Fast food workers in New York went on strike yesterday for what they call low wages. They say they aren’t being paid enough at $7.25 an hour and want an across the board raise that more than doubles their pay to $15 an hour and they want to unionize on top of that as well. Really. Are you serious? I see a number of problems with that already and I haven’t even dug into it. But here I go anyway.
Employment in the fast food industry is some of the lowest paid work, because it requires very little in the way of actual skills, cooking with grease and hitting pictures on a cash register doesn’t take exceptional skills. When labor isn’t all that intensive or skilled it isn’t going to have a large pay attached to it. In a free market, or at least the quasi-free market we have in the U.S., demand is a function of price. Higher prices equal lower demand, and that rule applies to prices and wages. When the wages of low-skill workers go up, jobs are lost. The lefties and the government sees minimum wage increases as an act of benevolence, but it is not so. Just as demanding a raise can mean the loss of a job.
When the labor completed can be done by more people for less pay it makes sense to hire them, i.e. two employees at $7.25 versus one at $15. But raise the minimum wage or demand a massive pay increase and the workers price themselves out of a job. When the wages get too high employers look to technology. A several thousand dollar cost for a burger making robot, or automated cashier would cost a lot up front but would decrease exponentially as it wouldn’t slack, need breaks, days off, require a shift change, etc. Think about this, when was the last time an usher helped you to your seats in a movie, an elevator operator asked you what floor you would like, a bagger, not a cashier, bagged and took your groceries out to your car. These low paying jobs were priced right out of the market.
The minimum wage was never meant to be something you could support a family on. Just like the entry-level, low skilled labor job was not a place that someone was supposed to stay in for life. But this is why the fast food workers want to marry this massive increase in wages to a union. A union protects it workers from a minimum wage and keeps other entry-level workers from competing for “union” jobs. This would thereby protect them from people who would be willing and happy to have a job at minimum wage and keep them from being terminated by management because of the exorbitant cost of employing them. It is a no win situation if the fast food companies cave to this.
Their higher wages would either half the amount of workers in the fast food industry in New York or it would precipitate a massive price increase of the food. In this economy both of these things are not good for continued economic growth. A worker complains he can’t make it on min wage, needs support from his relatives and wants to know why he can’t get a job in the white-collar world. The problem isn’t your work ethic, the color or your skin, or your motivation, it is a function of your skills. The lower your skills, the less you are going to get paid. Minimum wage is the bottom of the rung, the jobs that used to be for high-school age children but now even they don’t have enough skills for the minimum wage as it is. Their ultimate choices are simple, get more skills and move up, get the wage increases and lose half the jobs, or lose none of the jobs and increase the price of the food, then lose half the jobs or more when no one is buying the high-priced fast food.
Two of those choices are not pretty, but they are realistic.