FacebookTwitterGoogle+RedditEmail

Ikea Deserves Only Tepid Praise

by

By announcing it would be raising the wages of its U.S. employees for the second year in a row, the Ikea Corporation (people still refer to it as a Swedish company even though its headquarters, for years, have been located in the Netherlands) has been basking in the limelight, as if the announcement were some sort of emancipation proclamation. Yes, it’s good news for workers. Indeed, any raise is good news. But it’s not as “spectacular” as it seems.

Starting January 1, Ikea’s minimum wage will be raised to $11. 87 per hour. Let’s consider that. While $11.87 is $4.62 higher than the federal minimum (which, to be honest, is part fantasy, part cruel joke), it’s almost certainly not enough for a person to actually “live” on. If you make $11.87 per hour, and work 40 hours a week, for 52 weeks, and never miss a day, your pre-tax, pre-deduction income will be $24,690. Can one “live” independently on what’s left over?nightshift

Also, while Ikea has proudly stated that the Jan. 1 increase will raise the “average pay” of its U.S. employees to $15.45, such statistics can be wildly misleading. Say a company employing 100 people has four hourly pay rates: $12, $14, $16, and $30. But the only workers making that $30 wage are the 6 maintenance guys. The other 94 employees fall into the lesser rates. Still, the company can accurately say that its “average” pay rate is $18.

Example: If I and two friends are having lunch with the NBA’s LeBron James, and we decide to compute what the “average” income of our table is, we would total up our yearly incomes and then divide by four. Voila! We would find that the “average” income of the four people sitting there is more than $8 million a year. Rather misleading, no?

But Ikea’s pay raises do bring with them some useful lessons. By having raised its wages a year ago, Ikea has learned two important things: They have been able to attract a higher caliber worker, and they have been able to reduce employee turnover (which saves recruitment and training costs). Neither of which should surprise anyone.

In the 1990s I had a friend who owned a limousine service. Because punctuality and reliability were absolute necessities, his business suffered gravely when a driver called in sick or suddenly quit. To prevent employee turnover, he raised the drivers’ pay by a whopping 33-percent, paying them significantly more than the competition. The result? No driver ever quit—never, ever, not a single one—and his business flourished.

Former Secretary of Labor Robert Reich (whom I once interviewed for CounterPunch) has long maintained that union jobs—jobs that offer superior wages, benefits and working conditions—are going to attract the most qualified workers in a community.

And why wouldn’t they? Where would the most talented workers in a community opt to work? At some low-rent mom & pop shop, or a sleek, unionized factory? As that time-honored union maxim goes, “When you pay peanuts, you’re going to attract monkeys.”

David Macaray is a playwright and author. His newest book is “Nightshift: 270 Factory Stories.” He can be reached at dmacaray@gmail.com

More articles by:

David Macaray is a playwright and author. His newest book is How To Win Friends and Avoid Sacred Cows.  He can be reached at dmacaray@gmail.com

Weekend Edition
February 23, 2018
Friday - Sunday
Richard D. Wolff
Capitalism as Obstacle to Equality and Democracy: the US Story
Paul Street
Where’s the Beef Stroganoff? Eight Sacrilegious Reflections on Russiagate
Jeffrey St. Clair
They Came, They Saw, They Tweeted
Andrew Levine
Their Meddlers and Ours
Charles Pierson
Nuclear Nonproliferation, American Style
Joseph Essertier
Why Japan’s Ultranationalists Hate the Olympic Truce
W. T. Whitney
US and Allies Look to Military Intervention in Venezuela
John Laforge
Maybe All Threats of Mass Destruction are “Mentally Deranged”
Matthew Stevenson
Why Vietnam Still Matters: an American Reckoning
David Rosen
For Some Reason, Being White Still Matters
Robert Fantina
Nikki Haley: the U.S. Embarrassment at the United Nations
Joshua Frank
Pearl Jam, Will You Help Stop Sen. Tester From Destroying Montana’s Public Lands?
Dana E. Abizaid
The Attack on Historical Perspective
Conn Hallinan
Immigration and the Italian Elections
George Ochenski
The Great Danger of Anthropocentricity
Pete Dolack
China Can’t Save Capitalism from Environmental Destruction
Joseph Natoli
Broken Lives
Manuel García, Jr.
Why Did Russia Vote For Trump?
Geoff Dutton
One Regime to Rule Them All
Torkil Lauesen – Gabriel Kuhn
Radical Theory and Academia: a Thorny Relationship
Wilfred Burchett
Vietnam Will Win: The Work of Persuasion
Joyce Nelson
Why Mueller’s Indictments Are Hugely Important
Thomas Klikauer
Umberto Eco and Germany’s New Fascism
George Burchett
La Folie Des Grandeurs
Howard Lisnoff
Minister of War
Eileen Appelbaum
Why Trump’s Plan Won’t Solve the Problems of America’s Crumbling Infrastructure
Ramzy Baroud
More Than a Fight over Couscous: Why the Palestinian Narrative Must Be Embraced
Jill Richardson
Mass Shootings Shouldn’t Be the Only Time We Talk About Mental Illness
Jessicah Pierre
Racism is Killing African American Mothers
Steve Horn
Wyoming Now Third State to Propose ALEC Bill Cracking Down on Pipeline Protests
David Griscom
When ‘Fake News’ is Good For Business
Barton Kunstler
Brainwashed Nation
Griffin Bird
I’m an Eagle Scout and I Don’t Want Pipelines in My Wilderness
Edward Curtin
The Coming Wars to End All Wars
Missy Comley Beattie
Message To New Activists
Jonah Raskin
Literary Hubbub in Sonoma: Novel about Mrs. Jack London Roils the Faithful
Laura Finley
After the Parkland Shooting … Teach Youth About Dating Violence
Binoy Kampmark
Frontiersman of the Internet: John Perry Barlow
Chelli Stanley
The Mirrors of Palestine
James McEnteer
How Brexit Won World War Two
Robert Koehler
The Cheapening of Human Life
Ralph Nader
Absorbing the Irresistible Consumer Reports Magazine
Ted Rall
Never Mind Millennial Apathy, Here’s Generation Z Inbox x
Cesar Chelala
A Word I Shouldn’t Use
Louis Proyect
Marx at the Movies
FacebookTwitterGoogle+RedditEmail