You could have set the events of last week to
music.
Should
they stay or should they go?
Last week, the Bank of England (BOE),
Britain’s central bank, inadvertently sent a memo describing how staffers
should handle press inquiries about its confidential research into the
possibility of a British exit (Brexit) from the European Union, to the media. Oops.
The possibility of a Brexit is
top-of-mind after the re-election of British Prime Minister David Cameron who
promised voters a referendum on the issue by the end of 2017. Reuters reported, “Many British business leaders are worried
about the possibility of losing access to their main export markets and there
are also concerns about the impact on Britain's financial services industry.”
There
is no job too immense when you’ve got confidence.
Just before the long holiday weekend, while
confirming the Federal Reserve still expects to begin raising its benchmark
interest rate during 2015, Chairwoman Janet Yellen’s comments took a
philosophical turn:
“Of
course, the outlook for the economy, as always, is highly uncertain. I am
describing the outlook that I see as most likely, but based on many years of
making economic projections, I can assure you that any specific projection I
write down will turn out to be wrong, perhaps markedly so. For many reasons,
output and job growth over the next few years could prove to be stronger, and
inflation higher, than I expect; correspondingly, employment could grow more
slowly, and inflation could remain undesirably low.”
Money,
it’s a gas.
When oil prices fell, many people assumed
consumers would spend the windfall. For the most part, they didn’t. Barron’s reported earnings for several
retailers were lower than expected last week.
All in all, it wasn’t a very exciting week
for U.S. stock markets.
changing wages. The federal minimum wage remains at $7.25.
However, last week, the Los Angeles city council voted to raise the city’s
minimum wage from $9 to $15 an hour. The increase will be implemented gradually
between 2015 and 2020. It is hoped higher wages for minimum wage workers will
help address cost-of-living issues that affect LA’s poorer residents, according
to The Economist.
Did the minimum wage really need to increase by two-thirds?
According to the Massachusetts Institute
of Technology (MIT) Living Wage Calculator, an individual living in the Los
Angeles-Long Beach-Santa Ana area, who was the sole provider for his or her
family (1 adult, 2 children) and worked 2,080 hours a year, would need to earn
about $29.84 an hour to earn a living wage and $9.00 an hour to live at poverty
level. The living wage is different in various parts of the country. For
example, the living wage for the same family if they lived in:
·
New
York-Northern New Jersey-Long Island area $35.84
·
Milwaukee-Waukesha-West
Allis, WI $29.39
·
Portland-Vancouver-Hillsboro,
OR $27.86
·
Dallas-Fort Worth-Arlington,
TX $25.02
·
Little
Rock-North Little Rock-Conway, AR $25.58
·
St. Louis,
MO $24.50
·
Fargo, ND $24.33
·
Charleston-North
Charleston-Summerville, NC $24.28
Is a higher minimum wage good for business? It depends on the
business model employed. One Harvard
Business Review blogger opined:
“The smart way to deal with an increase in
the minimum wage is to design work in a way that improves employees’
productivity and increases their contribution to profits. All this is possible
even in low-wage settings. In fact, some companies are already doing it… When I examined these companies, I saw that they made four choices
in how they designed their work. They: (1) offer less, (2) combine
standardization with empowerment, (3) cross-train, and (4) operate with slack.
These choices transform their heavy investment in employees into great
performance by reducing costs, improving employee productivity, and leveraging
a fully capable and committed workforce.”
There is some food for thought.
Weekly Focus – Think About It
“Everyone thinks of changing the world, but
no one thinks of changing himself.
--Leo Tolstoy,
Russian novelist
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