McDonalds and $15 hourly

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jneo's picture
jneo
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McDonalds and $15 hourly

 

So the recent minimum wage battle has started and employees are protesting over wages they get at fast food places.  Employees are demanding $15 hourly, which has been the financial chant of the employees.  I was doing a little reserch at work and realized that places like Aldi and Costco pay there Cashier persons $10-20 hourly.  So my question is, how can a monster company like McDonalds pay so littel but other places pay very well?  Is McDonalds screwing the worker over?

 

Time2help's picture
Time2help
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McDonalds

You should not eat there.  The food is bad for you.

jneo's picture
jneo
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We all see the obvious

 

We all see the obvious unhealthy food at McD's haha, but when we look at the economy and the ruff spot that it's in, it's no wonder people demand more $$$.  I was reading some responses from yahoo news about the topic. 

The majority of the people say things like "Get another job" or "Get a better education"  both true but if you get a better education, that usually means for the majority of people Get into Debt.  Then after that you get to fight with everyone else over that 1 position then if you're lucky to get the job you get to Pay back the loan + interest.  Then you have to worry about loosing your job. 

Thanks to Globalization, it seems to me "No more good jobs from here on out"  It's going to be some that have and have not. 

Again according to Glassdoor, ALDI and COSTCO pay cashiers way better than McDonalds, I think McDonalds is giving the employees that shaft. 

Then again, if we had the Purchasing Power of the Dollar back......oh wait there I go again wishing for the impossible. 

Grover's picture
Grover
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The Hardest Thing is Easy Payments

jneo,

Here is a post on Mish's site that addresses the differences between Costco and Walmart.

http://globaleconomicanalysis.blogspot.com/2013/08/wal-mart-is-not-costco-so-why-should-it.html

The difference between manufacturing and fast food, is the latter must occur locally. But force higher minimum wages and you are guaranteed to see more fast-food robots.

I don't see any way that real wages can go up. Hiking a minimum wage will be temporary at best and will likely hurt the folks who rely on these jobs. I have to agree with Mish's conclusion:

Here's the deal. The problem has gotten worse ever since Nixon closed the gold window. Removal of ties to the gold standard allowed central banks to inflate at will, and governments to spend at will (and both did). The result was shrinkage of the middle class and declining real wages for everyone but those in the top 10%.

There is no magical solution available. Folks will just have to make due. I don't see education as the answer either. A sheepskin on the wall isn't what it used to be. Anyone who wants an education can get it free of cost on the internet (the sheepskin costs lots more.) I'm not suggesting that it is easy. There isn't any spoon feeding, no syllabus, no papers to turn in, and no easy way to prove what you've learned. Then again, is it easy to pay back those college loans?

Grover

Wendy S. Delmater's picture
Wendy S. Delmater
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Entry. Level. Jobs.

Okay, let me leave myself open for some bashing, but I have liberal friends who cannot seem to fathom why I am against a $15/hr minimum wage. How could I be so heartless as to oppose a "living wage?" It's not heartless to hope to avoid people losing their existing jobs.

Here's the conservative view. They're called . . . Entry. Level. Jobs.

These jobs are things you can do while livng with mom and dad, or to supplement your retirement without triggering cuts in your social securlity. They're jobs a start-up entrepreneur can afford to pay for as his or her company grows. They were never meant to be enough to support yourself. I say this as a former impoverished single mother of three: you take away the entry level, minimum wage jobs, and many opportinutues will dissapear. Opportunities to learn how to BE an employee--to learn to show up on time, folow instructions, give a good day's work for a good day's pay--should not be compensated at the same rate as jobs for people who already have a skill. Whether that skill is cashier, hostessing at a restaurant, stocking shelves or loading trucks, it still has a learning curve.

People rotate out of lower-paying jobs once they are more skilled. It's the nature of the beast. I understand that there seem to be only part-time, minimum wage jobs available (if you can get a new job at all), but when you try to make employers pay for unskilled newbies at "skilled" rates, employers may HAVE TO eliminate those jobs. And then no one is able to move up the ladder. Counterintuitvely, paying more creates less jobs.

To a large extent the whole narrative about "just wages" is a sham. It tries to blame the employers instead of the banksters, the economy, cheap oil, global competition (NAFTA) and mechanization/robotics. Be careful what you wish for; you just might get a $15/hr minimum wage.

Oozoid's picture
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Minimum wage

I agree with Wendy that a minimum wage is not a good thing.  A couple of years ago I compared the minimum wage in Britain with the proposed Living Wage and was quite alarmed at what I found. My concerns were ignored by the Living Wage Campaign. (They of course want to keep their jobs like everyone else.) The figures are a couple of years out of date and probably of little or no relevance in the US, but if anyone is interested my calculations and comments are at http://last.me.uk/supertax/ .

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Jobs.Not.Entry.Level

Wendy, you musta not got the memo: these aren't entry-level jobs anymore. People are in them for years, decades. Raising families like you are. What they were "meant" to be? That's irrelevant. Raising minimum wages won't make these now-non-entry-level jobs disappear, neither will it substantially raise prices. It might cut corporate profits or eat into executive pay packages though. Blame the employers, Wendy. Go ahead. It's the correct thing to do. There. Don't you feel better now?

jneo's picture
jneo
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I would like to say on the

I would like to say on the issue of jobs and wages.  If there were NO minimum wage, what do you think these corporations would pay employees?  As far as Entry-level jobs go, those words can be applied to many positions not just fast food.  I have a buddy that works for a circuit board company, his position was labeled Entry-Level and he works on circuit boards for companies like Boeing and BAE systems and does not make 15$ hourly even though he should.  So I guess Entry Level has a broad definition.  

The economic situation is not going to get better anytime soon or if at all, so I'll pose another question.  HOW in the World do you expect people to have a nice standard of living when there are not enough good jobs in the economy, while also dealing with more and more people that need and will be coming into the workforce?  It seems as though, you cannot get a RAISE, you have to DEMAND one. 

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Labor Day special- Making hay at the Haymarket

As it is Labor Day, it seems appropriate to comment.  Labor Day became a national holiday in 1894 when Grover Cleveland signed a symbolic bill rushed through Congress as appeasement for the government sending 12,000 troops to break a strike at the Pullman Company. Which of course they did.

The Panic of 1893 was in full force, with dismal economic conditions that would make our recession of 2008 pale in comparison, it was the beginning of the Gilded Age, and the obscenity on display brought about the Progressive Era. Then, as now, the State was closely coupled with Capital and the two worked hand in hand to control the wage labor economy, but certainly not to the extent of today. This was a time of robber barons, steel, oil, and railroad tycoons and they ran roughshod over labor with the full support and blessing of the US Government. The murderous Haymarket Massacre- rioting aimed at establishment of the 8 hour day, was still fresh on the mind and fueled the fires of vilification against any and all strikers.

These events and others like them marked the ascendancy of labor disruption to that of critical mass for the American embodiment of the capitalist mode of production. Capital was afraid- and so was the State, a worrisome combination that could not stand. It is hard to reconcile the differences in the labor strife from that era to today in the contours of a blog post, but suffice to say the goals and objectives of the day were quite different than the $15/hr minimum wage tizzy of today.

 

Labor had demands alright, but they had no interest in penny Anny negotiations over wage minimums, they had other goals altogether, in the beginning they struggled for workplace concessions such as safe environments, laws against child labor, 8 hour shifts, and protection from violent and abusive factories, but after the turn of the century they went further, much to the chagrin of capital they wanted a share of the profits, specifically, strikers began mobilizing for a reorganization of the revenue model - they wanted all profits to be distributed among the work force.

After the Great Depression, which acted as rocket fuel on the fires of rethinking capitalist accumulation, this conflict reached a crescendo, with organized political groups actively encouraging massive labor strikes throughout the 30’s. The result was the Grand Bargain, a State proffered compromise to provide a social safety net in exchange for a centralization of labor management, specifically, moving striking authority to a hierarchal organization of central authority, removing the highly effective (and disruptive) Wildcat strike from the American lexicon.

Over the decades ahead, the outputs of the Grand Bargain, termed Productivism by some, proved both highly effective to emergent Capital and destructive to organized labor, eventually sealing the death warrant for labor – centralized labor management can be corrupted, distracted, and easily controlled by the State, which it was and still is. Diffuse and localized Wildcat strikes are extremely dangerous and if severe enough, can only be beaten back by State intervention (consider the air traffic controllers strike personally broken by Reagan- widely applauded by the Right) These actions on outliers sends a clear signal to errant factions that no matter the circumstances if labor gets a large enough lever to provide bargaining strength they will be beaten back- one way or another.

This “New Deal” system of Productivism however, was a breakthrough for Capital, who finally had arrived at a system, however tenuous, of mitigating labor demands such that they minimized the disruption to the Capitalist mode of production. This system was promptly exported to post War Europe in the form of the Marshall Plan, and other types of trade actions and initiatives.

 

 

 

 

Labor and civil unrest rose it’s ugly head once more in the ‘60’s mobilized by anti-war protests and race relation issues, with a President (Nixon) fearful of his own populace, yet another Grand Bargain was struck, that of affordable housing, the seeds which were sown for State subsidy of home ownership in the form of accessible loans for low income and minority families, under the operating theory that having some skin in the game would lessen the propensity for riots, strikes, and mass protests. They were right, but these concessions were the genesis of the 1980’s S &L scandal, and ultimately the real state bubble collapse of 2007-2008. The alternatives were even worse, State funded housing projects, such as Nickerson Gardens, Jordan Downs and Cabrini Green provide demonstrable (and failed) examples of public housing. Naturally, a proposal that fed massive dollars towards loan guarantees enriching the financial capitalists was highly “preferable” to State funded housing projects, and there was not much debate on this one.

Today, the furtive protests of the fast food workers are a mere publicity stunt, “strikes” lasting just hours around lunch time, picket marches, anything to get the attention of the cameras. The 1963 MLK March on Washingtion demanded a wage minimum of $2/hr, scaled for inflation this would be close to $15/hr today, for what it is worth.

The real issue here is not the minimum wage, most workers would be more than happy to knuckle down to a low entry wage- if it meant that they could parlay this into a living wage and begin the American dream of ascendancy though hard work- which for the vast majority they cannot. The reason- loss of social mobility. There is no migration path in a fast food career, no exposure to technology, no meaningful training, no advancing of skill sets, this utility- typically provided by manufacturing is gone, offshored to foreign countries and with it the opportunity to be exposed to learning opportunities that can advance their wage earning potential.

By way of analogy, we have instead a group of disingenuous building owners, who set fire to their property after sabotaging the fire hydrants, then complain the firemen that show up are lazy and incompetent when they cannot complete their task.

A question was asked as to what the wage would be if there was no specified minimum. The answer- it would be as low as it could possibly be and still allow worker sustenance. This implies that not only does capital work to drive wages down therefore improving profitability, it also seeks to drive down sustenance costs for those workers, costs of rent, costs of sustaining foods etc.

The cheaper they can live, the lower the wage can be. This of course sets the stage for a widening income inequality, and a permanent underclass of exponentially expanding proportions.

restless94110's picture
restless94110
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Low-wage workers are older than you think

Really. All other points in this thread are irrelevant. This is the new American job market: service jobs at minimum wage. There's nothing else. So the minimum wage has to be raised drastically. And it will. Either by law or by union or by riot. You choose. All this talk is so very nice, but it's meaningless to someone whose got to raise a family or survive out there in America.

http://www.epi.org/publication/wage-workers-older-88-percent-workers-ben...

Grover's picture
Grover
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No Free Lunch
restless94110 wrote:

Really. All other points in this thread are irrelevant. This is the new American job market: service jobs at minimum wage. There's nothing else. So the minimum wage has to be raised drastically. And it will. Either by law or by union or by riot. You choose. All this talk is so very nice, but it's meaningless to someone whose got to raise a family or survive out there in America.

I'm sorry, but if you get your way to raise the minimum wage drastically, the incentive to reduce employment will only accelerate. These will be the good old days. A civil statute can't overcome economic "law." A union only has power when skilled workers are in short supply. Rioting will be met with police and National Guard troops.

Supply, demand, and price are intimately woven. Too much supply and not enough demand means that the price has to drop to clear the market. If you want price (wages) to go higher, either increase demand or cut supply. How do you increase demand when computing/robotics are improving exponentially, becoming more reliable, and costing less each year? Your best results will be from cutting supply. One way is to get into a specialized niche requiring a specific skill set that is in limited supply.

Or you can become an entrepreneur. If you think it is so easy, just create a business, get the funding, negotiate the bureaucratic quagmire, hire some folks, and pay them a living wage. Since you're the boss, you can choose which 18 hours of the day you want to work. If times are bad, you won't get a salary. If your business becomes slightly profitable, expect the living wage workers to demand more compensation.

Grover

 

jmcsd's picture
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Beyond Entry. Level. Jobs.

Interesting point about your liberal friends.  They always look at thing from a feeling perspective. Annoyingly, it is generally how can they use "your" money (aka: OPM) to do something that makes them feel good and righteous.  This activity bears little reasonable reflection on human nature and behavior, nor does it consider unintended consequences.

Beyond E.L.J. the basic concept is: Economic Worth or Economic Value.  This is where the discussion of "living wage" and "minimum wage" go awry.  They have no understaning of the concept.  As a business owner, if you are coerced into paying someone $15/hr (or $9, or $8...) who is in turn generating only $6-7/hour in economic value, then this is structured welfare or forced non-government transfer payments. Arguably, it is more efficient as it reduces the need for additional massive bureaucracy.  The business incentive is to eliminate as many of these transfer payment positions as possible.

Need fast food or other service in a $15/hr world? We'll have an app for that! (See: Starbucks, Redbox, PayPal, etc.) There will still be E.L.Js, just a fraction of what we have now.

John

yana_3's picture
yana_3
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I'm lovin it.

I'm lovin it.

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