Selection For New Labor Secretary – Good For Labor or For Management?

During a speech at the New York Economic Club, Donald Trump said he wanted to help workers.  He wanted to help improve their lives by raising wages and creating jobs. The President-Elect said workers had great abilities and future plans and he wanted to help them be great!

On Thursday, Donald Trump announced Andrew Puzder as his pick for labor secretary.  Andrew Puzder, as news sources reported, is CEO of a fast-food company that includes Carl Jr.’s and Hardees restaurants.

As you may have heard, Andrew Puzder doesn’t necessarily agree with increasing wages.  In 2014, he said California was unable to afford $9 and $10 per hour jobs.  That’s strange considering California leads states in gross domestic product according to the Congressional Joint Economic Committee reported in the July 22, 2016 Los Angeles Times.

The last time the federal minimum wage was raised was before the Great Recession.  It now stands at $7.25 which means, if you’re lucky to work full-time, the annual income is $13,920 – that’s less than poverty level for two people and just a little over for one person!  The average wage paid at one of Mr. Puzder’s restaurants is $7.70 for a cashier.  The cashier, if it follows most retail and fast-food restaurants, does not work a 40 hour week.  Most work part-time because of the need for scheduling purposes (during busy hours lunch, maybe dinner).

At the same time, Mr. Puzder is concerned about people losing their jobs.  He says raising the minimum wage can hurt low-skilled workers or those from the working class.  It won’t help them, he says, reach their ideals – just like Donald Trump said in his speech.  An article in U S News & World Report  supports this logic.  The author reports the debate on wages is more partisan and their arguments can be justified for both sides but it comes down to  low-skilled workers.  The greater the increase in the minimum wage, the more it hurts low-skilled workers.  They become unemployed which, of course, doesn’t help them.

If the minimum wage is raised to $15, which is what some have proposed, the annual salary is just over the federal poverty level for a family of 4 at $5500.  If you go to Indeed.com, the job openings web site,  you can see the range of salary and wages for Hardees’  restaurants.  It is good the range for a manager is greater but even for a shift manager, most do not make any more than $23,700 per year or about $400 over the poverty threshold for a family of 4 which is why the Overtime Rule is so important to them.  It’s important to note not all shift managers work 40 hours per week either.

In an article from the Brookings Institute, they said it will be left to communities to raise the minimum wage.  By leaving it to communities, it increases the chances for people to be paid less and it also pits communities against each other.  Businesses can leave one community for another or decide not to locate in a community because of the difference in minimum wage.

An article on PBS , Professor Emeritus of Economics and Economic History, John Komlos, said the minimum wage of today is worth only about $10.90 when you consider inflation.  He also identified the current minimum wage can be less than poverty level which means that $10.90 makes minimum wage much lower than poverty.  He also pointed out the U. S. minimum wage is much less than other advanced countries.  Some countries raise the minimum wage as income levels go up.

Unlike what Donald Trump claimed on the campaign trail, Mr. Puzder is a  big proponent of immigration.  He said immigrants can help workers and their wages by increasing economic growth.  Participating in a panel discussion about the need for an immigration reform sponsored by the American Enterprise Institute, Mr. Puzder said immigrants helped with his 100%+ turnover rate and encouraged economic growth as immigrants are glad to have a job  at his fast-food restaurants.  He said they have families and homes so they will want to buy goods from the wages they’ve earned working for him.  This will help stimulate the economy and make it better for everybody.

He appreciates the great set of work skills immigrants have brought to his fast-food restaurants.  Mr. Puzder thinks the immigrants have a much better attitude than resident workers.  He said immigrant workers energize the workforce and make it better for everybody.

Mr. Puzder also talked about people should be able to pursue happiness and this should be the land of opportunity.  There is no argument there.  Everybody wants opportunity to have their  basic needs met which includes economic well-being.  Mr. Puzder claimed workers make more than minimum wage at his restaurants which according to Indeed that’s true but some are still at the poverty threshold.  He says workers can increase their wages as they continue employment but if there’s 100% turnover or greater,  workers are not staying very long to make more money.

Mr. Puzder said he wanted the economy to grow to expand his business which is absolutely important but he also complained others have stopped that from occurring. That may be true, but if he had that much turnover at his fast-food restaurants, he needed to look at his own house.

Turnover is a huge expense.  Mr. Puzder is right when he said industry norm is high but it doesn’t have to be.  Having managed a fast-food restaurant for 7 years, it can be controlled quite easily.  The same principles we have talked about with labor-management cooperation can be applied to his restaurants.

What type of management staff is there at Carl Jr.’s and Hardees?  Are they autocratic, coaching, combination?  How much managerial training have they had?  What qualifications do the managers need?  In some fast-food restaurants, if you’re a good worker, that deems you a good manager with or without the good managerial skills.  Retail overall can be a very traditional environment.  Do employees understand what’s expected of them?  Is it laid out in advance to them and all the way through their employment?  Are those expectations and standards applied to everyone consistently or is it to selected employees?  Do managers and supervisors take the time to listen, not just hear, what the employees are saying.  Mr. Puzder has said immigrants don’t complain like other workers but everybody complains at some time.  He’s complaining about federal regulations and a number of things and we’re listening.

It’s also not just about meeting the the employer needs but what about the employees’ needs.  Are managers listening to scheduling needs for the single parent who needs to pick up their child or go to their child’s game to help support.  Again, Mr. Puzder talks about employees having families but does he meet their needs, too?

Do managers at Carl Jr.s and Hardees provide provide proper training and support to help employees in their jobs?  Is it ongoing and rewarding?  The fast-food restaurant chain I worked for wanted employees to have proper training.  They invested in a training package that matched people’s learning differences.  Managers were expected to follow-up with employees and provide feedback on performance.

Incremental raises were also done.  Scheduling requests were allowed with the expectation managers may not be able to provide the number of hours an employee desired.  Managers tried to work with employees – that was an expectation.  It also was expected the schedule went up in advance so people knew what they would be working a week to two weeks out so they could plan their lives.

Lastly, by treating people like ourselves, we had employees that stayed for multiple years – not the 100%+ turnover Mr. Puzder said, and that included students and teenagers. We, as managers, were expected to work within the confines of the law and regulations.  If not, as we were told, we would be written up.  That’s how my fast-food restaurant grew and had good profit margins.

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About CALMC Blog

Columbus Area Labor-Management Committee is a not-for-profit organization dedicated to involving employers and employees to preserve jobs, resolve workplace issues, and promote labor-management cooperation. Visit our website at http://calmc.org
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