Financial: Jobs More Plentiful as Wage Debate Rages On

By 
Mitch Morrison, Vice President & Retail Executive Platform Director, Winsight

There’s good news on the economic front.

The Labor Department reported a net gain of roughly 295,000 jobs in February, marking the 12th consecutive month the economy has produced more than 200,000 jobs. This is the longest streak since 1995.

Not surprisingly, job growth also spurred the unemployment rate to fall from 5.7% in January to 5.5% in February. The positive news played out well on Wall Street, where the markets surged; and globally, where the U.S. dollar continues to gain strength.

Still, the U.S. economy is not quite skipping along the yellow brick road. Average hourly earnings continue to lag, increasing in February by a paltry 3 cents to $24.78. And there remains a chill in the labor force, where millions of Americans remain on the sidelines. According to government figures, labor-force participation rate fell to 62.8% in February from 62.9% in January, marking the lowest level since the late 1970s.

So with wages struggling, expect ...


… that pressure on the public and private sectors will increase wages.

When Billy Joel wrote “A New York State of Mind,” he must have sensed there someday would be a mayor like Bill de Blasio, who only months into his first term has alienated law enforcement and the business community while winning over only a stable of horses. (He is banning those classic horse-and-buggy rides we all remember from “Sex and the City.”)

The latest episode has de Blasio urging the business community to raise wages above $13 an hour, with a goal of $15 over the next few years.

“It’s time for New York City businesses to take bold action—not only because hardworking New Yorkers deserve a path  to the middle class and an opportunity to stay in the middle class, but because giving them that opportunity would do so much to help our economy,” de Blasio said in March during a breakfast for business and civic leaders.

Reaction from much of the business community was predictable: Let businesses determine wages.

De Blasio is seeking the state’s permission to up wages above $13 an hour in 2016. After that, it would be indexed to inflation, bringing the city’s minimum wage to a projected $15 an hour by 2019.

The mayor may have a problem. New York has one fixed minimum wage for the entire stage, and Gov. Andrew Cuomo has proposed to raise the $8 hourly minimum to $9, with no obvious inclination to give New York City autonomy to set its own rates.

Meanwhile, several major retail chains announced plans to raise front-line salaries. In a span of days, the Gap Inc., Walmart and TJX Inc. (operator of T.J. Maxx and Marshalls) said they would increase starting pay. TJX is raising hourly wages to $9; Walmart says employees by February 2016 will earn at least $10 an hour; and the Gap lifted base pay to $9 an hour, with a pledge to increase it to $10 by June.


Playing Chicken

McDonald’s, one of the world’s largest purveyors of poultry, said in March it will begin using chickens that are not raised with antibiotics used to treat humans.

The decision could have a major effect on animal husbandry and also is the first major move since Steve Easterbrook became chief executive of the world’s largest fast-food chain, which has been struggling over the past two years.

The announcement comes as the Centers for Disease Control and Prevention has raised a clarion call about the widespread use of antibiotics in animal husbandry as new strains of bacteria and pathogens become more resistant to these drugs.

McD’s is not the first to place limits on antibiotics in chicken. Perdue last fall became the first major U.S. poultry company to cease using antibiotics, according to The New York Times. Tyson followed Perdue but still uses antibiotics for disease prevention. (See below.)


Use of Antibiotics

There are three stages in which the country’s largest chicken companies have used antibiotics.

CompanyHatcheryDisease preventionGrowth
Tyson FoodsNoYesNo
Pilgrim's PrideYesYesYes
Perdue FarmsNoNoNo
Kock FoodsYesYesYes
Sanderson FarmsYesYesYes

Source: The New York Times