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Health & Fitness

Minimum Wage and All You Can Steal

The minimum wage discussion could use some examination. Instead of speaking in worn out generalities, a few real world examples could be used.

For instance, I used to play golf occasionally with friends when I lived in Chattanooga. Sometimes when we needed a fourth, we’d get a local businessman to join. He and his father owned a few convenient stores. Once I asked him how much he paid his employees. He said, “Minimum wage and all they can steal.”

By that, he meant that for the minimum wage he wasn’t going to find the best employees, not the hardest working or the most honest. He counted on his ability to check the inventory and cash drawer often enough to know if more than the occasional six-pack and carton of cigarettes were going out the back door and if more than a handful of cash was missing from the register. He also had to fill in for late or absent employees at all times of day and night. His employee turnover was also very high.

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At the wholesale lumber yard where I worked, it was more of the same. There were 15-20 people who did the loading, unloading, receiving, and delivery. Low wages were the corporate standard for this Fortune 500 Company. High employee turnover was also the corporate standard. As soon as another bad job down the street opened up which paid a nickel more an hour, employees were gone. Inventory came up missing by the tractor trailer load. The manager was kept busy interviewing and hiring new employees. Then he had to train them. The process never ended.

After a while, he got his boss to allow for increased pay at the warehouse. The jobs became more attractive. Better people applied and were hired. They showed up on time and rarely missed a day. Turnover was a thing of the past. Training was only done once and the warehouse personnel got more and more productive with experience. The correct material was received, stocked, rotated, and delivered to customers. A truck returning material because it was damaged or the wrong item was the old norm. Profitability per delivery increased. Inventory losses were reduced to a few dollars per year instead of tens of thousands of dollars. Eventually, 6-8 people did the job that 15-20 used to do and they did it better.

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The manager now had more time to oversee purchasing, call on customers, and supervise the sales staff. He became a lot less tense by playing golf more often with customers and friends, using the extra free time he now had. He also started doing what no other manager had ever done for this corporation. He made a profit every month and every year. When he took inventory, the count only took hours.  Then he would get on the phone to the other managers and brag about how fast and accurate his inventory was. He knew they would be counting for a couple days and would probably have to do it over, just like he used to do. Then he would call his boss.

It is no surprise that the GAP is going to increase the pay to its employees. They want to make more money. It is no surprise that increasing the minimum wage is the most popular political idea in America and that the Democrats will be shoving it down Republican throats until the Republicans claim it as their own idea.

The only surprise is how all those MBA types on boards of directors and at the Chamber of Commerce deluded themselves into thinking that a low profit low productive business strategy was the best business strategy. Walmart is headquartered in the heart of the Bible belt. You would have thought that the world’s largest retailer would have discovered a long time ago that “Do unto others” also happens to be a very profitable business strategy. 

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