|Stop complaining, $7.25's at least half of a movie ticket per hour... oh. |
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While there is a need for discussion about the effect of such a raise on employment or economic growth, does it matter that some say a $15 an hour would not increase employment, and wouldn't impact the economy? By thinking about greater economic benefit we are missing the point. Fast food workers with families can't live on minimum wage, especially in cities like New York. Let's bring this discussion down to the human level, and think about the ethics and morals of a $7.25 federal minimum hourly wage.
Core Moral Question: Should we have jobs where working 40 hours a week won't earn you enough to feed, clothe, and house your family without government assistance? I think the answer is a clear and resounding no. We're losing focus on the morals and ethics of the situation by thinking about the almost entirely unknown economic consequences.
Can't Live on Minimum Wage? Work More!
In the world's most powerful country, should employees have to work 70+ hours in order to support their families? This 70+ hours figure comes from a budget released by McDonald's to help its employees live on their meager wages. The updated budget for its minimum wage employees (including heat this time) reads as follows:
Their financial advice website is subtitled with some sage advice: "Every Day and Every Dollar Make a Difference." Easier for the CEO, who makes $35,000+ every day.
The budget has already been blasted by hundreds of writers and bloggers, including Stephen Colbert, and shows an unbelievable lack of empathy and understanding.
McDonald's underlying message: "Oh, you silly silly poor people. Our wage is fair. You'll be fine as long as you get a second job and learn some financial skills."
Poor People Just Need to Live Longer - 603 Years Longer
This type of thinking if rife with contradictions. Should employees make $7.25 an hour while their CEO makes $4,375 per hour ($8.75 million per year)? Should an employee's full time earnings over a year (7.25*2000 hours), $14,500, equal what their CEO grosses in 3 hours and 19 minutes, less than half of one day of work? A McDonald's employee earning the federal minimum wage would have to work full-time for 603 years, 5 months, and 12 days before earning the annual salary of McDonald's CEO.
If only minimum wage employees were immortal...
The Costco Model
Of course, a company like McDonald's whose CEO makes $8.75 million per year and profits $5.5 billion per year can afford to pay its employees more, a lot more. Costco proves that such responsible business practices are both possible and profitable. It pays its hourly employees an average of $20.89 an hour, compared to full-time hourly employees at Walmart earning $12.67 an hour.
Says Costco CFO in the same Business Week Article,
“Could Costco make more money if the average wage was two or three dollars lower? The answer is yes. But we’re not going to do it.”
They also aren't going to give their employees condescending financial advice.
So Increase the National Minimum Wage?
Not so fast. The discussion gets more nuanced when you include small and medium companies. What's obvious for McDonald's is less black and white for smaller independent stores. Nationally set levels often overlook regional variation and the needs of a diverse business community.
So maybe small and medium companies shouldn't be forced to pay minimum wage if they can't afford such an increase. Then again, maybe companies that can't pay $15 and hour to workers supporting families don't have a suitable business model. Food for thought, and definitely something to discuss in the comment section.
Conclusion - Keep Protesting
I applaud the fast food wage-increase protestors. Multinational companies like McDonald's need to be paying employees a higher wage, simple as that. And get this, they have the money to do so while still making a substantial profit. Even if they paid for the increase by raising prices, it would only result in a small prices increase, i.e. Dollar menu items would cost $1.17.
If you had read my post on eating less meat, you wouldn't have to worry about $1.17 McChickens.
For companies like McDonald's, Walmart and YUM! Brands (Taco Bell, KFC, Pizza Hut), it's time to make an ethical, moral, and financial choice that guarantees a fair wage for employees.
In their own words, "Every Day and Every Dollar Make a Difference."
Much love from Norwich, Norfolk, UK,
Rhino Nation, keep an eye for a articles on entrepreneurship in the short term and articles/posts on the excellent oddities of Kurt Berning and British beer in the longer term.
This is not an official US Department of State website or blog. The views and information presented in this post are my own and do not represent the Fulbright Programme or the US Department of State.