Pre-empting the Minimum Wage Debate
July 12, 2016 1:28 PM Subscribe
Why We're Giving Our Employees a Raise Jamie Dimon, CEO of Chase Bank, wrote an op-ed for the NY Times proclaiming he would raise salaries, over time, for his lowest paid workers from $10.15 an hour to $12 to $16.50 an hour. Dimon's compensation is $27M per year.
Starbucks also announced big raises for workers:
In a memo sent to all 157,000 U.S. employees, CEO Howard Schultz announced a wage hike for all store employees and managers as of Oct. 3. Starbucks will also double the company stock awards for employees who've been there two or more years. Altogether, these changes will boost total compensation between 5% to 15% for all workers.
Starbucks employees earn an average of $9.43 an hour, according to Glassdoor.com.
Howard Schultz earns $20M per year.
The IMF recently recommended that the United States "combat widening income inequality and help the poor [with a] higher minimum wage and expanded tax breaks for low-income Americans."
Chart of minimum wages and legislation by state. New York, DC and California have led the way on a $15 per hour target.
Starbucks also announced big raises for workers:
In a memo sent to all 157,000 U.S. employees, CEO Howard Schultz announced a wage hike for all store employees and managers as of Oct. 3. Starbucks will also double the company stock awards for employees who've been there two or more years. Altogether, these changes will boost total compensation between 5% to 15% for all workers.
Starbucks employees earn an average of $9.43 an hour, according to Glassdoor.com.
Howard Schultz earns $20M per year.
The IMF recently recommended that the United States "combat widening income inequality and help the poor [with a] higher minimum wage and expanded tax breaks for low-income Americans."
Chart of minimum wages and legislation by state. New York, DC and California have led the way on a $15 per hour target.
This post was deleted for the following reason: Poster's Request -- frimble
this is all pretty pathetic compared to the guy who paid all his people $70k/year, including himself.
posted by jb at 1:39 PM on July 12, 2016 [13 favorites]
posted by jb at 1:39 PM on July 12, 2016 [13 favorites]
Not exactly earth-shattering but better than nothing I suppose. I wonder if they've explored indexing it to local cost of living - I doubt this helps junior bank tellers in San Francisco and Manhattan nearly enough. It may be fine for Oklahoma City.
posted by GuyZero at 1:45 PM on July 12, 2016 [3 favorites]
posted by GuyZero at 1:45 PM on July 12, 2016 [3 favorites]
I hate to be one of those people who hates good things because they're not perfect, but I find myself wondering exactly what GuyZero points out: is $16.50/hour a living wage in Manhattan? And then asking there paid time off? Health insurance? Some retirement benefit beyond social security, like 401K matching? Reliable scheduling?
Raising wages is great--equalizing compensation is better.
posted by crush-onastick at 1:49 PM on July 12, 2016 [6 favorites]
Raising wages is great--equalizing compensation is better.
posted by crush-onastick at 1:49 PM on July 12, 2016 [6 favorites]
And with reported unemployment under 5.5% (U-4 I guess - this table seems up-to-date) it's probably finally time when low-wage jobs are finally having trouble attracting new workers. Even U-6 is under 10%. So this is probably less about Chase Bank's amazing sense of morality and citizenship and more about actually have tellers at counters in costlier cities.
posted by GuyZero at 1:50 PM on July 12, 2016 [6 favorites]
posted by GuyZero at 1:50 PM on July 12, 2016 [6 favorites]
This Gawker article estimates that it amounts to an additional annual expenditure of about $108 million a year, while they profit more than $5 billion a quarter. Pretty cheap marketing/PR expenditure, in the context of such things and considering what other benefits they'll get.
posted by penduluum at 1:50 PM on July 12, 2016 [37 favorites]
posted by penduluum at 1:50 PM on July 12, 2016 [37 favorites]
Whoops, U-3 is the official unemployment rate which is 4.9% which is pretty good by recent standards.
posted by GuyZero at 1:51 PM on July 12, 2016
posted by GuyZero at 1:51 PM on July 12, 2016
The price increase for Pikes peak alone is well worth it.
posted by clavdivs at 1:51 PM on July 12, 2016
posted by clavdivs at 1:51 PM on July 12, 2016
You can absolutely live in NYC on $35K/year. Millions of people are doing it. It's not great or fun and it's hardscrabble as fuck, but it's not Impossible.
Having lived on less than that in NYC: anything helps. I fought and fought hard for dollar-an-hour raises and I definitely saw a quality of life increase.
posted by griphus at 1:52 PM on July 12, 2016 [35 favorites]
Having lived on less than that in NYC: anything helps. I fought and fought hard for dollar-an-hour raises and I definitely saw a quality of life increase.
posted by griphus at 1:52 PM on July 12, 2016 [35 favorites]
This Gawker article estimates that it amounts to an additional annual expenditure of about $108 million a year, while they profit more than $5 billion a quarter. Pretty cheap marketing/PR expenditure, in the context of such things and considering what other benefits they'll get.
yes, the notion that this is so amazing is a farce - they could pay all the junior employees $20 an hour nation-wide and the bank would remain very profitable.
posted by GuyZero at 1:52 PM on July 12, 2016 [24 favorites]
yes, the notion that this is so amazing is a farce - they could pay all the junior employees $20 an hour nation-wide and the bank would remain very profitable.
posted by GuyZero at 1:52 PM on July 12, 2016 [24 favorites]
My money's on GuyZero's explanation -- this is probably just the market rate for workers like this. But when you're doing God's work, you're allowed to claim it as a moral credit.
posted by Lyme Drop at 1:54 PM on July 12, 2016 [3 favorites]
posted by Lyme Drop at 1:54 PM on July 12, 2016 [3 favorites]
This is a step in the right direction, but at the same time, we still have stuff like this going on:
The pay hike comes at a time when the company is under fire from employees, who are unhappy that Starbucks has cut their hours. An online petition posted on coworker.org 18 days ago claims that cutbacks in hours and staffing at stores is killing employee morale and hurting customer service. It's already garnered 12,800 signatures.
Hourly wage hikes ultimately don't mean much if you're unable to get full time hours for whatever reason, including due to the use of scheduling software that makes it impossible to get a second job. I hope that in our focus on a higher national minimum wage we don't overlook all the other ways companies can shortchange employees.
posted by triggerfinger at 2:02 PM on July 12, 2016 [30 favorites]
The pay hike comes at a time when the company is under fire from employees, who are unhappy that Starbucks has cut their hours. An online petition posted on coworker.org 18 days ago claims that cutbacks in hours and staffing at stores is killing employee morale and hurting customer service. It's already garnered 12,800 signatures.
Hourly wage hikes ultimately don't mean much if you're unable to get full time hours for whatever reason, including due to the use of scheduling software that makes it impossible to get a second job. I hope that in our focus on a higher national minimum wage we don't overlook all the other ways companies can shortchange employees.
posted by triggerfinger at 2:02 PM on July 12, 2016 [30 favorites]
They just built a new Chase Bank here in town. There's almost no one in there. A couple of suits (loan officers?) and one, maybe two, tellers off in a tiny side closet, just in case you have an actual check to cash. The place is full of big touchscreen stations, though, for you to conduct all of your business.
posted by Thorzdad at 2:02 PM on July 12, 2016 [1 favorite]
posted by Thorzdad at 2:02 PM on July 12, 2016 [1 favorite]
A couple of suits (loan officers?) and one, maybe two, tellers off in a tiny side closet, just in case you have an actual check to cash.
So while the touchscreen displace some tellers the theoretical upside is that the remaining employees focus on more complex interactions which (again in theory) should mean they need more skills and thus garner higher wages. So maybe the theory is working in that there are fewer employees per branch who make marginally more than before.
posted by GuyZero at 2:09 PM on July 12, 2016 [3 favorites]
So while the touchscreen displace some tellers the theoretical upside is that the remaining employees focus on more complex interactions which (again in theory) should mean they need more skills and thus garner higher wages. So maybe the theory is working in that there are fewer employees per branch who make marginally more than before.
posted by GuyZero at 2:09 PM on July 12, 2016 [3 favorites]
I know they've been saying it for years, but to build on Thorzdad's comment--isn't retail banking dying anyway?
posted by aspersioncast at 2:10 PM on July 12, 2016
posted by aspersioncast at 2:10 PM on July 12, 2016
I wonder if they've explored indexing it to local cost of living.
Both of the large commercial banks that I've worked for (neither of them Chase) divided the country into salary zones based on cost of living in that area. Positions then have a base salary rate that's adjusted up or down based on the location of the position.
It's almost certainly a straight increase to everyone's base wage+geographic adjustment. It's possible that not all employees in affected positions will actually get a raise if they're are already making near the top-end of the pay range for their position.
posted by VTX at 2:14 PM on July 12, 2016
Both of the large commercial banks that I've worked for (neither of them Chase) divided the country into salary zones based on cost of living in that area. Positions then have a base salary rate that's adjusted up or down based on the location of the position.
It's almost certainly a straight increase to everyone's base wage+geographic adjustment. It's possible that not all employees in affected positions will actually get a raise if they're are already making near the top-end of the pay range for their position.
posted by VTX at 2:14 PM on July 12, 2016
yeah, I don't get excited by individual employers choosing to raise their wages. What gets me excited is law mandating that they raise their wages. The former is a sign of either temporary benevolence or a temporary increase in the market value of labor; the latter is a sign of actual empowerment.
posted by You Can't Tip a Buick at 2:16 PM on July 12, 2016 [44 favorites]
posted by You Can't Tip a Buick at 2:16 PM on July 12, 2016 [44 favorites]
Here in Manhattan where you can usually literally throw a stone at the next chase bank (or at least atm) location from whichever one you happen to be exiting (seriously, there are three on a three block stretch near my apartment, not even counting the ones in the Duane Reade.) That said there are literally zero employees in one of those locations as it is just an atm atrium (ATMium?) and fewer than ever in most of the others. The location across from my old workplace had three of its five teller windows removed and replaced with two of the oversized ipad "enhanced" atms.
I guess im glad that the few remaining employees are being paid a bit better, but this probably barely covers cost of living and is certainly a tiny fraction of the savings the company has achieved by automating and shifting the burden onto customers (in this case to wait in line for the few remaining human beings capable of non-atm transactions).
posted by Exceptional_Hubris at 2:17 PM on July 12, 2016
I guess im glad that the few remaining employees are being paid a bit better, but this probably barely covers cost of living and is certainly a tiny fraction of the savings the company has achieved by automating and shifting the burden onto customers (in this case to wait in line for the few remaining human beings capable of non-atm transactions).
posted by Exceptional_Hubris at 2:17 PM on July 12, 2016
//Hourly wage hikes ultimately don't mean much if you're unable to get full time hours for whatever reason, including due to the use of scheduling software that makes it impossible to get a second job.//
This was a huge issue for my son throughout college. All the traditional retail / fast food jobs that teens used to get are now taken by seniors that can't afford to retire, and immigrants available 40+ hours a week. If you aren't available 40 hours a week to be on call for an 18 hour a week job, you can't even get an interview.
posted by COD at 2:18 PM on July 12, 2016 [18 favorites]
This was a huge issue for my son throughout college. All the traditional retail / fast food jobs that teens used to get are now taken by seniors that can't afford to retire, and immigrants available 40+ hours a week. If you aren't available 40 hours a week to be on call for an 18 hour a week job, you can't even get an interview.
posted by COD at 2:18 PM on July 12, 2016 [18 favorites]
Every time someone in some dumb Facebook fight about minimum wage says teens should pay their dues and flip burgers for a pittance to Learn About Things, I realize that person has probably not actually looked in the back of a fast food place. It's been a long time since McD's et. al. figured out that adults with responsibilities are a much, much more useful and efficient workforce than teens have ever been and went all-in on that. I don't remember the last time I've seen anyone under the age of 25-30 working in a McDonalds.
posted by griphus at 2:27 PM on July 12, 2016 [20 favorites]
posted by griphus at 2:27 PM on July 12, 2016 [20 favorites]
I wonder if they've explored indexing it to local cost of living.
Oregon did this with it's last minimum wage hike (that won't take effect until 20-fucking-22). Apparently the Portland Metro area will have the highest wage, with a 2nd tier for the rest of the Willamette valley, and a 3rd tier for the rest of the state.
posted by furnace.heart at 2:31 PM on July 12, 2016 [3 favorites]
Oregon did this with it's last minimum wage hike (that won't take effect until 20-fucking-22). Apparently the Portland Metro area will have the highest wage, with a 2nd tier for the rest of the Willamette valley, and a 3rd tier for the rest of the state.
posted by furnace.heart at 2:31 PM on July 12, 2016 [3 favorites]
I wonder if that's going to affect commercial and residential activities on the borders of those zones.
posted by LizBoBiz at 2:38 PM on July 12, 2016
posted by LizBoBiz at 2:38 PM on July 12, 2016
Outside of the Portland Metro area, it's broken down by county. You might see some of that, but they grow counties big out here. There isn't too much of anything along most of those borders.
posted by furnace.heart at 2:43 PM on July 12, 2016
posted by furnace.heart at 2:43 PM on July 12, 2016
Vampire squid CEOs throw crumbs to workers. Not exciting.
posted by Kirth Gerson at 2:44 PM on July 12, 2016 [9 favorites]
posted by Kirth Gerson at 2:44 PM on July 12, 2016 [9 favorites]
Unless you're the one getting the raise.
posted by griphus at 2:58 PM on July 12, 2016 [10 favorites]
posted by griphus at 2:58 PM on July 12, 2016 [10 favorites]
It's good that these raises are being framed as savvy acts of compassion, because it makes their competitors fighting wage increases look all the more spiteful and awful. I still think a minimum wage increase is essential, but it's good to see not every CEO calling it the death of American employment.
posted by mccarty.tim at 3:10 PM on July 12, 2016 [11 favorites]
posted by mccarty.tim at 3:10 PM on July 12, 2016 [11 favorites]
If so many people think McDonalds and other minimum wage jobs are "starter-jobs" to teach teens how employment works, maybe McDonalds needs to start abusing internships so wage laws no longer apply. I remember when $15/hr started getting traction, one of McDonald's first statements was that they paid their employees more than liberal newspapers paid their interns, which sounded more than a little jealous.
posted by mccarty.tim at 3:18 PM on July 12, 2016 [1 favorite]
posted by mccarty.tim at 3:18 PM on July 12, 2016 [1 favorite]
"Vampire squid CEOs throw crumbs to workers. Not exciting."
I blame Rolling Stone. Vampire squid are pretty cool creatures, and not at all given to sucking your lifeblood and leaving you a soulless husk bound to their will…
posted by Pinback at 3:22 PM on July 12, 2016 [1 favorite]
I blame Rolling Stone. Vampire squid are pretty cool creatures, and not at all given to sucking your lifeblood and leaving you a soulless husk bound to their will…
posted by Pinback at 3:22 PM on July 12, 2016 [1 favorite]
A prayer to the nim gods by Jamie Dimon
posted by JPD at 3:31 PM on July 12, 2016 [1 favorite]
posted by JPD at 3:31 PM on July 12, 2016 [1 favorite]
Seems there are two issues: minimum wage; what to do about vanishing middle class.
Not Bernie, not Hillary, not Donald have addressed the issue of a vanishing middle class and what specifically they would do to change things. The Dems talk about raising minimum wage. Ok. But minimum hardly lifts many out of poverty.
I do not have the answer, but when there is so great a disparity between what those at the top are making and what others earn, clearly that needs changing.
I got through college with G.I. Bill. I worked, made enough to afford a house etc even as a teacher. I could not do this today. This suggests the following:
1. decent jobs now in the cities of the world. 2. most do not now earn enough to buy homes and commute and so they rent, in cities. Rents have shot way up. 3. with high rents, not enough income, there will be no home and a long time paying off college debt.
The magnitude of offshore banking as revealed in Panama Papers and the enormity of incomes for top people in banks and corporations seems a large pool of what has been taken away from the middle class.
posted by Postroad at 3:49 PM on July 12, 2016 [5 favorites]
Not Bernie, not Hillary, not Donald have addressed the issue of a vanishing middle class and what specifically they would do to change things. The Dems talk about raising minimum wage. Ok. But minimum hardly lifts many out of poverty.
I do not have the answer, but when there is so great a disparity between what those at the top are making and what others earn, clearly that needs changing.
I got through college with G.I. Bill. I worked, made enough to afford a house etc even as a teacher. I could not do this today. This suggests the following:
1. decent jobs now in the cities of the world. 2. most do not now earn enough to buy homes and commute and so they rent, in cities. Rents have shot way up. 3. with high rents, not enough income, there will be no home and a long time paying off college debt.
The magnitude of offshore banking as revealed in Panama Papers and the enormity of incomes for top people in banks and corporations seems a large pool of what has been taken away from the middle class.
posted by Postroad at 3:49 PM on July 12, 2016 [5 favorites]
We need to have a deeper think as a society on how we distribute income generate by companies among employees, executives and investors. Then we need legislation to change things.
posted by humanfont at 4:02 PM on July 12, 2016 [4 favorites]
posted by humanfont at 4:02 PM on July 12, 2016 [4 favorites]
It's been a long time since McD's et. al. figured out that adults with responsibilities are a much, much more useful and efficient workforce than teens have ever been and went all-in on that. I don't remember the last time I've seen anyone under the age of 25-30 working in a McDonalds.
FWIW, I've found that to be true in densely-populated areas, but the smaller the population, the more teens working those fast-food positions. Which makes sense, really.
posted by CheesesOfBrazil at 4:06 PM on July 12, 2016 [2 favorites]
FWIW, I've found that to be true in densely-populated areas, but the smaller the population, the more teens working those fast-food positions. Which makes sense, really.
posted by CheesesOfBrazil at 4:06 PM on July 12, 2016 [2 favorites]
//FWIW, I've found that to be true in densely-populated areas, but the smaller the population, the more teens working those fast-food positions. Which makes sense, really.//
It's always jarring when I'm traveling and stop at a fast food joint in the middle of nowhere and the entire staff is under 21.
posted by COD at 4:25 PM on July 12, 2016
It's always jarring when I'm traveling and stop at a fast food joint in the middle of nowhere and the entire staff is under 21.
posted by COD at 4:25 PM on July 12, 2016
For some companies the new FLSA rules concerning Exempt and Non-Exempt employees will probably result in a lot of people getting raises up to $48,000 a year as it's much easier to abuse exempt employees with all sorts of unpaid extra work but you can really put a lot at risk if you start trying to make a whole lot of formerly exempt workers continue to work unpaid overtime. Yeah some shitty companies will just make people do it off the books but those companies need to be shamed and/or sued into oblivion.
posted by vuron at 4:35 PM on July 12, 2016
posted by vuron at 4:35 PM on July 12, 2016
Minimum wage in the US from 1938 to 2015 - minimally interactive graph with comparison of nominal wages and those wages adjusted for inflation. The adjusted peak was in 1968, when the nominal minimum wage was $1.60, which becomes $10.86 in 2015 dollars.
The general trend has been downward from there, until 1990, when minimum wage was finally increased up to $3.80 from $3.35, where it had been since 1980. Since then, it's been a holding pattern, with some bumps and drops in the inflation adjusted wage, as minimum wage was slowly nudged up only after some 8 and 9 year stints (1981-1989, and 1997-2006) when there were no increases.
posted by filthy light thief at 4:44 PM on July 12, 2016 [1 favorite]
The general trend has been downward from there, until 1990, when minimum wage was finally increased up to $3.80 from $3.35, where it had been since 1980. Since then, it's been a holding pattern, with some bumps and drops in the inflation adjusted wage, as minimum wage was slowly nudged up only after some 8 and 9 year stints (1981-1989, and 1997-2006) when there were no increases.
posted by filthy light thief at 4:44 PM on July 12, 2016 [1 favorite]
He's not getting $27 million in gold doubloons.
"The package includes $20.5 million in performance share units, a new pay element tied to future targets....Dimon also got a $5 million cash bonus and a $1.5 million salary."
If Chase doesn't hit those targets, he still makes a lot of money, but it's not the entire $27mil.
posted by Ideefixe at 4:45 PM on July 12, 2016 [1 favorite]
"The package includes $20.5 million in performance share units, a new pay element tied to future targets....Dimon also got a $5 million cash bonus and a $1.5 million salary."
If Chase doesn't hit those targets, he still makes a lot of money, but it's not the entire $27mil.
posted by Ideefixe at 4:45 PM on July 12, 2016 [1 favorite]
Was bank teller ever a well-paying position? My grandparents generation seemed to regard it as such, compared to the fairly low-wage service job it's become today.
posted by dr_dank at 4:55 PM on July 12, 2016
posted by dr_dank at 4:55 PM on July 12, 2016
I'm surprised Starbucks pays so low. I worked there in '99-'00 and I'm pretty sure I was getting like $8.50 an hour. So now the average (not even starting wage) 16 years later is only $1/hr more? Dang.
posted by misskaz at 5:02 PM on July 12, 2016 [1 favorite]
posted by misskaz at 5:02 PM on July 12, 2016 [1 favorite]
Sometimes I don't understand Metafilter. Good news is good news regardless of the motivation. In my mind feeding a starving child or saving a panda from extinction is still good even if it is done to prop-up one's cocktail circuit status. Even better when the value add by the individual is valued by the markets.
Many of the comments in this thread advocate for poverty. As in it is better to have more poor people than people making their ends-meet by doing something that is valued by the markets.
posted by zeikka at 5:18 PM on July 12, 2016 [8 favorites]
Many of the comments in this thread advocate for poverty. As in it is better to have more poor people than people making their ends-meet by doing something that is valued by the markets.
posted by zeikka at 5:18 PM on July 12, 2016 [8 favorites]
Sometimes I don't understand Metafilter
Hint: we understand a PR stunt when we see one.
posted by Reasonably Everything Happens at 5:19 PM on July 12, 2016 [25 favorites]
Hint: we understand a PR stunt when we see one.
posted by Reasonably Everything Happens at 5:19 PM on July 12, 2016 [25 favorites]
Many of the comments in this thread advocate for poverty
Let me clarify my previous directly to this...PR stunts or rhetorical power plays in general have clear strategic goals. They seek to placate greivances and create 'divide>conquer' opportunities.
Ergo, if the wealthiest and most financially savvy corporation goes in on minimum wage increases, it's a large media signal that broader efforts to promote minimum wage changes are not needed.
However, the real effect on long-term poverty from delaying broader minimum wage changes is orders of magnitude larger than what Mssr. Diamond is up to.
Mefi is about expected value.
posted by Reasonably Everything Happens at 5:29 PM on July 12, 2016 [9 favorites]
Let me clarify my previous directly to this...PR stunts or rhetorical power plays in general have clear strategic goals. They seek to placate greivances and create 'divide>conquer' opportunities.
Ergo, if the wealthiest and most financially savvy corporation goes in on minimum wage increases, it's a large media signal that broader efforts to promote minimum wage changes are not needed.
However, the real effect on long-term poverty from delaying broader minimum wage changes is orders of magnitude larger than what Mssr. Diamond is up to.
Mefi is about expected value.
posted by Reasonably Everything Happens at 5:29 PM on July 12, 2016 [9 favorites]
Seeing as how Jamie Dimon belongs in jail, distributing some mundane (but helpful nonetheless) goodwill in the form of a marginal wage hike is probably money well spent.
posted by rhizome at 5:56 PM on July 12, 2016 [1 favorite]
posted by rhizome at 5:56 PM on July 12, 2016 [1 favorite]
Just to be clear – the argument is that companies should not raise the salaries of their lowest paid employees as it harms the overall universal good?
posted by zeikka at 5:59 PM on July 12, 2016 [4 favorites]
posted by zeikka at 5:59 PM on July 12, 2016 [4 favorites]
I'd respect CEOs a lot more when they pull this stuff if they chained the lowest paid worker's salary to that of their own compensation (salary+stock+benefits -- say, no more than 150 times the lowest-paid employee), but that's never going to happen.
At least we'll start learning what the ratio is (to median salary) in 2018. The Starbucks ratio is currently about 669. Starbucks raising their base pay for baristas as described above is ABSOLUTELY a stunt -- even if it helps people a little bit, it still ain't that much skin off the companies top dogs.
posted by mostly vowels at 6:31 PM on July 12, 2016 [4 favorites]
At least we'll start learning what the ratio is (to median salary) in 2018. The Starbucks ratio is currently about 669. Starbucks raising their base pay for baristas as described above is ABSOLUTELY a stunt -- even if it helps people a little bit, it still ain't that much skin off the companies top dogs.
posted by mostly vowels at 6:31 PM on July 12, 2016 [4 favorites]
Just to be clear – the argument is that companies should not raise the salaries of their lowest paid employees as it harms the overall universal good?
Not quite.
The argument is much like the one about major private philanthropy: yes, it is probably a net good to the people getting the money. However, it will not be a net good if this becomes a way to argue against larger social goods by pointing to the occasional voluntary acts of members of the ultra-wealthy class.
It's a very pretty tree they've planted here. Much of the rest of the forest is on fire.
posted by kewb at 7:04 PM on July 12, 2016 [20 favorites]
Not quite.
The argument is much like the one about major private philanthropy: yes, it is probably a net good to the people getting the money. However, it will not be a net good if this becomes a way to argue against larger social goods by pointing to the occasional voluntary acts of members of the ultra-wealthy class.
It's a very pretty tree they've planted here. Much of the rest of the forest is on fire.
posted by kewb at 7:04 PM on July 12, 2016 [20 favorites]
yeah, I don't get excited by individual employers choosing to raise their wages. What gets me excited is law mandating that they raise their wages.
So yes and no. Yes, i think the legal minimum wage should be higher than it is now in most places in the US.
In this case I don't think that actually matters. I mean, since when has bank teller been a bare minimum wage position? These people handle cash money for heavens sake. I would hope the market value of this job is above minimum wage.
Now, whether an increase in minimum wage pushes up wages that were already above minimum wage is the kind of thing that I'm not enough of an economist to speculate on. I dunno.
Just to be clear – the argument is that companies should not raise the salaries of their lowest paid employees as it harms the overall universal good?
The "argument" is that a dude who makes $27M a year shouldn't piss on peoples' heads and then tell them it's raining.
posted by GuyZero at 7:22 PM on July 12, 2016 [4 favorites]
So yes and no. Yes, i think the legal minimum wage should be higher than it is now in most places in the US.
In this case I don't think that actually matters. I mean, since when has bank teller been a bare minimum wage position? These people handle cash money for heavens sake. I would hope the market value of this job is above minimum wage.
Now, whether an increase in minimum wage pushes up wages that were already above minimum wage is the kind of thing that I'm not enough of an economist to speculate on. I dunno.
Just to be clear – the argument is that companies should not raise the salaries of their lowest paid employees as it harms the overall universal good?
The "argument" is that a dude who makes $27M a year shouldn't piss on peoples' heads and then tell them it's raining.
posted by GuyZero at 7:22 PM on July 12, 2016 [4 favorites]
this is all pretty pathetic compared to the guy who paid all his people $70k/year, including himself.
IIRC, this story was more complicated, the CEO was later sued by his cofounder brother for paying personal expenses on the company card alleged to amount to hundreds of thousands of dollars, and primarily a dispute over for bonus structures the size of roughly $1M dollars a year. While courts found in favor of the CEO brother, it seems the suit mostly comes down to whether the events rise to the level of shareholder oppression, not on the facts alleged.
Interestingly, the salary increases came after he was served for the lawsuit and before the suit was filed on court, and even the court findings state that "a desire for favorable publication" was a partial motivation for the salary increases. Not so different than today's Op-Eds, except smaller in some scales.
posted by pwnguin at 7:35 PM on July 12, 2016 [4 favorites]
IIRC, this story was more complicated, the CEO was later sued by his cofounder brother for paying personal expenses on the company card alleged to amount to hundreds of thousands of dollars, and primarily a dispute over for bonus structures the size of roughly $1M dollars a year. While courts found in favor of the CEO brother, it seems the suit mostly comes down to whether the events rise to the level of shareholder oppression, not on the facts alleged.
Interestingly, the salary increases came after he was served for the lawsuit and before the suit was filed on court, and even the court findings state that "a desire for favorable publication" was a partial motivation for the salary increases. Not so different than today's Op-Eds, except smaller in some scales.
posted by pwnguin at 7:35 PM on July 12, 2016 [4 favorites]
So, I just skimmed, and did a quick search, but didn't see this: My overdraft protecting with Chase is changing from credit card to either savings, or nothing. I guess this is a seemingly altruistic gesture that ultimately costs most people.
posted by kellyblah at 7:57 PM on July 12, 2016
posted by kellyblah at 7:57 PM on July 12, 2016
I had a business teacher who said great leadership was figuring out what direction people were already headed in and racing out in front of them and yelling "This way!"
New York State Department of Labor: Minimum Wage
NYC - Big Employers (of 11 or more)
12/31/16
$11.00
12/31/17
$13.00
12/31/18
$15.00
posted by srboisvert at 7:59 PM on July 12, 2016 [13 favorites]
New York State Department of Labor: Minimum Wage
NYC - Big Employers (of 11 or more)
12/31/16
$11.00
12/31/17
$13.00
12/31/18
$15.00
posted by srboisvert at 7:59 PM on July 12, 2016 [13 favorites]
I love how the press has swallowed the terminology in the press release. Heard it on NPR this morning now, looking at CNN and LA Times show they are repeating it.
If they employee some people $12/hour then the minimum wage at Morgan Chase is $12/hour, not "between $12 and $16.50." Christ, people, you are not required to unthinkingly use the same terminology their HR and PR consultants came with to make people feel better about their corporate policies.
posted by mark k at 8:44 PM on July 12, 2016 [14 favorites]
If they employee some people $12/hour then the minimum wage at Morgan Chase is $12/hour, not "between $12 and $16.50." Christ, people, you are not required to unthinkingly use the same terminology their HR and PR consultants came with to make people feel better about their corporate policies.
posted by mark k at 8:44 PM on July 12, 2016 [14 favorites]
I'd be more concerned that the 1%ers seem to be fearing that the other shoe is about to drop.
Perhaps they've got the message that The Hamptons is not a defensible position.
posted by fullerine at 12:55 AM on July 13, 2016
Perhaps they've got the message that The Hamptons is not a defensible position.
posted by fullerine at 12:55 AM on July 13, 2016
If the actual people doing the actual work at corporations were regarded to be shareholders in the operation the same way that people buying stock in corporations were regarded as shareholders, then either "maximizing shareholder value", (long a non-legal, non-binding, yet socially contracted metric) would involve real wages rising according to the health of the corporation, or it would be abandoned entirely (most likely IMO) as how corporations operate.
The idea that a rise in wages for employees means that a company has to raise their charged rates (which seems to be a standard economist trope) shows exactly how divorced the concept of what the work of a corporation actually is from what the stock market shareholders demand.
Raise the wages, reduce your profits, raise the entire economy. You're still making money as a rent seeker, just not as much as before. But you'll benefit in the long run.
posted by hippybear at 1:54 AM on July 13, 2016 [5 favorites]
The idea that a rise in wages for employees means that a company has to raise their charged rates (which seems to be a standard economist trope) shows exactly how divorced the concept of what the work of a corporation actually is from what the stock market shareholders demand.
Raise the wages, reduce your profits, raise the entire economy. You're still making money as a rent seeker, just not as much as before. But you'll benefit in the long run.
posted by hippybear at 1:54 AM on July 13, 2016 [5 favorites]
If Chase doesn't hit those targets, he still makes a lot of money, but it's not the entire $27mil.
Over the entire course of a lifetime of work, most people do not make even a large fraction of his annual salary. He has not cured cancer, ended a war, or lifted the poor to a higher standard of living. Nothing he has done is worth that kind of money, so long as most of the people who work much harder than he does are so badly compensated for it.
posted by Kirth Gerson at 4:47 AM on July 13, 2016 [13 favorites]
Over the entire course of a lifetime of work, most people do not make even a large fraction of his annual salary. He has not cured cancer, ended a war, or lifted the poor to a higher standard of living. Nothing he has done is worth that kind of money, so long as most of the people who work much harder than he does are so badly compensated for it.
posted by Kirth Gerson at 4:47 AM on July 13, 2016 [13 favorites]
My old CEO boss, who is a genteel Southern gentleman type in his 70s, had to fill out a survey one year for some award that we won and one of the questions was, "What other CEOs in business do you admire?" He told me, "None of them, to tell you the truth. They all think they need too much money. Leave that blank."
I knew how much money he made (and had), and it was vastly more than I will ever see in my lifetime - but still a laughable fraction of what these guys are hauling in. There is just no reason for it. Nobody needs that.
posted by something something at 6:02 AM on July 13, 2016 [6 favorites]
I knew how much money he made (and had), and it was vastly more than I will ever see in my lifetime - but still a laughable fraction of what these guys are hauling in. There is just no reason for it. Nobody needs that.
posted by something something at 6:02 AM on July 13, 2016 [6 favorites]
Dimon is trying to jawbone the fed on wage inflation. Some of that wage inflation is also real, so this is just him responding to the market. But none of this press release is really about "look at me- aren't I great".
If he can get the fed to be more comfortable raising rates he sees a massive uplift in his earnings. Just to put things in perspective - 1Q16 saw a .07% increase in the spread between his cost of deposits and his cost of loans. This small change is worth 2.8 Bil dollars a year to chase - give or take. So if the fed raises rates .25% its eventually worth billions of dollars to him.
posted by JPD at 7:00 AM on July 13, 2016 [1 favorite]
If he can get the fed to be more comfortable raising rates he sees a massive uplift in his earnings. Just to put things in perspective - 1Q16 saw a .07% increase in the spread between his cost of deposits and his cost of loans. This small change is worth 2.8 Bil dollars a year to chase - give or take. So if the fed raises rates .25% its eventually worth billions of dollars to him.
posted by JPD at 7:00 AM on July 13, 2016 [1 favorite]
Like, what good is owning a piece of fabulously expensive jewelry if you have to have it insured and kept in a safety deposit box and can't enjoy it without worrying?
That's exactly the thing - you have lawyers draft all the insurance documentation for you, so you don't have to think about it, and you don't keep it in a safety deposit box, you just wear it like normal and leave it lying around the house. Wealthy people don't worry about their "fabulously expensive" stuff much because fabulously expensive is relative, and once you can easily afford it, it's no big deal.
posted by Tomorrowful at 7:54 AM on July 13, 2016 [2 favorites]
That's exactly the thing - you have lawyers draft all the insurance documentation for you, so you don't have to think about it, and you don't keep it in a safety deposit box, you just wear it like normal and leave it lying around the house. Wealthy people don't worry about their "fabulously expensive" stuff much because fabulously expensive is relative, and once you can easily afford it, it's no big deal.
posted by Tomorrowful at 7:54 AM on July 13, 2016 [2 favorites]
If they employee some people $12/hour then the minimum wage at Morgan Chase is $12/hour, not "between $12 and $16.50." Christ, people, you are not required to unthinkingly use the same terminology their HR and PR consultants came with to make people feel better about their corporate policies.
I took this "raise salaries, over time, for his lowest paid workers from $10.15 an hour to $12 to $16.50 an hour." to mean that looking at the jobs that currently pay $10.15 per hour, some of those jobs would be raised to $12 and some would be raised to $16.50 and some would end up somewhere in between. Presumably which jobs end up where will be determined by whatever market forces are requiring them to raise their wages.
posted by If only I had a penguin... at 7:59 AM on July 13, 2016
I took this "raise salaries, over time, for his lowest paid workers from $10.15 an hour to $12 to $16.50 an hour." to mean that looking at the jobs that currently pay $10.15 per hour, some of those jobs would be raised to $12 and some would be raised to $16.50 and some would end up somewhere in between. Presumably which jobs end up where will be determined by whatever market forces are requiring them to raise their wages.
posted by If only I had a penguin... at 7:59 AM on July 13, 2016
Which means the lowest paid individual is only making a paltry $12 an hour, regardless of how much money their better paid peers make. $12 an hour works out to a pre-tax amount of $480 per week, assuming they even get 40 hours a week.
For comparison, an all-cash $27 million a year would work out to around $519,000 a week assuming no vacation, plus the CEO is always on call, and likely works 60-80 hour weeks regularly, with 100+ hour weeks at crunch time.
posted by fragmede at 8:22 AM on July 13, 2016
For comparison, an all-cash $27 million a year would work out to around $519,000 a week assuming no vacation, plus the CEO is always on call, and likely works 60-80 hour weeks regularly, with 100+ hour weeks at crunch time.
posted by fragmede at 8:22 AM on July 13, 2016
I've been an executive assistant to CEOs my whole career and am regularly astonished at the level to which the job consumes their lives - I absolutely could not and would not want to do what they do. But man, it's not worth $27 million a year by any stretch.
posted by something something at 9:12 AM on July 13, 2016 [1 favorite]
posted by something something at 9:12 AM on July 13, 2016 [1 favorite]
It's better than not raising wages, and it's likely a response to the US having strong employment, at least for people who haven't just left the workforce because of crappy jobs with crappy wages.
posted by theora55 at 10:12 AM on July 13, 2016
posted by theora55 at 10:12 AM on July 13, 2016
This was not quite the same situation, but my take as a former retail worker: In 2013 (or possibly 2014?), Gap Inc announced with much fanfare that they were raising their minimum wage to $10. Lots of verbiage about fair pay and whatnot. They also asked store employees to wear white on the day the increase went into effect, to "start a conversation" or some such nonsense. I worked for Gap stores on and off for years, but most recently at the flagship store in San Francisco in 2012, where I made $11.50 an hour. Often I would be scheduled for three hours in a week. I can't properly convey the soul-sucking horror that was working there (I've commented before about the time I was lectured for being one minute late returning from my 15, or the time the CEO made a store visit on Thanksgiving Day (yes we were open) and ate the last of the turkey from the employee potluck), but even having escaped it into a decently-paying full-time job, the idea of being asked to dress up in white clothes (that I didn't own and would have to buy with my employee discount) to fawn over an "altruistic" gesture that wouldn't even affect my wage filled me with a white-hot rage. If I had still been working there I probably would have made a point of wearing head-to-toe black.
posted by sunset in snow country at 10:20 AM on July 13, 2016
posted by sunset in snow country at 10:20 AM on July 13, 2016
this is all pretty pathetic compared to the guy who paid all his people $70k/year, including himself.
Setting aside the news this week that proved the $70k thing was probably just to get good PR ahead of some real bad stuff coming out in a lawsuit, $70k was the minimum salary. Besides his own salary, he did not implement pay cuts to everyone making over $70k.
posted by sideshow at 10:32 AM on July 13, 2016
Setting aside the news this week that proved the $70k thing was probably just to get good PR ahead of some real bad stuff coming out in a lawsuit, $70k was the minimum salary. Besides his own salary, he did not implement pay cuts to everyone making over $70k.
posted by sideshow at 10:32 AM on July 13, 2016
I have always been, and continue to be, completely baffled by this. What good is a certain amount of money after your needs and wants have been fulfilled?
I always wondered the same thing. Then I watched the documentary The One Percent, made by Jamie Johnson, at that time the 26 year-old heir to the Johnson & Johnson fortune. Highly recommended viewing.
One part that I will never, ever forget is the answer Paul Orfaela, founder of Kinko's, gave when asked by Jamie, "Do you want to make hundreds of millions of dollars on top of what you already have?" It is the very epitome of selfish greed.
posted by bologna on wry at 6:43 PM on July 13, 2016 [1 favorite]
I always wondered the same thing. Then I watched the documentary The One Percent, made by Jamie Johnson, at that time the 26 year-old heir to the Johnson & Johnson fortune. Highly recommended viewing.
One part that I will never, ever forget is the answer Paul Orfaela, founder of Kinko's, gave when asked by Jamie, "Do you want to make hundreds of millions of dollars on top of what you already have?" It is the very epitome of selfish greed.
posted by bologna on wry at 6:43 PM on July 13, 2016 [1 favorite]
Wow, I watced part of that doc and it's pretty great so far, thanks for the tip bologna_on_wry!
The thing that sticks with me in all of this is that rent always rises to match any increase in peoples' salaries. So, we have to look at the housing market, which is the only way to get out of renting and rent increases (outside of rent control), and whether people can even ever amass enough purchasing power to buy a house in their lives. If the average (mean, whatever) person can't, then that's a pretty shitty policy. I wonder if something like that could be said to be negative population growth in homeownership or similar metaphor.
posted by rhizome at 8:34 PM on July 13, 2016
The thing that sticks with me in all of this is that rent always rises to match any increase in peoples' salaries. So, we have to look at the housing market, which is the only way to get out of renting and rent increases (outside of rent control), and whether people can even ever amass enough purchasing power to buy a house in their lives. If the average (mean, whatever) person can't, then that's a pretty shitty policy. I wonder if something like that could be said to be negative population growth in homeownership or similar metaphor.
posted by rhizome at 8:34 PM on July 13, 2016
After the first $10M or so, it seems like having so much to lose (property, the goodwill of sycophantic orbiters or "friends") would harm your overall quality of life.
The general rule of thumb is that you live on 4 percent of your total wealth.* Amassing a million dollars in retirement funds means living on 40k a year. Having amassed $10M, it would be prudent to live on no more than $400k a year. Which is a lot, sure. But it goes a less far when living in high rent, high tax locations like NYC or SF where 50 percent of your income might be taxed. And you're going to be means tested out of everything, including scholarships and potentially social security.
That said, Mitt Romney having $100 million in IRAs is pretty much an odious abuse of tax laws.
*The Trinity study only looked at 30 year rates, so if your life expectancy has 60+ years remaining, arguably you should withdraw less than 4 percent.
posted by pwnguin at 9:51 PM on July 13, 2016 [1 favorite]
The general rule of thumb is that you live on 4 percent of your total wealth.* Amassing a million dollars in retirement funds means living on 40k a year. Having amassed $10M, it would be prudent to live on no more than $400k a year. Which is a lot, sure. But it goes a less far when living in high rent, high tax locations like NYC or SF where 50 percent of your income might be taxed. And you're going to be means tested out of everything, including scholarships and potentially social security.
That said, Mitt Romney having $100 million in IRAs is pretty much an odious abuse of tax laws.
*The Trinity study only looked at 30 year rates, so if your life expectancy has 60+ years remaining, arguably you should withdraw less than 4 percent.
posted by pwnguin at 9:51 PM on July 13, 2016 [1 favorite]
We need inflation bad and wages are a great way to do it
posted by Ironmouth at 9:12 AM on July 14, 2016 [1 favorite]
posted by Ironmouth at 9:12 AM on July 14, 2016 [1 favorite]
Jamie Dimon's misguided op-ed, and the right economic lessons of the JPM pay raise - "Here's page 12 from a presentation in February by JP Morgan's head of consumer & community banking... The presentation boasts about JPMorgan's automation of many tasks that were once handled by tellers: '~90% of all teller transactions will be ATM-enabled (up from ~50% historically)'... The bank employs 12,000 fewer transactional staffers than it did in 2012. We're guessing those staffers didn't all retire."
Look, we’re not criticising layoffs, the closing of bank branches, or the automation of routine tasks in finance or any other sector. To stop or slow such automation is neither possible nor desirable. FT Alphaville is one of those pro-market-forces-plus-redistribution sellout neoliberal types. As far as we’re concerned, Jamie Dimon and other managers can handle their employment issues however they like. We’d rather the burden for a strong labour market and rapid wage growth fall on the central bank and fiscal policymakers.posted by kliuless at 12:00 PM on July 14, 2016
But it’s awfully rich for Dimon to then write a self-serving article proclaiming his wholesome contribution to reducing income inequality for a class of workers that his bank was proud to be shedding just a few months earlier...
Yet despite the hypocrisy, the JPMorgan pay raise does neatly encapsulate a number of prominent economic themes from recent years. The labour market has tightened considerably... Routine jobs continue to be automated, including some services jobs...
But it’s also likely that many of the retail, lower-paid workers still employed at JPMorgan will be earning that higher wage by implementing a more sophisticated, interpersonal skillset than was traditionally needed for the earlier teller jobs, dealing directly with bank customers more often and more intensively. These roles complement the newly-automated routine tasks handled by ATMs.
So if the fed raises rates .25% its eventually worth billions of dollars to him.
I was astounded by the extent to which the fed's rates directly affected me as a bank employee. Once the Fed raised rates last year a ton of stuff that had been on hold while we were in "expense control mode" suddenly got approved including things like a big raise and then a promotion (both were only approved after the fed raised rates), a bonus that was nearly twice the size of last year's, travel to sites that haven't seen someone from my department in two years, office remodels for nicer and healthier offices, and a few other approvals that people had been waiting on to expand their teams and hire more people.
I chalk it up to the fact that a bank is more integral component of the economy than say, an electronics manufacturer or retailer of a similar size so it makes sense to me that there are large parts of the business that are essentially controlled by government entities.
posted by VTX at 1:03 PM on July 14, 2016
I was astounded by the extent to which the fed's rates directly affected me as a bank employee. Once the Fed raised rates last year a ton of stuff that had been on hold while we were in "expense control mode" suddenly got approved including things like a big raise and then a promotion (both were only approved after the fed raised rates), a bonus that was nearly twice the size of last year's, travel to sites that haven't seen someone from my department in two years, office remodels for nicer and healthier offices, and a few other approvals that people had been waiting on to expand their teams and hire more people.
I chalk it up to the fact that a bank is more integral component of the economy than say, an electronics manufacturer or retailer of a similar size so it makes sense to me that there are large parts of the business that are essentially controlled by government entities.
posted by VTX at 1:03 PM on July 14, 2016
But it’s also likely that many of the retail, lower-paid workers still employed at JPMorgan will be earning that higher wage by implementing a more sophisticated, interpersonal skillset than was traditionally needed for the earlier teller jobs, dealing directly with bank customers more often and more intensively. These roles complement the newly-automated routine tasks handled by ATMs.
This actually makes a TON of sense. Of course they gave a raise to the line employees. Most of the simple parts of their job have been automated so the stuff that's left is a lot more complicated.
I would expect that a teller who does mostly routine stuff and occasionally does a more complex transaction to be less experiences and paid less than a teller who does nothing but complex transactions.
posted by VTX at 1:12 PM on July 14, 2016
This actually makes a TON of sense. Of course they gave a raise to the line employees. Most of the simple parts of their job have been automated so the stuff that's left is a lot more complicated.
I would expect that a teller who does mostly routine stuff and occasionally does a more complex transaction to be less experiences and paid less than a teller who does nothing but complex transactions.
posted by VTX at 1:12 PM on July 14, 2016
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