What would it cost customers if fast food workers got $15 an hour?

@LostInParadise The employer would have to figure in some other costs. Workers comp. unemployment insurance, FICA and Medicare, and any other benefits would be incurred by the company. And they’re based on the wage base.

It would cost way more than you think.

There are a zillion other minimum-wage or low-wage workers at hundreds of thousands of other companies. They would, justifiably, take the position that their work is just as valuable (if not more) than fast food workers. Think about gas station attendants, shelvers in libraries, cash register people at the mall, and so on. Lots of people at minimum wage.

So over a short period of time, they would all want their pay to be $15/hour. And that would mean the people CURRENTLY making $15/hour would want to make more…. and so on and so forth. Basically everyone gets more money in this scenario except for you and me, who end up paying for EVERYBODY’s raise.

Sure you can make a case that one small group deserves more money, but that doesn’t happen in a vacuum. It begins the snowball effect.

What about the people that work in nice restaurants? Will they get the raise, too?

@Adirondackwannabe , Don’t workers already get some of the items that you mention if they work full time?

@elbanditoroso , It might snowball, but not necessarily. So far, the strikes by fast food workers have not had any effect.

@chyna , Interesting question. Wages of others may not necessarily rise. There could possibly be a flattening on the bottom end.

@LostInParadise They get them, but they cost more with higher wages. Unemployment can be almost 10 percent of wages, FICA and Med cost the employer 7.65 percent of wages, and comp is based on the industry and the wage base.

I don’t know but here they pay $16.00 an hour at least. A medium bacon deluxe meal cost about $8.80. (burger king)

@LostInParadise – they haven’t had any effect because they have been so sporadic and inconsistent. If the ‘strikers” were to get organized and cohesive enough to be noticed – which they were definitely NOT last week – then it might have some effect.

That’s the issue with a lot of these grass root movements – they are initially populated by people who have an idea and lots of good will, but they flame out, if they flame at all, for lack of support and visibility. Take Occupy Wall Street for example – great idea, reasonable points, generally agreeable policies, but they petered out rather fast – they didn’t become self-sustaining.

So if this fast food strike is going to do anything it all, it has to have almost total participation, and it has to be nationwide, and it has to make the news. And people (customers) have to support it by not going to buy fast food. And that’s a VERY hard hill to climb.

@elbanditoroso stole my response before I spotted the question. “Way more than you think.”

Here’s the thing. Whenever people talk about raising minimum wage (because that’s what we’re pretty much talking about) the Dotty-downers claim it’s a futile act because of the snowball effect mentioned above. In this view there is essentially not enough money in an economy to pay people a fair wage. From where most of us stand this seems reasonable. Most of us probably work hard for the money we have and still (at least some of the time) have to face financial challenges. The prospect of giving more of our money to help those in a tighter position is understandably hard as charity is a luxury of those with enough that they can give it away.

This is a distorted picture. We’re pessimistic because we are in effect imagining only a small part of the pie, the rest of the pie is out of circulation tied up with a small, but grotesquely wealthy contingent. Is it really so surprising that the lower working class is so brutally strapped when such a thin percent of the income is spread amongst them while such a large percentage is monopolized by so few?

So, maybe the question shouldn’t be ‘Why are some people paid so little?’, but ‘Why do some people have so much?’. Seriously, we’re a country of robberbarons people. See it in all it’s pie graphical glory.

@chyna Those who work for tips have a different set of rules. Then again, a good waitperson at many places can pull more in tips in a night than a McDonald’s worker will get paid for a full week.

@elbanditoroso How much would we save with fewer people on welfare, food stamps, and other public assistance? While you are correct on many counts, you fail to mention that.

Of course, the real solution isn’t a higher minimum wage, but to reduce the costs of housing (by far the largest expense most people have) and healthcare (#1 cause of bankruptcy). I earn well above minimum wage and pay below-average rent for my area, yet rent alone is >70% of my income. Millions have it worse.

If housing costs were to where two minimum wage workers could go halfs on a place then I would wager that there would be less demand for a higher minimum wage. And if healthcare weren’t many times more expensive than it is EVERYWHERE else on Earth, there would also be less call for a minimum wage hike. But when you refuse to adhere to the UDHR and thus deprive people of things that nearly every other nation on Earth considers basic human rights, it will cost.

@jerv not trying to hijack thread but isn’t Obamacare taking care of that healthcare thing?

@elbanditoroso Not really. You are already paying to make up the difference between a living wage and minimum wage if you are an ordinary working stiff. We the taxpayers pay for health care and food assistance for the working poor. We often fund housing assistance for them. We do all this so some of the wealthiest families in the world, like the Waltons who inherited Wal-Mart founder Sam Walton’s wealth, can have way more money. Gosh, that one family only has $90 billion, or more wealth than the bottom 40% of Americans combined.

The wealthiest 400 people in the USA today now have more financial wealth than half of all Americans combined. And we middle class working stiffs pay taxes to give the minimum wage workers enough to live on so that people who are fabulously wealthy and who pay no income taxes, but only capital gains tax at a far lower rate, can have even more. Obviously, we all need to pony up, so they can have a whole lot more.

The conservatives keep saying there are no free rides while being duped into providing them.

I would never say that “there’s not enough money in the economy to pay a fair wage”, @fundevogel, but I would say that “the economy is structured and balanced around the wages that are paid now”, and large increases (or decreases, for that matter) across a whole class of employees will upset that.

“Upset” is maybe not always a bad place to be, but for business it’s a very untenable place. Until business owners can predict with a pretty fair degree of confidence what their costs are going to be (and their sales, of course), they can’t expand, can’t hire more workers, and in many cases can’t even afford to replenish inventories to current “normal” levels to maintain sales as they are. Business owners who can see a near doubling of their labor costs are certainly in that position! (This also goes a long way to explain the current stagnation in hiring in what is still believed to be “a recovery”, because business owners are seeing huge increases in labor costs due to the costs to be imposed by the Affordable Care Act – Obamacare – which is also causing many business owners and managers to game their payrolls to match the “full time employee” ceilings that dictate many of the various elements to become effective on the business. Hence, lots of cuts in hours, refusal to hire more workers or more full-time workers, withholding of benefits offers, etc. – the opposite effect of what the law intended to make happen, in other words. It’s bad enough when “simple people” don’t understand about “unintended consequences” of mandating costs in a huge economy, but the politicians who passed this thing – and who routinely pass “minimum wage legislation” – should know better by now.)

If the upset comes from large gains in productivity, then it’s a different story. All of a sudden wages as a percent of cost of goods sold decrease, which means that the business can probably afford higher wages, and more hiring, and general expansion. Profits will also rise, of course – which is the purpose of business in the first place, after all – and everybody really does win: owners / investors, suppliers, employees, customers and even those who live off the dole, because the business and the owners and employees will be paying more income tax.

@trailsillustrated It’s a step in the right direction, but not a magic wand.

@CWOTUS The costs of healthcare just get transferred elsewhere as well. Would you prefer that insurance costs just continue to spiral up because the uninsured go to the emergency room and can’t pay, so the rest of us do?

@CWOTUS How will businesses prosper when practically nobody can afford the good/services they provide? It seems like an unsustainable business model, and anything that unsustainable should be killed before it causes too much more harm.

If you’ve been looking at the increases in productivity per worker, you would see that it’s risen quite dramatically over the years while incomes have remained effectively stagnant for decades. Therefore, your last paragraph is, at best, idealistic. Who wins? Owners, investors, possibly suppliers… list ends there! To claim otherwise is to largely refute history, current events, and reality.

Now, if more companies broke away from the Walmart business model then you would be correct. But it seems that they embrace it like it’s the best thing ever in the history of everything and feel that the best way out of our current economic situation is to give the causes of it steroids and PCP.

BTW, about the high costs of Obamacare, instead of paying for healthcare, they will be raising taxes for all, themselves included, to pay for the housing and healthcare of the unemployed. Great forethought there. And how nice of them to make you and I pay. Talk about not seeing unintended consequences…..

Some very good answers, but I again come back to what the cost to the public would be. For example, considering the cost of a grocery order or cost to fill a tank with gas, the extra pay to a grocery store bagger or filling station attendant would be a very small percentage of total cost. This is without even considering the hidden costs of things like food stamps that could be eliminated. We could double the wages of those on the bottom rung so that they could make a decent living at a very small cost to the general public.

there’s the JCPenny effect to consider as well. JC Penny recently decided things like “no $4.99, it’s $5”, and no weird sales which are actually just th real prices with a sale sticker placed next to it. Their thinking: we respect the intelligence of our customers.
The result: it tanked. It was horrible for their bottom line. Turns out customers do not want respect. They want SALES!
Even if none of the other fast food employees would ask for a wage increase, I think customers would think: $1.00 burger vs $1.50 burger, they would go with the $1 burger so often your business would be left high and dry.

@drhat77 That’s why I come across as derisive; I don’t respect the intelligence of the average person precisely because of things like that.

If the system cannot provide a living wage to those who participate perhaps it is time to look to a new system or at least some major modification of the old system.

For decades now we have been seeing the erosion of the practical income from the lower and middle class. We see more businesses doing away with full time employees and hiring “contract” employees or at a minimum reducing the hours to be able to classify them as part timers in order to sidestep responsibilities. They blame government interference but this is not the whole story. The system is breaking down and as a society we are unable to face it.

Programs such as Social Security, Medicare, Medicade, and the like came about in an attempt to alleviate difficult social issues. Unions were becoming more powerful and employees were demanding a larger piece of the pie in order to improve the lot of the working man. At the time these programs were initiated businesses saw them as a way to “pass the buck” and have the government made responsible instead of taking care of the welfare of their own employees as the Unions were insisting happen.

Over time though the government has increased the businesses share of the burden for funding these programs while at the same time the power of the peoples unions has been reduced, and in many cases eliminated, by the constant propaganda from the business community about how the Union is responsible for whatever they do that the employees do not like. Sure there has been corruption within the union power structure from time to time and this has been exploited by business for their own benefit. But the main driving force has been the desire to, by whatever means, eliminate the power that workers have when acting en masse. And the destruction of the Union has accomplished that very thing. Now they are trying to eliminate the power of the government to enforce regulations.

The ultimate goal is the return to the time of the robber barons when business was supreme and their methods and power went unchallenged.

@rojo I find much irony that the party calling for smaller government is causing government to grow, that those who call for lower taxes are greatly increasing the need for taxation, and that those crying the loudest for fiscal responsibility support an irresponsibly unsustainable fiscal policy. Don’t get me wrong, Democrats aren’t great, but they’re far better than the alternative.

@rojo, One of the arguments used by those who support the fast food workers is that we should be paying careful attention, because one day we may end up in their place. The middle class is being squeezed and the fastest growing job sector is the service industry with its low paying jobs.

@LostInParadise yet further evidence that it is a systemic problem and not a series of isolated “incidents”.

@rojo But so long as powerful people benefit from the current system, change is unlikely at best… unless things get violent, which is something most sane people don’t want under any circumstances.

Change will come again once the workforce realizes that they have allowed themselves to be duped and that, for all their faults, unions can be a force for good. But, as long as they are so easily terrorized by terms like socialism, collective and, my personal favorite, right to work, we will continue to go down this road.

People hovering about the poverty line are unlikely to change unless they are facing starvation very soon (french revolution). When you live hand to mouth it is very hard to strategize beyond your next paycheck.

I just found out that someone did exactly what I suggested I heard the story on the radio. It is a startup that has only been in business for a few months. I will be checking the Web to see how successful they will be.

I saw an article in one of the papers I read at night. It compared prices in the US and Australia for McDonald burgers and wages. The minimum wage they quoted in Australia is $16.00 and change in US dollars, the burgers are $.12 cheaper on average. I haven’t verified any of that, so I can’t vouch for the accuracy, but if it’s in print it must be true.~ Plus I’m guessing beef prices are lower there. Aussie jellies, any thoughts?

A&W pays $10.91 and hour for fry cooks in Canada. With that wage I couldn’t even buy a pineapple under the sea. Without collecting social security, but If I stay I can get $13 for supervisor and more if I pay my dues and become assistant manager, and maybe one day manager.