In his State of the Union speech Tuesday evening, President Obama once again lobbied for an increase in the federal minimum wage standard. Throughout the nation fast food employees marched against their employers in 2014, demanding a $15 per hour wage. They were joined by Wal-Mart employees and others as they rallied for pay which would allow them to live without public assistance.
A study has been completed by the University of Massachusetts-Amherst. The objective of researchers was determine if raising wages from the federal minimum of $7.25 an hour to $15 per hour would force the fast food industry to lay off employees to reduce costs. The answer was a resounding ‘no.’
They suggest a first year increase to $10.50 an hour, increasing that number to $15 per hour three years later. To compensate for the increase in payroll, the industry would likely raise prices, but by no more than three percent. In addition the rate of turnover would very likely drop from its extremely high percentage of 120 percent. Each employee the industry loses costs the company approximately $4,700. Other extenuating circumstances would help to entirely offset the wage increase.
Franchise organizations claim that the demand for $15 an hour is ‘irresponsible.’ They say that they would be forced to raise prices by a much larger percentage and would therefore lose business. They would also reduce employee numbers; doubtful.
Thanks to the outsourcing of tens of thousands of well-paying American jobs, the fast food industry has been blessed with a pool of highly over-qualified potential employees. It is not unusual that the person who makes or serves your hamburger and French fries is a college graduate. Fast food employees are no longer high school kids with an after-school job, or college students who need spending money. In many of our nation’s cities their employees are fathers and mothers attempting to feed their families. A large number of fast food employees are single mothers. An increasing number of them are forced to work more than one job. Scheduling for most workers offers less than 30 hours a week, thus eliminating the requirement to provide health insurance.
The claim by our legislators that the ‘job creators’ would reduce both the number of employees and the hours they work is entirely false. The industry made over $232 billion last year; they’re not going to risk lowering that figure.
I, for one, would like to know who these ‘job creators’ are. The only new jobs I see come from small and medium businesses. The larger corporations have not raised their employee numbers in decades.
Congress was wrong about the Affordable Care Act. Employers did not lay off huge numbers of employees as predicted. They are wrong about the minimum wage as well.
The President challenged the members of Congress to try and live on an hourly wage which was at or just above the minimum wage. I doubt any of them would last a single day. With their wages and the ‘perks’ they receive, members of Congress and the Senate spend more in less than a week than minimum wage employees make in an entire month.
Members of Congress have a minimum wage; $174,000 per year, or approximately $158,000 more than the average minimum wage earner. The real difference is that fast food employees actually work hard for the money they receive. In other words, they earn it.
By James Turnage