minimum wage

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Why Your Chipotle Burrito Costs MoreRepublicans have finally...

Published by Anonymous (not verified) on Wed, 30/06/2021 - 5:27am in

Why Your Chipotle Burrito Costs More

Republicans have finally found an issue to run on in next year’s midterm elections. Apparently Dr. Seuss and Mr. Potato Head weren’t gaining enough traction…

“Democrats’ socialist stimulus bill caused a labor shortage and now burrito lovers everywhere are footing the bill,” said an NRCC spokesman, Mike Berg.

You heard that right. They’re blaming Democrats for the rise in Chipotle burrito prices.

The GOP’s tortured logic is that the unemployment benefits in the American Rescue Plan have caused people to stay home rather than look for work, resulting in labor shortages that have forced employers like Chipotle to increase wages, which has required them to raise their prices.

Hence, Chipotle’s more expensive burrito.

This isn’t just loony economics. It’s dangerously loony economics because it might be believed, leading to all sorts of stupid public policies.

Start with the notion that $300 per week in federal unemployment benefits is keeping Americans from working.

Since very few jobless workers qualify for state unemployment benefits, the Republican claim is that legions of workers have chosen to become couch potatoes and collect $15,000 a year rather than get a job.

I challenge one Republican lawmaker to live on $15,000 a year.

In fact, the reason workers are holding back from reentering the job market is because they don’t have childcare or are still concerned about their health during the pandemic.

Besides, if employers want additional workers, they can do what they do for anything they want more of but can’t obtain at its current price — pay more. 

This is free-market capitalism at work…which Republicans claim to love.

When Chipotle wanted to attract more workers, it raised its average wage to $15 an hour. That comes to around $30,000 a year per worker — still too little to live on, but double the federal unemployment benefit.

Oh, and there’s no reason to suppose this wage hike forced Chipotle to raise the price of its burrito. The company had other options.

Chipotle’s executives are among the best paid in America. Its chief executive, Brian Niccol, raked in $38 million last year — which happens to be 2,898 times more than the typical Chipotle employee. All Chipotle’s top executives got massive pay increases. 

So it would have been possible for Chipotle to avoid raising its burrito prices by — dare I say? — paying its executives less. But Chipotle decided otherwise.

By the way, I keep hearing Republican lawmakers say the GOP is the “party of the working class.” Well if that’s the case, it ought to celebrate when hourly workers get a raise instead of howling about it.

Everyone ought to celebrate when those at the bottom get higher wages. 

The typical American worker hasn’t had a real raise in four decades. Income inequality is out of control. Wealth inequality is into the stratosphere (where Jeff Bezos is heading, apparently).

If wages at the bottom rise because employers need to pay more to get the workers they need, that’s not a problem. It’s a victory.

Instead of complaining about a so-called “labor shortage,” Republicans ought to be complaining about the shortage of jobs paying a living wage.

Don’t hold your breath. Or your guacamole.

February Regional Business Surveys Find Widespread Supply Disruptions

Published by Anonymous (not verified) on Thu, 17/06/2021 - 12:39am in

Jason Bram and Richard Deitz

LSE_2021_feb-bus-survey_bram_460

Business activity increased in the region’s manufacturing sector in recent weeks but continued to decline in the region’s service sector, continuing a divergent trend seen over the past several months, according to the Federal Reserve Bank of New York’s February regional business surveys. Looking ahead, however, businesses expressed widespread optimism about the near-term outlook, with service firms increasingly confident that the business climate will be better in six months. The surveys also found that supply disruptions were widespread, with manufacturing firms reporting longer delivery times and rising input costs, a likely consequence of such disruptions. Many firms also noted that minimum wage hikes implemented in January in both New York and New Jersey had affected their employment or compensation decisions.

Business activity grew modestly in the manufacturing sector but declined in the service sector, according to the latest Empire State Manufacturing Survey and Business Leaders Survey. Declines were particularly pronounced in the construction industry, as well as in leisure and hospitality, while activity in the retail and wholesale trade sectors held fairly steady. Employment rose modestly among manufacturers in the latest survey but continued to decline among service sector firms. Firms in both surveys were optimistic about future conditions, and on net expect activity to be higher in six months. Moreover, more service firms said they expect the general business climate to improve in the months ahead than at any point in the past three years.

Notably, recent months’ surveys point to a pickup in both input and selling price increases, particularly in the manufacturing sector, where input prices rose at the fastest clip in a decade over the past month; a number of manufacturers specifically noted steep escalation in metals prices. Supplier delivery times were longer for manufacturers, with further increases expected in the months ahead. This suggests it is taking longer for firms to get the supplies they need, an issue that was probed more deeply in supplemental questions about supply delays and disruptions. Specifically, the February Supplemental Survey Report indicates that roughly three in four manufacturers and half of service sector firms experienced at least some supply delays or disruptions in early 2021. Within the service sector, delays were particularly common among retail and distribution firms. When firms were asked about the source or reason behind these delays, the most widely cited was that domestic suppliers had either shut down or had had limited supplies themselves. It was also common for firms to see trucking delays and for manufacturers to see foreign supplier shutdowns and delays at the ports.

The February surveys also asked about effects of the latest phase of the minimum wage hike across New Jersey and New York (outside New York City), which took effect January 1. For context, New Jersey’s minimum wage rose $1 to $12, upstate New York’s rose $0.70 to $12.50, and downstate New York’s rose $1 to $14, except in New York City where it was left unchanged at $15. Around 55 percent of manufacturing firms and 40 percent of service firms reported that the increase has had at least some effect on their employment and/or compensation decisions, with about 10 percent of all firms reporting a significant effect. Within the service sector, however, there was a good deal of variation: not surprisingly, businesses in the leisure and hospitality sector— including restaurants, bars, and hotels—indicated the most widespread effects by far, followed distantly by businesses in the transportation and warehousing sector. Compared to this time last year when a prior minimum wage hike took effect in both states, fewer manufacturers reported an impact but there was little change in the share of service firms affected.

The wage hike did not solely affect workers whose wages had to be increased to the new minimum. On average, the hike caused manufacturers to raise wages more than they otherwise would have for about 16 percent of their workforce, and service firms to raise them more than they would have for about 11 percent.

Bram_jason
Jason Bram is a research officer in the Federal Reserve Bank of New York’s Research and Statistics Group.

Deitz_richardRichard Deitz is an assistant vice president in the Bank’s Research and Statistics Group.

How to cite this post:

Jason Bram and Richard Deitz, “February Regional Business Surveys Find Widespread Supply Disruptions,” Federal Reserve Bank of New York Liberty Street Economics, February 17, 2021, https://libertystreeteconomics.newyorkfed.org/2021/02/february-regional-...

Related Reading

Finally, Some Signs of Improvement in the Regional Economy

New York Fed Surveys: Business Activity in the Region Sees Historic Plunge in April

Businesses in the Tri-State Region Struggling to Weather the Coronavirus Outbreak

Disclaimer

The views expressed in this post are those of the author and do not necessarily reflect the position of the Federal Reserve Bank of New York or the Federal Reserve System. Any errors or omissions are the responsibility of the author.

Democrats are Running Out of TimeThe political window of...

Published by Anonymous (not verified) on Wed, 12/05/2021 - 5:02am in

Democrats are Running Out of Time
The political window of opportunity for Joe Biden and Democrats to deliver on their promises to the American people and pass the legislation the country needs, could close at any time. 

We must understand how rare it is that the Senate and the House and the presidency are all under the control of the Democratic Party.

That’s happened in only 4 of the past 28 years

The Democrats’ current Senate majority would end with the shift of a single seat from Democrats to the Republicans. That could happen even during this session of Congress. In 27 of the 38 Congresses since World War II, the party in control of the Senate has changed during the session.

Not to be morbid, but we also need to consider that this Senate has six Democratic senators, over the age of 70, who are from states where a Republican governor would be free to replace them with a Republican should a vacancy occur.

Five other Democratic senators are from states in which a Democratic vacancy would go unfilled for months until a special election was held to fill the seat — which itself would hand the G.O.P. control of the Senate at least until that special election.

It would be foolish to count on the Democrats increasing their numbers in the Senate or the House in the midterm elections of 2022. The president’s party rarely, if ever, picks up more seats during midterm elections. The last time a Democratic president has not lost Democratic seats in Congress in his first midterm election was 1934.

Meanwhile, state Republicans — who, not incidentally, control a majority of state governments — are proposing an avalanche of bills to make it harder for likely Democratic constituencies to vote, including people of color, young people, and low-income people. Some states, like Georgia, have already put these voter suppression measures into place.

And with these state Republicans in control of the upcoming once-in-a-decade redistricting process, we could see even more gerrymandering in these states — meaning an even greater likelihood that Republicans gain ground in the House.

If Joe Biden and the Democrats are going to accomplish what a majority of Americans want them to — such as raising the minimum wage, expanding health care, strengthening unions, raising taxes on big corporations and the wealthy, providing free public higher education, and strengthening voting rights with the For the People Act — they’ve got to get it done, now. 

That means Democrats have to get rid of the Senate filibuster and stop worrying about bipartisanship. 

The window of opportunity is already tiny. And it’s closing fast.

The Republican Rebrand, ExposedThe Republican Party is trying to...

Published by Anonymous (not verified) on Thu, 06/05/2021 - 6:10am in

The Republican Rebrand, ExposedThe Republican Party is trying to rebrand itself as the party of the working class.Rubbish. Republicans can spout off all the catchy slogans about blue jeans and beer they want, but actions speak louder than words. But let’s look at what they’re actually doing.

Did they vote for the American Rescue Plan? No. Not a single Republican in Congress voted for stimulus checks and extra unemployment benefits needed by millions of American workers.

So what have they voted for? Well, every single one of them voted for Trump’s 2017 tax cut for the wealthy and corporations, of which 83 percent of the benefits go to the richest 1 percent over a decade. 

They claimed corporations would use the savings from the tax cut to invest in their workers. In reality, corporations used their tax savings to buy back shares of their own stock in order to boost share values. And some corporations then fired large portions of their workforce. Not very pro-worker, if you ask me.

Have they voted for any taxes on the wealthy? No. Quite the opposite. Republicans refuse to tax the rich. They’ve even been trying to get rid of the estate tax, which only applies to estates worth at least $11.7 million for individuals and $23.4 million for married couples. Working class my foot.

Have they backed a bill to raise the minimum wage to $15 an hour, which a majority of Americans favor? No. Republicans refuse to raise the minimum wage even though it would give 32 million workers a raise. That’s about a fifth of the entire U.S. workforce.

Do they support unions, which empower workers to get better pay and benefits? No again. To the contrary: Republicans have enacted right-to-work laws in 28 states, decimating unions’ bargaining power and enabling businesses to exploit their workers. 

And when it comes to strengthening labor laws, only five out of 211 Republicans voted for the PRO Act in the House – the toughest labor law legislation in a generation. 

How about the historic union drive at the Bessemer, Alabama Amazon warehouse, which Joe Biden and almost all Democrats have strongly backed? Just one Republican spoke out in support. All others have been dead silent.

What about backing regulations that keep workers safe? Nope. In fact, they didn’t bat an eye when Trump rolled back child labor protections, undid worker safeguards from exposure to cancerous radiation, and gutted measures that shield workers from wage theft.

Do they support overtime? No. They allowed Trump to eliminate overtime for 8 million workers, and continue to repeat the corporate lie about “job-killing regulations.”

What about expanding access to healthcare to all working people? Not a chance. Republicans at the state level have blocked Medicaid expansion and enacted Medicaid work requirements, while Republicans in Congress have tried for years to repeal the entirety of the Affordable Care Act. If they succeeded, they would have stripped healthcare away from more than 20 million working Americans.

So don’t fall for the Republican Party’s “working class” rebrand. It’s a cruel hoax. The GOP doesn’t give a fig about working people. It is, and always will be, the party of big business and billionaires.

The 2021 federal budget

Published by Anonymous (not verified) on Tue, 04/05/2021 - 1:04pm in

I’ve written a ‘top 10’ overview of the recent federal budget. The link to the post is available here: https://nickfalvo.ca/ten-things-to-know-about-canadas-2021-federal-budget/

The 2021 federal budget

Published by Anonymous (not verified) on Tue, 04/05/2021 - 1:04pm in

I’ve written a ‘top 10’ overview of the recent federal budget. The link to the post is available here: https://nickfalvo.ca/ten-things-to-know-about-canadas-2021-federal-budget/