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GUEST COMMENTARY: Working for McNuggets no dream for Americans

Thursday, August 8, 2013 | 6:00 a.m. CDT

You might have missed this, if you didn’t happen to hit the right fast-food drive-through on the right day in July, but your neighborhood burger-flippers and assorted labor activists staged one-day strikes in cities across the country. They called for the right to unionize and for a raise in the minimum wage — to $15 an hour.

That’s right; they want to double the federal minimum wage. (Hey, why not swing for the fences?) But before you sputter at the chutzpah of this demand, consider the point made by venture capitalist Nick Hanauer in a provocative op-ed for Bloomberg: “If the minimum wage had simply tracked U.S. productivity gains since 1968, it would be $21.72 an hour — three times what it is now.”

Hanauer, who also supports a $15 wage floor, is clearly mixed up. We in America are not supposed to look at this issue from the point of view of the worker. We’re consumers first and foremost, right?

What’s supposed to matter is how much doubling the wage would add to the price of your Big Mac or Whopper. And, yes, prices would rise, but by how much is currently something of an Internet parlor game. The Huffington Post touted and subsequently disowned an estimate that McDonald’s would have to raise prices by 17 percent to maintain current levels of profitability, while an industry think tank pegged them at up to 35 percent.

So maybe you don’t care if the Dollar Menu becomes the Dollar-Thirty-Five Menu. Have you paused to consider that by raising the wage you would throw thousands of fry cooks out of work? That McDonald’s and its franchisees would close stores or introduce more automation to bolster profits? This could raise the unemployment rate.

Could it? Because if you consult actual research, there’s no clear consensus on what raising the minimum wage does to employment.

America’s real job creators are its consumers, and their wealth was decimated when the real estate bubble collapsed. Middle-class jobs are increasingly being replaced by low-wage ones. Putting more cash into average workers’ hands allows them to spend more, which puts others back to work.

As the low-wage sector goes, so goes the nation. That’s the message every middle-class American should be getting. A major challenge for this country in the coming decades — perhaps the central challenge — will be ensuring that the vast majority of its citizens have access to work that affords a decent standard of living.

Economists consider $11 an hour the cutoff for poverty level for a family of four. So you get why people are protesting. And you get why the fast-food industry has an incredibly high turnover rate, 75 percent rate annually. The national median pay for cashiers, cooks and the crew in the industry is $8.94.

The Colonel and Ronald McDonald are not the only villains in this piece, not even the major ones. For three decades, economic policy in this country has consistently undercut the interest of wage-earning Americans in favor of corporate managers and Wall Street. As this worthy class off-shored jobs, raided pension funds, and reserved profits for themselves alone, the courts, Congress, state legislators and the mainstream press could be counted on to endorse their actions as the natural workings of the free market.

Well, now the middle class finds itself in the crosshairs, too. Many who once thought their college degrees and white-collar resumes were a meal ticket for life are discovering what life is like for the economically precarious.

Is $15 an hour absurd? Would raising the wage floor to that level do more good than harm to the low-wage half of our nation? I can’t say with any certainty, and I don’t know that anybody can. All I know for sure is that working people need a raise, and there’s damn little chance they’ll get it without a fight.

Mary Sanchez is an editorial columnist for the Kansas City Star. Reprinted with permission.


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Comments

Jimmy Bearfield August 8, 2013 | 7:41 a.m.

When Mary eats at McDs and other fast-food chains, does she tip the person who takes her order $5, $10 or whatever she thinks is her fair share? If not, why not?

(Report Comment)
Mark Foecking August 8, 2013 | 8:41 a.m.

THe other thing to consider is the upward pressure that will put on wages above the $15/hour. Will people that currently get $20/hour now want $30 or $40?

I work in a rather underpaid field, and part of the reason for that is the labor market for lab science is quite employer friendly. There aren't that many of these jobs, and there's people here and all over the world that are highly educated and motivated and will come do these jobs for little (relatively speaking) money. So that means downward pressure on wages is high, and it also means that a lot of science gets done at a relatively low price.

For me, MS degree + extra coursework + 35 years of experience + 38 peer-reviewed papers = $22/hour (+ benefits). I understand why that is, have always accepted it, and lived my life within that income frame. If a high school kid with no experience is now making 2/3 of what I'm making, some would get upset with that and start demanding more money also. So it's not just the $1.35 menu, it could be quite a bit more than that, even if employment is not materially affected.

DK

(Report Comment)
Michael Williams August 8, 2013 | 6:59 p.m.

MarkF and downward pressure on wages:

You just described the K-12 teaching profession, too.

(Report Comment)

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