8 Reasons Why We Should (and should not) Raise the Minimum Wage

McDonald’s has given up lobbying against a minimum wage increase. Is this a good thing or a bad thing? I explore the pros and cons of raising the minimum wage, how robots and automation factor in and the effect on the  fast food industry  in this episode of “The Jim Stroud Show.” I also make comparisons to the retail sector and how the future of work for the retail industry might adapt. All courtesy of ClickIQ, the automated job advertising platform you should be using; at least in my humble opinion. 😉

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The Future of Student Loan Debt

19 | There is a crisis of college student loan debt that is mind-blowing in its scope. Let me share some numbers with you: 44.7 million Americans have student loan debt representing $1.56 trillion owed to the government and of that HUGE amount of money, 11.5% of student loans are 90 days or more delinquent or in default. Add to these facts that students are still applying to US Universities with no sign of slowing down, at least according to the statistics portal – Statista. So, the cycle of student loan debt will continue or, will it? I happen to think that the future of student loan debt is no more long-term debt, thanks to “income sharing.” Tune in to find out what I mean.


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About the host:

Over the past decade, Jim Stroud has built an expertise in sourcing and recruiting strategy, public speaking, lead generation, video production, podcasting, online research, competitive intelligence, online community management and training. He has consulted for such companies as Microsoft, Google, MCI, Siemens, Bernard Hodes Group and a host of startup companies. During his tenure with Randstad Sourceright, he alleviated the recruitment headaches of their clients worldwide as their Global Head of Sourcing and Recruiting Strategy.  He now serves ClickIQ as its VP, Product Evangelist.

PODCAST TRANSCRIPT

Hi. I’m Jim Stroud and this is my podcast.

There is a crisis of college student loan debt that is mind-blowing in its scope. Let me share some numbers with you: 44.7 million Americans have student loan debt representing $1.56 trillion owed to the government and of that HUGE amount of money, 11.5% of student loans are 90 days or more delinquent or in default. Add to these facts that students are still applying to US Universities with no sign of slowing down, at least according to the statistics portal – Statista. So, the cycle of student loan debt will continue or, will it? I happen to think that the future of higher education is income sharing. I’ll tell you why I think that, after this, special message.

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  • Lambda School is doing something that I think is revolutionary. Or, at the very least, is leading a revolutionary trend. Lambda School trains people online to be software engineers at no up-front cost. Instead of paying tuition, students can agree to pay a percentage of their income after they’re employed, and only if they’re making more than $50k per year. If you don’t find a job, or don’t reach that level of income, you’ll never pay a cent. Drop the mic’. Boom!Lambda School is one of the few education institutions doing this type of deferred payment initiative. The official name for this type of program is called – Income Sharing Agreements. Purdue and startup boot camps like App Academy and General Assembly offer similar ISA (income sharing agreement) programs. For the record, I love this model because it makes perfect business sense to me. ISA schools succeed when the students succeed. Such being the case, the curriculums lean towards high-salary jobs since they teach skills like iOS development, Android Development and Data Science. Looking at Lambda School objectively, its only been around a year. Will this idea work long-term? I hope so, but I don’t know. There are several successful alumni featured on its webpage and quite recently they raised $30m to expand its 6-month programs into high-demand industries like nursing and cybersecurity.So, are income sharing agreements the model all schools should adopt? If they did, what would likely happen? Umm… Let me speculate.
  • The Lambda model works well for jobs where the salaries are high. Such being the case, I don’t imagine Lambda supporting careers where the average pay is below… $50,000.00. Other schools seeking to duplicate this model, would likely follow suit which means, there would still be a lot of college debt but for people with lower incomes which, is not a good thing. But on the flip side, if more people join schools with income-sharing agreements, those jobs making less than $50k will have to raise their salaries in order to attract talent.
  • Something else to consider, a student in an income sharing agreement is not obligated to work; so during periods when the student is not working and has no income, the student does not have to make payments on their income sharing agreements. Compare that to the average student loan that you have to pay back whether you are working or not. I think this is a good thing as it will reassure students that they will only owe money on worthwhile education. So, how will some of the IVY league schools compete with that? I think they will have to offer fewer course like: Underwater Basket Weaving offered by the University of California at San Diego; or courses on pop stars like – Lady Gaga which was offered at The University of VA, officially entitled – “Gaga for Gaga: Sex, Gender and Identity.” Or, the “Joy of Garbage” which is a course designed to teach students how to manage garbage and encourage them to make less waste and recycle more. You can sign up for that at UC Berkeley.
  • And finally, one last concern, should this income sharing agreement model take off like I want it to. I think some regulation would have to be in place to protect students from predatory practices. For example, Lambda’s program puts a cap on how much money you pay back – $30,000. Competing programs could easily set a cap much higher, add late fees and without the safety net of being accountable only when you are working; how would that be any different than a government sponsored student loan? It wouldn’t be. It would be the same type of debt under a new name.

I am hopeful that the Lambda school model of income sharing agreements catches on. A good education, in exchange for a percentage of your income for a limited time is SOO much better, in my opinion, than graduating like the average college student with $39,000 in debt with 10 years to pay it back.. with interest. But that’s just my opinion. I would rather hear yours. A penny for your thoughts?

If you love what you heard, hate what you heard or, don’t know what you just heard, I want to know about it. You can reach me at my website – www.JimStroud.com. In addition to finding source material and related information for this podcast episode, you’ll find other goodies that I hope will make you smile. Oh, before I go, please financially support this podcast with a little somethin’-somethin’ in my virtual tip jar. (There’s a link in the podcast description.) Your generosity encourages me to keep this podcast train chugging down the track. Whoot-whoot, whoot-whoot, whoot-whoot…

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Who will win the Minimum Wage Fight for 15?

18 | The Fight for 15 is an American political movement advocating for the federal minimum wage to be raised to $15 per hour. The federal minimum wage was set at $7.25 per hour in 2009, and as of 2019 it has not been increased since. The movement has involved strikes by workers in child care, home healthcare, airport, gas station, convenience stores but most notably with fast food workers. What will happen if or when $15 is the minimum wage for all of the United States?  I speculate the national and global consequences in this episode of The Jim Stroud podcast.


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About the host:

Over the past decade, Jim Stroud has built an expertise in sourcing and recruiting strategy, public speaking, lead generation, video production, podcasting, online research, competitive intelligence, online community management and training. He has consulted for such companies as Microsoft, Google, MCI, Siemens, Bernard Hodes Group and a host of startup companies. During his tenure with Randstad Sourceright, he alleviated the recruitment headaches of their clients worldwide as their Global Head of Sourcing and Recruiting Strategy.  He now serves ClickIQ as its VP, Product Evangelist.

PODCAST TRANSCRIPT

Hi, I’m Jim Stroud and this is my podcast.

The Fight for 15 is an American political movement advocating for the federal minimum wage to be raised to $15 per hour. The federal minimum wage was set at $7.25 per hour in 2009, and as of 2019 it has not been increased since. The movement has involved strikes by workers in child care, home healthcare, airport, gas station, convenience stores but most notably with fast food workers.

The movement has seen some success on the state and local level. California, Massachusetts, and New York are currently in the process of raising their state minimum wage to $15 per hour and major cities such as San Francisco, New York City and Seattle, where the cost of living is significantly higher, have already raised their municipal minimum wage to $15 per hour with some exceptions.

What will happen if or when $15 is the minimum wage for all of the United States?  I speculate the national and global consequences after this special message.

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The fight for a $15 minimum wage has been argued over and over and over by people who support and oppose the idea. These are the points I tend to hear, both pro and con.

If you are for a $15 minimum wage then, you are likely thinking that minimum wage workers will have more spending power which means increased sales for businesses resulting in more workers being needed. There would be less stress on social programs because people will be able to better take care of themselves. And since people would be earning more money, there would be less employee turnover thus, saving companies money from lost productivity due to vacant openings.

If you are against the $15 minimum wage, its likely because you, as a business owner, believe you cannot afford the raise in salary and must layoff workers to compensate. Plus, the increased salaries will have to be compensated for in some way, likely you will have to raise your prices and outsource some of your jobs to countries where people are willing to accept a lower pay rate. I also imagine that competition for jobs will intensify exponentially as overly qualified individuals pursue jobs that younger workers typically pursue. And when that happens, younger workers won’t have the experience needed to build their resumes.

The minimum wage debate is only going to increase in light of the fast approaching 2020 presidential election. Presidential hopeful Bernie Sanders has been pressuring McDonald’s to raise their minimum wage to $15 via an open letter to the CEO of McDonalds – Steve Easterbrook and a tweet which (in part), says this, “If Amazon and Disney can pay $15 an hour, so can McDonald’s, which made $5.1 billion in profits last year.”  Some people agree with Bernie Sanders. I speculate, many businesses do not.

I was in London recently and I saw something I had never seen before, inside McDonalds was a kiosk that allowed you to place your order and pay for your food. I looked at the counter where I presumed the cashier would be. There were several workers handing out food and such and some were taking orders but, I had to wonder. How many less workers were needed once these kisoks were introduced?  I did a bit of research after witnessing this and found out that McDonalds was adding these self-order and pay kiosks to 1,000 stores per quarter; not to mention their  mobile app that let you place orders with your cell phone. Very, very clever.

Now, I don’t speak for McDonalds, so I can only guess that these kiosks are McDonalds rebuttal to the “Fight for 15” movement. In other words, McDonald’s says sure, we will pay a $15 minimum wage if required but thanks to automation negating cashier jobs, that $15 an hour salary will go out to fewer workers.

So, on one hand, it looks like McDonald’s wins by employing fewer people while at the same time reaping higher profits. Right? Well, not necessarily. What happens when your customers don’t agree with your policy and protest it or, worse yet, show their discontent by shopping elsewhere? Consider this… Quite recently, Walmart announced that it was getting rid of greeters (many of whom are disabled) and would replace them with “Customer Hosts.” The plan was to go in effect at 1,000 of their stores. Shortly thereafter, there was a BIG backlash from its customers. So much so, Walmart backpedaled on their policy. Listen to this report from CBS Pittsburgh.

And here is something else to consider… Amazon. Robert Charette, a risk consultant to financial organizations made a very astute observation. Here’s a quote from 2017 that is still ringing true today…

Amazon is a leading indicator of what may come for service industries. In 2012, Amazon purchased Kiva Systems, a maker of warehouse robots, for US $775 million. The company began deploying the 320-pound, 16-inch-tall robots to its warehouses in early 2014, with some 10,000 of them operational by the end of 2014. Analysts estimatedthen that each robot replaces 1.5 full-time-equivalent human beings. Over the past two years, Amazon has added another 30,000 Kiva robots to its warehouses, as well as increased the productivity of its warehouse activities through additional automation initiatives, which allowed it to ship over 1 billion items between 1 November and 19 December 2016. While it may still be some years away, nearly completely automated Amazon (and other companies’) warehouses are seen as inevitable.

Clearly, Amazon’s automated warehouse efficiency has other consequences. It has enabled Amazon, through its online sales channel and ability to discount prices, to become the world’s eighth largest retailer(and largest online retailer). Amazon increasingly is taking market share away from traditional department stores, helping place companies like Sears, Kmart, and Macy’s, among many others, at risk. All three announced significant store closures and layoffs this past week, with Macy’s alone eliminating 10,000 jobs after disappointing holiday sales attributed to increased online sales competition. Macy’s management says it will take the savings from the layoffs and invest it into its online presence.

How many of those employees that Macy’s and other retail companies laid off will be able to find comparable work at the same salary is unknown. However, it is unlikely for very many, as few retailers that are under threat by Amazon and other online retailers are hiring permanent staff. Instead, like Macy’s, they are looking for ways to shed staff while they increase their online presence to combat Amazon and other e-commerce discounters. [END QUOTE]

And now, 3 predictions…

  1. Technology will persevere, and progress will be made, as it always has, since at least the 19th century when people protested the cotton gin and the steam engine as a threat to their way of life. But I think the transitional period will be bumpy, to say the least. As automation encroaches and younger, under-educated workers from the services sector become more and more frustrated, I think it is entirely possible to see another type of… Arab Spring but this time, on a much larger scale. Why? People losing jobs in America due to automation is one thing multiply that number by the countries we no longer need to outsource jobs too due to that same automation; and you have young angry displaced workers all over the globe, and roughly around the same time.
  2. Companies will begin to experience consumer rebellion. What do I mean by that? People will begin to make a more conscious effort to forgo automation whenever possible: for example, skipping right past the robot operator and demanding to speak to an actual human being when calling a company; not using the automated checkout lines in supermarkets and reducing reliance on ATM machines.
  3. There is a Made in America movement to support American businesses and the families that rely on them. I imagine that in the next decade, there will be a “Made by Human Hands” movement to support those businesses who refuse to fully automate their processes so they can put a human being to work.

But that’s just what I think will happen. I’m more interested in what you have to say.  Share your thoughts?

If you love what you heard, hate what you heard or, don’t know what you just heard, I want to know about it. You can reach me at my website – www.JimStroud.com. In addition to finding source material and related information for this podcast episode, you’ll find other goodies that I hope will make you smile. Oh, before I go, please financially support this podcast with a little somethin’-somethin’ in my virtual tip jar. (There’s a link in the podcast description.) Your generosity encourages me to keep this podcast train chugging down the track. Whoot-whoot, whoot-whoot, whoot-whoot…

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A Future Talk on Careers with Dr. Tracey Wilen

NOTE: I’m thinking of doing a podcast where I interview interesting people about the future of work, life and everything in between. Consider this to be the pilot episode. If I do more of these, it will be because of the comments and encouragement of my listeners. So, please do share your thoughts.

A podcast about the future of everything.

My guest in the premiere episode of “Future Talk” (working title) is Dr. Tracey Wilen.  We discuss the career confusion of mature workers and millennials  seeking to progress in their career, how to figure out a career path in this constantly changing technological landscape,  what to do when you don’t know what to do next in your career and more. Get a pad and pencil (or have you texting finger ready) to take notes as lots and lots and lots of strategies are suggested herein.


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ABOUT MY GUEST

Dr. Tracey WilenDr. Tracey Wilen is a researcher and speaker on the impact of technology on society, work, and careers. A former visiting scholar at Stanford University, she has held leadership positions at Apple, HP, and Cisco Systems. She was an adjunct professor for Bay area colleges teaching classes in business, technology and women’s workforce topics.Dr. Wilen was named San Francisco Woman of the Year (WOW) and honored by the San Francisco Business Times as the most Influential Woman in Bay Area Business. She is a finalist for 2018 Women Advocate of the Year for Women in Technology(WIT). Dr. Wilen has authored 13 books, her newest book is Career Confusion: 21st Century Career Management in a Disrupted World (2018) a companion book to Digital Disruption; The Future of Work, Skills, Leadership, Education and Careers in a Digital World (2018). Available for order on Amazon and Barnes and Noble.

To contact Dr. Tracey Wilen:

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