Fast-food workers, urged on by the Service Employees International Union, held protests in American cities yesterday, calling for higher hourly wages.

The minimum wage is now $7.25.  The average fast-food employee makes about $9 an hour. The protesters say they want a “living wage” of $15 an hour.

Fifteen dollars seems like a convenient figure, but why not $16.50 or $18.33 or $55?  The higher the number goes up, the more absurd it sounds, but it’s the same flawed logic that produced the $15 figure.

An artificial wage set by the government suggests that income is simply an amount of money that is available for distribution, but as Thomas Sowell writes in his book Basic Economics, “there is no collective decision about the value of an individual’s work.”

“In a market economy, those who get the direct benefit of an individual’s work decide how much they are prepared to pay for what they receive,” Sowell writes.   On the other side of the equation, the individual doing the work is free to decide whether they are worth more than what the employer is willing to pay and then make career decisions accordingly.

The amount a person is paid is dependent upon many different factors, including productivity.   The guy digging a ditch is no doubt engaging in more strenuous labor than the fellow operating the backhoe, but the backhoe operator commands a higher wage because he is more productive.

In the fast-food business, the shift supervisor making $15 an hour is, in economic terms, more valuable than the worker in an entry level position because of the additional responsibility and the skills necessary to make the operation run smoothly.

Another problem with arbitrarily forcing employers to pay higher wages is that it may actually decrease employment.  A company forced to double entry level wages might choose to hire fewer workers or invest in technology instead of higher wages as a way to maintain or improve productivity.

Economist Milton Friedman argued that forcing employers to pay a higher minimum wage simply guarantees that “people whose skills are not sufficient to justify that kind of a wage will be unemployed.”

The fast-food worker protest also spreads some misconceptions about the industry.  Based on the rhetoric, you would think that most people working at McDonalds or Burger King are trying to raise a family on minimum wage.

Phil Hickey, Chairman of the National Restaurant Association, wrote in the Wall Street Journal this week that “only five percent of the 10 million restaurant employees earn minimum wage. Those who do are predominantly teenagers working part-time jobs.”  According to the bureau of Labor Statistics, half of the minimum wage employees in fast-food are under 20.

(The Center for Economic and Policy Research refutes that claim, arguing that 40 percent of all fast-food workers are over 25.)

At its most basic, people demanding a higher minimum wage want for themselves the same thing opponents want for everyone: prosperity.  The best route to that prosperity is through a market-based economy, which is the most efficient mechanism for allocating resources, including an individual’s labor.

 

 

 

 

 

 

 

 

 

 

 

 

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Comments

  • Tag

    Yet more demands from the grievance and gimme society. As a result, upward mobility via education and hard work is diminishing quickly in this country. Throughout their working career, it is the employee's responsibility to establish a value for their skills. If one chooses to be stuck in a minimum wage job, so be it. And don't think for one minute that the SEIU's involvement is out of compassion for these people. They are nothing but vultures looking for a fresh carcass to pick clean by the way of union dues.

  • NorthernWVman

    Just curious if it is so hard to make it on the minimum why do all these folks have "Smart" phones, cable tv, and a plethora of other non essential "needs"???

    • BigBadJohnHenry

      Like tatoos. That "body art" gets expensive.

  • Fubar

    NCWV - thank you for bringing reality to this issue. It doesn't take long to see which workers understand what has to be done to advance themselves and their employer.

  • NCWV

    So, I know this young woman who started working at a McDonalds about four years ago - at minimum wage. She was good to customers, kept her mind on her job, sought out training opportunities, and left the drama at home. She has worked her way up to shift manager and is now paid over $10 per hour with all the hours she can handle. She receives regular raises every six months and is in line to be an assistant manager. She has to recommend workers for firing regularly due to their lack of work ethic and tendency to bring their drama to work. Granted, many are teenagers, but many are adults by age who just can't seem to grow up. They require a babysitter to keep them working instead of standing around or playing on their phone, and most jobs have to be done more than once because they simply don't care to do it right the first time. They seem incapable of determining that a task needs done and doing it without an order to do so. Most managers recognize good work and reward the worker with a raise. Those who aren't getting raises are likely getting what their work has earned them.

    • Joe

      NC - that is a great post. To dovetail on it, I and my peers find this behavior growing in college graduates, as well.

      I participate in a WVU cross industry steering committee for the College of Engineering that meets twice a year.

      We have found a disturbing increase in discussing the behavior, maturity and basic dreesing ability of our graduates. Corporate bosses should not have to be these kids parents.

      I'm happy to hear your story of this obviously young, mature manger that has a greatcareer in the future.

    • bulldog95

      My wife worked retail a few years ago and started at 7.25. She worked hard, didnt need the boss to tell her what to do, and always stayed busy. I think within a matter of maybe 6 months she was given a .50 raise and a couple of months later was promoted to the highest level that the store manager could promote her too. That brought about another .50 raise and about 12 more hours a week to work. The higher position opened up about 2 months later but to get that spot required the district manager approval, but since the new DM had a beef with the store manager she didnt get the job. All in all she worked there for a little over 2 years and probably got 3 to 4 raises bringing her close to 10.00.

      But this is not what those striking want, nor is this what some people on this message board want, namely people like hiphop and td think that people should be given a paycheck to lean on a shovel all day.

  • takemetoemstar

    i think the MD's mgt should hold on to a few key workers at thier restautrant(s) and fire the whole lot of the employees for 'striking.' ripping an old page out of the Ronald Reagan playbook when applied to the airline traffic control personnel.

  • Joe

    TD

    If you owned a restaurant, would you pay the servers and line cooks 15 per hour?

    • bulldog95

      Now dont go asking him something like that. You know darn good and well that he would.

      • BigBadJohnHenry

        +1

      • Joe2

        Sure, I have no doubt he would. He would do it for a few months and close his doors.

    • TD

      I said $15 was way out of line didn't I??? At least $9 though

      • DonaldH

        $9? That's "Fiddy" cents below the national average for a fast food worker

  • CaptainQ(Moderated)

    Well Hoppy, you do make some valid points about the fast food industry. However, there is one thing you forgot to mention and that's the effects of the impending ObamaCare law on this industry.

    It is true that most fast food workers are part-time, but that will ALL become 'part-time' when the employer mandate provision of the ObamaCare law goes into effect in 2015 (unless Congress grants another extension). The owner of Papa John already announced his intention to make all his workers part-time and you have to believe all of the other fast food restaurant chains will follow his lead on this. So this will mean that even managers will, in all probability, becomes 'part time' employees too.

    Bottom line, to offset the 'unintended damage' that ObamaCare will do to fast food workers, fast food employees need to earn every penny they can. As for the prices of fast food rising, if you've been to fast food restaurants lately, those prices HAVE already started rising. And besides that, raising fast food workers to a living wage actually could help Michelle Obama's campaign to fight obesity. Think about it, if fast food becomes outrageously expensive, then that will deter people from buying it, thus, in theory, force them to make healthier choices for meals, right?

    Ok, ok, that last part was sarcasm, but the bottom line is, due to current and future economic conditions in America, fast food workers do need to make a living wage. Unfortunately, the odds of them obtaining that are as slim as a supermodel's body.

    • Hop'sHip

      Q: What did you write originally that warranted moderation? I'm currious as to what constitutes going too far here. Obviously there is no limit on the expression of mean-spiritedness against the downtrodden.

      • FungoJoe

        I don't see you passing out blankets to the homeless on a cold night. I don't see you handing out sandwiches to the "downtrodden". I don't see you turning your bank account over to the "downtrodden".
        Your compassion must end at your front door step.

        • Hop'sHip

          Huh? All I suggested is that maybe we should refrain from demonizing those who are struggling most in a difficult economy. Take your medicine, Fungo, or better yet, go play with those dogs that you spoil. It's hard to be so angry around man's best friend.

      • Wowbagger

        Hippie, A while back I learned that incorporating a youtube link even an innocuous one will get your post delayed until someone looks at it. Since mine was to a half hour speech at the Boy Scouts 2013 Jamboree it took a long time. Since the software change I haven't seen any formal rules posted, although to be honest I haven't spent a lot of time looking.

        I would kind of like to know too to avoid wasting my time with a post that takes half a day to get checked out.

        • CaptainQ(Moderated)

          I don't think I'm going to permitted to answer that question even if I knew the answer, Wowbagger, sorry.

        • Hop'sHip

          Bagger; thanks for the reply. I think you may be onto something because one of my postings that included an innocuous link was sent to moderation limbo, never to be seen again. But then maybe Q has decided to include "Moderated" as part of his name now.

      • CaptainQ

        Hop'ship, my FIRST reply to your post (a very detailed account of the situation at that time on Friday) did not get 'posted.' Apparently, sometime later that afternoon, my posts here were no longer 'awaiting moderator approval.'

        I have to be more careful in the future what I post so I don't end up in that particular 'situation' again. Probably best the subject be dropped.

  • Wowbagger

    Any raise in minimum wage simply punishes those in the middle class who earn somewhat above that level with little chance of receiving a meaningful increase themselves like most WV state workers, for example.

  • Medman

    Look, we can moan and complain, but eventually the Socialists in this country will win and will control wages. As a conservative I have come to accept that we will never elect a President who does not promise more handouts and uses class warfare as a central theme of the campaign. The voter demographics and the lack of an educated/informed electorate will assure that the Left controls this country to the brink of bankruptcy. I pray that I am wrong.

    • DonaldH

      You are right Medman..

    • David Stanton

      "Socialism is a great system until you run out of other people's money"
      Margaret Thatcher

  • TD

    Although I agree $15 is out of line, so is the current $7.something. What built our economy? I say it was the bulk of people being able to get into the middle class, those millions and millions having spending money is the very thing that created our high standard of living.

    The manufacturing jobs that were available to past generations have for the most part been outsourced overseas. People used to be able to take a high school diploma, or often times not even that, and get a factory job that they could make a middle class income.

    Now for the masses there are very few opportunities to climb the economic ladder. Their main employment is working in box stores or fast food chains and the country has to recognize these 10's of millions must make a livable wage or we will continue to see the middle class shrink.

    Anyone who quotes Milton Friedman and Thomas Sowell as their source for economic strategy has bought into the theories that ultimately fail. The balance is somewhere between as is the balance on the minimum wage

    You can't have it both ways, bemoaning everyday about gov't assistance programs to help the poor while at the same time arguing that people who do work shouldn't make a livable wage.

    • Joe

      So why don‘t we see a rise of that segment either entering a skill trade or vocational program or joining military service to serve and learn a technical career? Yes, the days of the non-skilled bumper installing jobs ending, bt there still remains unlimited opportunities for those motivated enough to seek them. It does not work the other way around. You never hear about plumbers, carpenters, or electronics technicians striking. A high proportion of those who generally have either a high school degree or GED.

      You cannot have it both ways.

    • DonaldH

      Sorry, but the middle-class is growing but it is growing globally.

      • TD

        thanks in large part to corporate America, job opportunities with a good economic future used to be there for Americans but are now overseas, thanks to idiotic trade policies and an economic theory that is pushing money to the top.

      • DonaldH

        TD, I hate to tell you this but the post- WWII era the US once enjoyed while the rest of the world's infrastructures was in shambles has ended. It is a global economy and the world has caught up... If you don't get that then you never will.

        • TD

          DH, I agree but we should draft trade policies that keep jobs here. Big corps still need the American market to prosper and if they want access to this market they should have to employ Americans. It's called a tariff and served us very well for our first 150 years.

          • DonaldH

            I believe the WTO was/is somehow,-- and I won't even pretend to know the ins and outs of their primary functions-- suppose to be the governing body to regulate and enforce trade laws-- Our eternal trade regulations nor laws mean spit if we want to remain part of the global economy..

            Ex: If you can remember in 2002 or 03 Sen. Byrd threw a fit claiming President Bush "Didn't go far enough to protect the American Steel Industry" from a foreign importation from France, Russia and China of steel.-- I thought it odd that during the most partisan era of my life time instead of Byrd fully blaming Bush he decided to attack Bush's lack of action in preventing the dumping of foreign steel in the U.S. market...

            Long story short; The unfettered opening of the US Steel market to France, Russia and China was part of an agreement President Clinton had signed with the Fr. Russia and China 5 years prior to not import steel into America. When the agreement ended and Bush did try to stop the importing of steel France, Russia and China hauled us before the WTO with a law suit and won-- and then several steel mills shut down in America and another part of Clinton's phony "robust economy" collapsed on some one else's watch!!!

          • DonaldH

            eternal= internal

    • bulldog95

      So why did all those manufacturing jobs go overseas? Why dont we look at the price of energy as a big reason why this has happened. Everytime the price at the pump goes up, everytime I cut back on my electric use, I still pay more. Thats why there is no spendin money to get things moving.

      Everyone have fun at your local fastfood joint when they are forced to pay something close to 15 when they cut their workforce in half or double the prices of their products. I dont think its to late to trademark "slowfood."

      • TD

        they go overseas because the labor is cheap, they can pollute all they want, if an employee is hurt on the job they can kick them to the side and put another person in their place without worrying about the one that just got hurt.

        Google this, "Apple puts up nets to stop worker suicides" and you will see a FOXCON factory in China where the conditions are so bad workers were committing suicide by the dozens. The factories solution? Put up nets to catch them when they jumped.

        Do you know the added cost per I-phone if those were built in America with decent wages? About $37 additional per unit.

        You think energy cost is the reason? No, it is the fact they can operate unregulated that attracts the American corporations.

        • wirerowe

          TD proximity to market supplies, labor. Infrastructure, logistics,cost of labor including productivity are also part of the picture. Your good points of bringing up regulatory environment as a site location consideration are diluted when you make assertions that it is the only or the major consideration. Because of logistics, difficulties with business practices and cost narrowing some high end manufacturers are returning to the Us. This is expected to continue and accelerate with our growing energy advantages.

        • bulldog95

          Hook, line, sinker.

          Cheap labor huh? Decent wages huh? Translation: The unions overdid it and demanded way to much and drove the companies out.

          Decent wages? I hate hearing that, what you really mean is a line worker making the same as the person running the show, taking all the risks, and putting in a lot more hours and restless nights. Get over yourself already. I bet all those people that work for you make top of the line pay, probably matching what you make amirite?

          • TD

            nobody says they should make the same but what's the incentive for these low educated welfare people to get a job when all that is available is Dollar General paying $7.25? I know lots of them and that is pretty much what they are facing so they just drop out completely. Most were raised by nonexistent parents who could never help with homework, teach work values, etc... Their parents experience was the same as theirs is and they follow the same path.

            IF a person shows up everyday and works for one of the most profitable businesses around, McDonalds-Walmart-etc... they should be paid well enough to live without gov't assistance, ie. you and I paying the rest. that's all I'm saying.

            You and I are the ones footing the bill for these large corporations low wages. Take the earned income tax credit, is that fair? That people working at Walmart get more back in taxes than they earn? Why, when they're employed by a family that has more wealth than the bottom 40% of Americans combined are we subsidizing their employees?

    • Joe2

      Artificially inflating wages will in no way help the middle class. It will absorb even more people who are currently making near 15 and hour to the poverty level and out of the middle class. At a very basic level the minimum wage affects the price of all goods and services. If you artificially set the floor of prices via some minimum wage you also reset all prices and the purchasing power of everyone at every income is less. At the end of the day, doubling the minimum wage does nothing to make it a more livable wage because prices of everything will totally eat away that increase, but at the same time everyone else's purchasing power will be lower due to the inflation of prices due to the artificial wage floor. This is simple economics.

      • bulldog95

        So what you are saying is if minimum wage goes up 2 more on the hour, its like almost like everyone else that doesnt get the raise is taking a 2 on the hour cut?

      • DonaldH

        So, if everyone made at least a million bucks a year,,, then a millionaire would below or at the poverty level.

  • DonaldH

    Joe, certainly you would agree that Unions are some of the most "Bi-Partisan" groups in America-- Just like all the posters on this board that aren't Conservative-- straight down the middle Bi-Partisans, the whole lot of them-- so we shouldn't criticize, question nor challenge their political and economic prowess.. Just step back and let them have the country..

  • Joe

    How about also reducing the union dues fee by the same percentage as the wage increase?! As long as we are simply to do what is best for "working people" (whatever the heck that term means).

  • zero tolerance

    Good to see solid union backing on this issue. Would you expect anything else?

  • DonaldH

    Instead giving fast food workers about a 45% raise why doesn’t the President just sign an Executive Order cutting all wages of those making over 15 an hr by 40-50%.. We could have UMW and UAW members working for about 20 bucks an hour and Engineers working for 40K a year… Doctors and Lawyers income could follow alike and everything will be just fine, right?—after-all, that’s the goal of all this social justice isn’t it, close the gap between the “have and have not’s”

    And in the spirit of “Bi-Partisanship” I think we should turn this economic and political conundrum over to Maxine Watters, Shelia Lee Jackson and Al Franken to solve.— What does my liberal/progressive,,, ooops sorry about that I meant my Democrat Party fellow posters think about that dynamic brain trust?

    • liberty4all

      Watters, Jackson and Franken could hold an economic summit with Palin, Bachman, and Akin. That would complete the brain trust.

      And before I get accused of being a liberal, socialist, commie simply because I point out that neither party cornered the market on intelligence, I completely agree with Hoppy's article and support a free market system.

      Neither party has all the solutions and neither party should shoulder all the blame. We are where we are because both parties cater to special interests, will do/say almost anything to cling to or return to power, and have long ago quit placing the needs of the American citizen before their own personal goals or the goals of their party. One party spends a whole lot. The other spends just a little less.

      • DonaldH

        Special Interest like Labor Unions?

        • liberty4all

          Or big oil, big pharma, banking and insurance, etc . . . Look for the money spent on lobbyists for any "cause". Each side has their favorites, and both cater to special interests at the expense of the citizenry. Just check out the tax code. For every deduction and credit there was a special interest somewhere that paid for (I mean "lobbied for") that benefit.

  • David Stanton

    Well explained Hoppy. In simple terms if min wage is $15, the basic BigMac meal price would double ($12?). Millions would not be willing to pay that much for a hamburger, and the fast food industry would shrink and die. The market determines prices and wages.

    • DonaldH

      Couple the wage increase and probable price increase with the fast-food products being the political target of many, many politicians and this will likely collapse an entire industry.

      So once again those most negatively effected will be the least educated among us-- And who are the least educated among us with the highest high school drop out rate? anyone care to answer? GregG?

      • GregG

        Tell me exactly what it is you want to hear Dandy Don so that I may answer your question. We all know if the answer isn't what you want to hear your going to throw a fit.

        • DonaldH

          If you believe laughing out loud is a fit,, then you have issues,, You know the answer but as always, you dodge...

          • DonaldH

            Oh, gregG please answer: lay-offs in the fast-food industry would have the hardest negative impact on what group?

        • DonaldH

          And GregG-- I'm still waiting on an answer from you on the "Meth" thread over why you think YOU should be able to take a gun I legally own--- But you are dodging,,, again!!

          So let me ask again-- Why should YOU, GregG be able to deny me, DonaldH, any of my guarantees under the U.S. Constitution?

          • GregG

            Oh Donald, I'm not playing your little game. You may think your are cute, but I don't. So you go ahead and live in your little world and I'll live in mine. I believe the word "troll" pretty much covers it.

    • Jim

      Why doesn't Obama make the minimum wage $50 an hour? Wouldn't we all be happier if everybody made at least $100,000 a year? Wouldn't that make us a richer country? Wouldn't that wipe out the gap between rich and poor?

    • DWM

      No David,

      What will happen is what is happening in all industries where minimum wage employees are being employed. What will happen is that those industries will continue to evolve to eliminate those employees that do not add$15/hr value to the workplace. The final impact is entry level workers, low skilled, and lightly skilled workers will not be able to find work, increasing unemployment. We all started as minimum wage workers and is was never intended to be or should be a living wage.

      Those minimum wage jobs that will be lost are important because 1) they help train kids how important developing themselves so they don't end up in minimum wage jobs is, 2) It puts some spending money in young kids pockets, and 3) it teaches them the value of a job. I appreciate the 6 years I spent in minimum wage jobs in high school and college.

    • sam

      Not true David, maybe the owner of the company would share some of its profits by paying higher wages. Look at the gas industry. We pay a higher price per gallon for what? Not in the quality of gas but so at the end of the quarter look at the amount of profit gain that's made and not passed on to the consumer.

      • DonaldH

        Government makes more off a gallon of gas than the "oil" companies do

    • Jimmy Two Times

      There is no proof that raising the minimum wage produces inflation. Shouldn't the minimum wage be enough to keep you out of poverty? Currently, wages are at all-time lows and profits are at all-time highs. That's a fact! This is what results from "trickle-down economics". It should actually called trickle-up. It's why the economy is growing at such a slow pace. The middle and lower class can't buy the products being produced. The rich can only buy so much. They don't power the economy. It's all common sense really.

      • DonaldH

        I'm not so sure there isn't proof to the contrary-- I know if I were something like a welder making $16 hr and I could go to work in a dry, cool work environment flipping burgers for 15 an hour then guess what,,, My boss is going to have to pay me 18hr to keep me welding-- that is, of course, if I were single and in my 20's or 30's

      • Dio_Bacio

        If you pay more, ultimately you spend more. I'd say 5/8th of a check is somehow put back in the system. I feel it'd turn us all into the richest and lowest crime populated nation in history. It offers businesses a chance to flourish as well. Death to fast food in regards to the "McDonalds Meal" however.