Big Labor's Big Mac Attack!
Doubling the minimum wage for fast-food workers is delusional and counterproductive.
This story originally appeared at The Daily Beast on December 4, 2013. Read it there.
In what is probably the least inspired labor action since the great Detroit Symphony Orchestra Picket Line of 2011, groups such as the Service Employees International Union, Fast Food Forward, and Fight for 15 are calling for nation-wide wage strikestargeting McDonald's, Burger King, Arby's, and other latter-day Dickensian workhouses. On Thursday, protesters in over 100 cities will stand outside of fast-food joints and call for doubling the wages of burger flippers and fry-vat operators from $7.25 an hour (the current federal minimum) to at least $15.
Regardless of how much solidarity or sympathy you might feel about the people who assemble your Triple Steak Stack or your Cheesy Gordita Crunch, this sort of demand is economic fantasy at its most delusional and counterproductive. Doubling the wages of low-skilled workers during a period of prolonged joblessness is a surefire way not just to swell the ranks of the reserve army of the unemployed but to increase automation at your local Taco Bell.
If you're reading this on the job, take a look around and ask yourself if your workplace could soak up twice its labor costs without seriously trimming the number of employees. While you're at it, ask yourself if you're worth twice your current salary.Even the maverick economists who are challenging the conventional view that raising the minimum wage hurts low-skilled workers by pricing them out of the labor market typically study hourly pay increases on the order of 20 percent or less, not a doubling of rates. Even Barack Obama—who knows a thing or two about unemployment rates—is only talking about increasing the minimum wage by $1.75 an hour. (And let's be clear: Despite what the ideologically autistic Paul Krugman pronounces, the idea that mandating higher wages doesn't cause serious problems for low-skilled workers is far from settled.)
Arguably the most important thing in the debate about the minimum wage is that hardly anyone makes it.According to the Bureau of Labor Statistics less than 3 percent of all workers take home $7.25 or less an hour and half who do are 24 years old or younger. And the vast majority—77 percent —of minimum wage earners belong to households that are above the poverty line. So when Fast Food Forward declares, "We can't survive on $7.25!", the good news is that very few people have to (and to the extent that they do, their income is supplemented by anti-poverty programs such as the Earned Income Tax Credit, food stamps, and housing subsidies). Staying at the minimum wage is also usually mercifully short-lived. For instance, between 1977 and 1997, two-thirds of full-time workers had moved on to higher pay within a year.
None of this is to deny that times are tough for many of the people who sling hash in Hardee's and Pizza Hut. But there's a reason that a long feature story in the SundayNew York Times titled "Life on $7.25 an Hour" actually revolved around a man who not only has a job that pays $13 an hour but also owns a $500,000 house.
The push to hike fast-food wages is indicative not of a brutal new economy but of a labor movement that is not only disconnected from reality but also almost completely devoid of vision. Remember in the late 1980s and early 1990s when soothsayers were bitching and moaning about "McJobs" and the perils of becoming a "nation of burger flippers"? Back then, Big Labor was convinced that the North American Free Trade Agreement would export all but the most servile tasks down Mexico way (they were way, way wrong about that, by the way). Nowadays, the SEIU and other groups seem to see flipping burgers as positively aspirational.
It needn't be. While there is nothing wrong with any job, the simple fact is that nobody is going to get rich—or even comfortably middle class—if his or her main gig is punching the buttons at a McCafe. The skills necessary to work there are simply not that advanced to increase wages exponentially and the entire economy of fast food is based on keeping prices—and by extension, wages—relatively low.
Rather than focus on fast food, it would be smarter to focus where the jobs—and wages—are. There's something on the order of 3.7 million openings (about the size of the entire minimum wage workforce) in various trades ranging from construction to carpentry to ++electrical to welding. These are jobs that are not only in high demand but pay relatively high wages, often around the median household income of $51,000. Mike Rowe, the former host of the cable show Dirty Jobs, makes a compelling case that these are exactly the sort of gigs that can secure people steady work that allows for advancement and serious benefits.
When Thursday's protest comes and goes and things in the fast-food industry pretty much stay the same, perhaps the organizers at the SEIU, Fast Food Forward, and Fight for 15 will turn their attention in the direction of Rowe's profoundly disconnectedwebsite. Imagine the possibilities if such organizations actively promoted matching unemployed and underemployed people with businesses that have massive amounts of openings rather than trying to squeeze existing employers. That might even be a way for private-sector unions—whose membership has been declining for many years—to reinvent itself for the 21st century. Certainly it would be more promising than trying to squeeze more gold out of the Burger King.
When Thursday's protest comes and goes and things in the fast-food industry pretty much stay the same, perhaps the organizers at the SEIU, Fast Food Forward, and Fight for 15 will turn their attention in the direction of Rowe's profoundly disconnectedwebsite. It might do them—and the people for whom they're fighting—some good.
This story originally appeared at The Daily Beast on December 4, 2013. Read it there.
