Finally, Non-Compete Clauses Eliminated... For Fast Food Workers (npr.org) 117
"Non-compete clauses are common among professionals, justified by a variety of innocuous-sounding and apparently reasonable business reasons," writes Slashdot reader Beeftopia. "This story shows that, surprisingly, it is a very effective wage suppression mechanism as well, used in industries where it would seem unnecessary."
NPR reports: For many years, fast-food franchises agreed not to recruit or hire one another's workers within the same chain. These "no-poach agreements," as they are known, meant a worker couldn't get better pay or move up the ladder by going to another franchise. Bob Ferguson, Washington's attorney general, said such agreements are clearly illegal. "These no-poach clauses, I think, are an example of a rigged system," he said. "I think you're a worker, you have no idea this clause exists, you haven't signed it. And yet when you try to go to another business to improve your wages, you can't do it, because of this condition in a contract that you never signed..."
Princeton economist Alan Krueger says such restrictions make the labor market work inefficiently, keeping wages artificially low. "I think it's very hard to come up with a sound business justification for this practice, other than reducing competition for workers," he says.
Arby's, Carl's Jr., and five other fast food chains agreed "under pressure" to stop enforcing their non-compete agreements, while eight more chains are currently being investigated by a coalition of 11 state attorney generals. Massachusetts Attorney General Maura Healey reports that 80% of fast food workers are currently locked into non-compete agreements, according to Food & Wine magazine.
"Though a statement from the International Franchise Association argues that these agreements are necessary to keep employees from jumping ship before the expense to train them has been recouped, opponents of these clauses suggest the industrywide benefit of suppressing wages may be the real driving factor."
NPR reports: For many years, fast-food franchises agreed not to recruit or hire one another's workers within the same chain. These "no-poach agreements," as they are known, meant a worker couldn't get better pay or move up the ladder by going to another franchise. Bob Ferguson, Washington's attorney general, said such agreements are clearly illegal. "These no-poach clauses, I think, are an example of a rigged system," he said. "I think you're a worker, you have no idea this clause exists, you haven't signed it. And yet when you try to go to another business to improve your wages, you can't do it, because of this condition in a contract that you never signed..."
Princeton economist Alan Krueger says such restrictions make the labor market work inefficiently, keeping wages artificially low. "I think it's very hard to come up with a sound business justification for this practice, other than reducing competition for workers," he says.
Arby's, Carl's Jr., and five other fast food chains agreed "under pressure" to stop enforcing their non-compete agreements, while eight more chains are currently being investigated by a coalition of 11 state attorney generals. Massachusetts Attorney General Maura Healey reports that 80% of fast food workers are currently locked into non-compete agreements, according to Food & Wine magazine.
"Though a statement from the International Franchise Association argues that these agreements are necessary to keep employees from jumping ship before the expense to train them has been recouped, opponents of these clauses suggest the industrywide benefit of suppressing wages may be the real driving factor."
Re:unenforceable anyway (Score:5, Informative)
One of the first things you learn in law school is that this kind of non-compete clause is virtually unenforceable in most U.S. jurisdictions as it is unconscionable as a matter of public policy. If you are so unskilled as to only be able to get a fast food job, then a non-compete clause would make it so you couldn't get -any- job.
Unenforceable? For years, it was those fast-food chains that were doing the enforcing by NOT HIRING people with previous fast-food work experience. That's the only "enforcement" a worker really cares about. "Unenforceable" only matters if you can afford to hire a very expensive lawyer.
Also, we're not really talking about traditional non-compete clauses as most people know them, despite the headline. We're talking about clearly illegal collusion between major corporations to suppress already-low worker wages. Calling it a "non-compete clause" is like calling a bank robbery a "third-party withdrawal".
Re:unenforceable anyway (Score:4, Insightful)
It seems ludicrously seld-defeating in the long run. Most fast food joints require a not insignificant amount of training, so if you're targeting your hiring towards those with no experience, sure you can offer a lower wage, but then the training time is extended, so you still end up paying more money, both for the training period and in the time it takes the new worker to ramp up to something approaching normal productivity. In the meantime your customers get pissed off at poor service, and that will hit your sales.
Honestly I wished I lived in an area like that. I'd open a fast food joint, lure away their experienced staff with higher wages and benefits, and while they flounder because of a moronic policy whose only purpose seems to be to suppress wages regardless of the ill effects on every other aspect of the bottom line, I'd have happier and more productive employees and happier customers.
This kind of "keep the wages low" mindset works when unemployment is high and you can abuse your employees with little fear they'll walk. But even in that situation, creating a demoralized workforce will still lower productivity and customer satisfaction, and will likely keep retention low, meaning training costs go up.
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It seems ludicrously seld-defeating in the long run.
In the long run all the competition is seeing the same expense and lowered quality work. There might be someone that comes along that is willing to hire those with experience but unless they have enough shops to hoover up the experienced workers at any significant magnitude then it does little to break the others to do away with this collusion.
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I'm still at a loss if "non-recruitment" agreements are just mutual non-solicitation pacts, or if they are no-hire agreements. I get how the latter is illegal, but not sure how the former would be. (We won't recruit your staff vs if your staff applies we will not offer them a job.)
But, it seems like the courts are referring to both, which can be dangerous.
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Re:unenforceable anyway (Score:5, Insightful)
It seems ludicrously seld-defeating in the long run. Most fast food joints require a not insignificant amount of training, so if you're targeting your hiring towards those with no experience, sure you can offer a lower wage, but then the training time is extended, so you still end up paying more money, both for the training period and in the time it takes the new worker to ramp up to something approaching normal productivity. In the meantime your customers get pissed off at poor service, and that will hit your sales.
Honestly I wished I lived in an area like that. I'd open a fast food joint, lure away their experienced staff with higher wages and benefits, and while they flounder because of a moronic policy whose only purpose seems to be to suppress wages regardless of the ill effects on every other aspect of the bottom line, I'd have happier and more productive employees and happier customers.
This kind of "keep the wages low" mindset works when unemployment is high and you can abuse your employees with little fear they'll walk. But even in that situation, creating a demoralized workforce will still lower productivity and customer satisfaction, and will likely keep retention low, meaning training costs go up.
The big chains will beat you. McDonalds INVENTED automation and lower middle class chef jobs were the first to take the cut with the introductions of franchises. No training needed like you said. Follow pictures of assembly and have metal pans of ingredients and an order to do something repetitively over and over again. If the employee is upset or not as long as he moves his hands fast product comes out in massive numbers. Morale makes no difference. Meat comes pre-marinated. Vegatables come presliced from Mexico. Just load and go as no chefs are needed for great recipes anymore.
Your restaurant will be too expensive, slow, and inefficient as the untrained workers across the street will outproduce you. At Amazon people piss in bottles to meet their quotas and workers hate working there understandably but Amazon keeps going.
The only thing that will stop this is ... gulp ... evil government socialism and unions. Until demand for expensive fast food and a less supply of workers become available owners will abuse their staff and squeeze the most profits for themselves. Why not?
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No, that kind socialism is part of a tired Marxist dialectic: on the left, you have people saying workers are at war with management shooting themselves in the foot, on the right you have the people this article is about, at war with workers, suppressing consumer spending and productivity by fighting free market labor principles while sending mass jobs and wealth to China, all in the name of lowering labor costs. The "left" and "right" of that dialectic are on the same side! The other side is workers develo
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The big chains will beat you. McDonalds INVENTED automation and lower middle class chef jobs were the first to take the cut with the introductions of franchises. No training needed like you said. Follow pictures of assembly and have metal pans of ingredients and an order to do something repetitively over and over again. If the employee is upset or not as long as he moves his hands fast product comes out in massive numbers. Morale makes no difference. Meat comes pre-marinated. Vegatables come presliced from Mexico. Just load and go as no chefs are needed for great recipes anymore.
Sure, if you have no pride in your work at all [youtube.com].
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You need to start attending your cognitive therapy sessions again
One reason I'd like to see minimum wage go up (Score:3)
I'd say low minimum wage cost me at least $10k/yr, and I've got coworkers hi
Re: One reason I'd like to see minimum wage go up (Score:2)
Raise minimum wage too high all at once and there won't be enough money in circulation to handle the inflation, and companies may not have enough room in the budget to remain solvent when a significant portion of their profit is wiped out overnight. The result is that the economy is likely to stall out and take time to recover.
Ideally in
That would be true if productivity (Score:2)
Demand for wages is only going to fall as new automation kicks into high gear. Slave labor wages have kept that mostly at bay in China, but even there Foxconn is starting to replace workers paid with tea & biscuits with robots. We know exactly what a healthy economy looks like. It looks like Sweden, Norw
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I'd say low minimum wage cost me at least $10k/yr, and I've got coworkers hired post 2008 who lost closer to $20k to it.
It does no such thing. Money is a commodity like any other and its value is relative to its supply. Otherwise we'd be able to increase the minimum wage to $10,000 per hour and everyone would be incredibly wealthy. Hopefully you can see from that example that flaw in your reasoning. If you can't, please tell me exactly what the minimum wage should be raised to solve all of these problems. It doesn't matter what you set it to as increasing the number doesn't correspond to any increase in wealth. Doubling the
It absolutely does (Score:2)
H1-Bs do hurt, but they're not the only factor. It's naive to assume that everybody at McDonald's is incapable of bettering themselves. Yes, few will make it to my level, but I know damn well some will because _I_ did. I was a pret
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BTW, it does not appear that a McDonald's franchise owner would not hire someone who worked for a Burger King franchise.
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FYI: Difference between no-poach and non-compete agreement. [google.com]
Re:unenforceable anyway (Score:5, Insightful)
One of the first things you learn in law school is that this kind of non-compete clause is virtually unenforceable in most U.S. jurisdictions as it is unconscionable as a matter of public policy. If you are so unskilled as to only be able to get a fast food job, then a non-compete clause would make it so you couldn't get -any- job.
Dude. You don't get it if you are on the bottom of the food chain. The managers don't give a shit and will hire someone else instead. This was a result of a big mega fast food chain owner to prevent these poor guys from working 2nd or 3rd jobs to support their families and to always be oncall ... uncompensated of course.
You could whine about the evils of socialism like most Americans (assume you are but not everyone is) but unions were formed to prevent this from those who have 0 bargaining power to be fucked over.
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I worked at a McD's franchise. They had Manager Trainee's acting as Manager's 100%, just with none of the pay. I would work 60hours one week and 15 hours the next week. No Overtime Pay. They offered me Manager Trainee position, I left. They were sketch in many other ways. But when i lost that next job i tried to get a job at a Corporate McD's, they wouldn't hire me until i got permission from the sketchy franchise. Of course they said no, I lived no where near that franchise, they had no valid reason to sa
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The problem is not really the former employer suing the employee. It's the prospective new employer declining the new hire because they are in cahoots with each other.
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re-read his post, where he said "it simply means that employees cannot be forced to pay union dues."
he didnt say you cant have unions, he said they cant be forced to pay dues.
i guess this will probably be detrimental to the union in the long run because they will lose a source of funding.
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Re:unenforceable anyway (Score:4, Insightful)
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but now as only 25% are paying union dues... the union can't afford good lawyers etc... The union doesn't have the power to demand higher wages, or better work environment etc... things start getting worse for everyone, inside and outside the union.
Why doesn't this create pressure in the other direction then? Wouldn't these people who used to be in the union start thinking back to all of this extra stuff that the union got them and join back up, bringing the membership rate back up and recreating the original set of circumstances you've described? The only way that doesn't happen is if the former union workers get to keep more of their money than the union was able to increase their wages in compensation.
Even that's a little pie in the sky though.
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I live in a Right to Work state. We also have unions in this state. So.. you're wrong? At least I think you're wrong. It isn't exactly clear what your point was supposed to be.
I do, too. It means I cannot be required to join the union or pay union dues. That is exactly what the person's point is, and it means that unions in those states have to actually be responsive to the members because they don't have a captive membership.
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I do not understand why workers should benefit from a union if they are not paying for it. If you do not want to pay for the union you get what the company will offer you. A union should not have to negotiate for non-union members.
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I do not understand why workers should benefit from a union if they are not paying for it. If you do not want to pay for the union you get what the company will offer you. A union should not have to negotiate for non-union members.
You do realize that, in the opinion of not insignificant number of non-union members, the issue is that the union does not do a decent job of representing them, right? The side that's actually going to protest this more is the unions, because if you can't be forced to join and they can't claim to represent you if you didn't, this means they can't do very much if they failed to convince people that there is a benefit to joining.
Never assume anybody who turns up to represent a group in negotiations actually
Train & Jump Ship (Score:4, Insightful)
"Though a statement from the International Franchise Association argues that these agreements are necessary to keep employees from jumping ship before the expense to train them has been recouped," - I'd recommend creating a workplace where employees wont want to 'jump ship'. Correct me if I'm wrong, but isn't that part of the competition process?
Quite surprised (Score:1)
Clearly since the clauses exist and are apparently being defended something is going on here, but how is that possible? Fast food work is only a couple rungs up from the bottom. I would have guessed that there's no meaningful gains to be had by pursuing lateral mobility. Given the managers are exploited even more than the hourly types, well, I must be ignorant of something.
Re: Quite surprised (Score:2)
We gotta sign that free agent fry cook! (Score:1)
He's the best, ok? Offer him 11.25..no, 11.50 an hour! He makes the best fries in all of Boston!
Sure... (Score:5, Funny)
Yes, non-compete agreements are definitely the reason fast food workers receive low wages. Without non-competes, we would see an elite class of fast food worker who can market their skills to the highest bidder.
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Ok Hitler.
If everyone is Hitler then no one is.
This calling people Hitler, a Nazi, or even just a racist means, nothing any more since being abused. But then saying this means I'm a racist. By reading this now you are a racist. Everyone is a racist. Trump is Hitler. Pence is Hitler. They nominated Hitler to SCOTUS. So many Hitlers, so little time, there's no way to point them all out.
Give it a rest. The words mean nothing now and when a true Hitler comes along then you are just a boy who cried wolf.
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Hyperbole aside, what else is the justification except to suppress wages? That they can't recoup training costs because workers keep leaving for slightly higher pay? Golly, maybe if they paid them more they'd stay... Oh, right.
They'll just do it under the table (Score:4, Interesting)
TL;DR: we need to start redistributing those productivity gains with taxes and social programs or we need to get used to being a second world hell hole ala Flint, Mi.
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You could say the same with those scripting languages like Python. Research labs that would have needed C and C++ programmers ditch the need for programmers who can understand pointers and system memory.
I am (Score:2)
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the economy sucks for workers right now. The unemployment rate is always bogus but the 'gig' economy means millions of people are being counted as working because they drive for Uber just enough to pay rent.
Enough to pay the rent? I believe in the OECD stats you're considered employed if you work just one hour a week.
Observation (Score:4, Insightful)
Re:Observation (Score:5, Informative)
Because in the Orwellian nightmare that the USA is heading towards, in most states, "Right to work" really means "Right to fire".
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A right-to-work law prohibits unions from negoptiating contracts that require workers at a given workplace to join that union. Basically, they are a government restriction on the union's FREEDOM to enter a contract.
Basically, by being in favor of right-to-work laws, you're saying that you are in favor of government interference into people's contracts. So it looks like you're now officially a "I want more big government" kind of guy. Good to know!
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There are all sorts of government laws that prevent peoples' FREEDOM to enter into (some) contracts. For example, you cannot sell yourself into slavery. You cannot enter into a contract to kill someone. And so on. Generally, these restrictions are regarded as good things for the larger society, even though it may negatively affect some sub group (like hitmen).
Your union contract is actually very similar to these non-complete clauses being discussed here. The worker didn't sign this contract, but is bei
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Indeed, FREEDOM in the real world is complicated. Often the question can be boiled down to "Should I be free to restrict the freedom of others?" The answer: sometimes, yes. And sometimes, no.
The right-to-work laws (btw, that name is a masterful bit of propaganda) are a pretty good example of that complicated balance. Note that 'duty of fair representation' [wikipedia.org] requirements mean that there isn't much incentive for non-union workers to seek out another union; they can just use an agreement struck by the original
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My real position is that the government should not exist
That's not a real position, it's a fantasy. The only way you're going to get rid of government will be to get rid of humans.
Everywhere that humans interact, they conflict, and they are going to come up with some mechanism for resolving that conflict. Sometimes that mechanism will look more like what we might call a gang (see: parts of Mexico), but it's still a form of government.
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It doesn't matter if it is illegal or not. Reason being if you're a senior software architect you can write your own checks and employers are desperate to look the other way and do their best to bring you on board.
If you are a fast food worker. The manger throws out your application and hires someone else and doesn't care. Even if the court throws it out they still won't hire you if the owner says no I know the other other owner etc.
Rotten but at the end of the day supply and demand can be very fucked up if
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Generally they're not legal. But try suing when you're working for minimum wage. The government won't sue on your behalf unless they have nothing better to do, and the current political climate is down on government agencies that sue on citizens' behalf.
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Many of these non-compete agreements exist in states that have Right to Work laws. In a right to work state, how can non-compete agreements even be remotely legal!?
Because that's not what "Right To Work" means. "Right To Work" does not mean "non-compete clauses are illegal". "Right To Work" means that you cannot be fired for refusing to join a union. "Right To Work" makes it illegal to require someone to join a union as a condition of having a job. That's all it means, and nothing more.
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Employees were never asked to sign anything. Instead, employers made agreements between each other. Employees never knew why they didn't get the job they had applied for.
compensation because their wages were kept low? (Score:2)
I got a handy payout after the hi-tech equivalent of this was shut down.
http://fortune.com/2015/09/03/... [fortune.com]
Thanks Capt. Obvious! (Score:3)
Yes, Mr. Krueger. That's why the businesses have them. Businesses are generally against things that make them less profitable.
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That actually hurts them long term. If everyone and their brother since Reagan busted the air traffic controllers union and strike out gets paid less and gets automated then no one will be able to afford to eat at their restaurants.
The market has winners and loosers for sure, but the more efficient the market is the more everyone benefits even if the owners have to raise the wages and working conditions it means he will have more customers with more disposable income to spend which he doesn't see.
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Economics 101 fail. Quite the opposite, a lot of times efficiency in the market means fragmentation of goods. That results in some good becoming more expensive as they sell luxury versions of goods. In the scope of fast food, inflation should inherently raise costs, prices, and wages.
Re: Thanks Capt. Obvious! (Score:2)
If the market is effecient and there are not enough qualified workers willing to work for your wage and conditions then prices will rise.
You can't have it both ways. But that is good for you. It's good because tight supply means customers are pounding on your door with money in their fists. Sure your expenses go up but your income does too as it was caused by lots of demand from sales due to the good efficient economy
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Companies today create a tremendous amount of value and bring in large cashflows. The problem is that the cashflow is not equitably (in many people's minds) distributed. Everyone is working to create that value, from the organizers to the workers.
Nice headline... (Score:2)
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What, exactly, was made up?
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Let me cut to the chase: Non-compete agreement definition: [investopedia.com]
this seems to reduce to... (Score:2)
A McDonald's on Gause Blvd can't try to poach workers from the McDonald's on Front Street....
Note that this is NOT about Arby's hiring your expert McDonald's people, it's about another McDonald's hiring them.
As to the legality, I really couldn't say. Depends on whether any two McDonald's are considered part of the same company or not. If not, then it's illegal. If so, then it's probably legal.
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That is fucked up (Score:2)
I can see expensive executives and senior software architects in order to protect IP, trade secrets, and less wages, but fast food workers? Talk about greed and if these poor saps didn't have life as hard as it already is but what to save a few dollars an hour?
Talk about being kicked when you are down.
I suppose this means the minimum wage is below the market demand already and the owners are just finding loop holes to artificially manipulate the supply/demand curve to their benefit.
It's funny these owners
Capitalism working as it should (Score:2)
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Capitalism doesnt work without regulation. e.g. Workers could just give the food away for free to their friends. They cant because there are laws. Guess what ? There are laws which owners too have to follow . If Owners want to live in a society without laws , workers will be happy to oblige by wlking away with all the owners property they can get their hands on. Theft is theft - whether you are stealing wages or burgers.
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Capitalism doesnt work without regulation.
Capitalism doesn't work without regulatory capture. https://en.wikipedia.org/wiki/... [wikipedia.org]
There, I fixed that for you.
Agreement between employers. (Score:2)
This is not close to as restrictive as "non-compete" clauses in employee/employer agreements. These clauses (in the cases they are enforceable) typically restrict the employee's right to work for any competitor for some period of time. If enforced, this can make a specialist almost unemployable in some cases. As well, the action will be taken by the ex-employer against the employee -- resulting in the employee incurring legal expenses and, perhaps, requiring her to pay the ex-employer's legal fees as well i
The NPR said that? (Score:2)
Did the NPR really say, âoe... investigated by a coalition of 11 state attorney generalsâ? The NPR has editors and proofreaders, they know that itâ(TM)s not âoeattorney generalsâ but âoeattorneys generalâ, plus they know that DC is not a state. What their article said was, âoeNow, 10 state attorneys general and the District of Columbia are taking on the issue with an investigation into eight national fast-food chains.â
Copy/paste is your friend.
NCAs are EVIL (Score:1)
I ALMOST signed one that would have prevented me from working on this quarter of the globe for 2 years after I left one company I interviewed with.
THey had a short "You will not work for any company listed as a client, potential client, or competitor for 2 years in any position" The list of their Clients, Potential Clients, and Competitors looked like the New York City Phone book.
Yeah, chief. NO. Not for $60K and a 401k