Fight for $15: Am I confused or are they?

fastfoodstrike2

As a retiree, I’m a long way past worrying about minimum wage jobs. The last time I thought about them seriously was when I was looking for summer jobs in high school and college.

I’m not the sharpest crayon in the box when it comes to economics and finance. So I’ll admit I’m a bit perplexed by today’s “Fight for $15” demonstrations. They seem to be centered on McDonald’s but include a number of other businesses that pay minimum wage. I’m perplexed because I don’t understand how people who have part-time and/or entry level positions that require no education or previous experience expect to demand and get a “living wage” for doing those jobs. Those jobs are not and never were intended to provide a living wage, to be the sole support for an individual and certainly not for a family. Sure, if wishes were horses, etc. But those are bottom-rung, bottom-of-the-ladder jobs intended to be part-time, temporary, after-school, pocket-money jobs. And people who aren’t content with that are free to leave; they can be easily replaced by the next teenager looking for a part-time job.

People who want a living wage, a livelihood, something on which they can survive and perhaps raise a family, need to go to school, get some training, learn a trade, and/or go to college. You have to learn the skills and earn the right to higher paying jobs. You don’t walk off the job you claim to need so desperately, strike, picket, and have a hissy fit on the street demanding $15 an hour. Not if you want to keep that job. What have these demonstrators done that warrants paying them more than what they’re making now? Did they absorb some additional education or training overnight? Are employers supposed to double their pay just because (or in spite of the fact that) they walked off the job? Have they forgotten the lesson of Ronald Reagan and the air traffic controllers?

Oh I’d be the first to agree that minimum wage should have been raised years ago and needs to be raised now. And I agree it should be tied to the rate of inflation and increase accordingly. And I’m sure there are plenty of companies that take advantage of the fact that it hasn’t increased and continue to pay employees that unfairly depressed minimum wage.

But where does the $15 number come from? Has somebody calculated that it’s the magic number that would result if minimum wage had been going up with the rate of inflation for x number of years? Even if that were the case, I doubt businesses could sustain an abrupt increase that big (the current federal rate is $7.25 an hour). Maybe a gradual increase spread over several years would work. I don’t know. But I’m sure there are many small businesses, barely surviving, that would go under if they suddenly had to double the pay to some of their employees.

And why picket the businesses? Isn’t it up to cities or states to raise the minimum wage? Shouldn’t picketing take place at city halls and state capitols? It’s not likely many employers will start paying more unless the law requires it or the market demands it.

Many of the picketers are also demanding a union. That idea, and the day of protest, are being led at least in part by the Service Employees International Union (SEIU). As I’ve noted in the past, I think unions are an anachronism. Their original purpose of ensuring safe working conditions and eliminating child labor has been taken care of with legislation. Today they seem to exist only to pressure for higher wages which may or may not be deserved and which employers may or may not be able to pay, and for more benefits and job security which, again, employers may not be able to afford. (They are, of course, a good way to blackmail employers, collect dues to support their leaders, ensure job security for bad employees, and contribute to political groups that individual members might not support … )

(I’ve warned you before, I’m liberal on some things, conservative on others. Neither party has all the answers. And it’s a cinch I don’t.)

We’ll always need minimum wage jobs, jobs that require no experience or education, that are part-time or temporary or entry level for people who need jobs like that. Such jobs are the bottom rung of the economic ladder that every worker hopes to ascend. But there has to be a bottom rung or there’s no way to even get on the ladder.

 



Categories: Money

17 replies

  1. You’re on the correct (I almost said “right”) side of this, so get ready for a bunch of flaming, something for nothing advocates to tell you how capitalism has enslaved the most prosperous lower class on Earth.

    • I’ve been lucky with flamers (but I also screen for them). I’m more than willing to entertain polite responses both pro and con. It’s a complex topic and I know there’s a lot to be said. Certainly more than I’ve touched on here.

  2. I am a retired demographer, and when I worked for Bell, I was part of an economics team which I ultimately managed. Therefore, I understand labor force and wage issues. I am impressed with your post today. And you are “right on.” The only thing I would take issue with is that the minimum wage should be raised at all.

    To add a personal note. Two of my granddaughters (one with a college degree in fine art and the other with a 2-year degree from a community college) who are currently “in the labor force” began their work careers in minimum wage jobs. When they became tired of earning peanuts, both looked for and found better paying jobs. A third granddaughter has recently completed a grad degree in earth science will be teaching next fall. The youngest granddaughter has an internship this summer with the advertising firm that did the ‘Got Milk” ads. That’s the way the economy works.

    • Well, it hasn’t been raised in many years, so an increase is probably due right away. But doubling it? I think that’s a ridiculous, unrealistic demand and I wouldn’t be surprised if it’s being driven by the union (after all, they’ve nothing to lose). I suspect most minimum wage workers don’t know enough about economics and the labor market to have any clue what a fair, sustainable increase would be.

      I worked a number of minimum wage summer jobs until I got out of college. At one of the first, I was paid partially with rats for my science fair project at school. One of the others was as a page at a bank that offered me a full-time salaried position after I graduated (because they knew me, of course). My son worked tons of part time and summer jobs. Some were minimum wage like projectionist and ticket sales at a movie theater. He tried fast food service and hated it (good lesson). Some involved computers (he’d had some classes) and those counted as experience for future computer jobs that paid better. My grandkids aren’t old enough to be working yet, but another year or two and the oldest will be wanting some money of his own.

  3. I am not sure how the 15.00 was calculated. But let me show and example of the why behind the demands. In 1991 I had to get an extra job. I applied to a hotel that for 10+ years paid the housekeepers 10.00 and hour to start. At the time a small family could rent a 2 bedroom home for 400.00 a month, sometimes with utilities included. 40 hours at 10.00 an hour is a gross of 400.00 a week which is the 25% allowance Dave Ramsey says you give yourself to cover rent/mortgage. (which after taxes is going to require a little more than one week’s wage to net). The average return on my CD investments were 4.5-5.6% and the Dow hovered around 6000 pts, no one ever thought it would reach 15,000. The average Summer job at the minimum which was somewhere in the 5.67-5.85 (fast food jobs) range paid for one half to three quarters of a years worth of tuition at your local community college. Office workers who were interning or had already the skills for specialized offices (my medical coding friends were getting 8.00 an hour and trained in the office without a specialized training program).

    Fast forward to 2015. I live in the same town. Rent BEGINS at 750.00 for one -two bedrooms, an average CD investment yields .5% (that is 5 tenths of 1 percent, DOWN nearly 5% from 1991 when the stock market average was less than half what it is today). The current starting wage for housekeepers in our area is the MI minimum wage of 8.15 per hour. The average Summer job in my town might pay for one term and 3 books… depending. It depends on if you will be allowed that Golden 40 hour a week Ring. Most kids do not get 40 hours. There is no wage gradient for physically harder jobs, office work at the entry/training level, or hazardous jobs like construction clean up. And we have a saying, “A view of the Bay is half the Pay.” But you can’t pay half of your electric bill with that same bay view credits employers get.

    So what happened to that 10.00 and hour? What happened to that gradient? The minimum wage job was all the things described in the post and more. It was also the job that let a mother of (x) kids recover her life when a husband walked out on her for the secretary he was paying so well. My Aunt, when her drunk husband was removed from the home, was able to keep her home and raise 5 kids on her “minimum” wage cashier job. Each one of her kids worked that same type job full time in the Summer (1970s) and pay for almost the full year of college. They didn’t take out loans for more than a few thousand dollars to get through school whereas now its the 10s of 1000s of dollars in loans.

    Also, there is some research that I think needs to be done on the statement that the minimum wage was never intended to be a living wage. Following the Great Depression, Catholic and Jewish leaders formed social leagues to combat poverty, hazardous workplaces and the return to “sweat shop” era working conditions that plagued American workers during our industrial revolution. They fought for most of the 1940s to raise the broadest category of workers, upon whose feet industry truly stands, out of the mire of substandard living. They did so through lobbies, but also in developing training ministries individually and then in a joint effort. I wish I could find the article links that originally informed me of this union between two diametrically opposed forces of faith. The closest I can find is this article on John Ryan http://en.wikipedia.org/wiki/John_A._Ryan

    If you compare factory worker pay for “skilled” labor today with what it was in 1991 and look at the wage shifts over time you will see that in fact, wages are decreasing in proportion to the economic advances within the speculative markets, the banking industry and in relation to the cost of real estate in most American cities. But before I get too far a field from my originally intended short blurb, lets go back to the basic Dave Ramsey premise.

    If rent is 750.00 month. And only supposed to be 25% of your income, then you would need to NET 750.00 a week. At 40 hours that would be an actual wage of 18.75 per hour. At the 8.15 minimum, it requires two jobs and/or two people to pay rent to NET the basic necessities in our town, provided that you do not require a car and can live on Ramen and coffee and do not need hobbies to keep your soul sane. Of course, working two jobs there are no hobbies for you. And you absolutely can not get sick at all even if you have the medical insurance you are now required to pay (which is 140.00 a month for me. 140 that I didn’t have to spare before). At the asking wage of 15.00 and hour it is going to take two weeks to cover rent but you will not have to work two jobs which means if you are a single mom who is recovering from divorce you won’t spend 2/3 of your pay on daycare and you can be home with the kids part of the day.

    • Oh I understand the reason for the demands. But wages and salaries, well up into the middle income ranges, are not keeping up with inflation. It’s not just minimum wage workers who are getting squeezed. They are overdue for an increase, but certainly not double the current rate. I can’t think of any circumstance where any employee demands and gets double the income for doing the same job.

  4. Good evening PiedType your article today is “spot on”.I liked Germanophile response as well.My thought on the matter is the kids graduating High School today are in for a rude awaking when our economy goes south for an extended period of time.

  5. I couldn’t agree with you more on this. It’s about that old politically correct level playing field. Regardless of ability skill, education or experience, in order to be ‘equal’ we must be paid the same. To me, it’s B/S. Also, I don’t know where you got the $7.25 per hour data, in CA min wage is $9.75 – and I thought I read that San Francisco city council passed the $15 per hour min wage a while back and a lot of people lost their jobs. And yeah, it’s breaking the backs of small businesses. Especially when you consider employer share of employee tax contributions which I think is somewhere between 12-15% of the wage. It adds up. And it’s a hard pill to swallow for a small business person to pay a ‘living wage’ to a kid who runs errands, or does unskilled labor.

    Anyway, somehow this will be construed as racist if it doesn’t happen. Count on it.

    • $7.25 is the federal minimum wage. So any city or state with a rate above that has acted on their own to increase it. Doing a bit of math, $15 an hour is $31,200 a year! That’s more than double the federal poverty level of $11,770. $11,770 is about $5.66 per hour. So minimum wage, at its lowest, is still above the poverty rate. If inflation is outstripping that, well, it’s doing so for most of us, including the businesses that are hiring those minimum wage workers.

  6. This is an interesting topic and there are some good comments here, particularly germanophile’s. And, this discussion is likely to be a centerpiece of the upcoming presidential debates, a la the income gap. I see germanophile’s argument as symptomatic of a larger picture. When we oldsters were growing up, the job picture was much different from what we see now and the main differences are two: the global economy and technology.

    Not only have most of the manufacturing jobs been outsourced, but there is lots of foreign competition even for the good STEM jobs still here and the trend for the latter is the same as for the low-pay jobs. Business continues to figure out how to get more productivity out of ever-fewer people and there’s no end in sight to that. Just trying to get a human on the phone has become a problem, hasn’t it? There’s really no need anymore for the likes of secretaries and receptionists either. Automobile plants have more robots working than people, or so it seems. My smartphone does an amazing job of translating dictation to words. AT&T’s answering system responds well to casual syntax. When something breaks, usually people now just buy a new one, thus fewer repair jobs. Microwave ovens sell for as little as $28.

    When you squeeze a system, it changes. The services industry, including Walmart and fast-food, have been squeezed big-time, and these people are turning to the only recourse they can see. It’s easy to cite a few people who have boot-strapped themselves up to cope with the problem, but that’s a facile answer that ignores the new economic realities. Very few people have the capacity to do that after a poor education and mistakes, like pregnancies out of wedlock and health problems. From the vantage point of a successful life it doesn’t sound so hard, but it is. When you’re busting your butt just to make ends meet, you are vulnerable. The car breaks down, someone gets sick, a marriage fails (half do), you’re the victim of crime, the credit-card debt gets away from you, and the camel’s back snaps. Horatio Alger is so last century.

    Raising the minimum wage to $15 is a stopgap measure that isn’t going to solve the problem, but I submit that it would at least give those with gumption a fighting chance, something that’s in very short supply now.

    • You make a very good point about technology causing/creating a huge loss in the types of jobs that used to exist as minimum wage jobs. That adds even more to the squeeze on both lower and middle income folks.

      As I’ve said, I agree minimum wage is overdue for an increase. I’m just not sure that a lot of businesses could afford to pay as much as $15 an hour. Small businesses are being squeezed as much as individuals. And larger businesses may still not have much margin with which to cover a significant pay increase to hundreds or thousands of minimum wage employees. I know saying that plays right into the hands of those businesses who prefer to maximize their profits on the backs of their underpaid employees, but I’d rather try to be considerate of honest businesses than destroy them to get at the abusers.

      Ultimately I think there has to be some give and take across the spectrum. Minimum wage should be raised a little, companies should pay a little more, employees should try to understand and prepare for the reality of today’s economy and job market.

      Looking ahead, though, I don’t know what the answer is. The middle class, too, is living paycheck to paycheck, one calamity away from financial disaster, losing ground slowly but surely. The answer may be at the top, with the government, and laws to keep our corporations from sending good jobs overseas and pocketing the profits while our workers go hungry. With globalization, etc., I’m the last person to know what to do. But what I do see is American jobs going overseas and crappy products coming back while our corporate leaders are getting rich beyond my imagination.

      • I’m just not sure that a lot of businesses could afford to pay as much as $15 an hour. Small businesses are being squeezed as much as individuals.

        If the $15/hour minimum wage were in effect, all such businesses would be on a level playing field relative to labor. The price of burgers and fries would go up somewhat, but evenly across the board. The market would adjust, as it always does. The end effect, I submit, would be similar to what Henry Ford experienced when he paid workers enough to afford the product they were making, albeit not profoundly in this case.

  7. These were intended to be part time/entry level jobs. Nothing should be done to make anyone think that these are careers and end game jobs. Motivation to learn and get someplace better.
    And as a small business owner, many cannot afford to pay $15.00 and hour. They will change/not expand/not hire/ find away to use technology and cut even more jobs if forced. It just raises the price of all goods.
    Odd that one of the major major backers of raising the federal minimum wage, Walmart, is now suddenly closing stores in 4 states supposed for “plumbing issues”. (Employees were totally shocked. They get 2 months pay.) A CA union is trying to force the company to immediately rehire over 2,200 people that were let go. This group says it is retaliation for attempts to unionize. Odd. But you know how I feel about Walmart. Locally on school district’s bus drivers were demanding a raise for “livable wages” – guess they didn’t read the application that said part time job with unusual hours…not a career. Drivers aren’t working a full day, so why do they want a career-style salary? The drivers didn’t win any backers when 90% of them didn’t show up to work on the coldest school day of the year….and were on tv picketing saying “Too bad the district won’t listen and all those kids stood out in the cold dark weather.” That’s the way to prove you are a valuable hard working employee……

    • I’d have fired every one of those drivers as fast as I could find replacements. There’s nothing lower than strikers who try to use kids for leverage. Personally, I think a low wage job is better than no job; therefore I would not jeopardize the job I had by striking.

      Yes, the timing of those Walmart closures is very, very suspicious. I’d say it lowers my opinion of Walmart, but my opinion couldn’t get any lower.

      • With such large growing school districts and so many of them here, replacements may be difficult to find, but the general feeling was fire them and we’ll manage somehow.
        Walmart. Stopped going there when one store manager said they couldn’t afford to donate 8 paper grocery sacks for a girl scout project…all the while advertising on TV about how customer friendly and community oriented they were.

        • I don’t go there because of their predatory tactics against small competitors when they enter a local market and the way they treat their employees. I also don’t care for a lot of their clientele (although that may vary with location).

"There is no conversation more boring than the one where everybody agrees." ~ Michel de Montaigne

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