Monday, September 02, 2013

Fast food and class warfare

CAUTION: The fast food wage debate is heating up. Get too close and you could get burned.  Consider recent actions undertaken by labor unions and community organizers against McDonald's and then...
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read Al Lewis' WSJ column, ("Let Them Eat Burgers" September 1, 2013).  Lewis concludes a super-sized minimum wage increase is justified on the basis of a single data point (average age of minimum wage workers has increased) and comparison to an Australian business model.  

Mr. Lewis' account of a recent protest demonstration reminds me of the danger I've been talking about since 2008.  Here's the story...

A vocal mob is demanding a doubling of the minimum wage to $15 an hour in front of a Denver-area McDonald's which had to shut down because of the ruckus.  Lewis interviews a twenty-six year old man working at McDonald's who's protesting and had this to say about his employer, 

"They'd rather line their own pockets, than take care of us." 

A little perspective is in order.  According to the Bureau of Labor Statistics (BLS), there are over four million workers employed at fast food establishments in the U.S. and half of them work part time. Turnover is high and this job pool is expected to narrow as new technologies become cost efficient alternatives to tasks currently performed by humans.

The education level required to perform most of these jobs is less than a high-school education.  Such jobs were not conceived as self-sustaining careers.  They are typically temporary positions for which the market pays a correspondingly low wage.  Nothing wrong with the work of course.  Many of us have performed such jobs -- I have -- and I take Lewis' point that if the average age of minimum wage workers is increasing, it says something troubling about our employment picture.  I never said that no wage increase is warranted.  

However, should McDonald’s have a primary responsibility to "take care of us" or satisfy their customers, franchisees and shareholders?  What are the implications to our system if a corporation like McDonald's is pressured to act less like a business and more like a social safety net that also sells fast food?

What disturbs me most is the implication that employees are "owed" more by McDonald's Corporation.  Most McDonald's restaurants are not even owned by McDonald's Corporation -- they are franchised to individuals or small businesses that pay royalties and franchise fees to McDonald's. This fact might not matter to the protester that Lewis interviewed who added,

"The corporation makes billions of dollars every year -- they can afford to pay us $15".

Piling on, Mr. Lewis writes, "Companies have paid the lowest wages they could, for as many years as they could".  Of course.  We call that a market economy.  Either way, can't we dial back all the shame-mongering and instead focus upon additional training and education of the workforce? 

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