Are They Worth $15 An Hour? - And Response (6)

Wednesday, December 4, 2013

I had to laugh at the headline advising workers at the McDonald's on Brainerd Road. These protesting employee's are demanding a wage increase to $15 an hour.  

What education and work history do these people possess? Have any of these people researched typical wages for fast food workers?  

I suggest these workers research what occupations offer pay levels at the demanded amount. They should then research education options to earn degrees to warrant this level of pay.  

By the way, the last three times I have ordered at this McDonald's my orders were wrong. If they can't work effectively at their current wage, what makes them believe they are worth $15?

Merle Woods 

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Let’s hypothetically say McDonalds gives into their workforce at a starting wage of $15.  One of two things would have to happen to compensate for the increase in labor rates.  McDonalds would have to raise their prices to the point of where a happy meal now costs $10 and the “value meal board” would become the “menu board” or they would implement and invest in so much automation into the workplace that nearly half the workforce would be eliminated.  

In the first case, one would assume unless a consumer has a fetish for a Big Mac, they would drive the extra 100 feet to the nearest competitor or go have a nice sit down meal for the same price ultimately putting them out of business.  

In the second case a lot of people would be looking for jobs in what is already a tight marketplace.  Either way I believe the protesters better be careful of what they wish for.  

I guess many of Merle’s points were probably overlooked by these protesters as they are looking at the bottom line in their paycheck versus the consequences of which a victory may truly entail. 

Chris Morgan    

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When I graduated from UT Knoxville a few years ago, I would have loved to have signed on for $15 and hour.  Instead, I hunted and hunted until I got a job making $22,500 a year. I had a college degree. After two years in an office, I landed my second job, making $15 per hour, (~$30,000 per year). 

I couldn't imagine graduating college and making less than a McDonald's worker. That was always the joke: "If you don't go to school and work hard, you'll end up flipping burgers at McDonald's." I can't imagine making more by saying "Would you like fries with that?"  

Furthermore, on a recent vacation to Disney, I noticed that their order takers at one of the resort restaurants was a touch screen with a card swipe. It was ideal. I didn't have to explain myself through a language barrier and if there was a mistake, I didn't take the computer's attitude personally. Instead, I confirmed that what I ordered was exactly what I wanted and paid. Then picked it up at the next window. It was very easy and convenient. And the technology is already there. Don't tell me that they aren't already looking into it.

Keep the $7.25 carrot on a stick and keep encouraging people to make something of themselves. Burger King is not supposed to be a career path. 

Tim Giordano 

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I don’t think that dollar amount is essential for those that have a limited education, that get on the job training. 

The problem I see with fast food wages is the norm of part time employees that lack the hours and automatically excludes healthcare benefits. I agree that they don’t get paid enough, but 15 bucks an hour seems too high for entry level positions. However, I feel they should work full time from the get go, if they are not in school. However, hourly workers as a whole, usually are paid far less than salaried managerial workers. 

I’m very sure if Obama gets what he wants with raising minimum wage, then the restaurants will differentiate their menu prices to offset oppressed operational costs. The bottom line of social corporate responsibility rests in the hands of the shareholders, and the CEOs, CFOs, and all other Os have the responsibility to answer (board of directors) for the profits and losses by respective organizations at their annual meetings before dividends are paid out. If they begin losing shareholders over lost stock, then the jobs of corporate officers are at stake. 

So, it is either the big wigs or the burger flippers that has to suffer. 

Robert S. Emers

* * * 

I completely agree with the comments that increasing the wage to $15 per hour is beyond ridiculous. As Merle and Tim mentioned perhaps these groups should research what this pay is equivalent to in the Chattanooga area. 

Many people are unaware that new nurses start out at just a couple of dollars more than this! I highly see comparing someone working at McDonalds, with little or no education to making the same pay as someone with a college degree taking care of human lives (but that's just me) 

As Tim mentioned some of these jobs are becoming obsolete. I too noticed this when I was out of town recently. The orders are taken by computer, done correctly, and no risk for human error. 

Yes, minimum wage is very little and hard to live off of, especially if you are a single parent trying to better yourself. However most of the people working in the fast food industry for a long period of time are teens, getting their foot in the door. As mentioned this is a starting point, not a career, that is why they pay minimum wage. 

Be careful protesters. To increase the wages, other things must change. Prices increase, jobs are cut, benefits are cut- it is business, not personal. 

Ashley Santos, RN, BSN 

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The fundamental law of capitalism is that if workers have no money, businesses have no customers. That’s why the extreme, and widening, wealth gap in our economy presents not just a moral challenge, but an economic one, too. In a capitalist system, rising inequality creates a death spiral of falling demand that ultimately takes everyone down.  

Low-wage jobs are fast replacing middle-class ones in the U.S. economy. Sixty percent of the jobs lost in the last recession were middle-income, while 59 percent of the new positions during the past two years of recovery were in low-wage industries that continue to expand such as retail, food services, cleaning and health-care support. By 2020, 48 percent of jobs will be in those service sectors.  

Policy makers debate incremental changes for arresting this vicious cycle. But perhaps the most powerful and elegant antidote is sitting right before us: a spike in the federal minimum wage to $15 an hour.  

True, that sounds like a lot. When President Barack Obama called in February for an increase to $9 an hour from $7.25, he was accused of being a dangerous redistributionist. Yet consider this: If the minimum wage had simply tracked U.S. productivity gains since 1968, it would be $21.72 an hour -- three times what it is now.  

Traditionally, arguments for big minimum-wage increases come from labor unions and advocates for the poor. I make the case as a businessman and entrepreneur who sees our millions of low-paid workers as customers to be cultivated and not as costs to be cut.  

Here’s a bottom-line example: My investment portfolio includes Pacific Coast Feather Co., one of the largest U.S. manufacturers of bed pillows. Like many other manufacturers, pillow-makers are struggling because of weak demand. The problem comes down to this: My annual earnings equal about 1,000 times the U.S. median wage, but I don’t consume 1,000 times more pillows than the average American. Even the richest among us only need one or two to rest their heads at night.  

An economy such as ours that increasingly concentrates wealth in the top one percent, and where most workers must rely on stagnant or falling wages, isn’t a place to build much of a pillow business, or any other business for that matter.  

Raising the minimum wage to $15 an hour would inject about $450 billion into the economy each year. That would give more purchasing power to millions of poor and lower-middle-class Americans, and would stimulate buying, production and hiring.   

Studies by the Economic Policy Institute show that a $15 minimum wage would directly affect 51 million workers and indirectly benefit an additional 30 million. That’s 81 million people, or about 64 percent of the workforce, and their families who would be more able to buy cars, clothing and food from our nation’s businesses.  

This virtuous cycle effect is described in the research of economists David Card and Alan Krueger (the current chairman of the White House Council of Economic Advisers) showing that, contrary to conventional economic orthodoxy, increases in the minimum wage increase employment. In 60 percent of the states that raised the minimum wage during periods of high unemployment, job growth was faster than the national average.  

Some business people oppose an increase in the minimum wage as needless government interference in the workings of the market. In fact, a big increase would substantially reduce government intervention and dependency on public assistance programs.   

No one earning the current minimum wage of about $15,000 per year can aspire to live decently, much less raise a family. As a result, almost all workers subsisting on those low earnings need panoply of taxpayer-supported benefits, including the earned income tax credit, food stamps, Medicaid or housing subsidies. According to the Congressional Budget Office, the federal government spent $316 billion on programs designed to help the poor in 2012.  

That means the current $7.25 minimum wage forces taxpayers to subsidize Wal-Mart Stores Inc. and other large employers, effectively socializing their labor costs. This is great for Wal-Mart and its shareholders, but terrible for America. It is both unjust and inefficient.  

A higher minimum wage would also make low-income families less dependent on government programs: The CBO report shows that the federal government gives about $8,800 in annual assistance to the lowest-income households but only $4,000 to households earning $35,500, which would be about the level of earnings of a worker making $15 an hour.  

An objection to a significant wage increase is that it would force employers to shed workers. Yet the evidence points the other way: Workers earn more and spend more, increasing demand and helping businesses grow.  

Critics of raising the minimum wage also say it will lead to more outsourcing and job loss. Yet virtually all of these low-wage jobs are service jobs that can neither be outsourced nor automated.  

Raising the earnings of all American workers would provide all businesses with more customers with more to spend. Seeing the economy as Henry Ford did would redirect our country toward a high-growth future that works for all.  

Nick Hanauer 

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Mr. Hanauer has a very long response. Cutting to his final paragraph, he talks of raising the earnings of all American workers. Raising the minimum wage at all will not raise the earning of anyone in my household, not me, my husband, or any of our three children. It will raise the costs of items produced and services offered by the companies paying higher minimum wages. In the real world economy of my household, that means we will be buying less from those establishments. 

If raising the wages of all American workers is all we need, why not do the reverse and just lower the costs of everything, beginning with taxes? To apply Dave Ramsey's simplest phrase, you either have to increase income or decrease outgo. Decreasing costs has the same effect as raising income. 


Check out this Forbes article from earlier this year regarding Mr. Hanauer's $15 minimum wage proposal.  

It responds to this exact letter by Mr. Hanauer, which can be seen here,

Macel Holloway
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