Louisville sawmill challenges perception about wages

&gt; the company announced the rollout of a new wage structure, including a minimum wage of $15.25 per hour<p>&gt; What Winston Plywood is doing defies almost everything we have been told about wages in Mississippi — that raising the minimum wage would cripple profits, throw company pay structures into chaos, create inflation and ultimately wreck the economy.<p>Uh, no ... they didn&#x27;t raise the minimum wage, they raised the wage that they pay. That&#x27;s not the same thing at all. That&#x27;s a market force, not a government intervention, in this particular case.

Meanwhile near me McDonalds has been offering $15 (or $18 for a closing shift) and they seem to be unable to fill positions.<p>Turns out if there are fewer jobs than people wages go down. Reverse it and they go up.<p>Smart companies will move to preserve the employees they have instead of having to train new ones after having to raise wages anyway.

I live in suburban Pennsylvania, we have lots and lots of warehouses and we&#x27;ve been seeing billboards announcing unusually high hourly wages, the highest I&#x27;ve seen is up to $27 per hour, here&#x27;s a local news story: <a href="https:&#x2F;&#x2F;www.lehighvalleylive.com&#x2F;business&#x2F;2021&#x2F;10&#x2F;uline-luring-workers-in-lehigh-county-with-25-hourly-wages-and-2k-sign-on-bonuses.html" rel="nofollow">https:&#x2F;&#x2F;www.lehighvalleylive.com&#x2F;business&#x2F;2021&#x2F;10&#x2F;uline-luri...</a><p>I think this is fantastic and I hope it lasts.

<i>&quot;The one thing that doesn’t change is that they want to make profits,&quot; [Will Hall] noted. &quot;Not to get too far into theory, but what’s happening here, I think, is basic economics. For a lot of years, there were more workers than jobs. Now, I think that’s changed.&quot;</i><p>Yup. It&#x27;s pretty basic. Labor gets a better deal in one of two ways.<p>1. Reduction in workforce. Historically, Black Death and wars.<p>2. Collective action. Guilds, unions, trades, and the like.<p>I honestly didn&#x27;t think I&#x27;d live to see Labor doing better. I&#x27;m glad there&#x27;s finally some movement. I&#x27;m sorry it took a pandemic.<p>[Yes, there&#x27;s multiple forces. Things are never simple, there&#x27;s always more to the story. Aging workforce, (mostly men) opting out, (mostly woman) stuck with child and elder care, wave of early retirement, reduction in immigration, increased disability and mortality, and probably more.]<p>--<p>Also interesting in this story:<p><i>&quot;This week, Winston Plywood, through its investors, a Connecticut-based equity firm, announced a new wage structure.&quot;</i><p>Access to capital.<p>If policy makers want employers to increase wages, we need to consider how to make it happen.<p>I&#x27;m <i>totally onboard</i> with using pandemic crisis cheddar (governmental largess) to provide capital to distressed businesses. Especially locally owned. Loans, grants, debt forgiveness, whatever.<p>Corporations and trusts receive billions. That&#x27;ll never stop. I just want some of that torrent of cash to go directly to where it will help the most. Versus waiting for it to &quot;trickle down&quot;.

As a Canadian in the wood products sector it’s a bit shocking wages in US sawmills are so low…in Canada production workers make 1&#x2F;2 to 2&#x2F;3 of trades wages and have excellent safety standards and worker protection. There is a fair amount of retention of young people in rural communities thanks to that. Automation displaces some amount of jobs, but is more geared towards increasing productivity and grade outturn

They were able to raise wages due to the increased market price of their goods. Government imposed minimum wages increase regardless of the market price of a company&#x27;s goods or services.<p>Mandatory minimum wages are most detrimental to those who the proponents are claiming to help. Low skilled workers are less likely to be hired because they have to be paid at a rate above what the market value of their labor is. This is not the case right now because the market rate of low skill labor has increased beyond the federal and state minimums.<p>During periods of high labor availability and low job availability, minimum wages can establish a significant barrier to employment for low skilled workers.<p>During times like the present when labor supply is short, minimum wage mandates are not keeping up with the market and have very little effect on hiring.

Nice article. Hopefully more companies will realize that their operations are more stable when employees are paid well enough to have a comfortable home life.

There exists volumes of research about the negative and positive employment effects of having a minimum wage. I am glad to see that finally a market mechanism (supply and demand) is the catalyst that is driving wages in general higher - including the minimum wage.

Some other commenters have pointed out: huge difference between artificially mandating this sort of wage through legislation and a company deciding on their own to do so because of economics, generosity (such do exist, not all), etc.<p>It also ignores whether it is sustainable long term, and economic impact should it continue. For all we know, this could put the company out of business financially. I hope not, but it could. And, should it become a trend or government mandate, the impact on inflation and other economic factors is a question.<p>In the end, likely pros and cons, and hard to balance: <a href="https:&#x2F;&#x2F;www.cbo.gov&#x2F;publication&#x2F;55681" rel="nofollow">https:&#x2F;&#x2F;www.cbo.gov&#x2F;publication&#x2F;55681</a>

This has me asking so many questions. They claimed Louisville grew in population. Did they come from the surrounding areas? If so, which ones? Mississippi as a whole lost population according to the 2020 census. The bigger places around Louisville would be Meridian, casinos, and maybe Jackson. I doubt folks are moving from those spots but I don’t know. I suspect it’s people coming in from the surrounding county&#x2F;rural areas?<p>Are the companies able to pay more because of the lumber market this year? What about other sawmills in Mississippi?<p>What about timberland owners? They haven’t reaped the benefits of sawmills, because there’s like 50 years worth of timber inventory in the American South (though it appears Q3 is picking up! <a href="https:&#x2F;&#x2F;www.forest2market.com&#x2F;blog&#x2F;southern-timber-prices-hit-14-year-high" rel="nofollow">https:&#x2F;&#x2F;www.forest2market.com&#x2F;blog&#x2F;southern-timber-prices-hi...</a>)<p>And does this just raise the wages or is there some profit sharing going on?

what goes up first the wages or the cost of living? in the end I think they chase each others tail. someone has to pay the bill for that person getting $18hr for flipping burgers or pulling green chain. it’s an upward spiral probably hurting those on a fixed income the worst. the paycheck will of course look and feel nice but now the trip to the grocery store will be $135 instead of $85.

Inflation will potentially reduce the US to a third world country. I&#x27;m not saying it&#x27;s bad that they are getting raises at this sawmill, but this article is brushing aside much broader implications and paints nothing but rosy pictures of what&#x27;s going on at a higher level. When you have to pay employees more, costs go up. When costs go up, prices go up. When prices go up, people get poorer. This lesson has played out in history innumerable times.<p>&gt;&gt; Everything is cyclical, so I don’t know how long it will last.<p>Right up until the bread runs out, boo.<p>&gt;&gt; The demand is for middle income and upscale housing, Hill said.<p>Because people with a bit of money stashed away that can are fleeing the highly populated areas due to pricing insanity.<p>&gt;&gt; Perhaps just as important is that those hard-working sawmill workers may find life a little easier and the stresses that lead to poverty and crime and all other sorts of societal ills may be relieved a bit.<p>This... is not generally how gaining more and more external population works.<p>This whole article is contrived euphoric delusion.