Published on: May 17, 2021
We had a story last week about how numerous companies are competing for low-wage workers, which prompted me to comment:
I know that there is a growing feeling out there that unemployed people are getting so much government assistance that they're not going back to work, and there may be some element of truth to that.
I do think it is a little more complicated that that - we are actually coming out of a pandemic, and there are residual fears and personal issues with which people are grappling. Yes, they have to get back to work, and yes, we shouldn't make it too easy for them not to. But a little compassion isn't a bad thing.
I also think it is important to remember that what some folks portray as extravagant government benefits isn't actually all that much money. The dollars we're talking about are what some people - among them the very people who are complaining about the benefits - drop in T&E on a weekend. The people getting these benefits are, for the most part, using the money to pay their bills, feed their kids, make rent or mortgage payments. And it isn't like they are buying cryptocurrency on the side with all the extra dollars.
It may be that the current scenario is creating an environment in which low age workers will become not-quite-so-low wage workers, putting them in a position where they can more comfortably pay their bills, feed their kids, make rent or mortgage payments.
One MNB reader responded:
I would guess you’ll get mixed views on this topic depending on how close your readers are to what’s happening with their current hiring success in the companies they represent.
With cost of living ranging from Mississippi at one end and California at the other , median rents ranging from $888 to $2518 by state, and annual mean wage ranging from $41,600 to $70,010, the recipients in states at the lower end of the economic scale do benefit more with a $300 per qualified person per week benefit than the states at the top.
From what I’ve read, the states having the most difficultly filling job openings are the ones at the lower end.
Even in Seattle, a market closer to the top of the economic scale, employment targets are not even close to being met.
You might think the answer is simply to raise wages, but raising entry levels on new hires means passing that consideration on the valuable current team members as well. That would be a great act if the business could survive and hold on to their team and company.
But in a sector with very slim margins where a cost of labor increase pushes you in the red unless you raise prices, and be willing to lose market share at the same time, it doesn’t leave you with a lot of good options.
Time will tell, but for an economy that could be ready to really take off, it won’t get off the ground without a much healthier job growth rate.
Another MNB reader wrote:
Kevin, I agree that the low wage worker may begin to experience more of a living wage. The issue is that it puts additional economic strain on our country’s businesses and places them in an increased noncompetitive situation when selling their goods.
So realistically, how sustainable is this? The economic reality is that we will have less people making more money. Which in turn will push more people to the subsidy lines because they have NO income. I have compassion for the people that can’t work. I have no compassion for the people that don’t work because they can’t find the work they want.
There has been and will always be work. The questions are will people be willing to put aside their pride, to work harder, to step back so they can run forward, in order to feed themselves or their families. In today’s society, a larger number of people are answering “no” to these questions. Entitlement is live and well in the US across all peoples.
From another reader:
One point that I rarely see mentioned in any media coverage about the challenge of getting lower wage workers right now, is the fact that millions of parents, largely women but men as well, are forced to be home right now because their children are not in school. Until all schools are fully open, a huge pool of potential employees is unable accept any job despite higher wages. In addition, childcare is less available and less affordable than it was before the pandemic.
After reporting last week about the change in CDC mask guidance - and expressing a certain skepticism that people who have not been vaccinated will behave in a way the CDC would view as responsible - I commented:
I am totally comfortable with a national vaccination program that makes it easily determined who has been fully inoculated and who has not. Vaccine passports strike me as being entirely reasonable, at least for the short-term future.
In fact, I'll go even farther. I've believed all along that businesses ought to require their workers to get vaccinated (with exceptions for religious or health reasons). But I also think that any business that took government money during the pandemic ought to be required to mandate employee vaccinations … and at the very least, you can't get forgiveness of your government loan if you don't implement such a mandate.
One MNB reader responded:
Kevin, this comment should be in your Politics Desk section…..you’re opening a large can of worms here with the passport and the mandate idea. Vax passport today …. what’s the next passport idea for tomorrow? I shudder to think what our creative government/big tech overlords could come up with.
I like to think I specialize in opening worm cans. (And, by the way, I reject the idea that masks and vaccines are political issues. Some people have made them that, but they shouldn't be.)
Rather than worrying about what government/big tech overlords might come up with tomorrow, I like to think of this in terms of what institutions came up with yesterday.
Like, actual passports that allow you to go into other countries. Or TSA Pre-Check, or Clear, which allow people to get through security faster. Or requirements that kids get vaccinated, and be able to prove it, for things like measles before going to school.
All those things exist. Frankly, they make me feel reassured, not threatened.
Another MNB reader wrote:
I understand your point on the businesses navigating through this mask/vaccination mine field. Frankly, now that I am vaccinated what others choose to do is up to them. From the government standpoint, I would say don’t require masks. Then at the business levels, they can make their own mandates as to standards for their stores. Ie: no shoes, no shirt, service (or no problem). Maybe this too will fall under the EGS movement. But for now, I’m safe. My family is safe. So if someone who is not “safe”, gets sick, that is on them.
I cracked wise the other day about cruise ships dealing with vaccination issues, commenting that I wouldn't want to get on a cruise ship anyway since they tend to be petrie dishes for disease, not to mention places that serve bad food and wine.
MNB reader Mike Lama objected to that characterization:
KC - you were spot on with my views, up to the point that you said you wouldn’t get on a cruise ship even without COVID going on because it’s a petrie dish for other illnesses. REALLY, Kevin ! A lot of us cruise and have never gotten colds or the flu. I totally see it with COVID - no way I’m getting on a cruise ship until this is completely over. But, never?
Nope, never. Not me.
Commenting on a story about how a Mexico-based retailer is acquiring Smart & Final, I asked why we never seem to read stories about American retailers buying retail businesses in other countries.
MNB reader Greg Seminara responded:
International acquisitions are beyond risk tolerance level for USA retailers.
Target failed in Canada. Whole Foods never ventured far beyond the starting gate in UK or Canada.
Walmart maintains a mixed record with international deals: success in Mexico, Chile, and Central America, but failures or pullbacks in Germany, UK, and Japan. Why has USA overseas expansion not worked ? Basically, because chains available for sale were already under performing.
“Managed by the USA” failed to supply any turnaround magic.
I am a globalist, but feel that USA retailer capital (financial/human) better deployed against USA opportunities like e-commerce and survival .
Another MNB reader wrote:
Walmart disclosed possible violations in Mexico to the Justice Department and SEC in November 2011.
1. Bribes and kickbacks are common in other countries.
2. Most American retailers are honest.
3. Foreign real estate ownership can be difficult in some countries.
4. Exchange rates can screw up the financial reporting of a small public company. That is why Jewel exited Mexico, wild swings in the peso made for wild swings in earnings.
5. Have you ever been to a wet market?
We took note the other day of a New York Post report that Amazon plans to open an Amazon Fresh grocery store in the second of two former Fairway locations in New Jersey that it bought out of bankruptcy. The two stores are in Woodland Park and Paramus. The Woodland Park location's conversion to an Amazon Fresh was confirmed by the company late last year, and now the Post reports that the Paramus store will get the same treatment.
My sense of the Fairway stores is that they probably are a little larger than ideal for the Amazon Fresh format … but that means that there could be plenty of space in which Amazon could operate some version of a micro fulfillment center that could effectively integrate its bricks-and-mortar and online operations. You'd think this would be the sweet spot that Amazon is aiming for.
There's a Stamford, Connecticut, Fairway store that's been closed for some time, and that, best I can tell, hasn't been picked up by any other retailer. It doesn't seem like a big stretch to think that this also could be on Amazon's wish list.
One MNB reader responded:
The Paramus FW store is a smaller location. It might even have been the smallest of the FW suburban locations. One floor; smaller kitchen for prepared foods; small office space; no basement. I think this location would suit Amazon Fresh perfectly. The Paramus location has lots of competition too. Large Stew Leonard's just a walk away; Shop Rite; Stop & Shop, Whole Foods only minutes away by car. A local hospital is doing construction right across the street from the FW location- they are building a brand new 4 story facility to replace one a few towns away. I believe the opening is in 2024? This will be a huge boost for any retailer in the area- especially Amazon Fresh. I’m thinking of hospital staff stopping by to pick up something on their way home from work or at lunchtime. It’s all about location, right?
The Woodland Park location is huge. Much bigger than Paramus. Offices on the second floor, good sized back rooms, kitchens, freezer and cold storage space, no basement. Last I was there- you could not access the store from the highway (46) and had to use a side road. There is a Shop Rite across the highway from them (can’t access from 46 either) that is huge too. I don’t know of any construction going on there that would add to the appeal of this location. That being said- this location might be too big for Amazon Fresh- and they will have to divide it- maybe use it for a warehouse for the Paramus location too?
As for Stamford- that was even bigger than Woodland Park. Not sure how AF could use that.
And finally, from another reader on another subject:
I really wanted to write to you today about an experience I had at my local Sam’s club at their food court. Number one, it irritates me that I have to show them my Sam’s club card to order food from the food court. I had just shown to the people at the front of the building to be able to enter Sam’s club so why do I need to show it again to get a drink and slice of pizza? It just slows the process down.
Number Two; Because I was wearing a mask, even though I have been fully vaccinated but do it as a courtesy to fellow shoppers, the kid behind the counter who took my order (and he was wearing a mask too) had a hard time understanding what I ordered. I ordered a combo which is a drink and slice of pizza. He thought I only ordered a drink. He handed me a drink cup and $2.04 back from the $3.00 I just gave him. I explained that I wanted the combo. He called someone over to clear the register so he could start with a new transaction. Unfortunately neither he or the person from Sam’s Club had the authority or override key to clear a $.96 cent miss-ring. They called for a “supervisor” who could override the register. After several minutes no one came so I asked for my $3.00 back and I was going to leave. Thankfully the person who had come over to try and help said to just give me the pizza and drink for the $.96 so I wouldn’t be delayed any longer.
During this ordeal the kid behind the counter told me he had only worked there for two weeks and was left alone behind the counter to fend for himself. He said they were short-staffed, but I am still shocked they would leave a new person with little or no training to run the food court. I was very patient with him since I know he was doing the best he could with the lack of training he was given. I suggested to him to go and get a job at Costco, which is literally only a ½ mile from this Sam’s club. I told him it was a much better run company.
I don’t understand how a multi-billion dollar company like Walmart doesn’t empower its employees to void a $.96 cent transaction without supervisor intervention? I walked out thinking I would never buy food here again. Seems very short sighted to me.
BTW – Costco is our to-go club store, but Sam’s Club carries a couple of items that Costco doesn’t. Of our club store purchases I would say 90% are at Costco and 10% at Sam’s club. We are lucky that they are do close to each other that it is easy to go to both when needed.