Fast Food Strike

[Backroads]

So, I'm having difficulty being sympathetic to this plight. Asking for $12 to $15 an hour? I know plenty of college graduates and trained workers in professional positions who don't get paid that much. Teaching, office work... I never made that much. Perhaps I'm throwing an unfair "me me me" coat to all this, but it's how I feel.

[MarginOfError]

I think there are some legitimate gripes to be made over wages. $12-$15 might be a bit much for Little Rock, Arkansas, but it's probably close to a living wage in New York City.

Consider the following:

I used an online calculator to get that graphic. I used an annual salary of $20,000 as a comparator (that's close to the poverty level for a family of four). If you live in Salt Lake City, Utah on $20,000 per year, you would need to earn almost $45,000 per year in New York City to maintain the same standard of living. The problem is that your annual salary in New York City will only be about $25,000.

Another way of looking at it is this:

In Salt Lake City, to earn that $20,000, you would need to earn 20,000 / 2,080 = $9.62 per hour.

To maintain the same standard of living in New York City, you would need to earn 45,000 / 2,080 = $21.63 per hour.

The typical hourly wage for fast food workers in New York City is $9.50.

In my understanding, the purpose of the minimum wage was two-fold...to prevent employers from exploiting workers, and to provide a living wage from the most basic of jobs in order to alleviate the burden on government welfare services. Having a minimum wage that comes no where near the poverty line, in my opinion, fails both of those objectives.

[Backroads]

Thanks for the graph. Yes, the cost of living is fair to consider. But if cost of living varies everywhere, wouldn't it be wiser to find a way to change minimum wage based on area? Or is that just dragging in far too many variables?

[pam]

I thought minimum wage was determined by individual states. There is the federal minimum wage but states have their own. California minimum wage is higher than Utah.

[Leah]

I think there are some legitimate gripes to be made over wages. $12-$15 might be a bit much for Little Rock, Arkansas, but it's probably close to a living wage in New York City.

Consider the following:

I used an online calculator to get that graphic. I used an annual salary of $20,000 as a comparator (that's close to the poverty level for a family of four). If you live in Salt Lake City, Utah on $20,000 per year, you would need to earn almost $45,000 per year in New York City to maintain the same standard of living. The problem is that your annual salary in New York City will only be about $25,000.

Another way of looking at it is this:

In Salt Lake City, to earn that $20,000, you would need to earn 20,000 / 2,080 = $9.62 per hour.

To maintain the same standard of living in New York City, you would need to earn 45,000 / 2,080 = $21.63 per hour.

The typical hourly wage for fast food workers in New York City is $9.50.

In my understanding, the purpose of the minimum wage was two-fold...to prevent employers from exploiting workers, and to provide a living wage from the most basic of jobs in order to alleviate the burden on government welfare services. Having a minimum wage that comes no where near the poverty line, in my opinion, fails both of those objectives.

But to look at it very simplistically, when you raise the minimum wage, prices go up accordingly. So how much is really gained?

I don't think it is feasible for every job in America to be a "lving wage" job. Does a teenager trying to earn money to buy his first cell phone need a "living wage" salary?

What is a "living wage" anyway? The minimum wage here in Oregon is higher than the Federal minimum wage, but the cost of housing is so high, it would take up the majority of your salary.

[MarginOfError]

Thanks for the graph. Yes, the cost of living is fair to consider. But if cost of living varies everywhere, wouldn't it be wiser to find a way to change minimum wage based on area? Or is that just dragging in far too many variables?

Usually the cost of living works itself in. Hence, you see a typical wage of $9.50 for fast food in New York, but you might see only $7.50 in Augusta, Maine. The cost of living is lower in Augusta, and so there is less pressure from prospective employees to continue searching for work if the wage isn't good enough.

The smarter thing to do would be to peg minimum wage to inflation and have the wage adjust every 5 or 10 years.

[Backroads]

I don't think it is feasible for every job in America to be a "lving wage" job. Does a teenager trying to earn money to buy his first cell phone need a "living wage" salary?

I agree. I realize that many people are going to fast-food jobs because they have been laid off from better-paying jobs and need to support their families somehow.

Yet... should so many people expect to support a whole life on a fast-food salary? Why should, by and large, the job that once typically meant to help out teens, students, and bored retirees with part-time money making become a real career? In other words, why should all jobs be placed at a living wages just because someone might be using it as pure survival?

Edited August 30, 2013 by Backroads

[MarginOfError]

But to look at it very simplistically, when you raise the minimum wage, prices go up accordingly. So how much is really gained?

If McDonald's were to raise it's minimum wage to $9.50

Yes, prices go up. But the relative price increase is smaller than the relative wage increase, so the workers come out ahead. In this article, the author cites that McDonald's could pay for a raise of minimum wage to $10.50 per hour by raising the cost of the Big Mac by 10 cents.

This works well if you have an economy of scale, but is more problematic if you have less throughput. For instance, if JAG runs his own firm with his paralegal, he's going to have to raise the cost of his services a little more than 10 cents per service in order to cover the increase wage to his paralegal. But it's also possible that his clientele are in a better position to pay a little more.

It's also worth observing what happens on the other end of the income distribution. Ideally, increasing the minimum wage slows down the wage disparity. Companies can make up the cost of the minimum wage increase by paying the people at the top a little less. If a CEO of a large bank earned $1,000,000 less in his bonus, that would be enough to pay 50 people an additional $20,000 per year. If you just look at the wage increase of $2.25 per hour (go get to $9.50), that same million dollars would cover the cost of 213 minimum wage employee increases.

Also, I think it's completely fair to pay a teenager a living wage while he or she is trying to earn money for his cell phone. If the person is willing to do the work, they deserve a fair wage. End of story.

However, I'm willing to define "living wage" based on the poverty level for a family of 2 instead of a family of 4. That's negotiable to me.

Edited August 30, 2013 by MarginOfError

[Backroads]

Also for consideration is the fact that part-time work is hard to live on. We might say we pay a teenager a living wage, but he is still working part time and will probably not be making enough to pay rent on or whatever.

[Dravin]

Also, I think it's completely fair to pay a teenager a living wage while he or she is trying to earn money for his cell phone. If the person is willing to do the work, they deserve a fair wage. End of story.

Another thing to consider is with a tiered minimum wage you've, assuming the value of the labor is the same, created an economic incentive to hire the teen over the family man for a minimum wage position.

[Backroads]

Also, I think it's completely fair to pay a teenager a living wage while he or she is trying to earn money for his cell phone. If the person is willing to do the work, they deserve a fair wage. End of story.

I agree wages should be fair. I also agree that, skill for skill and job for job, the laborer earns his wages. So what is the value of a fast food job? Should we argue to pay on need rather than skill? What is a "fair" wage?

[Lakumi]

I thought minimum wage was determined by individual states. There is the federal minimum wage but states have their own. California minimum wage is higher than Utah.

In Canada its the same anywhere you go

I can understand why they want to raise it, I mean here for example there are no jobs besides fast food, the industries went away and this city is a piece of crap that one day will implode in on itself as it is trying to attract retirees and all the young people move away due to lack of jobs.

It will get to a point where nothing in the city can run and it will shrink to a small town size.

Here, at least, no one who works at fast food is a teenager, or even a young adult.

Its a sad realization that in many places, these sorts of businesses are the only work to be had for anyone, as the general population gets poorer (and dumber)

[Bini]

My first job as an LPN I made $16.50 hourly which isn't much. It's crazy that CNAs, MAs and techs in general are making that right off the bat now - or higher.

[NeuroTypical]

You shouldn't get a living wage for most McDonalds jobs, because your labor doesn't provide enough value to be worth it. If you want a living wage, you need to learn how to do somthing that provides enough value to somebody to earn it.

My first job was at a small candy store - $3.25/hour. I emptied garbage cans. I shudder to think of where I would have ended up, if I had had the entitlement mentality and figured I 'deserved' enough at that job to allow me to live by myself and pay all my own bills.

[Lakumi]

You shouldn't get a living wage for most McDonalds jobs, because your labor doesn't provide enough value to be worth it. If you want a living wage, you need to learn how to do somthing that provides enough value to somebody to earn it.

My first job was at a small candy store - $3.25/hour. I emptied garbage cans. I shudder to think of where I would have ended up, if I had had the entitlement mentality and figured I 'deserved' enough at that job to allow me to live by myself and pay all my own bills.

in this day and age a lot of people simply can't afford to go to collage or university to get any better jobs

and this gap between rich and poor is growing

most jobs are meaningless in the grand scheme of things, really.

[Just_A_Guy]

I agree wages should be fair. I also agree that, skill for skill and job for job, the laborer earns his wages. So what is the value of a fast food job? Should we argue to pay on need rather than skill? What is a "fair" wage?

Those of us on the right would argue that "fair" is whatever the market will bear. If there are people willing to work for x number of dollars per hour, then x number of dollars per hour is a fair wage.

The trouble comes when the parties are in unequal bargaining positions--a labor glut (or shortage), or a union that's either too strong or too weak.

One of the problems I see with this particular strike, is that it isn't hurting the right group of people. McDonald's corporate doesn't pay the workers--the franchise owners do that. McDonald's makes their money in the form of royalties/rent payments that they receive from the franchise owners; and my guess is that those fees have to be paid whether the franchisees are actually selling any burgers or not. So, in the short run, the ostensible boogeymen here--McDonald's Corporate--can sit back and laugh.

If the "workers' advocates" really wanted to accomplish something by hitting McDonald's Corporate where they live, they'd have gotten the franchisees on board with this and orchestrated a sort of "rent strike" by the franchisees in conjunction with the worker's strike (Subway, for example, is experiencing some real discontent from its franchisees at the moment because they're basically requiring franchisees to sell sandwiches at-cost--average franchisee profit per annum is something like $40K). Because they didn't get , I think this is particular event is going to amount to little more than sound and fury, signifying nothing.

[Churchmouse]

Considering training for one of these jobs takes one day,I wouldn't be surprized if they just fire them and hire new people. I know college grads who would be willing to work for any wage. There are many teachers with no classrooms.

[NeuroTypical]

in this day and age a lot of people simply can't afford to go to collage or university to get any better jobs

You can do a job valueable enough to earn a living wage, without a college or university degree. You can even do it at McDonalds, if you work hard enough and become valueable enough.

and this gap between rich and poor is growing

Apples and oranges. We're talking a 'living wage', not 'getting rich'. No matter how wealthy rich people get, or how impoverished poor people get, taxing people to give me more money than I'm worth, because someone feels I should be entitled to have more, is not the answer.

most jobs are meaningless in the grand scheme of things, really.

Well, that's totally up to the person having the job, IMO.

From the Gospel Principles manual, Chapter 27: Work and Personal Responsibility

We Can Enjoy Our Work

To some people work is a drudgery. To others it is an exciting part of life. One way to enjoy life’s fullest benefits is to learn to love work.

Not all of us can choose the kind of work we do. Some of us labor for long hours for the bare necessities. It is difficult to enjoy such work. Yet the happiest people have learned to enjoy their work, whatever it is.

We can help one another in our work. The heaviest load becomes lighter when someone shares it.

Our attitude toward work is very important. The following story shows how one man saw beyond his daily labor. A traveler passed a stone quarry and saw three men working. He asked each man what he was doing. Each man’s answer revealed a different attitude toward the same job. “I am cutting stone,” the first man answered. The second replied, “I am earning three gold pieces per day.” The third man smiled and said, “I am helping to build a house of God.”

[Canuck Mormon]

In Canada its the same anywhere you go

I can understand why they want to raise it, I mean here for example there are no jobs besides fast food, the industries went away and this city is a piece of crap that one day will implode in on itself as it is trying to attract retirees and all the young people move away due to lack of jobs.

It will get to a point where nothing in the city can run and it will shrink to a small town size.

Here, at least, no one who works at fast food is a teenager, or even a young adult.

Its a sad realization that in many places, these sorts of businesses are the only work to be had for anyone, as the general population gets poorer (and dumber)

Last time I checked, each province sets their own minimum wage. I'm not sure what it is here, but I know it's much higher than when I was making minumum wage. Of course back then you could go to a movie and dinner with a date for less than $30. Good luck eating for $30 on a date anymore.

What has happened to your city is exactly what will happen if fast food workers start making $15/hour. Businesses will re-locate to where they can make money. If an employer has to pay someone $15/hour to make a Big Mac, plus pay everyone else the same, the profits will drop and it will not be feasable to operate anymore.

Why have alot of the maufacturing jobs left the continant? Because there isn't enough profit to maintain the factories.

Sad but true.

[Churchmouse]

You're not supposed to stay at that rate forever. McDonalds CEO started out at minimum wage in the 60's. He now makes 27 million a year. He never went to college. It's called initiative

[Backroads]

in this day and age a lot of people simply can't afford to go to collage or university to get any better jobs

Student loans are still possible. If one plays one's cards right, one can train under someone for skills. Many colleges allow payment plans and (gasp) a student can work at McDonald's while attending school. Your statement sounds like an excuse to hand out money.

and this gap between rich and poor is growing

So, what, institute pure socialism when not everyone is willing to make it work?

most jobs are meaningless in the grand scheme of things, really.

Yeah, my places of work probably won't mean anything in the eternities, I'll agree with you there. But what's your point?

[skippy740]

The people "striking" for more money doesn't understand opportunity in America.

According to Jim Rohn in "The Art of Exceptional Living", he said this:

"America is unique. It's a ladder to climb. It starts out at about $4 an hour. Last year in Congress, there was a big debate about the starting place. It should be $5. Well, no, it doesn't need to be $5. Why? It's a ladder... not a bed."

The people asking for more are taking the wrong attitude towards a job that is low paying and normally high turnover.

They may think they're stuck. They're not a tree. They can improve their skills, take stock of their transferrable skills and look for other opportunities. Yes, they may have to move for those opportunities... but they are out there.

[yjacket]

Minimum Wage Laws:

Economics in One Lesson, The Lesson Applied, Minimum Wage Laws

It's pretty simple. Unemployment is a combination of a mis-match in skills and wage rates. There are plenty of jobs available in the right industries at the right wage rates. A minimum wage higher than the natural wage rate will cause unemployment and will lock certain individuals out of the labor market.

What people really mean when they say they want higher minimum wage, is that they believe that the companies that employ them are making too much profit and therefore can afford to pay more for their wage, not necessarily that the employee is worth more. If the employee was worth more they would find a job that actually paid more.

Unfortunately that is a very short-term view. Companies don't just take money and stick under a mattress, they invest it. The more wages the company has to pay out the less they are able to invest which means less expansion, less people hired, etc. If one takes the argument that the CEOs and investors make "too much money", well where does that money go. The CEOs that make millions don't just keep that money in the bank (they do keep some of it for future investment and spending) but that money is put to work buying yachts, or whatever else. Which in turn employs those people who build yachts who employ mechanics who buy hamburgers from minimum wage workers.

The reason why the rich get richer and the poor get poorer isn't because of minimum wage; it's because of inflation and the banking system. The rich get richer because they are the ones with the first access to the money printed by the Federal Reserve or are well connected politically and benefit from government contracts. Those individuals get to buy up all the goods at depressed prices (i.e. before inflation manifests itself). The poor guy working at McDonald's has the last access to money, i.e. all the prices have been bid up before he can buy anything. Raising the minimum wage isn't going to change that, it just locks more people out of the labor market. To get rid of the rich get richer and the poor get poorer one has to completely revamp our underlying financial system.

[Lakumi]

Student loans are still possible. If one plays one's cards right, one can train under someone for skills. Many colleges allow payment plans and (gasp) a student can work at McDonald's while attending school. Your statement sounds like an excuse to hand out money.

So, what, institute pure socialism when not everyone is willing to make it work?

Yeah, my places of work probably won't mean anything in the eternities, I'll agree with you there. But what's your point?

school shouldn't cost money, knowledge should be free

I mean, you aren't actually paying for learning you are paying for a piece of paper, I can learn anything collage teaches me on my own.

Its free in so, so many other countries. But then again, a smarter population doesn't go along with the status quo as much as a dumber one.

[Quin]

My first job as an LPN I made $16.50 hourly which isn't much. It's crazy that CNAs, MAs and techs in general are making that right off the bat now - or higher.

Here's some fun:

Where my sister lives (Seattle, where I'm visiting! And it's sunny today!)

CNAs make $9 per hour

Fast Food makes $8.50

Poverty line for family of 3 is 40k (food stamps, full aid)

STUDENT housing is $1600 per month BEFORE utilities and parking

Cops & Firefighters make 85k*

Compared to where I was last (Phoenix)

Restaurant makes $2.90

(No idea about CNAs)

Student housing is $500 w/ utilities paid

Cops make 45k

So.... 2 major cities...

Cops make double (or half)

Restaurant makes 3x (or 1/3)

Housing is 4x as expensive

Whoops.... Got started on the med stuff... Got sucked into the price of milk.

Ahem. What my sister pays in UTILITIES paid my rent in Phoenix last month.

Add them both together and they won't even scrape 1 month rent in DC (where I am next month).

In general, I just look up Police & Fire salaries , and student housing, before I travel somewhere. That gives me a working idea as to middle class cost of living.

Q