Bernie Sanders and Martin O’Malley prepare to debate Saturday night, the Democrats have a wage problem of their own: American incomes have dropped during the Obama presidency.

It’s a vulnerability that Republicans haven’t figured out how to exploit, and it’s clearly one of the biggest weaknesses in the Obama economic recovery.

In 2014, the last year for which Census data are available, median household income was $1,656 lower than it was in January 2009, when President Barack Obama took office. A recent survey by the private firm Sentier Research showed household income finally rose this year above its level in June 2009, when the Great Recession ended — but only by 1.3 percent. That’s a terrible record for any presidency. But that such stagnation occurred during a Democratic one is potentially a big problem for Democratic candidates, and especially for Clinton, who’s running on her role in that administration.

“I think that there are two phenomena here,” said Stuart Stevens, a senior strategist in Mitt Romney’s 2012 campaign. “Those who normally are the most articulate, passionate voices for those who are doing least well in the economy have been muted over the past seven years” because they don’t want to undercut Obama. That should create an opening for Republicans.

But “Republicans have never been great at talking about this,” Stevens said.

The Republican candidates’ wage conundrum isn’t about excoriating the Democrats. They’re all too happy to call out Obama for failing to lift incomes.


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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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Wage Strife Clouds Car-Sales Boom – By ANNE STEELE and JEFF BENNETT Oct. 1, 2015 7:42 p.m. ET

Auto workers’ anger over earnings grows as auto demand hits a 10-year milestone

Surging sales at Fiat Chrysler and other U.S. auto makers have union workers fuming that the industry’s good fortunes aren’t reflected in industry wage talks.ENLARGE

Surging sales at Fiat Chrysler and other U.S. auto makers have union workers fuming that the industry’s good fortunes aren’t reflected in industry wage talks.Photo: Daniel Acker/Bloomberg News

`Automobiles flew off dealer lots last month at the fastest pace in 10 years, but the good times are stirring tension between U.S. auto makers and their unionized workers that threatens to undercut the industry’s rebound.

United Auto Workers union members at Fiat Chrysler Automobiles NV this week rejected for the first time in three decades a tentative agreement as inadequate, and Ford Motor Co. faces a walkout at a big truck factory as soon as Sunday.

As buyers flood dealer lots, snapping up pricey pickups and sport-utility vehicles that deliver fat profits to General Motors Co. , Ford and Fiat Chrysler, factory workers are demanding an end to the concessions that put the U.S. industry back on its feet after near collapse seven years ago.

“We got a catered meal of hot dogs and hamburgers as our thanks while others, I’m sure, got big bonuses,” said Phil Reiter, a 44-year-old union member referring to a recent production milestone at Fiat Chrysler’s Toledo, Ohio, Jeep factory. That plant on Tuesday rejected a UAW supported contract by a more than 4-to-1 ratio.

The workers are angry that neither union officials nor Fiat Chrysler want to eliminate a concession put in place just ahead of the 2008 recession that pays some assembly-line staff substantially less than co-workers doing the same work. The same two-tier system exists to a lesser extent at GM and Ford.

Surging sales aren’t helping the relationship. U.S. car and light-truck sales rose nearly 16% last month compared with the same period a year ago, an annualized pace of 18.17 million vehicles. It was only the ninth time in history the monthly pace eclipsed 18 million, and the first time since 2005.

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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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All Work and No Pay: The Great Speedup

Illustration: Mark Matcho

Update (9/3/2015): The US economy has roared back since the Great Recession, but many employees are grappling with the same overwhelming crush of work that was a hallmark of the downturn. The phenomenon has fueled an extraordinary rise in corporate revenues, but it has also stretched workers to the breaking point. Here’s why: 

On a bright spring day in a wisteria-bedecked courtyard full of earnest, if half-drunk, conference attendees, we were commiserating with a fellow journalist about all the jobs we knew of that were going unfilled, being absorbed or handled “on the side.” It was tough for all concerned, but necessary—you know, doing more with less.

“Ah,” he said, “the speedup.”

His old-school phrase gave form to something we’d been noticing with increasing apprehension—and it extended far beyond journalism. We’d hear from creative professionals in what seemed to be dream jobs who were crumbling under ever-expanding to-do lists; from bus drivers, hospital technicians, construction workers, doctors, and lawyers who shame-facedly whispered that no matter how hard they tried to keep up with the extra hours and extra tasks, they just couldn’t hold it together. (And don’t even ask about family time.)

Webster’s defines speedup as “an employer’s demand for accelerated output without increased pay,” and it used to be a household word. Bosses would speed up the line to fill a big order, to goose profits, or to punish a restive workforce. Workers recognized it, unions (remember those?) watched for and negotiated over it—and, if necessary, walked out over it.

But now we no longer even acknowledge it—not in blue-collar work, not in white-collar or pink-collar work, not in economics texts, and certainly not in the media (except when journalists gripe about the staff-compacted-job-expanded newsroom). Now the word we use is “productivity,” a term insidious in both its usage and creep. The not-so-subtle implication is always: Don’t you want to be a productive member of society? Pundits across the political spectrum revel in the fact that US productivity (a.k.a. economic output per hour worked) consistently leads the world. Yes, year after year, Americans wring even more value out of each minute on the job than we did the year before. U-S-A! U-S-A!

Except what’s good for American business isn’t necessarily good for Americans. We’re not just working smarter, but harder. And harder. And harder, to the point where the driver is no longer American industriousness, but something much more predatory.

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Uneven Wages Cast Shadow Over Labor Day – By Andrew Soergel Sept. 7, 2015 | 12:01 a.m. EDT

Labor Day has been around in the U.S. for more than 100 years. So, too, has wage inequality.

Americans' paychecks vary by more than just job titles.

Americans’ paychecks vary by more than just job titles.

Millions of American workers for more than a century have welcomed the beginning of September – and the three-day weekend accompanying it – with open arms, ironically enjoying a day off on a holiday known as Labor Day.

But not everyone is celebrating. A recent Bloomberg BNA poll found that 41 percent of employers will require at least some of their workers to punch in on Labor Day. About 80 percent of firms with at least 1,000 employees will require some of their staffers to work, while only 29 percent of smaller companies said the same.

It’s understandable that not all employee vacation plans in the U.S. are created equal. But as America prepares to celebrate a holiday dedicated to the diverse body of workers that help drive the country’s economy forward, it’s worth taking a step back to look over the labor market’s deeply uneven landscape that extends far beyond workers’ vacation schedules.

Worker pay, for example, is up all over the U.S. Average hourly earnings for private, non-farm workers in August increased 2.2 percent year over year, according to the Bureau of Labor Statistics. But that doesn’t mean everybody’s 2.2 percent better off now than they were in August 2014.

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