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High Wages for Everybody

It is possible to raise wages, lower prices, and make more money

William A. Levinson
Wed, 02/26/2020 - 12:03
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Almost half of Americans work in low-wage jobs despite the nation’s low unemployment rate. Aimee Picchi, writing for CBS News, cites a Brookings study that says “44 percent of U.S. workers are employed in low-wage jobs that pay median annual wages of $18,000.”1 A Bloomberg story adds, “An estimated 53 million Americans are earning low wages, according to the study. Their median wage is $10.22 an hour and their annual pay is $17,950.”2

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These wage levels are not consistent with the United States’ industrial and technological development or its standard of living, but this is far from the only issue. Executives with profit-and-loss responsibility should realize that low wages are also often symptomatic of low profits. Purchasing managers should recognize that a supplier’s low wages are often symptomatic of excessively high prices, even though this seems counterintuitive. The reason is that low wages, low profits, and high prices all have the same root causes: waste (muda) and opportunity costs. Recognizing this simple fact, for which there are proven, off-the-shelf, and simple remedies, opens the door to almost limitless wealth for all stakeholders.

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Comments

Submitted by Jim Hardy (not verified) on Wed, 02/26/2020 - 09:46

Thought provoking and well written article

William has put together a well argued presentation here.  I really appreciate the thought provoking information.  Well done!

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Submitted by Stephen Skillman (not verified) on Thu, 02/27/2020 - 06:46

Great Article!

This is one of the best articles I've read in a while. Very good job detailing points relating to Lean, Politics, TOC Principles, Creativity and Innovation and Continuous Improvement, all while not specifically aiming at any one of these. 

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