This post was published at TheRealNews
Earlier today, we mentioned the bizarre story of a San Francisco animal shelter which was using a low cost, high-tech robot security guard to purge homeless people outside its facilities. The San Francisco SPCA branch had contracted Knightscope to provide a K5 robot (the same model which in July committed suicide at a mall fountain) for securing the outdoor spaces of the animal shelter.
Why use a robot to chase away humans? Simple: money – it costs the SPCA $7/hour to rent the robot, about $3 less than the minimum wage in California, and according to San Francisco Business Times, the robot was deployed as a ‘way to try dealing with the growing number of needles, car break-ins and crime that seemed to emanate from nearby tent encampments of homeless people.’
This post was published at Zero Hedge on Dec 15, 2017.
As the homeless crisis on America’s West Coast forces many cities to the financial brink, one innovative animal shelter in San Francisco is using a low cost, high-tech robot security guard to shoo away the homeless outside its facilities, the San Francisco Business Times reported.
The San Francisco branch of the SPCA (the Society for the Prevention of Cruelty to Animals) contracted Knightscope to provide a k5 robot (the same model which in July commited suicide at a mall fountain) for securing the outdoor spaces of the animal shelter. Knightscope’s business model allows the SPCA to rent the robot for around $7 an hour, which is about $3 less than the minimum wage in California. According to San Francisco Business Times, the robot was deployed as a ‘way to try dealing with the growing number of needles, car break-ins and crime that seemed to emanate from nearby tent encampments of homeless people.
This post was published at Zero Hedge on Dec 14, 2017.
Amazon delivery drivers in the UK are asked to deliver up to 200 packages a day while earning less than minimum wage for agencies contracted by Amazon. The drivers reportedly have to keep schedules so tight they are forced to skip rest breaks and urinate in bottles, according to an investigation by UK’s Sunday Mirror. The report comes weeks after the newspaper reported on brutal work conditions at an Amazon UK warehouses. “If the drivers return to the Amazon depot without having made enough attempts to deliver parcels, or if they can’t work for any reason, they risk having their pay cut, being fined or denied future shifts,” reports the Mirror.
The allegations surfaced after investigative reporter Dan Warburton spent a day with an Amazon delivery driver so he could experience the “impossible” schedules that often exceed their 11 hour shifts – a limit mandated by UK law.
This post was published at Zero Hedge on Dec 11, 2017.
Casual dining investors, despite the retail route, have become increasingly optimistic over the past month and a half with several of the largest names in the industry rallying 15-20% into the holiday season.
As TDn2K points out, part of the optimism is attributable to a recent “acceleration” in average check size across the restaurant space with comps up 2.4% in November and 2.5% in October. Despite many brands focusing on price promotions to drive sales and traffic amid a decline in mall/retail foot traffic, both figures are higher than the 2.0% check growth experienced the first nine months of the year.
This post was published at Zero Hedge on Dec 9, 2017.
Minimum wage laws are often put forward as regulations that help everyone. If anyone is hurt, it is wealthy capitalists who can afford to lose a little money. Unfortunately, this is rarely the reality. In order to decode the impact of minimum wage laws, one has to examine the effects on multiple levels, examining both the seen and the unseen consequences. Increases in wages have to be paid for somehow, and given the interdependent relationship of a market, there are three major players who are impacted by minimum wages: employers, employees, and the consumers.
1. Employers Employers are faced with the increased costs of the factors of production without any corresponding increase in value. Although minimum wages are argued by pointing at multinational companies and the profits they are raking in, MacDonald’s and Wal-Mart are not the only ones paying minimum wages. Indeed, they are the least affected, since their enormous profits enable them to cope with the increase in wages.
It is the small emerging businesses that are harmed the most, the local businesses that provide employment in their neighborhood to people who would have otherwise remained unemployed. Minimum wages punish small time entrepreneurs by decreased profits – especially when profit margins are razor thin, as is usually the case. This fact helps to deter entrepreneurs from opening businesses, and this is doubly unfortunate when we consider the fact that minimum wages are often a legislative reaction to an excess labor supply in the first place. When wages are low is precisely the time when we need new entrepreneurs the most.
This post was published at Ludwig von Mises Institute on Dec 1, 2017.
A deputy sheriff pays a visit to a small business. He confronts the owner.
DS: I see you got a “help wanted” sign in your window.
Owner: That is correct.
DS: How much is the starting wage?
Owner: The federal minimum wage.
DS: We got a local minimum wage of $15 an hour.
Owner: I cannot afford that much.
DS: That don’t cut it with me, boy. The city government says you got to pay a living wage.
Owner: I already do. All of my employees are alive.
DS: You trying to make me look stupid, boy?
Owner: You don’t need any help from me.
DS: I see. A smart ass. Well, we got ways of dealing with smart asses. I’m writing you up. You’re going to pay a $10,000 fine, I expect.
Owner: That’s outrageous.
DS: No, it ain’t. $334,000 is outrageous. That’s what Seattle collects. We’re real lenient around here.
Owner: But I cannot afford to pay $15/hour.
DS: Well, then, you need to go into another line of work.
Owner: But I have invested everything I own in this business. I took out a large loan.
DS: Then you better have gotten someone to co-sign the note.
This post was published at Gary North on November 09, 2017.
America’s liberal left coast states count themselves among the most adamant supporters of controversial pieces of legislation intended to support low-income families. From their stunningly high income tax rates to their $15 minimum wage mandates, states like California and Washington are leading the charge on implementing Bernie’s socialist agenda.
Of course, some of the biggest advocates of that socialist agenda are the billionaire leaders of Silicon Valley’s largest tech companies…which is precisely why it’s so ironic that it’s the “tech boom” being enjoyed by those billionaires that has resulted in surging housing prices and what SFGate described earlier today as a “homeless explosion pushing West Coast cities to the brink.”
Housing prices are soaring here thanks to the tech industry, but the boom comes with a consequence: A surge in homelessness marked by 400 unauthorized tent camps in parks, under bridges, on freeway medians and along busy sidewalks. The liberal city is trying to figure out what to do.
“I’ve got economically zero unemployment in my city, and I’ve got thousands of homeless people that actually are working and just can’t afford housing,” said Seattle City Councilman Mike O’Brien. “There’s nowhere for these folks to move to.”
This post was published at Zero Hedge on Nov 6, 2017.
While an unhampered market remains elusive in both countries, government policies are more anti-business in Canada than in the United States, and the gap appears to be widening. As state governments in the U. S. are trying to attract business investment, Canadian governments seem intent on granting their wishes.
As an example, Ontario’s Liberal government is responsible for high electricity costs, new labour laws (including a huge increase in the minimum wage), a cap-and-trade program, and other regulations which are prompting many businesses, including Magna International, to reconsider their plans. A report published by the Fraser Institute on October 12th tells us:
In July 2017 Magna testified at a government hearing on the proposed overhaul of labour legislation that the high cost of operating in Ontario had led it to reconsider future investments and production in the province, especially as neighboring states in the US are pursuing policies to attract investment.
Bill Morneau, Canada’s Minister of Finance, is preparing to impose further restrictions on business investment. His proposed policy will limit ‘passive investment’ within a small business, because in his view this money should only be invested in ‘active business’ i.e. the actual business conducted by the small business corporation.
This post was published at Ludwig von Mises Institute on November 4, 2017.
One of our preferred “off beat” economic indicators is how many workers apply at any one given moment in time for jobs that are hardly considered career-track. An example of this is the number of applicants for minimum wage line cook jobs at McDonalds, or flight attendant positions at Delta Airlines; conveniently, this is a series which we have tracked on and off for the past 7 years.
As regular readers may recall, back in October 2010, the Atlanta-based carrier received 100,000 applications for 1,000 jobs, an “acceptance ratio” of 1.0%. Things appeared to improve modestly in 2012 when Bloomberg reported that Delta had received 22,000 applicants for 300 flight attendant jobs: this pushed the acceptance ratio slightly higher to 1.3%, as by this point the job market had improved somewhat, and there were far better job career options available.
Fast forward to today when things have turned decidedly more grim for the US job market once again, at least based on this one particular indicator. According to CNN, Delta is once again on the hunt for new flight attendants, and has roughly 1,000 open positions for 2018, although this year the competition is virtually unprecedented: so far, Delta has received more than 125,000 applications for this hiring round, which all else equal would result in an acceptance ratio of 0.8%. Note, we said “virtually unprecedented” because this year ratio of applicants to open positions is identical to last year, when 150,000 people applied for 1,200 flight attendant jobs, resulting in an identical, 0.8% acceptance ratio.
So what makes it such a tough gig to land?
“You need to not only be a customer service professional, but also a safety expert,” said Ashton Morrow, a Delta spokeswoman.
Political correctness aside, you have to be young, relatively good looking, preferably a female (sorry, sexism does exist)… oh and willing to accept next to minimum wage.
This post was published at Zero Hedge on Oct 23, 2017.
The hunt for taxes has turned to employees of companies. Any benefit you give an employee is considered ‘soft-income’ and is to be taxed. In the USA, the maximum value of a gift I can hand an employee is $25. I can’t even give them a decent bottle of champagne for New Years.
In Canada, this same idea of taxing any employee benefit has gone all the way to hunting the minimum wage earners. The politicians have classified any discount an employee gets as tax-avoidance and they want their nickel and dime. A minimum wage store employee who gets a 20% discount on anything the store sells or if a waitress gets a free meal while working is to be taxed. The Income Tax Act of the Canada Revenue Agency is now targeting not the ‘rich’ but minimum wage earners since the rich are leaving. When an employee receives any sort of a discount on merchandise or a free meal because of their employment, the value of the discount is to be included in the employee’s income and taxed.
This post was published at Armstrong Economics on Oct 20, 2017.
Last Friday, in an attempt at humor, we shared a satirical note from The Onion suggesting that Hillary had already begun work on a follow-up book, entitled “What Also Happened,” intended to define precisely who was to blame for the failure of her first book, “What Happened.”
Alas, if prices are any indicator of demand, which they’re pretty much universally accepted to be unless you’re discussing minimum wages with Bernie Sanders, then Hillary may want to double down on efforts to rush out the sequel as both Amazon and Walmart have decided to slash prices of “What Happened” by 40% before the books even hit shelves.
After Hillary’s publisher Simon and Schuster suggested a price of $30, Amazon slashed prices to $17.99 earlier today…
This post was published at Zero Hedge on Sep 11, 2017.
Generally when we see news of a new minimum wage law it relates to a city or state raising it. Missouri went in the opposite direction recently, instituting a rule which forbids any local government entities from instituting a minimum wage which is higher than that state minimum. (Currently sitting at $7.70 per hour.)
That’s going to cause considerable consternation for people in St. Louis who only recently received a raise to $10.00 per hour because of a municipal law. (Associated Press)
Thousands of workers in St. Louis will likely see smaller paychecks starting Monday, when a new Missouri law takes effect barring local government from enacting minimum wages different than the state minimum.
This post was published at Zero Hedge on Aug 28, 2017.
/ Aug 18, 2017 8:10 PM
We’ve spent a lot of time this year discussing the complete collapse of mall-based retailers, a collapse which has resulted in more store closures in Q1 2017 than all of 2016 and will likely claim more victims by the end of this year than any year since the great recession nearly a decade ago. Here are a couple of recent examples:
Visualizing America’s Retail Apocalypse 2017 Will Be The Worst Year For US Retail In History “The Retail Bubble Has Now Burst”: A Record 8,640 Stores Are Closing In 2017 But those mall-based apparel companies aren’t the only ones suffering the dire consequences of collapsing mall traffic. For years, the casual dining space has become more and more saturated with new concepts resulting in thinner and thinner margins for the restaurant industry. Now, with foot traffic in malls collapsing these same restaurants are about to experience the brutal realization that declining traffic, massive fixed costs, rising minimum wages and razor thin margins aren’t a great combo.
Thankfully, Barclays’ restaurant team, led by Jeffrey Bernstein, has identified which publicly-traded restaurants are about to get screwed the most. Here’s a summary:
Of the large publicly-traded casual dining chains, Cheesecake Factory ‘wins’ the ‘most screwed’ award with 93% of their locations heavily dependent on mall traffic.
This post was published at Zero Hedge by Tyler Durden.
Anyone who has a basic understanding of elementary-level arithmetic and some common sense can easily explain why raising the minimum wage is bad for employment levels. In a nutshell, higher labor costs simply improve the payback profile of capital investments in technology thus accelerating job losses.
We recently shared the following example regarding California’s minimum wage hike from $10 per hour to $15. At $10 per hour and a 10-year payback, employers may be reluctant to invest in new technology. But, at $15 per hour and a 6-years payback, that investment become a no-brainer.
This post was published at Zero Hedge on Aug 16, 2017.
Ask any farmer in California what keeps them up at night and we would guess that nearly all of them would list ‘labor shortages’ and ‘water access’ as their top two concerns. Ironically, despite over 90 million American citizens choosing to sit out of the labor force and California having one of the highest minimum wage rates in the country, farmers in the Golden State struggle every year to find enough labor to keep fruits and vegetables from literally rotting on the vine.
Meanwhile, as the new administration promises to crack down on illegal immigrants, farmers are feeling the labor shortages in 2017 more than ever. As the Wall Street Journal notes today, many farmers have turned to the H-2A agricultural visa program to recruit temporary workers from Mexico but the process is generally described as “bureaucratic, costly and time-consuming.”
This post was published at Zero Hedge on Aug 8, 2017.
In April, the Fed’s otherwise boring Beige Book revealed a striking anecdote about the current state of the US labor market: as the Boston Fed commented at the time, the qualified labor shortage had gotten so bad, that the hit rate on hiring after a simple math and drug test, has collapsed below 50%. To wit:
Labor markets in the First District continued to tighten somewhat. Many employers sought to add modestly to head counts (although one manufacturer laid off about 4 percent of staff over the last year), while wage increases were modest. Some smaller retailers noted increasing labor costs, in part driven by increases in state minimum wages being implemented over a multi-year period. Restaurant contacts, particularly in heavy tourism regions, expressed concern about possible labor shortages this summer, exacerbated by an expected slowdown in granting H-2B visas. Half of contacted manufacturers were hiring, though none in large numbers; several firms said it was hard to find workers.
One respondent said that during a recent six-month attempt to add to staff for a new product, two-thirds of applicants for assembly line jobs were screened out before hiring via math tests and drug tests; of 400 workers hired, only 180 worked out.
Fast forward to today when we have a practical example of how severe this quandary has become for employers.
This post was published at Zero Hedge on Jul 31, 2017.