When we live in rural Iowa, mail order remains important to our way of life. Shopping by mail has changed since I was a child. In addition to the United State Postal Service, there are Amazon, FedEx, UPS and other company trucks delivering in the neighborhood almost daily. The fact is, much of what I need to operate our household is not available in the city of 3,000 souls near our residence. Mail order is the most efficient way to find what I need, compare price, and receive goods in a timely manner.
Amazon is rightly the whipping post for all that is bad about modern mail order. The company is very large, and has a monopoly on what they do. They are hard on workers. The online retailer has made its owner one of the wealthiest men on the planet, and the upward flow of weallth to already rich people is an essential problem for society. After a family conversation I decided to do something about Amazon in my life.
I looked at my Amazon purchases because I agree, at least in part, about their labor abuses. The book I just read, Nomadland, described the lifestyle of people who travel the country in mobile living vehicles and do temp work, including at Amazon warehouses during the push right before Christmas. The author does not paint a positive picture of working conditions, even if many people rely on that temp work to live. Amazon warehouses are already staffed with robots for certain tasks and the expectation is more humans will be replaced in the near future. For now, the temp jobs fill an economic need for these nomadic workers.
I spent $1,309.27 at Amazon this year, in 43 orders, or $194 per month. Here’s what I’m willing to do: a. cut back on the number of orders to no more than two per month (down from 6.4 per month). b. I plan to cut my overall spending in half.
While some purchases are unavoidable because the item (like the corded electric lawn mower) are simply not available here, I can reduce the amount of foodstuffs I get at Amazon and buy locally when I’m already at the market. Likewise, I have less need to own books. In writing my second book, there are plenty of research materials in our home library and we have a good public library for non-writing related reading.
So that’s the plan. Not too fancy, yet with specific goals. Hoping this will cut back on Amazon enough to improve my life. Mail orders will continue, yet hopefully better managed. Fingers crossed!
Pastries from The Eat Shop, a small, locally owned business. A Small Business Saturday purchase to support them.
Shopping small local businesses is challenging. Before dawn I went to town and got cash at a locally owned ATM, bought gasoline after my trip to Des Moines at a local franchise of the Iowa Casey’s convenience store company (definitely not a small business), and then splurged for a box of four pastries at the locally owned The Eat Shop in Solon. No one local is getting rich from my purchases, but that’s not the point of Small Business Saturday.
The Saturday after Thanksgiving as Small Business Saturday began in 2010, promoted by the American Express Company. The following year the U.S. Congress passed a resolution recognizing the day. It adds to the post-holiday shopping trend retailers hope to generate. Black Friday needs no explanation, and I just explained today. Next is National Secondhand Sunday, then Cyber Monday, and Giving Tuesday. Weeping Wednesday is supposed to be the day you receive the bill for all the shopping. In the days of online banking, we can tally the expense before then and regulate how much we spend.
The ATM I used is locally owned yet my money is kept at a bank in Texas. I have been a member of an automobile insurance company since 1976 and in the 1990s they started a bank. I joined and have been with them ever since. By having everything immediately available online once the internet came along, I have been able to stop bank fraud by crooks before it happens. I met and like both the local banker and his father. In a small city one gets to know all the bankers. I’m glad my bank contracted with the one they did.
Don’t get me started about the gasoline I bought to refill the tank after the Thanksgiving trip to Des Moines. Who really knows who makes money and how much on that commodity. The major oil companies have the system rigged so they make money every step of the way from pumping it out of the ground overseas, to managing the ocean vessels carrying it to the U.S., to refining, and pipelines, and truck transport, to the local station. Each step in the journey of a barrel of crude oil is a pricing point for the oil company. The locals work on a tight margin and make their money by selling convenience items, gas station pizza and sandwiches, and drinks.
At least there is hope for the bakery, which is owned by a woman with six or so area locations. The goods are all made from scratch and a bit pricey for everyday eating. They call themselves a boutique bakery, which means fancy stuff intended for purposes other than nourishment. Their philosophy, according the their website, is
In today’s world, people are increasingly health-conscious. It seems nearly everyone diets or allows themselves to have that coveted “cheat day.”
So, when you do indulge, it better be worth it. Worth the calories. Worth the sugar. Worth the carbs.
I do buy things from them a couple times a year, so why not on Small Business Saturday? Cheat day or no.
Couple of bits for the ATM transaction, buck or so margin on the gasoline sale, and $18.70 for the pastries is about it for my Small Business Saturday. At least I feel like I did something.
Locally owned hotel in Solon, Iowa on Small Business Saturday, Nov. 30, 2024.
Conventional wisdom is there is a worker shortage in Iowa.
“Companies are really at a tipping point with respect to their workforce,” Iowa Business Council Executive Director Joe Murphy said in an interview with Perry Beeman of Iowa Capitol Dispatch. “They need people more than ever.”
The surge in demand for products and services in the second year of the coronavirus pandemic notwithstanding, there is no shortage of workers. It is a shortage of jobs people want to do.
My colleague Tony Lloyd put it this way: “Can we stop saying that ‘Companies can’t find workers’ and start saying ‘Many corporate work environments are toxic. Workers weren’t thriving before the pandemic. Now they realize that life is short.’ The way you spend your time is the way you spend your life.”
Anyone who worked on a farm knows how hard physical labor can be. Factory workers are well attuned to the toll repetitive tasks take on their bodies. Retail workers figure out ways to eek out a living on low wages. People who are self-employed–housekeepers, landscaping contractors, beauticians and barbers, child care professionals, crafters and creatives–often feel one step from the debt collector with slim chances of making it. We go on working partly because we want to, yet mostly because we need income in 21st Century society.
Labor unions of the post World War II era framed what worklife can be: a 40-hour work week with paid overtime, a safe work place, vacations and holidays, health insurance, sick leave, and other perquisites. About one-quarter of all U.S. workers belonged to a union in the mid-1950s, yet only 10.8% of U.S. workers were union members in 2020. The union membership rate of public-sector workers (34.8 percent) continued to be more than five times higher than the rate of private-sector workers (6.3 percent), according to the Bureau of Labor Statistics. While we are friends of organized labor, their model has not worked for the majority of Americans in the workforce.
Most small, family-run businesses I know seek to avoid hiring people unless they must. Everyone from the owner to the dish washer pitches in to help get required daily work done. Yet small businesses have been and continue to be acquired by larger ones, or are run out of business through market competition.
American business favors a structure where management expenses are minimized, and to do that, scale is important. The bookkeeper for a $1 million dollar a year operation may stay busy, yet the better use of such labor is said to be that same bookkeeper managing a portfolio of ten or twenty such operations. To do that businesses need scale. Scale well-serves the owners of business–the richest one percent among us–but that’s where trouble came in. It was noticed during the pandemic.
Scaling business to reduce overhead costs, and taking the individual decision-making aspect out of operating a small office or outlet within a large corporation is what created the “toxic work environments” to which Lloyd referred. If there is will to do something about it, I don’t see it in public. As we answer the question, “What work will we do?” our options are limited by the corporatization of the United States.
Wouldn’t it be great to work like this:
Oh, I get by with a little help from my friends Mm, I get high with a little help from my friends Mm, gonna try with a little help from my friends
Sony Music Publishing or Sir Paul McCartney, who knows.
Unfortunately, even something as simple as “getting by” gets complicated. How we spend our days is made more difficult by the corporatization of worklife and the increasing divide between the richest people and the rest of us. The question remains unanswered.
People who harp about hourly wages are tedious and mostly fooling themselves. The economic instinct in society should be and is making a decent life from what we have and are given. Wages are a part of that, but there is a lot more.
A person can’t make a decent life based solely on wages.
I’ve read my friends at the Iowa Policy Project on Iowa’s cost of living, wage theft, and minimum wage. I don’t disagree with their analysis of the data sets they chose. My issue is work like theirs serves the political class more than it does regular workers. Useful for policy makers, but not for those working poor.
The Johnson County Board of Supervisors recently implemented a policy to raise minimum wage in the county — with caveats — to $10.10 per hour by Jan. 1, 2017 and then index it to the Consumer Price Index for the Midwest Region. I attended a public hearing on the ordinance in Solon, read online comments and news articles on the ordinance and its impact, and importantly, talked with scores of people impacted by the law. The ordinance is a lifeline to some, but has little impact on most working poor because it does not adequately address their central concern — finding a job that pays a living wage.
As a low wage worker, I tell a small part of my story in the following paragraphs. It includes a brief history lesson, corporate interests in consumer pricing of gasoline, work injuries, and the role of total compensation packages.
History Lesson
In 1975, minimum wage was $2.10 per hour. With the proceeds of a full-time, no benefits job at a convenience store, I rented an apartment, bought food, had a telephone, owned a car and lived a reasonable life in my home town. A person could get along on $2.10 per hour, barring personal cataclysm, if just barely.
According to the CPI inflation calculator, the $2.10 I earned in 1975 equates $9.26 in today’s dollars. The exact same job I held in 1975 — convenience store cashier — now pays a going rate of $10 per hour. Minimum wage hasn’t kept up but the market has.
How can a person can build a decent life on low wages? It’s not easy. However, addressing minimum wage is a form of tinkering around the edges. So many analyses of minimum wage fail to consider the corporate system we have in every aspect of our lives. Yes, people have to contend with complex issues involving corporate life. They include health care, insurance, banking, debt, fuel, communications, food security and electricity. People complain about these aspects of life rather than leverage them to their advantage. The one I know most about is fuel pricing.
Gasoline Pricing
Gasoline prices were $2.099 per gallon at local outlets this week. Gasoline is the dominant passenger vehicle fuel and buying it has become an accepted part of life that includes transportation as a basic expense.
One of my roles during a transportation and logistics career was to purchase about 25 million gallons of diesel fuel per year for a large trucking firm. I visited refineries, pipeline companies and retailers and came to know how every penny of the price we paid came about. While I bought diesel, the same lessons apply to gasoline — something almost everyone who lives outside public transportation routes has to buy.
When I drove my first car, a Volkswagen Beetle in high school, a couple of bucks would fill it up. During gas wars, the price went as low at $0.27 per gallon. Today, state and federal tax alone is $0.579 per gallon in Iowa. An escalating tax became part of the expense background.
Perhaps the biggest change in gasoline pricing over time has been the move from vertical integration of energy companies to the culture of outsourcing and partnering among varied aspects of the fuel supply chain. This is sometimes called horizontal integration.
When I worked for Amoco Oil Company in Chicago in 1990, the corporation was paid $600 million for its oil fields in Iran. Partly because of political instability — their oil fields were seized during the 1979 Islamic Revolution — partly to divest assets and buy crude oil on the open market. Little did we know at the time, Amoco, a company viewed as a stalwart of great places to work and the ninth largest global corporation, was in the process of disappearing. At one point they did everything from exploration, production, refining, research and retailing. They merged into a foreign corporation.
When we pull up to a gasoline pump at a convenience store, the details of the hydrocarbon supply chain seem very remote. Oil and other hydrocarbons have become fungible commodities, and as such, we tend to deal with the price at the pump. Crude oil and crude oil futures trade on financial markets which provides some price visibility. Invisible are the many people from exploration and drilling, to production and refining, to transportation and delivery, to sales and marketing who get some part of the transaction of filling a passenger car gasoline tank.
Working for low wages reinforces the focus on per gallon price. When gasoline prices go up it’s bad. When they go down, we like it. Set aside the government subsidies, the unrecognized cost of using the atmosphere as an open sewer for emissions and everyone taking a fraction of our $2.099 per gallon. Energy company executives and politicians alike realize price is king and expend resources to keep it so. All a minimum wage earner knows is when price at the pump goes down, there are a few more dollars to spend this month. What people in the oil and gas business know is each entity along the supply chain is taking a margin above their costs out of the pockets of gasoline buyers. The impact on working poor is disproportionate. Raising the minimum wage won’t fix corporate extraction of money from gasoline consumers or almost anything else.
Work Injuries
I cut my right hand at work this week and had to get stitches — six of them at the base of my thumb.
It doesn’t hurt much, and my motor skills haven’t been impaired, however, the doctor said I’m supposed to minimize use of my hand until a worker’s comp doctor reviews my healing progress on Monday. There’s plenty of work that can be accommodated at the home, farm and auto store where I work so lost wages there shouldn’t be a problem. I went back to work after returning from the clinic — there was no lost time.
What matters more is the loss of productivity in everything else I do during spring to get by.
I contacted the farm and asked for relief from soil blocking for a week. I’ll lose that wage earning opportunity. The work restriction will also be a setback for weekend work in the garden. I had hoped to plant radishes, peas and turnips in newly turned ground, some of which I will sell at the farmers market. Income is delayed. There’s no short term disability insurance, so If I don’t work, productivity and income will be lost.
People who craft models about minimum wage often include the idea of short term disability as a footnote. Focused on hourly wage, they say if everything goes according to plan a person can make it on $15 per hour or whatever. Everything doesn’t always go according to plan, especially if one is working poor. Consequences of the minor lacerations on my right hand serve as testament.
That’s where economic models created to advocate for raising the minimum wage are inadequate. Life is much more complex. There are unwelcome limits an injury imposes on life at the economic edge. Accommodating and adjusting in response is a more resilient skill that matters more than raising the wage.
I’ll adjust because I have to to preserve the tenuous thread from which our economic life hangs.
Total Compensation Package
Anyone who has studied employee turnover knows the key reason people leave jobs is not wages. It’s how they were treated by their manager. None of the analyses about minimum wage I’ve read included this key aspect of work life. It makes a difference how well trained a manager is in a lowly paid job. The tendency is to rigidly design a work process and try to get workers to fit in like they were a precision machined part of the operation. Low tolerances for performance are often baked into the job, but regardless of performance if one’s supervisor is a prick, that employment will end eventually, usually by choice of the employee.
Under the Patient Protection and Affordable Care Act, companies that employ workers 30 or more hours per week must provide health insurance. To the employer this is one of many costs that yield a total cost of the employee. There is a tendency to push as much of the cost for health insurance on the employee in the form of premium co-pays, deductibles and co-pays. In my current job employees get health insurance benefits with reasonable premium co-pays and a high deductible/co-pay structure. Family coverage is more expensive, and the cost of covering a spouse is roughly equal to the cost of the least expensive policy on the government health insurance marketplace for a single individual.
Since the insurance is offered by the employer, there is no government premium subsidy, which with premium co-pays creates a disincentive for working poor to seek full time work with benefits. It is easier, and better economically, to work multiple part time jobs without benefits and sign up for health insurance through the marketplace to get the subsidy.
Wages in larger businesses are a function of total pay package. Smart companies look at the competitive marketplace for employees and determine the range of how much a position should be paid. Often a human resources consulting firm is engaged to benchmark compensation per position. Once the range is determined, the company decides what part of pay is through benefits and what part through wages. Wages, paid time off, workers compensation, disability, health and dental insurance, employee discounts, clothing allowances and the like are all part of the cost of an employee and their total compensation package. Companies will always strive to keep the overall cost of employees low.
If government raises the minimum wage, a company will seek to keep employee compensation costs the same or lower. That means some aspect of pay and benefits will take a hit, shifting the same dollars to wages from benefits. Another alternative is to turn employee hiring and management over to a temp agency which bills employee costs at a fixed rate. In some cases, like that of the Whirlpool Corporation’s recent operation in North Liberty, there are multiple layers of this type of outsourcing. The employee may earn slightly above minimum wage, but the rest of the benefits package is taken by the temp agency or subcontractor. Raising minimum wage may only shift where the money is coming from. It all comes from the total compensation package.
Conclusion
The starting point for a new conversation about wages is to consider our history, the impact of corporations on almost every aspect of our lives, the risks of injury in low wage jobs and how the total compensation package and erosion of benefits in favor of wages makes a difference when one is working poor. Hopefully this post will serve to begin some new, more meaningful discussions.
Buying and selling things is the heart of economic systems. Most people I know would rather be on the production side of the equation, yet someone has to do the selling, and there is a living to be made as a salesperson.
When we lived in Indiana, one of my employees’ spouse worked in sales for a precious metals company. His job was to convince large companies to sell them spent catalysts containing platinum. In a year he had to make only a couple of sales to support his lifestyle of constant engagement with purchasing managers and key executives of Fortune 500 companies. He played a lot of golf with customers.
In another corner of the economy, there are those who work retail sales in low wage jobs. Many retailers pay more than minimum wage—they have to to attract workers. Instead of wages, they offer positions such as “team leader,” “shift supervisor,” “crew chief,” and the like. None of them pay a living wage, far from it. It is all hourly work designed to stock shelves, staff cash registers and generate sales from a corporate-designed supply chain that pays the lowest wages the market can bear. Retail workers don’t play a lot of golf.
Retail workers have more than their share of problems. Health, access to health care, relationships, transportation, housing, security, disability, abuse—you name it, problems come in almost every area of life. Financial problems are rife, and the reason many take a job in retail, but low wage workers don’t always make good decisions about jobs. The financial equation is stacked against them before they even leave the house.
This is where I part ways with people who promote increasing the minimum wage as a solution to working poor.
Discussion among low wage workers is seldom about wages, but how to sustain a life. While “extra” money would be nice, and well spent, nice doesn’t make it very far in the tough lives of retail workers. Those who advocate for an increase in the minimum wage do so from a position of privilege most retail workers don’t share. Increasing wages doesn’t get to an essential problem.
With the drive to employ part time workers with less than 30 hours per week and no benefits, a retail worker’s earnings potential caps out around $15,000 per year. In today’s environment, that’s barely enough to buy health insurance, let alone pay bills. Add a 25-mile commute, an older car with high maintenance expense, expensive banking services, physically demanding work, and other complications of working poor, and retail workers enter a trap from which there is no escape. As others have written, it is expensive to be poor.
There will always be a need for workers at the low-wage end of the scale. A system that recognizes all kinds of work and rewards it with the ability to sustainably live an honorable life is lacking. Money can’t solve that problem, even if it makes some feel better about themselves.
Social justice will take more than giving alms to the working poor, including the denizens of retail.
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