The news out of Illinois this morning tells us that up to 2,000 people, including 325 uniformed employees, descended on McDonalds' Headquarters yesterday in advance of the company's annual shareholder meeting to demand that the company pay their workers' “what they are worth”. I am not privy to the convoluted calculations involved, and have no idea how they arrived at the magic number, but the general feeling seems to be they are all worth $15 per hour.
The employees and other interested parties were organized and bussed in for the protest with the help of the Service Employees International Union and the NAACP. It should be no surprise that part of the concerted effort is to organize a union for McDonald's fast food workforce.
This is part of an ongoing movement pushing back against a minimum wage that many feel is too low, and does not provide a livable wage for those who are at that pay level. They are correct, in that the federal minimum wage of $7.25 an hour does not provide a livable wage.
I don't think it was ever intended to.
Honestly, I believe many people have lost sight of what the minimum wage was supposed to be. It was an “entry level” wage designed for low skilled or inexperienced workers' just entering the workforce. It was never intended to be a family supporting, bill paying, and life creating wage. We were supposed to start there, and work our way up. And by work our way up, I mean develop new skills and expertise, create value within ourselves and the services we can provide, and leave that minimum wage job forever behind us; in order that it be filled by some other unskilled worker newly entering the workforce.
It doesn't matter if that new skill was fixing engines or operating on the human brain, we were supposed to do something with our lives.
Not anymore. Today we define worth and value by the rate of our respiration and pulse. “I am”, therefore you owe me. My own brother-in-law subscribes to this belief, and constantly references some poor sap he read about who has worked for a fast food restaurant for a bazillion years and only makes $8 an hour. He really does not have a response when I say, “Wow, he should quit and find someone who values him more”.
Opponents of my statement will point out that many do not have that option – the only thing available to these low skilled workers is minimum wage employment. Those opponents are correct in many cases. However, what they do not consider in this ongoing debate is the greatest enemy is not the skinflint employer raping an unskilled workforce for fun and profit; no, the real enemy here is pure, unadulterated economics. It is simply economic facts and realities that will sink this misguided effort.
Here is really what is likely to happen if the push for an increase in the minimum wage to $15 an hour is successful.
My brother-in-law, who in addition to speaking for the little man constantly complains that a fast food soda costs a $1.50 when it only costs them “like a nickel”, will have to get used to paying $2.50 for that soda. He is diabetic, so he shouldn't be drinking that swill anyway.
The unions, many of whom have contracts tied to the minimum wage as a base, would see immediate raises for their workers' across the board, since the base on which their wages are determined will have doubled. (That, by the way, is the real key behind the unions support for fast food workers)
And finally, and this is the BIG finally, you will see automation in these low end jobs like you've never witnessed before.
That, in the end, is what these workers are really fighting for. They are fighting to be replaced by machines. It is Economics 101. Automation is not feasible at $7.25 an hour. It is at $15.00. A visit to a McDonald's of the very near future may find self service kiosks similar to those in some retail stores or airports. Customers could place their order and pay on their own. Some of the food may be produced by automation as well. A large machine, half freezer and half deep fryer, might dispense, cook and portion the French fries based on what the kiosk systems tell it to do. They already have automatic dispensing soda machines based on the same principal; the fast food industry merely will expand the use of automation to other jobs within the facility.
I should not need to add that machines don't complain, they don't have personal issues, they don't call in sick, they don't require benefits, and they never file grievances or workers' compensation claims.
This of course will not be limited to the fast food industry. This will happen throughout the service and retail sector. The cost of this automation and the rising wages of the remaining workers will be reflected in the general increase of prices across the board.
The end result? We are merely raising the water level in the pool, and everything will rise at a commensurate level. A minimum wage workers $15 hourly wage of tomorrow will not buy much more than their $7.25 does today. Upper level earners, those swimming in the deep end of the pool, will feel this impact less than those at minimum wage, but in the end it will be those completely displaced that will feel the greatest negative impact. Those living on fixed retirement or disability incomes will also see a major hit from this effort.
In an interview, one of the protesters, Melinda Topel, a 43-year-old McDonald's employee who makes $7.50 an hour, said “I'm here fighting for $15 and a union, so that my path does not become my children's future.” I understand her desire for her children to have a better life. I also understand that the key to that effort will be in education and skill development. That is the only way forward to the achievement of that goal. Whether Ms. Topel understands it or not, that “better life” will not exist in a minimum wage job, no matter what the minimum wage is. Economic principals will not allow that to happen.
If the fight for a $15 minimum wage is successful, it will make some people quite happy. The unions will be ecstatic. The Robotics industry will be elated. But the minimum wage workers' will, if they are lucky, still be minimum wage workers. Some will probably (and ironically) find themselves expendable in their own battle, having fought and won for their own irrelevance, and successfully attained the automation of the jobs they once held.
Robert Wilson is President & CEO of WorkersCompensation.com, and "From Bob's Cluttered Desk" comes his (often incoherent) thoughts, ramblings, observations and rants - often on workers' comp or employment issues, but occasionally not.
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