On Raising Wages And Departing Employees

 In what is going to be a real life test of an Ayn Randian principle, California has recently decided to up the minimum wage of fast food workers.

For the purposes of this exercise, I am setting aside the arguments about what a minimum wage is and why it is and who gets it.  That is not the crux of the issue - but there is an underlying issue I think bears careful watching.

The issue is simply the breaking point of the average consumer.

One of the things that remains relevant even in my own industry is the idea of COGS, or Cost of Goods Sold - that is, the sum total that one sells a good for.  In theory, COGS is supposed to include all the things which go into the manufacture of that good, including materials and labor (but excluding things like overhead, which falls into administrative expenses).  Nor does this include some level of profit for the company manufacturing the product (Useful description here.)

When labor goes up - just like materials go up - the COGS goes up.  But COGS is not necessarily the same as "price sold at".  This becomes a balancing act of all of the things - COGS, Administrative expense, profit.

When California raised the minimum wage to $20 an hour, it increased the COGS.  Unfortunately for fast food (and all of us), the cost of goods in general (in this case, food) has also gone up.  Which leaves the business owner three choices:  lower profits, raise prices, or cut costs.

From the view of the government, I am reasonably sure that the most desirable outcome is "lower profits".  Profits are, after all, generally evil except above some small socially acceptable norm which is never quite defined but everyone knows what it is (ignoring, of course, the fact that lowered profits equal lower tax receipts.  But more on that shortly.).

From the business owner's point of view, the most desired outcome is "cut costs".  Cutting costs reduced (or at least mediates) COGS.  And, sadly for everyone else, labor is usually the greatest cost any business has.

The option that is overall least desirable is "Raise prices".  From the government's point of view, although likely it generates more sales tax it also hikes overall prices.  From the business owner's point of view, the more prices rise the more likely it is that you will begin to price out certain portions of your market and thus lower overall revenue.

And so - even before this started - business owners started cutting staff.

In at least one example, it started with pizza delivery drivers.  There is a certain cold logic to it - in an age of apps that handle delivery of food, why would one keep a staff to deliver food?  Yes, it means that you do not have direct control over that part of the supply chain, but you are also not paying people who may or may not have deliveries.  And now that overhead and administrative expense falls on someone else, not you, reducing your cost. 

From the government's point of view, this is a bit of a catastrophe.  Less payroll taxes, less income taxes, likely more drain on the social welfare systems as these people look for work.  By "increasing" income, they have decreased their own revenues and increased their own spending.

The other element, of course, is simply the price hike.

As prices increase due to inflation and material costs, people start making choices.  People start realizing what is important and what is not.  And in times of tightened budgets, fast food and restaurants in general are likely some of the first things to go.  

The problem for Our Political And Social Betters (OPASB) is that although they can control owners indirectly, they cannot control consumers.  And consumers will respond to the market in a realistic fashion based on their experience, not on what good intentions would mandate.

By (in theory) trying to do the "right" thing in increasing people's salaries, they have likely ensured that more people will not have jobs.  Which seems like a bit of a reverse outcome. 

Contrast this mandate with at least one restaurant here in New Home 2.0, where they notify you up front (literally up front as you enter the restaurant) that they charge a 3% "living wage" fee as part of the check.  If you do not care to pay it, you can have it removed.  This, to me, makes more sense:  I am informed, I have the ability to opt out, and the company is able to do something to mitigate costs (likely most people do not refuse the additional amount).

My prediction?  Layoffs will skyrocket. Businesses will fold.  Where businesses do not fold, automation will not just become an interesting idea or unique selling point, but critical to the businesses ability to survive.   It will not impact OPASB of course; they eat at locations where none of these things will be an issue.  But almost everyone else will see some kind of effect.

Atlas may not be shrugging, but he may be limbering up his shoulders.

The Price Of A Flight

During the initial outbreak of The Plague in 2020, one of the things that was impacted was travel - more specifically, my travel as a family vacation to a foreign country where Nighean Gheal was then going to school was canceled because, well, the country shut down (which made getting there a bit difficult).  The credit was issued of course, and so for the past two years it has sat there, slowly getting extended expiration dates.

This past June, The Ravishing Mrs. TB sent a note along: would I consider not in Country X, but in Country Y?  Sure, I said.  After all, Country Y had just as much historical interest and as many historical places to visit as Country X and - barring the collapse of the entire system - I could probably use a break.

(To be fair: This trip was originally planned as a graduation trip for The Ravishing Mrs. TB and Nighean Dhonn, our youngest.  They mentioned that they was going and I helpfully invited myself along.)

At the time, the cost of plane tickets would have been about double what we had in credits from 2020 (therefore, 50% more in current dollars).  The Ravishing Mrs. TB and I discussed it, then we made the plunge and purchased the tickets.  It was a gamble that the tickets would not go back down in price, but at the same time with selected dates, it is also a gamble that if you do not reserve tickets, you will not get the dates or times you want (because arriving at midnight in a foreign country where you do not speak the language is, well, awkward).

Near the end of last month she checked ticket prices again - they had doubled from what we paid, or had exhibited a 70% increase in cost overall.

Now admittedly airfare overseas is not something that impacts most people (not even me, usually). And it is a bit hard to have sympathy for individuals complaining that their trip to the French Riviera or the Bali coastline is "unattainable" due to price increases (I, myself, am sobbing into my coffee as I write this).  But a 70% increase in price in a two year period is a sign of things rapidly accelerating beyond not only control, but affordability.

Does it impact me?  Sure, a little.  What is true in international flights is true in domestic flights as well, and I have definitely seen an increase in the cost of getting from New Home to The Ranch.  And it will impact any ability I have to go to train in Japan (which, to be fair, is the last trip I would likely give up and will do everything in my power to do until it simply becomes unaffordable).  

As is evident to almost everyone, prices are going up.  On everything.  And will have impacts in ways that we cannot fully understand until we get there (the term "distorted markets" will come to have a new meaning).

And no, oddly enough, I suspect none of us saw a 70% increase in our salaries over the last two years.  After all, the rest of us dwell here, in the real world.

Economics As Predator

 Of all the things that impact our lives living as social creatures in a state construct, the most influential one is economics.  

It is also the one that seems to be least understood.

Economics creeps into every aspect of our lives. When we turn on our lights, economics is either charging us for that electricity or we paid to have off grid systems to supply it.  When we purchase anything - food, fuel, even books (shocking as it seems), economics has informed the price of that item through availability, supply, demand, desirability, and the inevitable overhead in taxes. Retirements and pensions rise and fall on the global and national economics; in the United States our version of Old Age Provision, Social Security, bases its increases off of the inflation rate of said economics.

And yet, I suspect for most people, their eyes glaze over at the thought of digging deeper.

Most people - myself for years - understood economics in terms of "I get paid.  I lose some money in taxes.  With the rest, I pay for my life".  If I am wise, I am saving for the future. If I am not, I am consuming for the present (I have done both at one time or another).

And then the economy comes back to bite.  And people are mysteriously surprised that somehow this thing, this scarcely acknowledged thing that like a rarely seen fish at the bottom of the ocean is only occasionally brought to the surface, has suddenly appeared in all of its needle-teeth, bug-eyed, bloated body horror.

Inflation eats up purchasing power.  People lose their jobs and suddenly, they cannot buy more thus pushing those business they purchased from closer to the edge of failure.  The government, as provider of last resort, raises taxes to support more programs.  With more taxes comes less ability to spend which, when coupled with rising costs, puts even more pressure on businesses.  Which means more people lose their jobs. 

And so it goes.

Employees react to less ability to purchase by demanding raises.  Employers either give the raises and pass the costs on or give the raise and do not pass the costs on - and then reduce staff to pay for the remaining employees.  Or, they look to other technologies to reduce overhead cost altogether.

Somehow the "rich" are holding on to every thing and making it tough for everyone else, yet the definition of "rich" keeps settling downward as a government desperately in need to money to pay not only the programs it keeps continually creating, but the ever increasing national debt that is now incrementing even more quickly as the interest rates rise to combat inflation.

All of this goes on until, of course, it does not.

This may come across as a somber post for me - because it is. I am no genius and neither an economist nor the son of an economist, yet even I can see that this does not work well.  Like every economic disaster - and arguably, that is what I think we are facing - the bulk of people will find themselves shocked that this occurred.  "How did this happen?"  will be the cry.  "We were the pinnacle of economies!  The richest!  The most productive!  How did it come to this?"

It came, because when the subject of economics came up - the one thing that cuts across every sort of political, social, religious or moral belief - came up, everyone turned away.  After all economics is boring.

Predators from the deep are boring to other inhabitants of the deep.  Right up to the point the predators consume the other inhabitants.

We Are Done: Nibble Ring Edition

 Here at An Taigh a Thoirdealbheach Beucail, we spend more than a bit on pet supplies supporting, as we do a cat, a dog, two guinea pigs, and three rabbits.  It is I am sure (for many) not an entirely justified expense but we have always had pets (certainly through our marriage and for me, most of my life) and they bring me a great deal of joy (and frustration).

One of the treats which are given - twice a day - to the rabbits and guinea pigs are Nibble Rings.

Nibble Rings (for the uninitiated) are small rings of compressed corn and hay.  The practice is that everyone gets one in the morning (5) and the evening (5).  A the Cat also demands one - no harm, I suppose - as does Poppy the Brave when she is here, so add another 2, or up to 14 Nibble Rings a day.

Honestly, I probably should have purchased stock.

My primary purchase point for these is the rabbit shelter I volunteer at, because (frankly) they need the money and it is better than giving it to a nameless corporation.  Given our recent supply chain issues, it has been a bit of a challenge to get these in house.  For a while their supply slowly dwindled as they could not get them for love or money.  Now, they are available - six packs at a time.  I had always tended to buy another pack when I was getting close to bottom; now, I buy much earlier.

I opened up one of the recent packs and as I was distributing them, I thought they looked a little different to me.  I was able to find an "older" nibble ring at the bottom of the food box:

You may notice a change in size.  You would be right.  

Mind you, the cost to the shelter has not gone down.  I am getting it a little above cost, so my price has gone up as well.  I doubt that the animals notice the difference (well, the guinea pigs might have - they treasure every morsel of food and grumble when their "supply" is less), but I certainly do.

If we are at the point of compressed hay and corn rings shrinking in size, we are only a few short steps from the breakdown of civilization as we know it.

TB Goes To The Mall, Or An Economy Of Buying Things

 During my weekly visits to Old Home, one of the standard practices I have is to meet a high school friend (as she is of Italian descent, hereby La Contessa) for dinner.  We try to meet halfway between her home and The Ranch, which usually puts us in the same geographical location every month for dinner.  As one might imagine, after X amount of times at the same place, one starts looking to branch out. 

Her most recent suggestion was near to Local Big Mall Of Things (LBMOT).  After looking at the location and the likely traffic patterns and the fact that I had not yet exercised for the day, I decided to beat the traffic and take my daily jaunt around LBMOT.

In my limited experience (by limited, not having stepped into a mall in a least 3 and possibly 4 years), there are only two sorts of malls currently: malls that are doing well (which from what I know, typically cater to a typical income level, which is above mine) and malls that are not and are slowly dying (which probably do cater to my income level).  The LBMOT is the former a larger mall in an affluent community and one that, if I recall correctly, I had not been to in at least 8 years.

The mall itself is a gleaming white edifice both inside and out laid out in classic "mall fashion": four anchor stores with two long corridors of two levels with occasional bridges crossing (this one had stores on the crossings; not all do) and the expected food court, movie theater, and arcade.  The white tile floors made to resemble marble clumped under my boots which, wearing one of the father's hats that says "TB Farms" with jeans and a plain blue T-shirt, completed my look of "Local Hick Escapes Back Country For A Ramble And Just Looks Awkward Trying".

I wended my way through the bottom floor and up one side and down the other, then took the elevator to top floor and did the same.  The mall was lightly attended - not surprising for a weekday afternoon - filled mostly with singles and small groups and some families either pushing carriages or shepherding small herds of children.  No annoying background music blared and (thankfully) no holiday decorations were up yet.

The mix of malls always has always fascinated me.  I remember the early malls of my youth being a real mix of different kinds of diverse retail outlets.  From what I know of the ones in New Home this is no longer the case, which was matched at the LBMOT:

- The bulk of the stores (60%?  I did not count - but the majority) were either clothing or shoe stores, high end brands or smaller "indie" brands that make people feel like they are both exclusive and rebelling against the system - for a price (Rest easy there, rebel.  I am sufficiently intimidated by your slightly acerbic attitude and generationally appropriate saying/picture on your shirt.).  

- The standard 4 to 6 jewelry stores/accessory stores, which, while tempting to sink my life's savings into a single item or more cheaply, to get my nose pierced with an accompanying nose ring to tie the ends of my moustache to (Take that, rebel). 

- 3 to 4 home goods stores of the higher end variety, which typically means "I should not touch anything lest I break it".   

- The ubiquitous Sportsball store where you, too, can spend hundreds of dollars supporting those making millions.  

- The odd unique or outlier - a build your own slime shop (no, really), a stuffed animal construction shop,  an alterations store (this was a real surprise - I have never seen one before), and an actual Hallmark Gold Crown shop (when was the last time I was in one of those?).  

- A smattering of snack stores - gelato, pretzels, the every present coffee store with the mermaid, the center aisle stand alone kiosks selling calendars/phones/jewelry/exotic scrub from far off lands whom I try to avoid making eye contact with lest I become engaged in a conversation about the importance of exfoliation.

- The small kid friendly zones that always make me smile if for no other reason than I remember bringing Na Clann here for the same thing (watching a little tyke stand as much as he could on a car ride that just went up and down made my day).  

In other words, American commercial culture at its finest.

Me being me of course, I cannot just "walk around" the mall without thinking and pondering.  In this case, thinking and pondering about what I saw and what it portended economically.

I can safely say that everything in that mall - every thing with perhaps the exception of generating my own personal colored slime - can be procured somewhere else.  Maybe not the precise item, but the type of item represented.  Clothes can be bought at stores of lesser heritage (and expense), online (which is where The Ravishing Mrs. TB gets most of hers) at one's local charity store, or even hand sewn.  And while I have to confess to a secret love of strolling through kitchen goods and home goods stores like Bob's Of Wine-land or Box and Cylinder (I love looking at kitchen gadgets and fancy foods and fancy coffee machines), I usually need none of those things or can purchase them far more cheaply somewhere else. (official shout-out for Lehman's, the home goods store for the rest of us).

In other words, there is precisely nothing I actually need there.  

But in large part this is our economy and at least in the West, our world.

We construct edifices that we fill with things that we then mark up said goods to sell and hire people to sell them so that we can generate "economic growth".  We work to acquire the funds to to acquire said things, then motor our way to and from said edifice to purchase the thing, to use it and then (often) to get rid of it so we can acquire other things. 

We have built an economy that requires us to buy things to remain economically viable.

Imagine - if you will - a world where spending was drastically curtailed.  Let us assume for the moment that it is not for any bad reason (highly unlikely, but go with it), but people came to some grand awakening.  The edifices close.  The people working in the edifice lose their jobs.  The people delivering things to the edifices lose their jobs.  The people make things for the edifices to sell - maybe they keep their jobs making things, but less than they used to (Who knows - do the personalized slime people make it?  I hope so.).  In our imaginary world, we have just created massive unemployment and a possible recession.  

Simply because everyone decided to no longer "consume" things.

To be clear, I am not against the concept of malls or high end stores or people enjoying themselves at them - for some, this is their form of leisure and if leisure prevents a mental breakdown without illegal practices, I am all for it.  Even I keep going back to Bob's of Wine-land to look at the gadgets and admire the fancy coffee machine I would never buy.  But what is foolish is the concept that somehow we have built an solid and stable economy on this, an economy that requires us to continue to spend - and spend big - to sustain it.  Much like riding the tiger, we may suddenly find out we have no option for escape except to let the tiger run itself to exhaustion, lest we be devoured.

On the bright side, if everyone is devoured, my fancy coffee machine may finally drop in price.

When We Cannot Talk Anymore

We seem to be losing the ability to even talk to each other.

Like most bloggers, I go to number of sites:  some blogs (like the ones over there), some opinion sites, some boards.  What is becoming both increasingly clear and increasingly alarming is the fact that the ability to have even the most basic of discussions is rapidly disappearing.

It is not longer enough to just disagree with a statement or present an opposing view.  More and more, responses are at least passively aggressive, if not actively so.   This is something I have sort of come to expect on sites that opposing sides are actively "debating" (I use the phrase rather loosely, given the times).  What is rather shocking to me is this is now happening on sites and between individuals which in theory are ideologically, culturally, or socially aligned.

I consider myself fortunate - the conversations here remain polite, restrained, and kind, to which I am indebted to you who read and comment.  Even if you may disagree with myself or others, you are gracious and observe "the house rules" (so far as I have rules on this site).  The thing that surprises me is how less and less true this seems to be out on the InterWeb.

How is that we lost the ability to respond to each other not in anger, rage, sarcasm, or disgust - and not "the opposing side", but the side that one is theoretically on?  This is not a silly passive sort of name calling or "You are wrong".  This is active and angry responses meant not to communicate information (well, possibly) as much as it is to injure and wound and some feel superior.  And again to emphasize, this is from people who theoretical claim they are all on the same side (or at least opposed to the same things).

I am honestly confused as I expected more of people who espouse the virtues of rational thought, data, reason, and (in some cases) Christian charity.

It matters - not just because we lose the ability to discuss things, but that we take the social fabric and rend it even further.  That which we despise becomes despicable; that which we loathe becomes loathsome.

That which we hate, becomes hateful.

In C.S. Lewis' book The Great Divorce, Hell is imagined as a dreary gray township under a gray sky which constantly threatens to turn to night.  The city is huge but sparsely inhabited.   The Narrator (presumably Lewis) asks another individual about it:

""It seems a deuce of a town" I volunteered, "and that's what I can't understand.  The parts of it I saw were so empty.  Was there once a much larger population?"

"Not at all" said my neighbour. "The trouble is that they're so quarrelsome.  As soon as anyone arrives he settles in some place.  Before he's been there twenty-four hours he quarrels with his neighbour.  Before the week is over he's quarreled so badly that he decides to move.  Very likely he finds the next street empty because all the people there have quarreled with their neighbours - and moved.  So he settles in.  If by any chance the street is full, he goes further.  But even if he stays, it makes no odds.  He's sure to have another quarrel pretty soon and then he'll move again.  Finally he'll move right out to the edge of the town and build a new house."

By losing the ability to talk to each other, even those who in theory share similar views (let alone those we disagree with), we are danger of building our own version of Lewis' Hell.

Götterdämmerung

11 Days ago I posted on the Fall of Afghanistan.  I seldom comment on current events and assumed that having written on it, things would continue apace and other than a colossal embarrassment and the effective change in the world order, there was not much more to write on and I could go on to something less depressing.

I was wrong.

As I write this, 13 US Service members have died and 18 are wounded, plus civilians (an early count was 43 killed and 130 injured; I presume both counts will go higher) due to a suicide bomb.  A second car bomb went off elsewhere in the city.  A US General has reached out to the foes they were fighting weeks ago - the foes they have been fighting for 20 years - to "make sure they know what we expect them to do to protect us."  There is the assumption - and fear - that the attacks will continue.  The theoretical leaders of the Current Administration struggle to make updates to the people they supposedly serve:  in a moment when they should be actively and frequently talking to the citizenry, they say nothing or try their best to appear as infrequently as possible.

It is Götterdämmerung.

I understand that I could be accused of hyperbole - after all, although this is terrible event or series of events, this is hardly the end of the country.  The lights still went on this morning and will likely go on tomorrow.  The economy will still be there.  My oatmeal and yogurt will be ready for me when I eat them in the morning.

All true of course.  But beyond the true casualties - the military and civilian dead and the images that will undoubtedly appear of those who could not make it out but will serve as useful pawns for The Orcs (I will not name them) that have overrun Afghanistan - the remaining casualty is the legitimacy of this Administration and its government.

If it is not clear now, it will soon become so that the ongoing series of action which at best are pointless and at worst counterproductive indicate that there is literally no-one of any sense or capability at the helm.  Our enemies have been emboldened past any sane point of reason.

The US will act?  By doing what?  Sending a few troops and then begging to not be attacked?   Say they will support us and then flee in the middle of the night?   The United States has become the lowest cow on the herd order, to be bullied and pushed by anyone and everyone.  Our allies look on with a mixed wonder and horror at what we have become, our enemies rejoice at what we have become, and apparently our leaders have no idea what we have become.

But set aside military action for a moment.  Human rights?  You have enabled by your actions the takeover by the Orcs whom have made very clear - as they are doing now - how they view human rights.  Any and all complaints and excoriations coming from the government or the Current Administration will simply be words, vacuous protestations without anything behind them.  Their attempts at home to enforce what they subjected people to abroad will stand as a rebuke from this time forward.

Finally, of course, is the domestic chaos.  Domestic, you ask? This has happened far and away - how does it impact the domestic? Simply put, by demonstrating their complete and utter ineffectiveness - indeed, their fecklessness and mendacity - they have shown they should not be put in charge of anything.  Infrastructure?   Health Mandates?  Business?  Borders? Can anyone in their right mind believe that having failed abroad so completely, they will do any better here?

In two weeks, an entire era and belief in a system has been gutted.  Whatever comes after this - when the bodies have been returned and the wounded, healed in body but not perhaps in mind, are integrated into society, and the horrific videos of the work of the Orcs is put out for the world to see - it will not be the country that I either grew up in or even knew in the last 20 years.  It will be a rapid shell of top level failure and ineffectiveness attempting to prove it is still what it always was.

I wonder, this time, if everyone else will play along.

Tolerance

 

HT:  Ann Barnhardt

We Are Done: Speed Limit Edition

 Everybody - once in their lives - should drive through West Texas on I-10.

Once you get out of El Paso and past the trailing border cities to Fort Hancock, you get into a world of long landscapes, mesas, rocks, scrub brush - and learn what the word "vista" means.  The towns there - Van Horn, Balmorhea, Fort Stockton, and on to Ozona, where you begin to reach the Central Texas Highlands - are small communities strung out between the wilderness, towns which probably have the same purpose now as they did 150 years ago as rest stops for travelers.

The ground is white and brown with gravel or rocks and dirt.  If you drive at the right time of year, storms blow through - the kind of storms you picture in the deserts, full of wind and driving rain and lightning that flashes above the mesas and drives the periodic windmills faster and faster as they dance between the oil pumps.  If you drive at the wrong time of year, the sun beats done without mercy, straining the air conditioner unit and making one keep an eye on the gas gauge to refuel every chance one gets.

The other reason you should drive it is because of the speed limit.

Once you get out of the towns, the speed limit climbs:  75 mpg, 80 mpg, 85 mph even (in some stretches of road) no speed limit to be seen at all.  The Texas authorities, in their wisdom, decided that in long stretches of land,  mandating a lower speed limit for the sake of a lower speed limit made no sense at all.

Contrast this with my drive in Old Home this past weekend.

Old Home, like many other states, likes to consciously trumpet its 65 mph speed limit and how much more sane and rational it is.  

It may sane and rational.  It is also noteworthy that no-one seems to follow it.

I am actually one of those sticklers for speed limits and so I am always at it. During a three hour total driving time as I drove to my in-laws and back, I passed a total of 4 cars doing at or less than the limit.  Everyone else was bustling along at 70 mph at least, if not higher.  And on a major interstate, so there were plenty of vehicles on it.

Yes yes, I know this happens all the time.  So what does it matter?

It matters because it says a great deal about how people view the law.

The speed limit - everywhere - is a law.  It is not a suggestion or a "good idea".  And yet, more often than not, people break it.  Routinely.

They break it routinely, smug in the fact that it exists and may be doing "some good", whether in safety or environmentally - but it does not apply to them.  They have important places to be and frankly, driving there slowly is just an excuse to waste time.  And after all, almost no-one every gets caught, except those that are going really fast (and probably deserve it).

But it is a mendacious belief.  

By firmly adhering to this practice, they in point of fact make the law meaningless.  Oh, it feels good to say "look how much good this speed limit does" - but in point of fact, they undermine their position by failing to follow it.  They have pushed their minds to where law breaking is really more of an inconvenience than a violation.

They will not fight to change the law.  They will not obey the law.  They just act as if it is not there.

Which is fine, I suppose, if all you are concerned about is speed.  But do not be surprised when all of a sudden, everyone else stops paying attention to or obeying laws that they find inconvenient.

"But the law!"  will be the cry of those righteous folks.  "It is written" they will call out.

"True"  will be the response.  "But other things were written as well, and you ignored them.  You have set the standard.  We are merely following your example."