In case you haven’t heard, Seattle’s fast-food workers went on strike last week to demand a $15 minimum wage and the right to organize their labor without intimidation. At the same time, economics professor Kshama Sawant is running for city council on a platform that includes that same wage increase. Other labor activists around the country have made similar demands.
The demand for a $15 minimum-wage, here in Seattle and across the country, is in the air.
Predictably, there are many who oppose such an idea. A link to a petition for a higher minimum wage on Good Jobs Seattle’s Facebook page displayed hundreds of comments disparaging fast food workers as lazy and entitled. What’s weird, though, is that many of the people who oppose a raised minimum-wage are themselves low-wage workers.
Why the hostility?
It can’t be that minimum-wage workers aren’t voicing a legitimate need. According to the Living Wage Calculator, a single adult in King County needs to earn a baseline of $9.64/hour to subsist. One single adult, with no responsibilities other than staying alive, needs more than the current minimum-wage to do so. For a single parent, the baseline jumps to about $20; an adult with a partner needs about $15. Families with more children have a higher baseline, obviously. So the cost of subsistence in King County is indisputably higher than the pay of a full-time minimum-wage worker. Assuming that we’re a society that wants poor people to be able to have children, it’s quite a bit higher. This is a fair assumption: David Manuel cites US Census figures showing that the average age of fast-food workers is 29.5. (You can see an estimate of national living-wage here; the Seattle PI reports slightly higher numbers for King County living-wage here.)
How about the difficulty of the job? Could it be that minimum-wage jobs are easier than higher-paying jobs, and therefore should be better compensated?
Nope. Fast-food work is outstandingly unpleasant. As a recent Business Insider article puts it:
Fast-food jobs are notorious for low pay, monotony, and poor benefits, to the point where “McJob” came to stand for dead-end employment.
Unpleasant and dangerous. A 2011 report from the Bureau of Labor Statistics notes:
Food and beverage servers face many hazards on the job. Nonfatal injuries and illnesses among these workers tend to result directly from their normal job duties and include sprains, bruises, cuts, lacerations, overexertion, and heat burns.
Let’s be frank: everyone acknowledges that fast-food is among the most-punishing, least-desirable kinds of work available. The idea that fast-food workers are “lazy” is patently false; on the contrary, they are among the hardest-working employees in our economy.
This hard work translates into higher productivity. Fast-food companies are making record-breaking profits, despite the continuing effects of the 2008 financial crisis. Al Jazeera reports that McDonald’s profits increased by 135% between 2007 and 2011 (i.e. more than doubled), while the parent company of Taco Bell and Pizza Hut saw a 45% increase in profits over the same period. (See Forbes reporting on McDonald’s here.) The New York Times reports that Burger King just doubled its quarterly earnings.
These higher profits are a direct result of labor: cash registers, fry stations, and drive-throughs are just so much refuse unless they’re staffed by workers. In short, shareholders receive record profits because fast-food workers endure terrible conditions for next-to no pay. So it’s implausible to claim either that companies can’t afford a wage-increase, or that workers don’t deserve one.
A third reason given against a $15 minimum-wage is that it would create a drag on the economy, driving firms to hire fewer workers. This is actually backwards: A higher minimum-wage would accelerate the economy. As Bloomberg Business Week reported back in 2000:
A small but growing body of academic research suggests that living-wage laws do more good than harm. So far, they have imposed little, if any, cost to the 50 cities that have passed them, the studies find. And they have led to few job losses and have lifted many families out of poverty.
Part of the reason a higher minimum-wage won’t hurt the economy is that restaurants hire as many people as they need to meet demand. As long as restaurants are making significant profits, that number is independent of the minimum-wage: if McDonald’s needs 10 workers to meet demand, they’ll hire 10 workers regardless of their cost as long as that cost is low enough to allow for profit. In short, demand is a stronger determinant of job-creation than the cost of labor is.
Part of the reason that a higher minimum-wage will stimulate the economy is that workers and consumers are the same people: you have to make money to be able to spend it. It’s clear that the more consumers there are (i.e. the greater demand is), the more businesses will be able to expand and hire workers. But not all consumers are equal: poor workers spend a higher proportion of their take-home pay (and at a higher velocity) on necessities like food and rent, whereas higher earners can spend about the same amount of money (i.e. a lower proportion of their pay) and put the rest in savings for a rainy day.
The economy is a kind of ecosystem. Each organism in that ecosystem relies on constant interaction with other organisms to survive: shipping companies need shippers, restaurants need patrons, doctors need sick people, and landlords need tenants. The economic downturn we’re currently inside of has not been caused by a decrease in the total wealth in the economy; rather, the problem is that the wealth has become concentrated in too few hands, so that it cannot freely flow among the economy. In this context, it’s clear that a raise in the minimum-wage amounts to a mechanism for moving wealth back into the dynamic economy. That mechanism is low-wage earners, who can be counted upon to boost demand across the economy.
So a higher minimum-wage meets a justified need, counts as an earned reward, is fiscally plausible for companies, and will stimulate the economy. Why, then, such hostility?
I don’t have a well-supported answer, but I speculate that the answer has more to do with psychology than economics or morality. Economically speaking, America is a profoundly unjust country, with wealth heavily concentrated. In such an environment, very few of us have any serious economic agency: the job I hold is more dependent on the budgetary considerations of investors and (via elected officials) lobbyists than on my own action.
That’s scary. It’s frightening to be in the hands of a careless fate. And it seems to me that one of the most popular ideas in our country–that success is entirely dependent upon personal gumption, rather than factors outside your control–is popular in part because it helps us escape that terrifying scenario. If my fate in my own hands, then maybe I can make tomorrow better; maybe I’ll get that job I’ve been dreaming of, if the power to do so is in my own hands. I speculate that many of the people who so vehemently oppose a higher minimum-wage do so because they are heavily emotionally invested in bootstrap-individualism, and they’re invested in bootstrap-individualism because the reality–that the dynamics of the market are no more under their control than is the weather–is too terrifying to behold.
Not all of them, obviously. But that’s one hypothesis that would go a long way toward explaining why poor people get angry at poorer people and not at the rich who oppress them: “If I got screwed this badly, you should be, too.”