Today we will add the New York Times to the list of parties that understand how labor costs impact their own bottom line, but deny the broader economic effects of a mandated increase in the federal minimum wage.
In this morning’s lead editorial,“The Clear Benefits of a Higher Wage,” the editorial board of the New York Times criticized Republicans for exaggerating the estimated job losses stemming from an increase in the minimum wage made by the Congressional Budget Office. Yet, it the 2013 10K financial report the company filed with the Securities and Exchange Commission, the company warned investors that high labor costs could impact its own profitability and efficiency:
A significant number of our employees are unionized, and our business and results of operations could be adversely affected if labor negotiations or contracts were to further restrict our ability to maximize the efficiency of our operations.
Approximately half of our full-time equivalent work force is unionized. As a result, we are required to negotiate the wages, salaries, benefits, staffing levels and other terms with many of our employees collectively. Our results could be adversely affected if future labor negotiations or contracts were to further restrict our ability to maximize the efficiency of our operations. If we were to experience labor unrest, strikes or other business interruptions in connection with labor negotiations or otherwise, or if we are unable to negotiate labor contracts on reasonable terms, our ability to produce and deliver our most significant products could be impaired. In addition, our ability to make short-term adjustments to control compensation and benefits costs, rebalance our portfolio of businesses or otherwise adapt to changing business needs may be limited by the terms and duration of our collective bargaining agreements. (NYTimes, 2013 10K, page 10).
The Times says that CBO’s widely cited potential loss figure of 500,000 jobs “bears further scrutiny, because, unlike the benefits, the employment estimates have been disputed by a wide variety of nonpartisan economic studies.”
To be sure, there are many conflicting academic studies on the effects of a mandated minimum wage increase. However, Times management could perform its own experiment by meeting the demands of its labor unions and see how that would impact the company’s ability to deliver it “most significant products.” It would then understand how a minimum wage hike would affect millions of small businesses.
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