Mark Bittman wrote a really interesting column in the New York Times yesterday about labor protests in the fast food industry. Apparently, recently workers have started organizing themselves in earnest to protest the pitiful wages and social benefits paid to them.
According to the U.S. Bureau of Labor Statistics, the average worker in the fast food industry only earns around $18,720 a year. In jobs often paying only the U.S. minimum wage of $7.25, they “have less buying power than their peers did in the mid-50s.” This is evident if you dig deeper into the minimum wage issue like these economists did: “In 1968, the real value of the minimum wage was $10.65, so that, in fact, an increase today to a $10.50 federal minimum would not even bring the minimum wage fully back to the 1968 standard. Moreover, since 1968, average U.S. labor productivity has risen by 135 percent. Thus, if, since 1968, the U.S. minimum wage had only just kept up with inflation and average labor productivity growth, the minimum wage today would be $25.00.” That, of course, is a far cry from the current stance, and might be a contributing reason to why (fast) food is so cheap.
No wonder that McDonald’s main budgeting advice is to get a second job (besides a normal 40 hours work week at the Golden Arches). Or factors in $20 in health care premiums per month in a sample budget, when average premiums hover around $180 a month, 9 times higher.
What would it cost to pay them $10.50 an hour instead? According to the economists championing a minimum wage increase, you could recoup half of the costs just by hiking the price of a Big Mac by 1% from $4.00 to $4.05. As if these 5 cents make a difference to the consumer.
This issue is even more astounding when you consider that McDonald’s CEO makes $8.75 million a year, and profits have grown by 135% from 2007 to 2011. According to Bloomberg.com, the pay gap between the lowest-paid workers and the top tier has doubled at the fast food giant in the last 10 years. “At the same time, the company helped pay for lobbying against minimum-wage increases and sought to quash the kind of unionization efforts that erupted recently on the streets of Chicago and New York.“
A commonly mentioned argument against hiking the minimum wage is that only teenagers who don’t need to fully support themselves work in these kind of industries – but this is far from reality. 90.7% of workers that would benefit from a minimum wage increase are adults, and the median age of today’s fast food workers is 29 – when not only supporting yourself, but a family and kids as well is more and more likely. Further, according to Saru Jayaraman, director of the Food Labor Research Center at the University of California at Berkeley, “the sheer number of adults in the industry has just exploded” because fast-food restaurants “not only survived, but thrived during the economic recession.” But apparently this boom was rather reflected in shareholder dividends – McDonald’s paid out “$6 billion on share repurchases and dividends last year, the equivalent of $14,286 per restaurant worker employed by the company.“
When will we learn that, as Mr. Bittman wrote, no food is produced without labor?