Friday, May 20, 2011

Digging a ditch instead of a hole

Weekly unemployment claims are continuing to trend down, the spike in claims a couple of weeks ago has been blamed on an unusual number of schools all having spring break at the same time. Last month saw 244,000 new jobs created (according to a survey of employers). This may or may not have included the 62,000 people Mickey D’s hired for the summer season. Most of these people won’t end up with permanent jobs even if they want to push burgers and high fructose corn syrup for the rest of their lives.

McDonalds has no incentive to pay very well since nearly a million people applied for a job that barely pays more than minimum wage.  The real minimum wage should be 12-14 dollars/hour to match what it would buy when it was first set to 25 cents/hour in 1938. This number also matches up to the minimum wage of the early sixties when McDonalds was first going nationwide.

Way back in those days McDonalds hired mostly high school kids and it was a really good job since it paid much more than minimum wage (can you imagine such a job paying the equivalent of $18/hour today?) (only the cool kids and jocks got hired and you could pay for college working there) And it was hard to get a McDonalds franchise since they weren’t building one on every corner. That all changed under Reagan who created a guaranteed low wage workforce in post union America and the “fries with that?” service economy was born.
2009 grads who are two years into the American Dream find that 22% are still unemployed and 23% have jobs that don’t require a degree (fries with that?). That is almost half of the graduating class that may well have wasted four years and tens of thousands of dollars that they can’t ever get out of paying back unless they die. The median income of the class of 2009 is only 30,000/year, so it’s no wonder that 57% of college students and their parents rate colleges as doing only fair or poor in providing good value for the cost of a college degree. McDonalds doesn’t need to hire high school kids anymore, they can get college grads and grandmothers. (granddad is greeter at the Walmart)

And the 30,000 a year that a 2009 college grad makes works out to a little more than $14/hour or the equivalent of the minimum wage a ditch digger with a shovel made in 1938. We’ve been told that we no longer want those dirty manufacturing jobs, but jobs that take a college degree are being outsourced to India, the Philippines and China even faster than factory jobs and they bring in H1b visa workers to drive down American wages on other jobs. Some people have been back to the community college four times to retrain after being outsourced.

Employers used to pay for this retraining but no more, almost no one who was laid off in the last three years has gotten employer paid retraining. The government has little incentive to force employers to do this since colleges are full to capacity with people paying for it themselves and you wouldn’t want to tax the job “creators” anyway.

That ditch digging job that paid 25 cents/hour might not seem like much but it was in fact a productive job, it accomplished something for the good of society and created real wealth. The “fries with that” jobs produce exactly nothing but move a lot of high fructose corn syrup. Health experts predict that one third of today’s kids will develop type II diabetes in their lifetime. But hey, that’s more jobs in the medical field that pay pretty good. A win, win for the service economy.


FilthyRich said...

Yeah, I've been through a couple of corporate "re-training" programs before (yeah so much for that entry-level Cisco certification). Didn't they offer "re-training" programs to all the steel workers in CLE OH back then? Buddy of mine hooked up with the State of Ohio for a (taxpayer-funded) "re-training" program for CNC. I thought this technology was DEAD in NE OH but my buddy sez THEY have an 80% hire/referral rate! I asked him how much they were paying and he said "Twelve dollars an hour. To start." Yeah the "Bradley" of big NE OH employer Milwaukee-based ALLEN-BRADLEY turns out to be a massive right-winger, too. When A-B became part of Rockwell they already began moving their manufacturing off-shore.

The joke back then was that McD's was a "manufacturing" job. Right. And ketchup is a vegetable.

(say I keep getting the same "Nothing smells like a dead horse" from "1 yr ago" link to you in my GO READ section at How come? thanks.)

Anonymous said...

Judge Smails really was a genius. The world really does need ditch diggers!