Should fast food paychecks get supersized? How it would affect the industry, prices
Attorney Donna Ballman, Special to THELAW.TV
2:32 PM, Aug 29, 2013
2:33 PM, Aug 29, 2013
You may have noticed that there are some picketers in front of your favorite fast food restaurant today. That’s because fast food workers around the nation are striking to try to get their wages raised above minimum wage. They want $15 per hour, up from the federal minimum wage of $7.25.
Here are answers to five questions you may be asking yourself about the fast food workers strike:
1. Wait, does this mean my burger will cost more?
How did I know that was your first question? I must be psychic. Here’s the deal. According to a researcher who crunched the numbers, giving into the demands of fast food workers might cost you a little more, but not much. A Big Mac would go up about 68 cents. Dollar menu items would go up about 17 cents. So you might have to pay a tiny bit more for your burgers, but if you think about it, paying a little more could make a big difference for these workers.
Some economists who wrote a letter supporting a nationwide minimum wage increase to $10.50 calculate that such a raise would up the cost of a Big Mac by a nickel. On the other hand, McDonalds’ 2012 profits were $5.47 billion. Maybe they could pick up some of the tab for paying their employees a living wage instead of passing it on to us.
2. Aren’t most fast food workers teenagers? Why should I care what some teenager earns to pay for video games?
If you’re like most people, you may assume that most fast food workers are teenagers looking to earn some extra cash. Heck, I slung tacos myself when I was a teenager. But most fast food workers are adults. Here’s what economists have to say about this:
If a worker today is employed full time for a full 52-week year at a minimum wage job today, she or he is making $15,080. This is 19 percent below the official poverty line for a family of three. Raising the minimum wage to $10.50 would deliver much needed living standard improvements to 45 million U.S. workers and their families.
The average age for these workers is 32-years-old and they have been in the labor force for an average of 14 years. Only 9.3 percent of the workers who would benefit from this minimum wage increase are teenagers; i.e., 90.7 percent are adults.
This means that many fast food employees are below the poverty level unless they’re working tons of overtime. That affects you. When we have companies that won’t pay its employees enough to afford basic necessities, who picks up the slack? Taxpayers do. We end up paying out of our pockets through increased taxes for health care, food, shelter, and other necessities of impoverished workers.
Compare that to the top of the fast food hierarchy. McDonalds’ CEO makes $8.75 million a year, and I bet he has some nice benefits. Maybe fast food bigwigs should think about paying their employees better and taking a little less for themselves.
3. What about corporate profits? Aren’t these companies entitled to make money?
Nobody is claiming that corporations shouldn’t make profits. The issue is, should they be able to make gigantic profits on the backs of impoverished employees who then have to seek government assistance, which then costs us money as taxpayers.
A Congressional study was done last year when the Wal-Mart strikes were going on to find out how much it cost taxpayers to subsidize workers who are paid such low wages. The report says, “one 300-person store in Wisconsin may result in a cost to taxpayers of up to $1,744,590 per year – about $5,815 per employee.” We’re talking the cost of reduced price lunches under the National School Lunch Program, subsidized housing, Earned Income Tax Credit, Medicaid, subsidized energy costs, and more.
So, while it might cost you a nickel more for your burger, the tax savings that would result from paying a living wage could be substantial.
4. Do fast food workers have the right to form a union?
Sure, but organization efforts have mostly failed. Experts cite two factors: the fact that there’s a huge amount of turnover (about 75%) and that many restaurants are franchises, meaning smaller companies own the individual restaurants. The big parent companies frequently limit what franchises are allowed to pay their employees. These corporations also have lots of money to throw into anti-unionization efforts. Because most employees aren’t planning to stay long, many can’t or won’t invest the time and effort needed to establish a union.
5. What’s the next step for fast food workers?
If the fast food companies are like Wal-Mart, they’ll fight these efforts and start retaliating against the ringleaders. Still, strikes like these can cause even the biggest companies to change slowly, and they are drawing attention to the need to increase the minimum wage to bring workers over the poverty level. I doubt we’ll see any changes soon, but maybe the American people and Congress will see fit to help these workers in their time of need. There’s a bill pending in Congress now to raise the minimum wage to $9.80, which would be a start. President Obama has been stumping for a minimum wage increase to $9.00. While doubling the minimum wage may sound crazy, the U.S. doubled minimum wage in 1949 and it gave the economy a well-needed boost. If you think about it, giving folks more spending money may be just what we need to jump-start a tired economy.