Saturday, August 24, 2013

Why $15 per hour for fast food workers is a bad idea

     Recently, some fast food workers have protested their low wages and asked for  $15 an hour. For a variety of reasons, this is a terrible idea.

     First we should examine the arguments of the supporters for the raise. The supporters say that the fast food workers are victims, and deserve to get paid that amount. Another popular claim is that a person can't make a living off a lower level fast food workers wage. They claim that if the fast food workers do not get the raise, then corporations will continue to pay their minimum wage workers wages that are below subsistence level.  

    A major flaw in the argument is the claim that fast food workers deserve to get this money. Looking at education statistics, only a third of them have some college education, and a pathetic 6.2% of them got a college diploma. Even if we take out the 30% under the age of 18, fast food workers still receive little education. This is compared to 33.5% of people between 25-29 who have a bachelors degree.
Thus, the vast majority of fast food workers are not well educated people who have fallen on hard times, but uneducated people who get a low skilled job because it is the only one for which they can qualify.  Fast food jobs are not just unskilled positions, they are highly replaceable. There is a 75% first year turnover rate it the fast food industry. There is apparently no shortage of people who are willing to take this type of job at the present wage level. Unskilled, inexperienced, uneducated, and easily replaceable workers are the ones who are going to get payed the least. It is simple economics. Additionally, the jobs these people are doing do not help society. They hurt us by raising obesity rates, which kills many Americans. The people working these low paying fast food jobs are getting paid what they deserve.

     Another argument is that a person can not make a living off a fast food salary. What they fail to mention is that it is not supposed to be a career. 75% of the workers leave after the first year. This shows that a fast food job is temporary, not a career. Workers in the fast food industry should use this entry level job to obtain the skills and experience to qualify for a better one.  Secondly, over 60% of fast food workers are under 25, with a mean age of just 28. In the total workforce in 2010, just 13.6% of workers were under 24, and about 43% were 45 or older. If a person is depending on a low level fast food job for to support themselves, the problem is not that the person isn't getting paid enough. The problem is that he or she is depending on a low level fast food job to support them self.  Doubling the fast food worker's salary encourages that individual to languish in an unskilled job rather than obtaining the skills to qualify for a better job.  

      Lastly, many proponents of the $15 dollar wage say that the results of this protest will have a large effect on the way Americans get paid. However, as I have shown, the American workforce and fast food workforce are very different. The average American worker is far more educated and experienced than the average fast food worker, and thus gets paid much more. Further, very few people stay in the fast food industry. Of the 4.1 million people who work in the fast food industry, only a million of them will still be working there by the end of the year. Compared to the roughly 145 million people in the workforce, this is a tiny fraction. In addition, the large increase in entry level wages would certainly be passed on to the consumer. This would mean that although a small percentage of the population would get paid much more, most Americans would end up spending more money. This would cancel out any positive economic effects this wage increase would have.

    The supporters of this wage increase may have their hearts in the right place, but their arguments are deeply flawed. Rather than focus on raising fast food wages to help income inequality, people who truly want to solve inequality should strive to extend education and training for skilled jobs to a larger number of people. In 2011,  roughly 25% of teenagers who started  high school did not finish it.  Furthermore, a 33.5% college graduation rate for adults 25-29 is low, the one for 25-34 year olds was higher, but, college graduation rates have still not risen for years. According to Fareed Zakeria GPS in 2011 "Australia, Belgium, Canada, Denmark, France, Ireland, Israel, Japan, South Korea, Luxembourg, New Zealand, Norway, Sweden and the United Kingdom" all have higher college graduation rates for 25-34 year olds. A combination of low education rates and the loss of middle income manufacturing jobs means that more people will be going into low paying jobs. Additionally, in late July of 2013, there were three million unfilled positions because of a lack of skilled workers. There are much better jobs for minimum wage workers to receive.  However, only the individual can make the decision to stay in school and acquire the skills necessary for a better job.  Mandating a wage increase hurts American companies who must raise prices to support it, and the consumer who must foot the bill for higher prices of goods and services.  More importantly, nearly doubling the minimum wage gives these workers much less incentive to seek skilled jobs that will be much better for career.

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