Monday, May 6, 2019

Big Little Liar

Nashville used to be called Little Big Town and then it became the "It" city.  It means a great deal of outside investors flooding the same ground the Cumberland did just a decade ago.  Declaring large swaths of the city "opportunity" zones enabled investors to hit the marketplace, buy up as much land as possible and in turn lead to job growth and subsequent higher cost of living. Then often flipping the same property within a small time frame meant that rents and leases, commercial or residential, will increase while the city population grew in parallel wages did not.  Tennessee and particularly Nashville is not seeing the wage growth that has been touted with current job numbers. True unemployment is low but the reality is that many of the newcomers came from places that were even worse off, they lack degrees and work experience and technical skills.  The few migrants I have met with degrees and work skills are employed by one of the Universities that surround the city or via the medical institutions that make up the largest force of labor here.  These jobs while well paid are still often below the average for cities with higher costs of living and Nashville is creeping up, however, the largest percentage of workforce is in Hospitality and Construction, two areas that do not require an education nor large investment in training.  They are also largely transient and can ebb and flow on demand and need easily.  The biggest cohort of employees are truly Municipal workers in the varying state and city offices that dominate the buildings here and this includes Teachers, Police and Fire Fighters the ones who have not seen wage increases in three years and currently the City is struggling with a budget that leaves little for adjustment when it comes to wages.  Right now we are in day two of a Teacher sick-out and with three weeks left of school I wonder what happens in August when school starts again and the need for bodies may be lacking in warmth to be there to greet students at the school door.

But again the city of humble brag they are sure that every white collar business and industry will be making the high step to Nashville thanks to the promise of 5,00 jobs by Amazon over the next seven years.  A LOT can happen in that time frame and promises are often broken when it comes to jobs fueled by incentives and tax dodges that at the time explain the bullshit that accompanies it. The Tennessean does an excellent job documenting many start ups and their quotes about their employee numbers but given what I know about the Tennessean I doubt any of the numbers were verified and vetted for accuracy.  I recall the dot com bomb and again take a look at Facebook now that it is under the microscope these are people to take at "face" value.    Again today the Tennessean decided to humbly mention how "many" business are thinking of relocating here despite the fact the Legislature is a right wing branch of the crazy town and are doing their best to destroy public education, health care via block granting Medicaid and of course voting rights.  YEE HAW!

The rank file worker that comprises the largest employee in Nashville is an un-educated, blue collar service worker and they are paid minimum wage.  Resistance to collective bargaining continues and while the rest of the country is addressing wages and the right to workers to organize, here in the racist buckle of the belt they have no intention of doing so.  And again I want to point out that the reality is telling for buried in the bullshit is this article below about Tennessee.

And while some areas in the country are seeing boons for workers and wages without a college degree it is like real estate, location, location location; as this article in the New York Times discusses, the reality is that unless you want to sling coffee or drive a pedal tavern the tech jobs here are highly specific and demand higher skills.  Good luck with drawing those workers here. Which is why we have a two tier economy.

Oh wait this idiot is actually believing that highly successful people want to live here.   Again I want to point out that I live directly across the street from this and next to said train tracks, the building was originally designed as apartments and I went to the permit processing hearing. He said he was willing to pay for the silent zone and had set rents at 800 to 1000 dollars to attract artists.  That has since changed and what I love is the artist rendering which does not look anything like the street or the area. Maybe he should have hired a better artist!  But okay then!  I am moving in September and I will miss the whole Tiki Bar nonsense but then again I don't want more traffic to clog an already challenged track crossing nor can I afford to keep replacing smashed plants.    I am still trying to figure out who bought any of my units as the lot seems to be filling up with cars but the transfer of titles have not been posted yet.. hmm.   More lies and lying the state of life here in the state of good Christians.

In Tennessee, minimum wage remains unchanged since 2009, with no bump on the horizon

Jamie McGee, Nashville Tennessean Published May 2, 2019

When Torrance Hardnick was earning minimum wage four years ago as a cook at Krystal, he took a second job at a lumber company to make ends meet. He fell into a cycle of relying on payday loans for car payments and, at times, turned to Second Harvest for food.

"I never had time to be at home with family," Hardnick, a father of two, said. "I barely had any sleep. I had to do what I had to do to make sure my family didn’t end up on the street."

Hardnick's hourly earnings have nearly tripled since he took a construction course through Goodwill of Middle Tennessee two years ago, and he now works 10-hour days as a forklift operator. He is able to help his parents with their bills and is more present for his daughter and son, now 13 and 11.

"I am home every night," Hardnick, 37, said. "It feels real good. Everything is working out better now."

Looking back on his time in the fast-food sector, he said the $7.25 minimum wage earnings fell short. "It's not enough to get by," he said.

The federal government last raised its minimum wage to $7.25 in 2009, thanks to legislation passed two years prior. Twenty-nine states have raised their minimum wage above that level, but Tennessee and four other states have shied away from wage rules altogether.

Tennessee last year had the second highest percentage of workers earning $7.25 an hour or less, along with Mississippi, at 4.1%. Only Kentucky's rate was higher at 4.4%, according to the U.S. Department of Labor. Nationally, the percentage has dropped from about 6% in 2010 to 2.3% in 2017, according to Governing magazine. Tennessee's percentage increased in 2017, up from 3.9% in 2016.

At the time of the last federal increase, financial and real estate markets were collapsing and Tennessee was grappling with an unemployment rate exceeding 10%. Ten years later, the state's unemployment rate has dropped to 3.2% and national corporate profits have climbed from $1.3 billion to $1.9 billion, according to the Federal Reserve Bank of St. Louis. The cost of living has also increased, with goods costing 18% higher on average since 2009.

But the minimum wage in Tennessee has gone unchanged. Those working 40 hour weeks at minimum wage earn just more than $15,000 annually. In Tennessee, a living wage for an adult without a child is $10.75 an hour and $11.73 in Nashville, according to Massachusetts Institute of Technology living wage calculations.

"Minimum wage workers are falling further and further behind," said Ben Zipperer, an economist at the Economic Policy Institute, a nonpartisan think tank focused on low to middle-income workers that is based in Washington, D.C. "Minimum wage increases have been too infrequent and not large enough in order to keep pace with the rest of the economy."

But outside of the private sector, Tennesseans are unlikely to see changes to the minimum threshold anytime soon.

"It's a political issue and there is no political will to raise this at the federal level," University of Tennessee economist Matthew Murray said, pointing to a Republican-controlled U.S. Senate and executive branch. "I don't see this changing anytime in the foreseeable future."

And in Tennessee, in a Republican-controlled House, Senate and governor's office, greater regulation on wages is also likely a nonstarter, although there have been multiple, unsuccessful efforts in recent years by Democratic lawmakers to boost the wage floor.

"I don't think it will change in Tennessee until the political dynamics change and I don't see any basis for that to change," Murray said.

Companies respond to market forces

While the state has not mandated a minimum wage, many companies operating in the state are raising their own thresholds well above the required amount. With the private market acting on its own accord, the debate over minimum wage requirements becomes less relevant, Murray said.

"Wages are going to surpass it," Murray said of the $7.25 an hour minimum. "Earnings growth is going to render it less and less important to intervene by raising the minimum wage."

First Tennessee Bank, part of First Horizon National Corporation, announced its minimum wage increase last year from close to $12.50 to $15 an hour,a level bank leaders considered a more livable wage for those in teller and customer service roles, said John Daniel, First Tennessee chief human resources officer. The Memphis-based bank had been considering boosting its minimum wage for a while and the Tax Cuts and Jobs Act, passed in 2017, helped it absorb the higher costs.

"Inevitably, with the social and economic pressures, particularly with a good economy and low unemployment rate, $15 was going to become the new norm," Daniel said. "We said we would much rather be in front of that than in the back of that ... It just seemed like the right thing to do."

While the bank's motivation for increasing wages went beyond reducing turnover, it has had a moderate impact on attrition, Daniel said. The best indication that it has been a good decision was initial feedback from affected employees. Some said they no longer had to work a second, part-time job, which meant more time with their family, he said.

Most recently, Bank of America announced its lowest paid employees would earn $17 an hour beginning May 1 and $20 an hour by 2021, earning $41,000 annually. Pinnacle Financial Partners, based in Nashville, said that more than 99 percent of its employees earn more than $15 an hour.
Unum, an insurance company based in Chattanooga, boosted minimum wages to $15 an hour from $11.50 an hour last year, and Volkswagen raised its minimum for Chattanooga plant workers to $16 an hour in March.

Amazon and Walmart also raised their minimum wage in 2018 — Walmart to $11 an hour and Amazon to $15 an hour. Target made a commitment to $13 an hour wages in 2017 and $15 an hour by 2020.

In a survey sent to Nashville Area Chamber of Commerce members, 20% of the 385 responding companies said their lowest paid workers earned between $7.25 and $10 an hour. About 20% said their lowest wages ranged from $10.01 to $12 an hour and 28% paid between $12.01 and $15.

Just more than half of the Middle Tennessee companies had increased their minimum pay in the past year.

Amazon policy official Jodi Seth said the increase was spurred by employee feedback and that job applications went "through the roof" after the wage announcement, increasing by hundreds of thousands in one month. When Amazon announced its wage increase in October 2018, those focused on job recruitment forecast it would spur other increases.

The e-commerce giant said it would increase its minimum wage on November 1 to $15 for all U.S. full-time, part-time, seasonal and temporary employees, including temps hired by agencies. USA TODAY

"We always hear that Amazon comes in and builds a warehouse across the street and people jump for 50 cents more an hour to work for Amazon," A.J. Brustein, founder and chief operating officer of San Francisco- and Nashville-based online staffing company Wonolo, said last year. "Now it's not 50 cents, it's $3.50 or something like that. All these other companies are going to have to deal with that. They will either struggle to find talent or they are going to have to match the pay."

While some businesses are making their own changes to minimum pay, that does not erase the need for a required increase for other companies reticent to improve pay, Zipperer said.

"Employers are raising wages," he said. "The problem though is that employers are not raising wages enough so that workers can maintain a decent standard of living."

Effects of wage hike disputed

Those opposed to a higher minimum wage have argued that such regulation ends up hurting the blue collar worker it seeks to help because businesses would have to lay off workers, cut hours or raise prices to afford higher operating costs. Most of those earning minimum wage are younger than 24 and are second or third earners in a household, said Samantha Summers, communications director for Washington, D.C.-based nonprofit Employment Polices Institute. The institute is opposed to legislation proposed for a federal minimum wage increase of $15 an hour.

"A one-size-fits-all approach doesn't work for the entire country, Tennessee in particular. That would be a huge increase for businesses in Tennessee," Summers said. "The rise in labor costs forces (businesses) to look at their bottom line."

Zipperer points to the Fair Labor Standards Act of 1938 that established the minimum wage to ensure workers could afford a minimum standard of living.

"We've lost sight of that when we have minimum wages that are too low for a person or a family at a low-wage job to maintain purchases of basic necessities,"Zipperer said. "Raising the minimum wage to $15 by 2024 isn't going to make anybody rich. It will allow someone to come closer to affording the basic necessities, such as rent, health care, children, child care and transportation expenses."

A minimum wage increase would likely cost some workers their jobs and raise costs for some businesses relying on minimum wage, Murray said. The impact would be modest, though. An increase would improve the economic well-being of individual workers experiencing wage gains.

"When you pay workers the very bottom, the very minimum of what you are legally allowed to pay them, it doesn't do much to create loyalty on the part of those workers. You could argue when you raise wages, you raise the quality of the applicant pool, and you can improve the quality of the workers you hire," Murray said. "You can in fact make up for that higher wage through a more productive worker."

A wage increase also could decrease the cost of government programs supporting struggling working individuals and families, he said.

"A​​​​n individual alone cannot survive on minimum wage. You just can't do it," Murray said. "A lot of the working poor have to rely on government benefits to benefit the meager earnings they earn in the marketplace. We are paying for the cost of this in other ways."

Zipperer described the argument that jobs would be lost if a minimum wage increase took effect as theoretical.

"That hasn’t actually played out in our real world labor market," he said. "The typical study finds that the employment effects of minimum wage increases are very small to nonexistent and certainly small to the benefits low-wage workers receive from higher wages."

Murray said average wages in Tennessee lags the nation in part because the state's education attainment rates also trail the nation and because of poor health among Tennesseans. Tennessee leaders have sought to focus on improving education pipelines through the Drive to 55 initiative and Tennessee Promise rather than on wage regulations. 

"Economists may reluctantly agree to rely on a minimum wage but economists would prefer to do things that invest in human capital, education and health, invest in things that inherently make them more productive that would allow them to garner a higher wage," Murray said.

While some U.S. cities have taken action to increase the minimum wage, Nashville Area Chamber of Commerce CEO Ralph Schulz said he does not hear substantial discussion about such a move in Nashville. A state law passed in 2013 prevents local governments from setting their own minimum on private companies as a condition of operating in their jurisdiction or contracting with that government.

The chamber sees it as a federal issue, not a state or local one, Schulz said.

"We would always like to see workers have a higher level of skill that would apply to better-compensated jobs," Schulz said.

Similarly, Debbie Grant, director of mission integration at Goodwill of Middle Tennessee, said the nonprofit focuses on skill building to help people place out of minimum wage jobs and providing a support system that helps them while they are building new skills.

"Minimum wage just does not make it in terms of the cost of living," Grant said, pointing to rent rates, health care costs, utilities and other basic payments. "They don't have a chance of getting out of poverty unless they are able to have opportunities with education and people who can support them and give them resources they need."

Highest minimum wages by state
Washington, D.C.: $13.25 an hour
Massachusetts: $12 an hour
Washington: $12 an hour
States with no minimum wage: Tennessee, South Carolina, Alabama, Mississippi, Louisiana  ***HMM all Southern with large Black populations***

No comments:

Post a Comment