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Tuesday, September 10, 2013

Fast food workers and the minimum wage

Most readers of this blog probably reacted instinctively against the fast food workers who went on strike last week, seeing them as part of the Left -- which they are -- and therefore as part of the problem. That was my reaction as well.

After all, higher minimum wages mean lower profits for corporations and fewer entry level jobs. And raising the minimum wage would go against the principle of free markets.

But no one should lose sight of the fact that employees at a place like McDonald's are working. They are choosing to work and earn money and pay taxes rather than just go on welfare or deal drugs. And for many, those are their only options. So these workers should be encouraged, not discouraged.

If raising the minimum wage is what it takes, maybe that's the answer.

Fast food workers are not like pampered United Auto Workers with self-serving no-work rules, lavish pensions, and, according to Obama's definition, "Cadillac" health care plans. They have jobs that can only be described as lousy.

There will always be tension between labor and management. Management's goal is to be as profitable as possible, and labor's goal is the highest-paying job possible. These aims are often at odds, but that is a healthy tension that makes businesses efficient. And ultimately, it makes this country strong.

I've seen too many analyses of how people who milk the system and get every possible government benefit have a higher standard of living than those who work at low level jobs. With that kind of incentive, who would opt to work for minimum wage?

Even worse is the way the welfare system in this country is set up: women too dumb and irresponsible to do anything else are basically paid to have babies. That's the long term death knell for this country.

In 2011 I announced that I was running for President, and outlined my platform here and here and here.  Much to my surprise, my campaign never took off. But I did distinguish myself in one respect: I became the first announced Presidential candidate to throw his hat in the ring and then, basically, just forget that he was running.

In any case, in that third link above this is what I said about corporate pay:

The highest paid employee of a company ought not to be paid more than forty times what lowest paid employee is -- which is the way it was forty years ago. And stock options and bonuses will be counted as part of their pay. This would not prevent an Edwin Land or a Bill Gates of a Steve Jobs or a Bill Hewlett or a David Packard or a Henry Ford from becoming fabulously wealthy, as they all deserved to be. They got rich by founding companies which they then grew. But it would prevent corporate climbers from taking advantage of a company's shareholders. These types tend to rise by virtue of their skill at corporate politicking, then tell us that their presence is invaluable to the company, and reward themselves outrageously. I have a hard time lying back and enjoying it when I get raped this way.

I have not changed my mind about this, despite the fact that it is actually an extremely Leftist position (too much so for most Democrats). We've all heard how back in the 1970's CEO's used to be paid roughly thirty times as much as the average factory worker, and now some of them get paid upwards of a thousand times as much. Have CEO's gotten that much better? Do they now put in 1000 times as many hours as factory workers? Are their IQ's 1000 times as high?

Maybe the solution is what I suggested in my platform above, which would both decrease CEO pay and increase the lowest paid employees' pay. And that should be combined, as I stated elsewhere in my platform, with a program to wean people off welfare both by turning it into workfare and by making the payments contingent upon taking some form of effective birth control.

A country with such huge wage disparities is as unsustainable as a country with ever increasing numbers of people on welfare.

In any case, and this is the main point of this post, there is no reason to resent the fast food workers. They just want to do an honest day's labor (unlike the welfare freeloaders) for an honest day's wage (unlike many corporate CEO's).


Anonymous said...

Burger flipping is a job suited for teenage kids, who need some pocket money and something to keep their idle hands from creating mischief. Nobody should try to "make a living" at such a job. Even worse, are those who work that dead-ender for years, and then complain that it doesn't pay enough to support their 3 kids. And the higher you make the min.wage, the less ambition anyone will have to find a better job.
As for the CEOs: yes, their pay is often ridiculously high. But if you cut it to $1, and redistributed his earnings to "the workers", it wouldn't amount to jackshit. In Walmart's case, their CEO makes $20mil, and they have over 1 million employees. I'd wager $20, that if you gave them each $20 from the Zhivago Fund, they would complain about their "cheap-ass" bonus.
I wouldn't really object to a higher min.wage, if it were guaranteed that only Americans would receive it. But that would mean deporting every wetback, yellowback, euroback, sandback, blackback and hinduback outta here, whether they are "document-challenged" or have green cards with red+white+blue holograms.
We should also rediscover protectionist tariffs, so we can reclaim some of the manufacturing jobs we let slip away.

John Craig said...

Anon --
You make some good points. It's true, burger flipping is mostly a job for kids (you rarely see older people, other than the store manager, working there), and people who cannot afford them should not be having kids. But a lot of people simply don't have the intelligence to move beyond menial jobs, and they should be encouraged to work, not go on welfare.

As for the CEOs, the people they're ripping off are primarily the company shareholders. When I said I don't enjoy getting raped that way, I was referring to being a shareholder, not a worker. I agree, if you redistributed it to the minimum wage workers, it wouldn't make a dent. CEO pay is a separate issue from minimum wage, but as a matter of principle, the inequity between CEOs and low level workers doesn't seem right. It seems to me there should e more differential between minimum wage workers and people on welfare, and less between low level employees and people more successful at corporate climbing.

I know enough about sociopathy to know that the people who are successful corporate climbers are so not because they are productive workers or even because they help the company, but because they are simply good at ass-kissing and backstabbing and lying, and that for the most part, they aren't worth nearly the money they ay themselves. Again, as I said in the post, this would not prevent entrepreneurs like Jeff Bezos and Larry Page and Sergey Brin from becoming incredibly wealthy.

I agree completely about illegal immigrants. They should all be deported, period.

I'd combine repealing NAFTA with imposing a penalty on American companies that "outsource" labor. If Google and Amazon can be competitive hiring primarily American workers, then so can Nike and Apple. We should also close the loopholes which allow American companies to use tax havens abroad. Microsoft claims that it produces a huge percentage of its intellectual property in Puerto Rico, which is utterly ridiculous, so it can pay less in taxes. Games like that have to be clamped down on.

But anyway, this is getting away from the main point of the post, which was that fast food workers are not the enemy; people content to stay on welfare are.

Glen Filthie said...

Economics is not a zero sum game. Poor people aren't poor because Bill Gates is rich.

The fast food industry is going to get clobbered when Obamacare goes into effect. A minimum wage hike on top of that will see store closures.

If you want social justice, John, you have it already: to increase your worth on the job market, you have to invest in skills and training and probably take some risks. If you do nothing to improve yourself, you will end up doing a job anyone else can do - even high school kids - and you will be paid accordingly.

The unions are on borrowed time, IMHO. Today they are corrupt, all about greed, and easy to compete against. The market will destroy them in due time.

John Craig said...

Glen --
I dislike Obamacare too, but I don't think the fast food industry will get clobbered; most of its employees work less than 20 hours per week.

Yes, economics is far from a zero sum game: Bill Gates improved not only his own lot but the lot of countless others as well. My problem is not with him, but with CEO's who were not visionaries and good only at sliming; a lot of them climb to the top and reward themselves at the shareholders' expense.

I agree about improving one's lot in the job market, but A, there should still be more of a gap between workers and welfare freeloaders, and B, there are a fair number of people out there with IQ's between 75 and 85, i.e., above the line to be considered retarded, but below any meaningful capacity to be trained for any sort of skilled job. They should be encouraged to work.

Agreed about the unions. We saw what they did to Detroit, and a lot of the municipal unions are doing the same to the states and cities.

Baloo said...

This is thought-provoking. I've reblogged it here:
This goes against my thinking on the minimum wage, but it's worth thinking about for other reasons.

Anonymous said...

Increasing in the minimum wage to the levels being discussed will lead to the adoption of automation in the fast food industry.

Regulations and our idiotic tax code(s) have done more to move manufacturing jobs overseas than wages.

Bob Wallace said...

They can automate all they want. It'll leave the door open to places that treat their workers decently, such as In-N-Out Burgers, which has loyal workers and loyal customers.

John Craig said...

Bob --
Next time I have fast food, I'll try them.

Glen Filthie said...

I want to go to the Heart Attack Grille before I die. I would love a wheelchair ride into the restaurant for a 20 patty burg served up with a gallon of beer by a flirty, naughty nurse!

It's all fun and games until somebody gets an eye poked out - so why don't we get dangerous and put numbers on it John? Here are some of the questions you will need to answer:

1. how much are you prepared to pay for a burger? Around here I think a big mac meal is $7~8.00 Canadian.
2. how many jobs will be lost by decreased demand? After all, if you inflate my costs to the point where Rotten Ronnie is on the same price point as The Heart Attack Grille - it is no contest.
3. If you are going to enact wage controls...are you prepared for the inflation that inevitably will result?
4. Given that inflation, are you averse to price controls as well?

Please be prompt in your reply, John - the scholarly old farts at our coffee table are most interested in what you have to say.

John Craig said...

Glen --
Here I go, as quick as I can be, and not in order.
1. Not sure.
4. No, I'm against price controls.
2 and 3. We already have wage controls with the minimum wage, it's just a question of where it's set. I agree, the biggest downside of a hike would be lost jobs. I'm not even sure if hiking it is the answer; the main point of this post was to point out that there is a world of difference between those who are willing to work for a living, even if at the worst-paying jobs, and those who don't, and are content to stay on welfare. My preference would actually be to make welfare more unattractive; but, failing that, a hike in the minimum wage wouldn't bother me. As far as seeing people who are overpaid, corrupt CEO's with rubber stamp boards of directors bother me more, and they certainly don't need to be encouraged in any way. I suspect most readers of this blog would agree that decreasing welfare benefits is the way to go; but whichever way we go, there does need to be some respect for people willing to work at an honest job, even if it's at the bottom of the (legal) food chain.

Anonymous said...

Okay, I know this is off topic but i want to find your opinion by asking,
what is your opinion on basic income in light of more automation?

What does the future have in store? People like to point out the first industrial revolution and said "don't worry! nobody got fired!", but they forget there used to be a lot more horses per people alive...1 horse for every 10 guys, now there is 1 horse for every 100. I won't go as far as to stupidly claim all jobs will be done by robots, but we will need fewer people to do one task.

One suggestion from the classic (lower case) leftists is to tax automation, the "Leftists" will say everyone will just live in a moneyless society and chill, Libertarian/neo-liberals say the world market will take care of it and to just chill, I hear nothing from the more traditional conservatives.

Then there are some luddite types who want to prevent automation or advances in tech for the sake of the free market (which is not a free market, it's a type of feudalism like the state of modern Pharmacutical companies. Like a hypothetical future HIV vaccine. What about the company selling immune system drugs? Their workers making ends meet?

I do not believe in creating useless jobs for the sake of it. In Hong Kong we have three times as many security guards as we used to, all elderly people, in Mcdonalds and the subway station we have all these elderly folks hired to stand around doing nothing, maybe wiping a floor or doing some menial labor like stacking boxes for 2 hours, but a younger person could stack as many boxes in half an hour, and some are like the guy at one station I saw who just announces exits being on the left or right even though there is a sign above him already doing that, we may as well just hand them taxpayer dollars since our government is subsidizing companies to hire so so so many elderly people, it could be even cheaper just to give them free money than what we are doing now.

Should we tax living too long?! The lifespan is still going up in Hong Kong, people who are breaking past their 80s who need government welfare since their retirement money was meant to only last a decade, they didn't expect to have to make it last more. We have people pushing 90 who may develop dementia, and some already have. Over 100,000 people have dementia in Hong Kong. We live too long! Asian genes!

What do you think should happen for all this? Basic income? Let the market handle it? Encourage the automation or newer techs ownership of each individual to increase, like owning dividend paying stock in an automated company to make up for lost work hours? (more capitalist, more people with self determination in the market)?

Actually the more I think about it, my idea is having private ownership of more assets may be part of the solution. Partial basic income to make up for the difference, some hours worked just so people don't become depressed enough to commit suicide, then ownership here and there, more shareholders so one guy controls less of an entire company, allowing dividends to also make up for some of the changes.

For the elderly population problem, I don't know, even if we treat aging problems with better medicine, they are less educated so many jobs are not available to them except menial labor or standing around, much of which is already taken or unneeded in the first place.

Do you have opinions?


John Craig said...

Ga --
I've been asked that before, and honestly, that's a question I haven't figured out. I don't know exactly how automation will affect employment. And I don't know exactly who will be left behind, beside traditional factory workers. Another problem is going to be the internet-ization of certain jobs. Retail jobs are getting decimated by Amazon right now. How to replace those jobs? I just don't know.

I agree with you that the Luddites are wrong. And I agree that make work jobs which accomplish nothing aren't the answer either.

As far as the elderly, we're just supposed to take care of them. Hey, maybe that's the solution to the unemployment problem -- having more people take care of the elderly.