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Wednesday, June 12, 2013

Livable Wages for Fast Food employees: Possibility or a Myth?

There was a story in today's Philadelphia Daily News about fast food workers seeking a true living wage from their employers.  Most make between $7.25 (legal minimum wage) and $7.75 per hour while working 30-40 hours/week.

Many receive no health benefits or paid time off from work when ill

3.5 million Americans work in the fast-food industry not counting management or higher corporate-level employees.
The article mentions that many workers across the country have been taking to day-long strikes to express grievances, desiring the ability to unionize and a higher wage.

The reason strikes last merely a day is because employees typically can not be fired for simply striking but can for missing prolonged time from work..

Where things get a little dicey is their salary demands-- $15/hr.
Certainly that's a livable wage and if we were some economically radical-left blog (which we are not), we'd be arguing for the right for fast food workers to earn that salary, and damn the consequences-- full speed ahead!

A situation like this presents a good example of where theory and reality do not always mesh as much as many of us would desire it.

Let us imagine this became a reality-- $15/hr for all burger flippers, cashiers, etc..   How would that impact the fast food and overall economy?
1) Businesses would have one of two choices-- drastically cut back on labor meaning much longer lines to make and serve their 'fast' product or dramatically increase the prices of the food.

Would people who normally wait in line 15min on lunch break for a burger be willing to wait 30?   Would someone willingly pay $8-10 for a Whopper or Big Mac?  Or $3-4 for a soda?

We think the answer is a resounding 'No way in Hell!'..

This leads to point #2...
2) As business adversely suffers, it means less tax revenue for federal, local and state economy because less product is being sold.  It means the potential for businesses to close up altogether...

Just like with residential areas, when commercial areas have too many abandoned buildings, it drops the overall real estate value those surrounding properties and attracts lesser elements which scare off most shoppers to a given shopping center or area..

Thus, its a domino effect.

Businesses like McDonalds and Burger King are known as staple stores meaning they attract so many people daily that it allows a certain level of exposure to smaller local businesses in nearby proximity which tends to increase those shoppes' foot traffic.
A closed up fast food restaurant dramatically increases the chances the small mom & pop businesses nearby will ultimately perish too.

3)  Speaking of domino effect, if uneducated, minimal-skilled workers were able to make $15/hr, then those who do have education and physical or academic skill would demand dramatically higher wages from their employers as well.

Ultimately this leads to a society where everyone's paying 2-3x more for everything and those at the bottom or with fixed incomes like the elderly or disabled would be destroyed.

Everything has cause and effect...
We do feel there should be a better wage for those in the fast food industry but something closer to $9/hr is more realistic.   Admittedly not us, but others may be willing to pay 50 cents more for a burger or fries if it means better wages...

We were honest in saying 'admittedly not us' because we believe fast food restaurants frivolously toss their money away on advertising, especially famous athlete spokespeople when that money could be used to increase wages or improve the overall food product.

In 2008, McDonalds spent $1.21 Billion (that's with a 'B') on US advertising alone, ranking it #29 in the top 100 corporate advertisers according to  If you combine the total advertising of Burger King, Wendys and Subway, it came to $1.273B, a mere 50 million more than Mickey D's.
In the next decade, 7  out of 10 growth occupations over the next decade will be of the low-wage variety.

Ultimately employers are going to have to figure how to give their employees a fair enough wage to allow their work force to feel motivation to continue working, while not out-pricing their product or service to the point people stop spending altogether.

Because if the past 5-6 years are any indication, college educated people are going to be the ones asking if we want our meals 'Super-sized' and they will not be content with $7.25 while their student loan debts keep growing..