Fast food workers around the country are striking today, calling for the federal minimum wage to be increased to $15.
James Surowiecki tackles the fast food low wage debate this week by looking at the shift in the American economy in the last few decades, the key thing being that fast food jobs were never considered the kind of jobs a person would take to support a family until fairly recently (fast food jobs were mostly dominated by teens who used the money to buy stuff and go to the movies). Manufacturing and factory jobs were where people used to go to find a job that paid a decent enough salary to raise a family, but as we've seen, those jobs are quickly disappearing while the retail and fast food business are now becoming America's biggest employers. They've done this by doing what they've always done—pay people low wages, and not keeping up with inflation (in 1968, the minimum wage was $10.70 in inflation-adjusted dollars).
Branch's reporting covers a myriad of issues: What it's like to grow up in a town plagued by things like unemployment, substance abuse, racism, and teenage pregnancy.
I received lots of emails from you guys this weekend about McDonald's ridiculous "budgeting" site for employees, which assumes that workers will work two jobs to earn $24,000 a year to get by, don't have any children, and doesn't include groceries or transportation costs like gas in its sample monthly budget. The Youtube video was made by fast food workers who are fighting for fair wages.
Over at the Motley Fool, a popular investment news and tips site, Morgan Housel writes that adjusted for inflation, the minimum wage has declined by 30 percent over the course of 40 years, while the percentage of Americans on food stamps rose. This indicates, as we've noted previously, that the public is essentially subsidizing low-wage work.
The team at Mother Jones used data from the National Employment Law Project, Bureau of Labor Statistics, and Economic Policy Institute's Family Budget Calculator (which I posted about last week) to calculate what it would take to earn a living in different metropolitan areas on fast food wages. The example I used below, is again based on the single mom with three children I spoke to. One thing that this calculator allows you to do that the family budget one didn't is to look at the data from the perspective of a single person.
Sarah Kendzior, who previously wrote about unpaid internships at the U.N., has now tackled the McDonald's McBudget issue, arguing that the American Dream is not survival. It's a terrific piece.
In it's most recent issue, The Economist looks at one of Britan's biggest job trainers: McDonald's.
Nancy Salgado, a single mother, asked McDonald's USA President Jeff Stratton if he thought it was fair that she earned $8.25 an hour working at McDonald's despite being there for 10 years. His response: "I've been there [at McDonald's] 40 years."
A student at the University of Kansas School of Business did a little financial modeling based on annual reports from McDonald's to see how much menu food items would rise in the theoretical case where employees were paid $15 an hour. The results: Big Macs would increase by 68 cents to $4.67, and items on the dollar menu would see price increases of 17 cents. Of course, this is theoretical, and an economics professor from the school calls it "a leap of faith" because that kind of wage increase would have huge, unforeseen effects (besides, you know, changing the lives of everyone who works at McDonald's).
NN talked to four McDonald's employees about what their actual budgets look like, an unsurprisingly, they're not making enough money.