Incomes Are Going Down   1 comment

This election season, it’s a rare thing when the Presidential candidates agree, but they do agree on this:  even in an economic recovery, the manufacturing jobs are not all coming back to America.  They’ve been lost, primarily to Pacific Rim nations.  By losing these jobs, one key source of middle class income for the Baby Boom generation is, simply, gone.

Manufacturing jobs were “good union jobs.”  They were relatively high paying.  They were jobs you could build a life around, and the world-wide economic expansion following World War II has been called the “Golden Age of Capitalism.”

Union membership declined 9% from 2008 to 2011.  The recession has been devastating to unions, too.

Clothing retailers often rely on the benefit of employee discounts on clothing purchases to incentivize employees to stay.

Now, we see that retail jobs are also going away.  This recent article in the New York Times describes the machinations that today’s retailers go through to minimize their labor costs.

Sophisticated computer programs are now utilized, incorporating factors such as weather forecasts, to predict what the store traffic will be on any given day.  Most retailers routinely limit their employees to less than 30 hours a week … and if employees are not available to work their schedule, then they’ll get fewer hours in future schedules.  Employees are left with a Hobbesian choice:  get a 2nd job to make more money, but risk losing your first job if the schedules ever conflict.

Retail employee’s incomes are going down — at the least, the people working retail should not expect to earn a full-time wage.  A few managers run the operation; the hourly workers are literally at their beck and call.

I was recently surprised by how little employers owe hourly employees, even in California.  You can be scheduled for a shift of any length (1 hour?  3 hours?  4 hours 15 minutes?  No problem.)  If you are dismissed and sent home from your shift, you are generally owed for 50% of the scheduled shift (there are some exceptions, such as if the power goes out, you’re owed nothing beyond what you’ve already worked).

Most of my career has been in the radio industry, which has undergone profound job shrinkage over the last 16 years.  The industry changed because of the Telecommunications Act of 1996, which President Clinton signed into law.  The industry has consolidated away from an industry with many small operators owning a few local or regional stations, to a more nationally integrated model, with groups of hundreds of stations owned by a single operator.

The banks favor the new model; they provided billions of dollars to fund the acquisitions.  To create the efficiencies needed to pay the mortgage, though, many managers, air personalities and sales reps lost their jobs.

Owners are making money, banks are making money.  Middle class jobs are lost.

What’s the lesson?  Go to school.  Get a skill that cannot be shipped overseas.  Get a job that requires a premium salary.

Don’t expect to be well compensated working retail, or doing anything that can be done faster/quicker/cheaper overseas.  Because if it can be, it will be.

Posted October 30, 2012 by henrymowry in Living Life

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