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June 16, 2014

Raising Minimum Wage : Will it help us or hurt us?

Filed under: Food for thought for friends — Alec @ 6:32 pm

There has been a lot of discussion about “Minimum Wage” the last month. I have a feeling that it is more emotional than logical.

First, let’s assume that a huge percentage of the “Minimum Wage” people work in the food service industry or agriculture during the high producing seasons. I am sure it changes from major metropolitan area to rural areas in different parts of the country.

Second, the cost of living varies widely form New York City to rural south, so to pay the same “Minimum Wage” may be unreasonable.

Third, let’s assume that 50% of the food service workers are young, under 30. I tried to find employee demographics for McDonalds, but could not. I did find that 70% of McDonald employees are minorities or women, and over 25% of them are in Leadership positions.

Fourth, most agriculture jobs are not full-time annual jobs, most food service jobs are not full-time 40/hrs a week positions. Obamacare took care of eliminating full-time food service jobs. Most food service jobs report a huge turn over i.e. 100% plus a year.

Fifth, I do not know what percentage of food service employees are considered the major bread winner. In some areas, a person earning tips at a decent restaurant can make a decent living, but that is not everyone. In Mexico some of the highest paid people work in the restaurant industry.

Assumptions: I love to hire what I call “Fresh out of McDonalds” employees. If they have a good attitude and a high school diploma, they can make great entry-level employees. I can hire them for $10 to $14 per hour, they are happy with the wage and I can invest some time and money training into them.

Fact #1: A small percentage of “Fresh out of McDonalds” candidates can read and write English at the 8th grade level and do elementary math at 6th grade level. If they can’t, I can’t hire them to run quality parts, follow safety procedures, etc. Some assembly manufacturers can hire non-English speakers and math challenged, but CNC machining companies usually can’t.

Fact #2: I need to hire those $10 to $14 non-skilled employees if I want to remain competitive in the global market. If I can’t hire them, or have to pay a higher wage for the same amount of experience, I have to do the following:

1. Raise my prices and risk losing business

2. Replace a human with an automated machine

3. Outsource the non-skilled parts to Asia or Mexico

All of the above usually result in hiring and maintaining less employees.

Opinion #1: I don’t mind raising the minimum wage to approximately $9. But more than that just causes more unemployment of the least skilled people in the marketplace.

Opinion #2: If we raise the minimum wage to $15 per hour, a lot of my potential employees will take those jobs and bump the people with less education and a reduced skill set. I will probably have to buy automated machines or outsource some work to Asia. The result will be higher unemployment for HS dropouts and people without a trade. In this instance we have to stop thinking locally, and try to think globally. If we raise the minimum wage too much, we may just hurt the people we are trying to help.

What We Can Learn From Music

Filed under: Food for thought for friends — Alec @ 6:10 pm

I would like to talk about music and how it relates to us.

I love music. I even tried to learn to play the piano – and took lessons for 2 years – at the ripe old age of 51. But I am not very good and have since stopped taking lessons (I know, I should restart!) My true love is gospel vocal music. I have been in many choirs over the years and have learned a lot from these experiences. Several years ago when preparing for a vocal concert as part of a large symphony choir, our conductor talked to us about errors i.e. we were making lots of mistakes. Maestro Vodnoy stated that there are 3 types of errors (he assumed, and I agree, that all musicians want to make beautiful music). These errors are:

1. The musician knows they made an error and knows how to correct the error. In this case, no action is required because the Maestro knows that next time the musician will correct his or her own error.

2. The musician does not know they made an error, but has the skill and knowledge how to correct it. In which case it is the Maestro’s job to respectfully point out the error and proceed.

3. The musician does not know how to correct their error and may not have the skill. In this circumstance the Maestro must become the teacher and coach.

We are all musicians and Maestro’s at different instances. In other words, depending on the scenario, sometimes we are the players, sometimes the coach; sometimes we are the manager, sometimes the worker. Job titles and position does not determine who is the teacher and who is the student. Throughout our careers, we must learn new skills and execute our part with precision. When we are the Maestro, we must respectfully point out errors and train our musicians to new levels of skill as needed.

The choir will only make beautiful music when every member sings their part correctly and with heart. The results will be a beautiful song.



What’s new at MLP

As a few of you know, for the last 3.5 months and through June, I have been the interim President & CEO of Swiss Tech LLC (ST) in Delevan, Wisconsin.

Thus, I have renewed empathy for all the things you do as a Profit Loss Manager of your company. It has been 6 years since I left Symmetry – doesn’t seem like that long, but I had forgotten all the little issues that seem to spiral out of control and become huge. We at ST had a less than stellar year last year. But things are slowly turning into a very good 3 months of the last 4. And we are a little ahead of plan year-to-date. We have a very good team of people and hopefully we can keep them all happy. When you are working mandatory 55 hours a week, people get edgy.

I would love to tell you about all the changes we have made to improve the financial performance. There have been a lot; Quoting Accuracy, Lead Times and Load Reports Accuracy, Off-loading the Herby (Eli Goldratt constraint), as well as Hiring and Retaining skills. It has all been challenging and fun. Which brings me back to my point of empathy. I have a improved understanding for the things you do every day! And I have a renewed tool kit of things tried and failed / succeeded.

I should be back on track to be “calling on you” soon. End of June or early July, right after my huge “Honey Do” list and a few miles of bicycling to catch up on.

Email me if you want to know what worked. I’d love to hear from you!

Core Values

Filed under: Food for thought for friends,Personal Philosophy — Alec @ 5:24 pm

Eagle Technologies, a friend of mine’s company, in Bridgman, Michigan has the company core values posted inside his lobby. They are:

1.      Must be trustworthy

2.      Have a strong work ethic

3.      Have an unselfish attitude

4.      Willing to give Equal and Mutual Respect

5.      Willing to take Ownership and be Held Accountable

6.      Willing to Strive Together Towards a Common Goal

“Possessing these qualities will result in ensuring the success of our company, customers, teams and people”

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