It’s really exciting to see that there is coverage of the Fast Food Worker’s strike on CNN. A public outcry for a living-wage-as-minimum-wage is something I kind-of never expected to see. Unfortunately, I’m not terribly hopeful about the response of the employers and lawmakers to this, in part because of the shoddy, slanted reporting that’s going on.
Obviously, no one can live on the current minimum wage. The fact that the restaurant organization is claiming that paying people a livable wage will drive up their costs, forcing them to raise prices, especially on their dollar menu, and hire fewer workers, is not being countered by the truthful statement that if workers make more money, more money will go back into the restaurant owner’s pockets. Currently, workers cannot afford to eat out. Maybe they can afford the dollar menu? I have a hard time believing that a fast food joint wouldn’t benefit from most workers being able to afford a meal deal, that usually costs upwards of $6, rather than ordering something that only brings in a dollar. (I haven’t eaten fast food in a very long time, so I’m guestimating here. I don’t dare eat at those places).
I view the elimination of the dollar menu as a positive sign all around. First of all, the dollar menu’s main target is people who barely have a dollar in their pocket to spend on food, isn’t it? If people aren’t taking advantage of it, perhaps it’s because they don’t have to; they can afford to buy a real meal. Secondly, if everyone is making a living wage, the only people who’ll miss the dollar menu are the real bargain hunters. I believe that if people can afford it, they’re going to choose healthy, organic food. There’s free range fried chicken and burgers, after all, but that’s not something you’re likely to ever see on a dollar menu. Honestly, who wouldn’t choose humane, organic food if they could afford it?
So let’s see. On a living wage, people can afford to take their families out for a healthy meal. Who benefits from this? Obviously, the restauranteur and everyone who works for her; waiters, dishwashers, bussers, bartenders, chefs, prep cooks, hosts, if not with the cash from the increased tips, then at least from job security; all of the restaurant suppliers: produce, meat, dry goods, beverage and spirit, utilities suppliers, landlords (or the bank if the owner can afford to own the building, the likelihood of which is much higher in my scenario), etc. All of those employees and suppliers now have more money to put back into the economy by buying more, likely higher-end, products and services. You get my point.
What I want to know, and I asked this same question over a decade ago, is why isn’t this the main stream rhetoric of economists? Why isn’t this the agenda of business owner everywhere?
The only thing that occurs to me, regarding CEO’s and billionnaires, is that they’re already making so much money, they don’t care if their businesses do better? But that doesn’t really make sense, now, does it. So why are they so greedy; ultimately at their own expense?
It would be a miraculous salve to the economy if minimum wage were to be catapulted to the $15/hour living wage that the workers are asking for, but until my armchair economics are public opinion, I’m not holding my breath on that one.
I’d love any feedback on the economics of this, but keep it intelligent, decipherable and polite. I took the time to articulate my arguments. If you claim to be an economist, make your points something understandable or don’t bother. Attacks will not be tolerated. I still mediate this blog.