The Fast Food Forward Movement

[Ser Scot A Ellison]

FB,

Poverty is always on a sliding scale. As such it will never disappear:

[Sci-2]

You don't negotiate that way, Sci. The only place where wage negotiations are "all or nothing" is in sports arbitration. In the real world you aim high. If the workers asked for $10.50, the chains would offer bumping up $7.25 to $8.00.

I can understand that, though the rate they are asking for seems to be one of the biggest points of contention.

If they are generating enough momentum I'd say stick to their guns, as I think you're right about negotiation.

[Former Lord of Winterfell]

FLOW,

I call bullshit on your house cleaner example. Seriously, it takes like 3 hours to clean a 2 br house, and you're saying people pay significantly less than 45$ (that's 3 hrs at 15/hr for those counting along)? Wtf?

Call bullshit all you want, but there is a reason domestic workers are more common in areas with higher number of immigrants -- particularly illiegals -- than others. In many cases, they'll work at the same house every day. Sometimes it's housekeeping, sometime gardening, whatever. And yes, they sometime do earn less than minimum wage. So you're not just talking 3 hrs per week.

[thecryptile]

...So a mixed bag...

Agreed, but I believe that we need to work to remove those regulations that are not needed. One example of needed regulation that comes to my mind is environmental regulations that prevent dangerous levels of industrial pollution. We do need some government, I'm not advocating anarchy. Of course, that is a whole different debate...

Obviously this is more artificial bullshit that may have been designed by a corporate lobbyist but I'm guessing that when you said get the damn government regulation off you didn't mean get the damn government regulation off my food stamps.

Yeah, I'm aware that you can actually hurt yourself by getting a raise if you depend on government benefits- that's something that needs to be worked on. "Hustling backwards" should not be possible. The system should reward people for finding work, not punish them.

Let me make it clear, I approve of programs like SNAP and WIC, it is hard to find a legitimate moral argument against feeding children.

[DanteGabriel]

Let me make it clear, I approve of programs like SNAP and WIC, it is hard to find a legitimate moral argument against feeding children.

Huh. Well, your boy Ken Cuccinelli disagrees with you, in his own book.

One of [politicians'] favorite ways to increase their power is by creating programs that dispense subsidized government benefits, such as Medicare, Social Security, and outright welfare (Medicaid, food stamps, subsidized housing and the like). These programs make people dependent on government. And once people are dependent, they feel they can’t afford to have the programs taken away, no matter how inefficient, poorly run, or costly to the rest of society.

http://thinkprogress.org/justice/2013/02/12/1578761/medicare-is-despicable-and-nine-other-crazy-ideas-in-ken-cuccinellis-new-book/

[thecryptile]

I know, but that is another thing like the sodomy law or marijuana decriminalization. He can't get anything changed there. Ken is what John McCain would call a "wacko-bird". I just think he is slightly better than McAuliffe. If I was voting my conscience [instead of choosing the lesser of two evils], I would vote Sarvis- and he's against food stamps too*.

But feeding the people has been a function of government since ancient times, the people would overthrow a government that let them starve.

ETA: The Libertarian argument is not that food support is inherently bad. It's that private charities should perform this function instead of government agencies, and they would perform it better than the government.

[DanteGabriel]

I know, but that is another thing like the sodomy law or marijuana decriminalization. He can't get anything changed there. Ken is what John McCain would call a "wacko-bird". I just think he is slightly better than McAuliffe. If I was voting my conscience, I would vote Sarvis- and he's against food stamps too.

But feeding the people has been a function of government since ancient times, the people would overthrow a government that let them starve.

I've never thought "It can't happen here" was a good rationale for voting, but your mileage may vary I guess.

[Gillio]

I think part of what that article shows me is how costly Australia is. A friend of mine who regularly went to Australia on business (he was in mining, what else, lol) talked about how incredibly expensive restaurant meals were. A meal that would cost $12 to $15 in Canada would cost $25 to $30 in Australia, for example. I think cars cost much more as well, don't they? And I know I've read the real estate market if very pricey in major cities.

Here is Mercer's cost-of-living study, showing Sydney as the ninth most expensive cities in the world, http://mthink.mercer...ound-the-world/

I pay $1.65 to $2.00 for a medium coffee - $5.16 in Sydney is pretty hefty.

And Gillio, your links just wouldn't open for me. What was in them?

links to aussie award payment information, I've updated the links, dont know why the old ones failed

[Horza]

I think part of what that article shows me is how costly Australia is. A friend of mine who regularly went to Australia on business (he was in mining, what else, lol) talked about how incredibly expensive restaurant meals were. A meal that would cost $12 to $15 in Canada would cost $25 to $30 in Australia, for example. I think cars cost much more as well, don't they? And I know I've read the real estate market if very pricey in major cities.

Here is Mercer's cost-of-living study, showing Sydney as the ninth most expensive cities in the world, http://mthink.mercer...ound-the-world/

I pay $1.65 to $2.00 for a medium coffee - $5.16 in Sydney is pretty hefty.

1) Note, that's the expat employee Cost of Living guide. This Sydney local hasn't found anywhere that charges $5 for coffee. Don't know where these poor corporate types are hanging out.

2) Your pal in mining is right about Perth, the NT and WA, where there are labour shortages on account of the decade-long mining boom. That's a classic boomtown supply-and-demand problem, one not ameliorated by paying service staff less.

[delete this account pls]

Horza, stop coming in here with your facts and you actual concrete examples, it's just rude imo.

[Persicaria]

I'm fairly liberal, but honestly no I don't think they should be getting double the pay. A raise of maybe $ 9 or $ perhaps, but to double it. We pay people to provide valuable services. We pay people more depending on the specialization and the need of the skill set. A fast food worker has really no skills and the value of their jobs are very low (supply vs, demand). They heat up premade food and tend registers (it doesn't take much thinking or skill to do that). At this point in time raising them minimum wage will probably do nothing except encourage inflation (which will always grow faster then wages). If we really wanted to aide fast food workers or other low income workers we should have education programs that work around their hours and help to provide child care; and perhaps allow them to continue to receive some form of benefits for a short period following employment as a small safety net.

[Honey Badger]

When you raise the minimum wage above equilibrium you produce a surplus of labor supplied versus the labor demanded by employers; it's just a law of economics that will produce unintended consequences. We'll need a large float to deal with contingencies as the fallout of not having $7-$8 workers anymore. This won't be a small, cheap thing that we brush under the rug. My guess is it produces a wart similar to large farming subsidy.

Teenagers who make up 30% to near 50% of minimum wage workers (depending on whose study) have the right to work a shit job for pocket change and develop a work history. Otherwise they're forced to leapfrog directly into trades or skills training. High school and college students are going to encounter problems finding part time positions if minimum wage goes away.

There are winners and losers in fast food, with McD's at net margins of 20%, but you can't discount chains operating at 4% or net loss for the year as a loser. Speaking generally, there isn't a magical slush fund to dip into to cover these new wage increases. It will have to pass directly to the consumer. As fast food is an inferior good and fairly elastic, this isn't a good thing. The fast food industry in general will shrink. Don't forget cheaper diners and mom and pop restaurants.

Without a crystal ball, I predict some bad results similar to rent control. It causes unintended headaches while arguably solving intended headaches. I think this stuff is more zero sum than you guys give it credit for. Like Merc Chef says, lots of small restaurants and eateries will not afford a min wage hike. This isn't just evil big corporations, but also small families betting their life savings.

[Honey Badger]

I'm fairly liberal, but honestly no I don't think they should be getting double the pay. A raise of maybe $ 9 or $ perhaps, but to double it. We pay people to provide valuable services. We pay people more depending on the specialization and the need of the skill set. A fast food worker has really no skills and the value of their jobs are very low (supply vs, demand). They heat up premade food and tend registers (it doesn't take much thinking or skill to do that). At this point in time raising them minimum wage will probably do nothing except encourage inflation (which will always grow faster then wages). If we really wanted to aide fast food workers or other low income workers we should have education programs that work around their hours and help to provide child care; and perhaps allow them to continue to receive some form of benefits for a short period following employment as a small safety net.

To add to this:

For those who aren't economists, taxes and government floors produce a deadweight loss, which is a loss in economy that is irrecoverable. In layman's terms, it's not that you take a dollar from the fat cat boss and give it to the worker. It's much more accurately a $1.10 taken from the producer to pay the worker $0.90, with $1.20 passed on to the consumer. Some consumers will feel the elasticity of the inferior good and not buy fast food, opting to cook at home, or the same customer will only get fast food once a week versus twice a week. McD's will feel supplier elasticity on their side by shrinking the number of American McDonald's and make it up with more stores opened in non-minimum wage countries.

It's better to incentivize behavior than to tax it. So a subsidy to the woman working 50 hours instead of penalizing her. Give her an additional dollar for working overtime hours instead of taking it out of her welfare. They'll have to figure out another way to get her off welfare, if that's even possible. The current system of reducing benefits as the person makes more money works for the most part as most welfare recipients are temporary, but it's a blunt tool that's ineffective for long term recipients. Some reform is needed, duh.

tldr; this shit is so much more complicated than you guys think, that it's not a simple either-or scenario. You're hitting a hornet's nest with a large stick, hoping to control the predictability of hornets. Subsidies to deal with minimum wage are better than taxing the market with a wage floor as it doesn't distort the market.

[Shryke]

When you raise the minimum wage above equilibrium you produce a surplus of labor supplied versus the labor demanded by employers; it's just a law of economics that will produce unintended consequences. We'll need a large float to deal with contingencies as the fallout of not having $7-$8 workers anymore. This won't be a small, cheap thing that we brush under the rug. My guess is it produces a wart similar to large farming subsidy.

Teenagers who make up 30% to near 50% of minimum wage workers (depending on whose study) have the right to work a shit job for pocket change and develop a work history. Otherwise they're forced to leapfrog directly into trades or skills training. High school and college students are going to encounter problems finding part time positions if minimum wage goes away.

Except a labour surplus and reduced employment is not what we see from minimum wage raises. I linked stuff before on this.

There are factors at work beyond a simple supply/demand model in the minimum wage labour market.

There are winners and losers in fast food, with McD's at net margins of 20%, but you can't discount chains operating at 4% or net loss for the year as a loser. Speaking generally, there isn't a magical slush fund to dip into to cover these new wage increases. It will have to pass directly to the consumer. As fast food is an inferior good and fairly elastic, this isn't a good thing. The fast food industry in general will shrink. Don't forget cheaper diners and mom and pop restaurants.

Actually research indicates that fast food pricing is fairly inelastic when it comes to rises in labour costs. Heck, one NBER study I was looking at indicated they couldn't find a relation between the two.

[Shryke]

I'm fairly liberal, but honestly no I don't think they should be getting double the pay. A raise of maybe $ 9 or $ perhaps, but to double it. We pay people to provide valuable services. We pay people more depending on the specialization and the need of the skill set. A fast food worker has really no skills and the value of their jobs are very low (supply vs, demand). They heat up premade food and tend registers (it doesn't take much thinking or skill to do that). At this point in time raising them minimum wage will probably do nothing except encourage inflation (which will always grow faster then wages). If we really wanted to aide fast food workers or other low income workers we should have education programs that work around their hours and help to provide child care; and perhaps allow them to continue to receive some form of benefits for a short period following employment as a small safety net.

Actually it'll likely just raise demand (exactly what the US economy needs) and the effect on inflation will be fairly minimal.

[The Anti-Targ]

I'd also suggest that if you don't want to be working at a fast food job at a minimum wage, you should figure out a way to make yourself more marketable.

Of course until we get masses of robots to do all those minimum wage jobs it will always be the case that someone's got to flip those burgers. So just telling people to make something of themselves is a cop out answer. Some people will never be more marketable than minimum wage. You think a person with an IQ of 90 is somehow going to work their way into a $50K/year job? Unless it involves selling themselves for sex, or being a drug mule, it ain't gonna happen.

The minimum wage is a social safety net, if that safety net doesn't keep people above the poverty line then it's no safety net, it's more like the cover of a pit trap.

Minimum wage should be taken out of the hands of politicians and set to be adjusted according to CPI, with a broad based, say, 5-yearly review, to see if the minimum wage is progressively delivering an improved quality of life for those at the bottom of the rung.

[ThinkerX]

ThinkerX - I work in a corporate office for a large retail corporation that relies partially upon low-wage store labor. Believe me when I tell you no one is cheating or stealing and we are doing our jobs. I would guess that Walmart's corporate workers spend more time complaining about store workers than vice versa.

Corporate management is often incompetent but rarely actively undermines the stores. Any promotions and whatnot that come down might be bad, but there is no reward for promos that don't work, so it's not in the ad manager's best interest to make bad ads.

I'd like to believe this, 'just people doing their jobs', but down through the decades I've seen far to many one sided shenanigans come down from on high to really buy into it. Some scheme hatched at corporate blows up, corporate blames the field hands in the stores rather than admit to screwing up.

Case in point: corporate pizza joint I spent most of a decade working at. Old manager finally paid off his child support and walked. Guy from corporate showed up to take over until corporates new hand picked golden boy could take over.

First day there, corporate guy lines us up, and says this shop will run by the corporate book - a book designed for stores in cities with about ten times the population of the town. We were making money, just not as much money as corporate wanted. Sales (profits) had gone flat. Reason? We were THE pizza joint in a semi isolated area. Tried explaining this to corporate guy. Never even registered.

Corporate guy starts in with his agenda - how he was adding this and redoing that - things totally wrong for this area. Not only that, things that ADDED to the costs of running the store, detracting from the profit. Brought this up. His response? 'Well, we got rid of the highest paid employee here, which frees up some money.' (Meaning the old manager)

Things started out bad and got worse. After a couple of months, I walked. I was one of the last of the old 'core' staff to do so - the group of people who actually KNEW how to keep the place running. On my way out, I told several people this place would be lucky to still be in business in two years time.

As it was...corporate guy went back to corporate a couple months after I left. Corporates new hand picked manager managed to rack up multiple sexual harrassment suits in less than a year and left. Two years after I left, by the book corporate policies had run the place so far into the red it was almost shut down. Came right down to the wire on that more than once, from the tales I heard later on.

I also heard corporate guy got a bonus and a promotion for his efforts...before leaving to join the corporate crew of another food chain.

Another example, from earlier on, when the old manager was still there. Corporate had a second fast food joint next to the pizza place - literally across the parking lot. At the pizza joint we had a really good waitress, lots of experience, including a bit of actual management at other places. Fast food joint across the parking lot ended up short a manager. She said what the heck and put in for it, with our managers blessing. Three weeks later, word comes back, and she and the old manager is both pissed: Corporate offered her a management slot alright - but at the pizza joint, not the other outfit, WITHOUT telling the pizza joint manager. She quit shortly thereafter rather than deal with such blatently treacherous people.

Back to WalMart: I have a nephew, did a stint in Afghanistan. Did some MP training towards the end of his stint. Got out, came back home, heard WalMart was looking for security types. And with good reason: the daughter told me more than once the amount of stuff being swiped out of her store hit the five digit range per month at times. At first, WalMart says 'Sure, we want you, glad to help a vet and all that.' He gets packed off to another store in the state for training with other former vets. Then some dimwit at WalMart central looks at these guys and realizes something: as vets, because of government regulations, WalMart has to pay these guys $16 an hour, plus offer them a wee bit more in benefits. BUT - they could hire non-vets for the same work at $12 an hour, and not worry about forking over benefits. This really did come out of corporate. Right then and there, my nephew along with these other guys went from 'security' to 'ordinary employees'. They then proceeded to screw his scedule up so much he quit after less than a month - he was getting directly contrary orders from different people in store management (and elsewhere) about his work times.

Work schedules are one of the biggest gripes a lot of low wage types in corporate shops have: schedules get added to or changed a lot, depending on some idiotic earnings/labor formula. People get days off cancelled because of this, get sent home shortly after showing up, can't schedule anything, and it become hell to try and juggle a second job because you don't know the hours at the first job. And the idiots at corporate see absolutely nothing wrong with this despite it costing them a lot of otherwise good people. Its apparently policy. It is also totally wrong.

Also, Walmart is notorious for noxious wage control policies, but any pushback your daughter got (which I absolutely believe to be true) was from her store manager and not corporate.

There is no corporate conspiracy to fuck over the workers, anti-union pressure notwithstanding.

From the perspective of those on the shop floor, it certainly seems like there is a corporate conspiracy to f*ck over the workers, at least some of the time.

And just what do the people at corporate actually do that justifies their far larger paychecks and bonuses, anyhow? The money is made at the stores, not corporate. Without the people on the actual shop floors, there'd be no corporate - a point corporate seems utterly oblivious to.

Might be interesting sometime if say...80% of the low wage types were to not only go on strike, but physically lock up the stores (no entry by anybody, for any reason) for a week or so. Wouldn't affect just fast food places, but retail giants, grocery stores, and more. Probably result in a nationwide state of emergency, though. And corporate STILL wouldn't grasp the point.

[Fragile Bird]

1) Note, that's the expat employee Cost of Living guide. This Sydney local hasn't found anywhere that charges $5 for coffee. Don't know where these poor corporate types are hanging out.

2) Your pal in mining is right about Perth, the NT and WA, where there are labour shortages on account of the decade-long mining boom. That's a classic boomtown supply-and-demand problem, one not ameliorated by paying service staff less.

I have no idea where they found the coffee - perhaps in hotels and restaurants, versus coffee shops? Hotel and restaurant coffee is usually more expensive, at least $2.50 here, sometimes $3.50.

He was not in Perth or the NT or WA, he was on the east coast, Sydney and Melbourne, usually. Best lamb dishes he ever ate in his life, lol.

[lupis42]

Except a labour surplus and reduced employment is not what we see from minimum wage raises. I linked stuff before on this.

While that's true, it's worth pointing out that our experience with this is in the context of small bumps in the nominal minimum wage, which means that the real value follows a sawtooth pattern, and has been hovering in the same area for 40+ years.

http://blog.supplysideliberal.com/post/43482772288/isaac-sorkin-dont-be-too-reassured-by-small-short-run

There's also some evidence that the long run effects of minimum wage do lead to labor surplus, through slower job growth:

http://blog.supplysideliberal.com/post/43980516189/jonathan-meer-and-jeremy-west-effects-of-the-minimum

There are factors at work beyond a simple supply/demand model in the minimum wage labour market.

I would say that there are a lot of constraints beyond wages that impact the market, particularly for unskilled labor, but I agree that supply/demand alone abstracts too many things to explain whats going on in that labor market.

[Former Lord of Winterfell]

Of course until we get masses of robots to do all those minimum wage jobs it will always be the case that someone's got to flip those burgers. So just telling people to make something of themselves is a cop out answer.

No it isn't. Why should the pay for every single job be sufficient to support a single adult living alone? People can share living spaces, expenses, etc. There is no logical connection between the value of particular labor and being able to live alone as an adult. Some labor just isn't worth enough to support that standard of living.

Minimum wage should be taken out of the hands of politicians and set to be adjusted according to CPI, with a broad based, say, 5-yearly review, to see if the minimum wage is progressively delivering an improved quality life for those at the bottom of the rung.

Why? Did the actual value/worth of that worker increase? Are they flipping more burgers without any increase in capital investment? I suspect not. So if they're doing the exact same job they were doing before, why should their real wages continue to increase? 500 burgers cooked are no more valuable now, in real terms, than they were in the past, or will be in the future. So why should they continually be paid more for doing the exact same job?