Posts tagged labor costs
22 States Raised the Minimum Wage: What Does This Mean for Low-Skilled Workers?
January 12, 2024 // If an employer must pay someone $16 hourly, the new minimum wage in New York and California, whom will they pay? Would it be a higher-skilled college graduate or a less-skilled worker with only a high school diploma? You can deduce which hire is the safer option. When the cost of obtaining more education or skills is higher than the cost of relying on government unemployment benefits, dependence becomes the more appealing choice over labor-force participation.
Ford Sells Barely Any EVs
January 9, 2024 // Ford recently made the point that its new United Auto Workers (UAW) union contract would be costly and affect its product development plans. Between signing the deal and 2028, Ford said the contract would cost it $8.8 billion, about $900 a vehicle in 2028. Tesla, which does not have a unionized workforce, also has an advantage in labor costs.
How McDonald’s, Chipotle, Starbucks are preparing for the fast-food worker battles to come in 2024
January 4, 2024 // “Anyone looking at this in the industry, now that emotion has been removed from the negotiation, sees this as the least bad option or worst good option, depending on which side you’re on,” said Matt Haller, president and CEO of the International Franchise Association, a trade group that represents franchisors, franchisees and franchise suppliers. In exchange for concessions, and staring down a very uncertain outcome on the referendum, “We have this very predictable business environment for our members moving forward,” he said.
Pizza Hut franchisees lay off more than 1,200 delivery drivers in California as restaurants brace for $20 fast-food wages
December 26, 2023 // Mark Kalinowski, a restaurant-industry analyst, wrote in a note this week that he expected "more harm to come" in various ways as fast-food chains "take action in an attempt to blunt the impact of higher labor costs." Chains such as Chipotle and McDonald's said they planned to pass the costs of higher wages in California to customers by raising menu prices. In 2022, Gov. Gavin Newsom of California signed the FAST Act into law. It called for the minimum wage for fast-food workers to increase to $22 an hour in 2023. But corporate chains such as McDonald's, Chipotle, and Chick-fil-A, as well as franchise advocacy groups, fought the law. A coalition of restaurant-industry organizations said the law could raise costs for fast-food restaurants by $3 billion. They rallied to get a referendum on the ballot.
25 states will hike minimum wage in 2024
December 22, 2023 // Sean Higgins, an analyst at the libertarian Competitive Enterprise Institute, said many food and hospitality workers already earn more than their state minimum. He noted that employers have raised salaries to compete for a shrinking pool of applicants. “Raising state and local rates does hurt the smaller businesses, the classic mom and pop enterprises, who will employ local high school or college-age kids if they can but may not be able to justify that if the minimum rate increases,” Mr. Higgins said.
Tesla to Raise Wages at Nevada Gigafactory Amid Pressure to Unionize
December 21, 2023 // During the UAW's strike against the Big Three, analysts noted that Tesla could stand to gain as lost revenue from the strike and higher labor costs under new contracts could make it more difficult for traditional automakers to make the EV transition. Tesla is not the only automaker to raise wages following the UAW strike resolution, as Hyundai and others have taken steps to raise worker pay as well. 2 The electric vehicle maker also faces growing pressure from organized labor activity in Sweden, Denmark, Finland, and Norway over its refusal to enter into collective agreements with labor unions.
Ford workers join those at GM in approving contract settlement that ended UAW strikes
November 20, 2023 // The United Auto Workers union overwhelmingly ratified a new contract with Ford, a pact that, along with similar deals with General Motors and Stellantis, will raise pay across the industry, force automakers to absorb higher costs and help reshape the auto business as it shifts away from gasoline-fueled vehicles. Workers at Ford voted 69.3% in favor of the pact, which passed with nearly a 15,000-vote margin in balloting that ended early Saturday. Earlier this week, GM workers narrowly approved a similar contract. At Stellantis, 68.7% of workers favored ratification, an insurmountable lead with votes at only two small facilities left to be counted.
Small business owners not optimistic as inflation, labor struggles continue: NFIB survey
November 14, 2023 // The NFIB's Optimism Index was 90.7 points in October, significantly lower than the survey's 50-year average of 98 A seasonally adjusted net of 17% of owners plan to create new jobs in the next three months and 61% of owners overall said they were hiring or attempting to hire in October – but 90% reported few or no qualified applicants for open positions.
Some Tesla workers say they’d never join a union, even as Ford and GM workers get big raises
November 7, 2023 // The United Auto Workers might have set its sights on Tesla, but some workers at the EV company told Insider they'd be hard-pressed to join a union. After reaching tentative agreements with Detroit automakers, the union's president, Shawn Fain, said last week that the UAW aims to expand its reach. And what better target than the most valuable car company in the world?
GM reaches tentative deal with UAW, ending strikes at Detroit automakers after six weeks
October 30, 2023 // It’s not immediately clear how much the labor deals will increase labor costs for the companies, which had argued that giving in to all of the union’s demands would affect their competitiveness and even long-term viability. Deutsche Bank recently estimated the overall cost increase of the agreement at Ford to be $6.2 billion over the term of the agreement; $7.2 billion at GM; and $6.4 billion at Stellantis.