Minimum wage and the fast food fight
Shaaya Ellis | Monday, November 18, 2013
All across American, fast food workers have mounted a campaign to demand a so-called living wage. Workers fed up with low wages in the fast food industry from Durham, NC. to San Diego, CA. and New York City, NY. all share one common goal: To have their wage increased to $15 per hour. Fast food workers believe they are entitled to higher wages because the companies they work for make billions of dollars in profit. This might seem like a practical argument for fast food workers to make, but they miss one key ingredient in doing so. If you pay people for what they are worth as opposed to what they need, then clearly they would get a better job if their work were worth more than what they were currently being paid. It’s simple economics.
The issue is that the fast food workers are objecting to the operation of basically a classic case of supply and demand. If one has little to no education, fast food jobs can often be all an individual can get. These individuals are thus easily replaceable and consequently will not be paid well. However, if one becomes a doctor or lawyer, acquiring a specialized skill as a result of years in school, then they are not easily replaceable and will be substantially economically rewarded. If a fast food worker thinks that they are entitled to more money then they should simply seek to acquire skills that will merit a higher wage. It is very counter-intuitive to burden American businesses with individuals’ indolence towards working hard and by demands for unearned and unrealistic wage increases.
It is not incumbent upon business to simply dole out more money to people who either did not earn it or whose work does not merit that distinction. The amount a company can pay its employees is a function of the productivity of its business model and the productivity of its employees. To assume that companies can pay much more than they already are paying their employees in wages is pure magical thinking, a prevailing trait among workers in the fast food industry as evidenced by their insistence on higher wages for menial work.
It is highly unlikely that anyone will pay for a fast food item whose price is inflated enough to cover a $15-an-hour workforce. Even if a business tries to pay that much and charges more to offset the costs of those wages, they will likely face bankruptcy, thus leading to an erosion of jobs and massive unemployment. Likewise, with today’s market, with unemployment at a persistent seven percent and with millions of Americans looking for a job, there will no doubt be someone who will be willing to work for less that $15 an hour.
Those advocating for a high wage in the fast food industry would have the American people believe that these workers are being disadvantaged somehow while being paid so little. According to the Census Bureau, 80 percent of poor households have air conditioning. More importantly, 92 percent of poor households have a microwave. Two-thirds have at least one DVD player and nearly 75 percent have a car or truck. 31 percent have two or more cars or trucks. With this in mind, clearly those that work in the fast food industry and who are considered to be “living in poverty” have substantial means.
Most Americans enter the labor market through low entry jobs such as fast food positions that pay minimum wage. As a result of having little experience in the labor force, young people make up a significant percentage of low, entry-level workers. However, when a price floor is set, it is young people – those benefited by such entry-level positions – who are often priced out of the market, thus leading to higher youth unemployment. Not only have young people lost what they could have earned with a low paying job, but they also lost the opportunity to work their way up from the bottom, which would in turn lead to experience necessitating a higher wage.
When the minimum wage is raised, businesses cannot afford to hire as many new employees. While some workers benefit as a result of the increased wages, many do not fair as well. As a result of the government increasing wages, companies are forced to lay off workers or to make them work part-time. In addition to this, many companies are finding new and innovative ways to deliver the best possible produce while reducing costs. With such technological advances, many minimum wage-workers, specifically fast food workers, will face displacement. The best remedy to this problematic conflict, to fast food workers who are protesting against their employers, is for them to simply acquire skills that will merit the wages they want to be paid. Protesting and rioting for higher wages is often done in vain, especially for a job as menial as burger flipping.
Shaaya Ellis is a junior political science major with a classics minor. He can be contacted at firstname.lastname@example.org
The views expressed in this column are those of the author and not necessarily those of The Observer.