Browsing the blog archives for March, 2015.

Raising Wages


Wal-Mart recently announced it will start paying all of its workers at least $9 per hour. TJ Maxx and Target have now followed suit. I’m being asked frequently if these moves are a response to the minimum wage protests or other business interests. It’s impossible to tell if you read the press releases—companies never tell you exactly what’s going on the boardroom—but I think both are factors.

Wal-Mart is the most protested and sued corporation in the US. Its customers are driven primarily by value and convenience. Still, most Americans like to “feel good” about where they work and shop. Raising wages at the bottom certainly helps companies like Wal-Mart and Target fend off some of the social criticism. If customers are willing to base their shopping decisions in part on retailer image, then these companies could be making a wise business decision.

Nonetheless, Wal-Mart and Target must compete for labor. With the employment picture improving a little—especially in certain markets—retailers must deal with reality. If you pay less than your competitors, then you’re likely to lose your best workers. There’s no doubt that both Wal-Mart and Target are raising wages for certain employees because their leaders believe they need to do so for competitive reasons.

There are several take-home points here. First, corporate social decisions are usually just business decisions. Pressure from social groups calling for changes such as higher wages, better benefits, or more products made in the US can influence business strategy, but this is unlikely to occur unless it is necessary to keep customers happy. Put another way, Starbucks is often touted as a very “socially responsible” firm because of its human resource and environmental practices, but its customers seem to be willing to pay more—a lot more—for coffee there. For Starbucks, it’s a good investment. For companies like Wal-Mart and McDonald’s, it’s often not.

Second, raising the minimum wage is irrelevant when competitive pressures make it more difficult for companies to attract and retain employees. The minimum wage is only relevant to workers whose market value is really less and therefore, would earn less without it. Wal-Mart, Target and other retailers are making proactive decisions to pay market value above the minimum wage.

Finally, companies like Wal-Mart are criticized primarily because they are large, successful, cost-conscious firms. The criticism hasn’t stopped because of the impending wage increases. Search “Wal-Mart” in Google News and count the number of negative stories. Those who despise Wal-Mart will continue to do so. It’s about capitalism, not just wages.


Political Correctness at the U of Minnesota


I was intrigued to learn that the University of Minnesota recently decided to no longer include racial descriptions in crime alerts to avoid stigmatizing minorities. By definition, crime alerts are designed to provide specific information about a perpetrator so that the general public—in this instance, faculty, staff and students—can remain vigilant and safe. The purpose and effectiveness of crime alerts is directly tied to the specificity of the information. It wouldn’t do me much good to know that robbery suspects on my campus are on the loose if I don’t know what they look like.

There are two problems here. First, why not eliminate other descriptors as well? For example, most assailants are young males, so identifying a perpetrator as such reinforces the stereotype that young males are criminals. If we are really concerns with social stigmas, then we must take this argument to its logical conclusion. Needless to say, a crime alert that avoids race, gender, and age would be essentially useless, as in the hypothetical alert, “We have information that a heavily armed person with a red shirt is loose on campus.” I hope I don’t happen to be out for a jog and wearing a red shirt when that alert goes out.

The second problem is ironic; not including specific information in a crime alert can cause members of the general public to fill in the blanks themselves. Although removing this information from the alert is designed to trigger fewer racial or ethnic stereotypes, those prone to them might mistakenly conclude that a nondescript perpetrator identified in an alert is a young, non-white male. Hence, withholding information can actually lead to stigmatization.

In researching the University of Minnesota’s decision, I ran across a column by Camille Galles at the Minnesota Daily ( Galles presents the logic that underpins PC thinking, arguing that, “for students, being politically correct helps facilitate open dialogue instead of stifling it.” Put another way, political correctness is not offensive and makes everyone feel safe, thereby promoting deeper conversations among parties with different worldviews.

There is a kernel of truth here. Avoiding offending someone—when possible—helps advance an argument and promotes greater understanding. The problem is that real issues involve inconvenient reality. When truth is evaded in the interest of political correctness, then an entire conversation is based on half-truths and is therefore, worthless at best. At worst, such conversations can be damaging because they create the illusion of sound conclusions.

Consider the following example. Common sense tells us that some Americans who receive unemployment benefits don’t really want a job. This is not to say that all or even most unemployed Americans are in this category; the percentage is up for debate, but at least some are. If making this point is not permitted (i.e., politically incorrect) because it might offend unemployed Americans who are genuinely seeking work, then the discussion must proceed on the misguided idea that all Americans who receive unemployment benefits really want to work instead of receiving government benefits. Hence, Galles has it completely wrong. As this example illustrates, political correctness stifles open dialogue and can actually lead to poor personal decisions and poor public policy.

I’m a strong advocate for free speech everywhere, especially college campuses. It’s important to encourage everyone to be respectful when expressing views. However, real tolerance is the opposite of political correctness. It’s about being offended less and respecting differences, not evading them.