Starbuck$$$ Coffee Buzz Gets Pricier; JPMorgan Ups the Minimum Pay Game; Drop in Job Openings Bums Out Economists

And then it happened…

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Image courtesy of Photokanok/FreeDigitalPhotos.net

If there’s one thing you can rely on at Starbucks, besides the quality of their coffee, it’s that come July, the company will raise its prices. Today, the company did just that for the third year in a row. What Starbucks dubs as a “small price adjustment” shouldn’t be too bad. Well, that is, depending on what you purchased. Hey, if you don’t like it, blame rising coffee costs. And Starbucks, too, I suppose. The amount of Americans who drink coffee is expected to rise by 1.5%. The more people drink, the more the beans cost. Just another case of supply and demand, my friend. Prices went up between 10 cents to 20 cents on its brewed coffee, and between 10 cents and 30 cents on its espresso beverages and tea lattes. However, the price increases vary depending on which region you find your local Starbucks. In the grand scheme of things, purchases only actually increase by about 1%. Plus, the price went up on only 35% of its beverages. Which means that 65% of its beverages remain unchanged, price-wise, for those of you who shun change. But in all fairness, Starbucks is giving its employees a 5% raise come fall, not to mention doubling stock awards for employees who have been there for two years or more. Not that their raises and stock awards had anything to do with boosting the price of your chai latte, mind you.

Dimon in the rough…

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Image courtesy of Sira Anamwong/FreeDigitalPhotos.net

Starbucks isn’t the only company who is giving its hardworking employees a raise. Enter JPMorgan, the second most profitable company in the United States, who is about to give 18,000 of its employees a much appreciated boost in their paychecks. And this time, the employees aren’t even the ones who regularly rake in big bonuses. JPMorgan CEO Jamie Dimon will be raising the company’s minimum pay by 18% for employees who are mostly bank tellers and customer service representatives. These employees currently receive $10.15 per hour, but over the next three years will see increases of $12 per hour and then $16.50 per hour, depending on several factors. The company is also beefing up its in-house training programs as well, to the tune of $200 million, that will train thousands of entry level employees who work in consumer banking. Mr. Dimon says the new initiative is all about addressing concerns over income inequality, an issue that’s been getting a lot of negative attention, usually directed at Mr. Dimon and his peers. He also says it’s a way to attract and retain talent – an idea that company’s like Walmart, Target and McDonald’s have already started putting into practice. But leave it to the skeptics to whip out their negative spin and question if Dimon’s motives have more to do with a shrinking labor pool, and if JPMorgan is just getting ahead of an issue that might pose a problem in the future. The cost of raising the minimum pay by 18% will cost JPMorgan just about $100 million, which is just $7 million shy of the total 2015 compensation for Jamie Dimon and his four top-named executives.

Book of jobs…

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Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Even though JPMorgan and Starbucks are giving its employees more money to attract and retain great employees, the Bureau of Labor Statistics paints a very different employment picture. According to its latest report, job openings dropped to a five month low in May, with just 5.5 million jobs up for grabs, even though that same month also saw 5 million people getting hired. Not to be a downer, but that was the lowest rate since November 2014. At least voluntary quits fell to a 4 month low, with just 2.9 million leaving their jobs, presumably for better opportunities. Yet in April, job openings were at an all-time high. All these mixed numbers might just mean that the economy is not as healthy as we think it is. The Job Openings and Labor Turnover Survey, a.k.a JOLTS, is the division of the Bureau of Labor Statistics that tracks job openings, hires and separations. The Labor Department, which reports just on job creation and unemployment, reported that employers only managed to create 11,000 new jobs in May. In case you’re wondering why that’s a bad thing, then consider that those 11,000 jobs were 25 times less than the amount of jobs created in May of 2015. At least the number of layoffs and firings in May fell to a ten month low of 1.67 million. Economists, however, still think these numbers should be taken with a grain of salt. Which is easy for them to say since they seem to be gainfully employed.

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