Diary

About That $15/Hour Hamburger Flipper

This is not about the minimum wage which differs significantly from the concept of a “living wage.”  Living wages are considerably higher than minimum wages.  This is nothing more than socialist b.s. and their desire for an annual minimum income to wipe out poverty.

First, we have no set definition of a living wage.  The cost of living varies widely based on one’s geographic location.  For example, for a family of four the estimated living wage figure in New York would have to be $21.23/hour while Alabama comes in considerably lower at $18.04.  These figures are based on a single earner in the household, but we know that is not the reality in most households that are supposed to see the benefits of living wage efforts.  So already we see that in terms of “living wages” and the real world, most household income likely reaches these figures already.

Furthermore, there can be huge differences in these figures within a state.  In New York City, the estimated living wage is $22.32/hour for a family of four assuming a single earner.   Yet in Steuben County in upstate New York near Ithaca the estimated living wage is $17.75/hour.

But let’s just assume there is a single income earner in the household of a family of four.  No matter what state we are talking about or whichever county in that state, there are commonalities among the jobs whose average hourly rate falls below the estimated living wage for that area.  They are: Sales (cashiers, salespeople, telemarketing), food preparation (including fast food workers), building/maintenance (janitors, maids, landscapers), personal care attendants (ushers, ticket takers, childcare), and farming (laborers, fishers).  As one can plainly tell, these are all jobs that used to be called “entry level” jobs (the key word being “entry”).  Today, we call them low-skill jobs.  No one aspires to be a cashier at Macy’s.  No one aspires to be a janitor, or usher at a theater, or a landscaper helper.

The fact is that these categories of jobs were never designed to be careers.  But they are a great way to gauge the relative worth of someone entering the labor market.  Furthermore, many of these jobs are not full time jobs and all the estimated living wages are based on a 40-hour work week (or 2080 paid hours per year).  Hence, even if there was some national living wage law set at a number like $15 per hour (which seems to be a number pulled from the collective butts of the Left), a living wage would not be achieved since most of the affected workers would not be working 2,080 hours per year.  In fact, in response to local laws that demand a “living wage,” we see this very trend in the businesses affected- decreased hours and movement towards a more part-time workforce.  One wonders whether the last time anyone on the Left ordered a Big Mac, they tipped the poor cashier at the register.  My guess is they did not even think of doing so.

Also, many of these jobs are subject to automation.  We see it when we purchase tickets at a movie theater and elsewhere.  Agriculture also lends itself to automation.  It should also be considered that many of these fast food workers- the flash point job category for this movement- also receive substantial government benefits in the form of subsidized housing, food stamps and the like.  Hence, the majority of these people have a roof over their heads and food in their bellies.

To understand how it currently works, the system in New York City is one example.  Any entity that receives any subsidy is required to pay the predetermined living wage.  The sums are substantial as over than $300 million in such subsidies are “awarded” every year. In Los Angeles, larger hotels are required to pay their workers at least $10 per hour and provide benefits ($11.50 without benefits), although this system is currently being litigated.  The infamous SeaTac $15/hour mandate is also illustrative.  Those who park their cars at a public lot are now subject to state and local sales taxes, but also a “living wage surcharge.”  Likewise, given the higher labor costs, it is facetious to believe that any business will not pass those costs onto customers in the form of higher consumer prices.  In the sales area, especially telemarketing (and call centers) we have seen the response of business- offshoring those services where Janet has that suspicious Bengali accent.

No one denies that fast food workers, janitors, maids, and theater ushers work hard under sometimes difficult situations and dealing with equally difficult people at times.  But looked at objectively, one has to ask whether the service they provide or the work they do justifies a wage of $15/hour.

And the Los Angeles system and those elsewhere reveal the true motivation behind these laws.  It is no wonder organized labor is supportive of these laws since there are often carve outs for unions.  For example, the aforementioned hotel workers in Los Angeles are subjected to the law UNLESS a union negotiates otherwise through collective bargaining.  So suppose you are a hotel operator that falls under this law and employ a non-unionized workforce.  You are now required to pay an employee $10 per hour and provide them benefits. Along comes the SEIU who unionizes your workers and negotiate that you can pay them $9.50 an hour without benefits.  Its actually a good deal for you- the employer- and its certainly a good deal for the union because they just swelled the ranks of their dues paying membership.  Unfortunately the only one who does not benefit is the actual worker- the very person these laws are supposed to help.  This illustrates the hypocrisy behind these schemes.

While the workers have the right to demonstrate and walk off the job, they would be well-advised that they are easily replaced by others entering the labor force or people looking for part time employment.  And if not replaced by someone willing to work for $9 an hour, then automation is always an option.  In reality, these feel-good living wage programs and ideas do not help their limited intended population, but serve to line the coffers of unions and actually lead to decreased job growth.