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Thursday, September 10, 2015

No One Is Serious About $15 Minimum Wage

OK…this is a lighthearted story, but one that is most likely to play out in the wake of “Fight For Fifteen” minimum wage hike movement:
“I’m a 23 year old young man in middle America, earning $7.50 an hour at one of America’s many fast food giants, living with my parents and riding my bike to work or hitching a ride every day. I don’t have too many bills, but Mom and Dad aren’t paying for my phone and make me pay some rent and buy a few groceries, which I don’t mind doing. They’re keeping me on their insurance for a few more years, so I can at least pay for a few things.
Lately we’ve been getting some folks talking about the minimum wage going to $15.00 an hour. I don’t know who they are, but their logic sure sounds good. That would mean I could get a place of my own, maybe split the rent with someone or get a small apartment. Everybody at the joint is excited about what it could mean for us. It is crazy that my bosses have kept us at such low wages. I’ve been working at this job a whole 6 months and I believe I should earn more money for giving this company 29 hours of my life a week. I should be able to earn a living wage here, especially if I intend to work here for many years.”
There are a few things wrong with Junior’s thinking here, but this story is more than likely truer than we want to believe. Pick a different part of the country or a different, slightly higher actual minimum wage and this story is abundantly true in every city across the country.

Ultimately, when his bosses or the state or local officials don’t budge on raising the minimum wage to $15, those people who started the conversation about raising the wage will convince Junior that he is unhappy, disgruntled and being put down as a worker. They will also tell him that he and his fellow employees should come together and act as one by joining a union where they will have more bargaining power. All along these outsiders have been acting as union proxies and have positioned themselves as trusted friends and like-minded workers in order to sway Junior and his fellow fast food workers to unite. These people are actually out there, filling the emptiness between Junior’s ears, all across the country with the same babble I stress here.

What most young workers don’t realize is the real financial impact that raising wages across the board has on a company. Consider the impact that raising the wage just $1 per hour has on a company with 100 employees open 24 hours per day.

Just $1 per hour x 100 employees x 8 hours/day = $800 per day x 5 days per week = $4,000 weekly increase in payroll, and $208,000 per year.

Think about the impact of going from $7.50 to $15.00. It would be as if the company automatically hired 100 more employees overnight. A weekly payroll of $30,000 jumps to $60,000 in one fell swoop…over $3 MILLION per year!

One college friend of mine, frustrated with the concept of college algebra, told me she would love the day she gets through algebra, because she never uses math in her daily life anyway. Obviously she’s not alone.

The unfortunate, but very realistic solution that a company has if the minimum wage is increased to such a level is to cut back on hours or workers or both. Junior is already taxed with working 29 hours per week, but if the company changes it’s hours, Junior is very likely to feel a decrease in his hours if the company decides to keep all of its employees or not. If his bosses were to cut back to 16 hours per day, but felt compelled to keep all of their employees, logic would tell him that less operating hours means less working hours per employee to get the same job done, not to mention the law of diminishing returns starts to kick in. His bosses would be wise to consider laying off at least 1/3 of their workforce and consider automation or best practices to alleviate unnecessary work or workers.

Junior also needs to realize that he is on the road to NOWHERESVILLE if he expects to work here for “many years.” Junior needs a good swift kick in the pajamas and a good career counselor to spend an hour with him about his future. Mom and Dad must not be doing it, so maybe an outside force could pinch that skin tag off and help him make some real career choices. On the other hand, by this time he may be brain-washed into thinking that $15.00/hr will sustain him and cement his long term commitment to his dead end life at this job, so intervention may be futile.

No one will tell you the truth, but the real goal of the “Fight to Fifteen” movement is to increase union rolls in the service sector by creating a rift between big bosses and employees, even though raising minimum wages is usually a legislative measure and the bosses have very little say in it. Regardless, if legislation isn’t passed, Junior and his buddies will blame the bosses because they don’t go ahead and raise their pay. A Catch-22 situation for the bosses. Union rolls have been on the decline for years and union officials are mobilizing teams as fast as possible to secure their own jobs and line their own pockets before it’s too late.

I've probably missed a few points here, but I think the main point is clear...the "Fight for Fifteen" organizers (union organizers) are not there to make life easier or better for the workers, they are there for themselves and only themselves.