Consequences of raising salaries...

[Externet]

On the news, UPS drivers to earn 175,000 US$/year.  Soon, DHL, FedEx, all others as the incompetent postal office always in-line will be after the same.

That makes my life and yours more expensive as merchandise we buy or receive will have tripled fees on top.

UPS employees will be celebrating, partying their triumph; every consumer paying for their happiness and everyone else will join after the same.  I did burn my eyelids studying and should had been just a truck driver.  Always thought that pay increases are the main cause of inflation :  What more money? ---> work more !  has been my religion.  Seems am wrong again 😡

[Steve81]

1 minute ago, Externet said:

What more money? ---> work more !  has been my religion.  

Try being a UPS driver for a year, and then tell me what you think it should be worth.

[Externet]

Try designing/repairing/manufacturing/correcting robots assembly errors in microelectronics for a year and then tell me what you think it should be worth.

[Steve81]

8 minutes ago, Externet said:

Try designing/repairing/manufacturing/correcting robots assembly errors in microelectronics for a year and then tell me what you think it should be worth.

I didn’t ask the question, and insult UPS drivers by suggesting they don’t work enough. It’s back breaking labor. Like I said, try it for a year, then get back to me.

[Externet]

Who insulted ?

[Sensei]

From what I see $172k/year, will receive Long Haul Truck drivers.

https://www.cnbc.com/2023/08/18/ups-drivers-can-earn-as-much-as-172000-without-a-degree.html

In the U.S., it is a completely different level due to the size of the country.

"Long haul drivers earn $172,000 on average ($122,000 plus $50,000 in benefits)"

122k / 12 = 10166 per month / 49 usd/h = 207h per month / 8h per day = 26 days.

Here the truck driver has daily limits on how long he can drive the truck and how long he must rest before he can drive again.

207h / 12h per day = 17 days

It seems that a truck driver can't have a real family.. Because how? When you are thousands of miles away, in another state..

 

https://www.google.com/search?q=airline+pilots+salary

"How much do A320 pilots make a year?"

"The estimated total pay for a A320 Captain is $104,686 per year in the United States area, with an average salary of $83,161 per year. These numbers represent the median, which is the midpoint of the ranges from our proprietary Total Pay Estimate model and based on salaries collected from our users."

https://www.glassdoor.com/Salaries/a320-captain-salary-SRCH_KO0,12.htm

(and you have to pay $20-30,000 for training out of your own pocket first)

 

Edited August 23, 2023 by Sensei

[swansont]

The number is at the end of the contract, i.e. 5 years from now, and it’s pay plus benefits

https://finance.yahoo.com/news/170k-bit-exaggeration-ups-driver-111600072.html

The union says the deal would improve the average top rate for delivery drivers to $49 per hour. At that rate, working 40 hours a week would pay just shy of $102,000 annually. (not including overtime)

The rest is what is paid for medical and other benefits, and paid into the pension account.

36 minutes ago, Externet said:

What more money? ---> work more !  has been my religion.  Seems am wrong again 😡

There’s a limit to how long you can work, and this mantra becomes less and less useful as you approach minimum wage.

[CharonY]

I am not sure how it is in this case, but often long-haul truckers also have to pay for maintenance and fuel. Also they are often only paid for the time driving (similar to flight crews). I.e. delays the loading docks eats severely into their salary.

And while there is connection between inflation and salary, the connection is complicated and there is a different discussion to be had on that matter. But blaming things on a particular group is usually not the answer to any question.

37 minutes ago, Externet said:

What more money? ---> work more !  has been my religion.  Seems am wrong again

Against a background of rising cost and lower salaries it becomes simply unsustainable. This is where a Marxist view can make sense. I.e. a situation where all you have is your labour and the relative value of labour decreases, alienation is inevitable. Don't get me wrong, I am quite familiar with brute forcing ones way out of poverty (which includes sacrificing health by forgoing sleep), but increasingly, this is not possible anymore.

[Steve81]

31 minutes ago, Externet said:

Who insulted ?

You, by suggesting they work more. Try it, see for yourself. Otherwise, you speak from ignorance.

[Endy0816]

With only the normal devaluing of currencies by governments, pay has to increase to at least try to keep pace.

 

It's honestly weird how we're more understanding of companies raising prices of goods they sell, but not when people go to sell their labor.

[mistermack]

35 minutes ago, Endy0816 said:

It's honestly weird how we're more understanding of companies raising prices of goods they sell, but not when people go to sell their labor.

Under normal circumstances, companies have to weigh up the effect on sales, when they raise prices. The last round of price rises seems to have been coordinated in some way, maybe it's the effect of the internet or social media, but the fear of losing business seems to not have reined them in.

When you can check the prices of your competitors in an instant, and match your price rises to theirs, the opportunity is there for coordinated price hikes, without actual collusion.

[Phi for All]

3 hours ago, Externet said:

Try designing/repairing/manufacturing/correcting robots assembly errors in microelectronics for a year and then tell me what you think it should be worth.

Just like with the UPS driver, I think it's worth a MUCH bigger share than any corporation out there does. The models they're using all focus on spending as little as possible on labor, always claiming that their resources are worth FAR more. 

I've always been at a loss as to how their resources magically turn into products and services without your labor, and why they don't value you as much as I do. Do you have any idea?

[Steve81]

3 minutes ago, Phi for All said:

Just like with the UPS driver, I think it's worth a MUCH bigger share than any corporation out there does. The models they're using all focus on spending as little as possible on labor, always claiming that their resources are worth FAR more. 

I've always been at a loss as to how their resources magically turn into products and services without your labor, and why they don't value you as much as I do. Do you have any idea?

Agree 100%. 

[Phi for All]

4 hours ago, Externet said:

Always thought that pay increases are the main cause of inflation :

Not in the US, in fact, the pay increases we get here don't even cover the inflation we already have: https://www.forbes.com/sites/johnbremen/2023/05/17/why-salary-increases-still-do-not-align-with-inflation/?sh=6f97e9535d0d

Quote

A WTW survey of U.S. companies conducted in early 2022 reported employers were budgeting an overall average salary increase of 3.4%, which was less than half the then-current inflation rate of 7.9%. At year-end, another WTW survey reported the average U.S. salary increase grew to 4.2%, but still a third below the 2022 U.S. inflation rate of 6.4%.

 

1 hour ago, Endy0816 said:

It's honestly weird how we're more understanding of companies raising prices of goods they sell, but not when people go to sell their labor.

It's like everyone knows they're worth more, but they don't like it when someone else's worth is acknowledged. Or is this part of the bizarre admiration Americans have for ruthless businessmen? Why do we forgive how the wolves of Wall Street destroy people's lives as long as it's just business?

[mistermack]

4 hours ago, Steve81 said:

It’s back breaking labor. Like I said, try it for a year, then get back to me.

No it isn't. It's really not. I did do it for a year, not for UPS but here in the UK, driving a 7.5 ton lorry, down narrow streets. There was the odd hour when we grafted, but generally it was pretty easy work. When you're on the open road in a truck, it's quite relaxing. A bit of loading and unloading was physical, but only in short spurts. 

[iNow]

56 minutes ago, mistermack said:

on the open road in a truck, it's quite relaxing. A bit of loading and unloading was physical, but only in short spurts. 

Was your vehicle air conditioned? How many flights of stairs did you have to carry loads up when elevators were invariably broken or being serviced? Did you drive after Black Friday or the days after Amazon Prime Day?

Curious to better understand how closely YOUR experience was aligned with the modern median experience today. 

[Ken Fabian]

Here in Australia I've seen a pattern where increased labour productivity was not matched by increased wages and wage increases persistently remained below inflation, all whilst corporate profits were still high - often exceptionally high - and the salary increases for executives (aided even more by tax cuts) were far above inflation. Other issues contribute, like rising interest rates and supply chain constraints but one standout was outrageous fossil fuel prices - and not for the sake of saving any economy from the impacts would the gas and oil producers cut their war inspired hyper profits down to mere exceptionally good profits. Renewable energy costs would supposedly be economy wrecking but extreme gas and oil prices with high volatility, plus climate impacts isn't?

But of course business owners, their associations and lobbies blame wage increases... they always, as a matter of principle, oppose wage increases, a bit like denying and pleading not guilty even when you are guilty when facing criminal charges. Low and declining wages do not sustain a healthy economy or even, ultimately, longer term growth in corporate earnings.

The micro impacts - a company is more competitive and makes more profit by reducing their workers' pay (or restricting their rise in the face of inflation) - are accompanied by the macro impacts when every workers' pay is reduced - ie it results in economy wide reduced demand. Yes there is a balance that needs to be kept within bounds but the spending power of ordinary workers is a powerful source of demand for businesses. Increasing profitability and  by reducing wages - giving businesses what they want - can be more economically damaging in the long run than not giving it to them.

There are examples in the world of nations that sustain livable minimum pay rates, with strong union participation and companies paying taxes too, all without being economy wrecking. Or even preventing capitalist wealth accumulation. I strongly suspect intolerance for corruption - including of excessive corporate influence - is a significant factor in finding a healthier balance.

[Phi for All]

34 minutes ago, Ken Fabian said:

Here in Australia I've seen a pattern where increased labour productivity was not matched by increased wages and wage increases persistently remained below inflation, all whilst corporate profits were still high - often exceptionally high - and the salary increases for executives (aided even more by tax cuts) were far above inflation.

This is the US pattern exactly, letting increases in productivity go unmatched by average wage increases. There were also some changes in the ways corporations accounted for workers in their valuations, and suddenly all the biggest corporations started outsourcing many positions in order to make themselves look more attractive. It started with getting rid of janitors and cafeteria personnel, and nowadays many companies outsource even their accounting. I've never understood this part, since it HAS to cost more to hire outside firms in the long run. The corporation may not have to pay insurance and other perks, but the outsourced company does and they figure that in to their own costs, so where ultimately is the cost-savings, if you aren't getting cheaper overseas labor?

And training has become a dirty word in so many companies. Corporations don't train you well because you'll just go get a better job. They don't pay you enough to make you loyal, and encourage a revolving door policy since your training doesn't cost them much. 

I think raising people's salaries is a GREAT idea. Especially when you hear about how poorly the average worker is doing, and how exceptionally better than ever the big corporations are doing. 

[iNow]

7 hours ago, Externet said:

What more money? ---> work more !  has been my religion.  Seems am wrong again

It is remarkable how very often the person working 3 or 4 jobs is making several commas less than folks who take an occasional business call while swinging at a golf ball or sipping cognac.

Take two equally talented people and the one who works harder will tend to do better, but hard work is not the rocket ship to prosperity it once was. In fact, it seems the harder you work these days the less you get paid. 

We're racing to the bottom, and we're winning.

[Steve81]

3 minutes ago, Phi for All said:

It started with getting rid of janitors and cafeteria personnel, and nowadays many companies outsource even their accounting. I've never understood this part, since it HAS to cost more to hire outside firms in the long run. The corporation may not have to pay insurance and other perks, but the outsourced company does and they figure that in to their own costs, so where ultimately is the cost-savings, if you aren't getting cheaper overseas labor?

It depends on the company’s needs. I work providing technical support to dental practices. There’s just not enough to do for a practice to need a full time IT guy, so they contract out, and we’re there when they need us. Same deal with accounting. A small business may not have enough daily GL, AR, and AP entries to justify a full time gig, and prepping financial statements is a scheduled thing. Not big enough? Outsource.
 

Trust is another factor. A company that specializes in their trade looks a lot better to some than hoping you can trust the accountant you just hired not to embezzle funds behind your back.

[TheVat]

Ken, as usual, steps in and posts much of what I wanted to say, except better.  I will just add how annoying it is that American business has such dislike for worker profit sharing (with a few exceptions), the sort of Marx Lite that gives workers a stake in their company and correlates with improved quality and productivity and worker loyalty.  The whole Red Menace thing is tiresome.  

[Phi for All]

13 minutes ago, Steve81 said:

It depends on the company’s needs. I work providing technical support to dental practices. There’s just not enough to do for a practice to need a full time IT guy, so they contract out, and we’re there when they need us. Same deal with accounting. A small business may not have enough daily GL, AR, and AP entries to justify a full time gig, and prepping financial statements is a scheduled thing. Not big enough? Outsource.
 

Trust is another factor. A company that specializes in their trade looks a lot better to some than hoping you can trust the accountant you just hired not to embezzle funds behind your back.

I was focused on big corporations that used to have their own accountants, janitors, chefs, parking attendants, and other positions that filled multiple floors in a single building. They still need those services and the people to do them, but for tax purposes and to be a more attractive company to investors, stockholders, and lenders, they started downsizing their personnel. I don't believe the crap about it being cheaper to hire a foodservice company to replace your cafeteria personnel, or an accounting firm to replace in-house accountants, because it's not, and never could be. The corporations are paying more for this type of outsourcing, but they look good because they keep the employee count low. Stockholders hate it when employees get expensive things like health insurance, retirement packages, and salaries.

[Steve81]

2 hours ago, Phi for All said:

Stockholders hate it when employees get expensive things like health insurance, retirement packages, and salaries.

Pretty much. It’s easier to justify from the accounting side too. A monthly invoice for your technical support company is easy to explain as the cost of doing business; an IT staff of a dozen, with salaries, FICA, FUTA, SUTA, insurance premiums, etc. is a lot more complicated.

Edited August 24, 2023 by Steve81

[swansont]

I just read that US automakers are threatening a strike for a 40% increase in pay, which is the raise that the CEOs of some major automakers have gotten the last 4 years. Going to be interesting to hear how they can’t afford to pay the people who actually do the work 

[mistermack]

Top salaries are getting obscene, and the old argument that you can't get talented people for less is really suspect. 

We've just had a really bitter scandal here in the UK, where seven consultants were constantly warning that an incredible stream of unexpected infant deaths in a hospital in Chester were all happening when one particular nurse was on shift. 

She's just been convicted of the murder of seven babies, attempted murder of six, and got off several more for lack of conclusive evidence. 

The management didn't get it, over and over, even forcing the consultants to APOLOGISE to the murderer, nurse Lucy Letby, and they were threatened with being reported to the medical council if they persisted. 

These managers were all on big salaries, but really, they could not have done a worse job. They've all left with payoffs and big pension pots on top of their big salaries. Any one of the consultants, or nursing staff, or parents, or porters could have done a better job, but we're still fed this line that "you can't get that sort of talent for less" . 

The way top salaries have exploded isn't market forces, it's backroom deals. These people set their own salaries, and the salaries of the people who set their salaries. It's all deals done in back rooms and on golf greens, and talent has very little to do with it. It used to be freemasons, now it's little 'clubs' that get together and milk the public.