Friday, October 10, 2014

Raising the floor: The minimum wage, fast food restaurants, and the food service industry

Food service, income inequality, and the minimum wage

Restaurants and food services employ nearly half of all American workers who earn the federal minimum wage or less while restaurants employ nearly 10% of all American workers.  The National Restaurant Association found that there will be nearly $683.4 billion in sales in 2014.   It’s not surprising that thanks to these sales restaurant CEOs are very well compensated.  The average top restaurant CEO was paid $10,872,390 in 2013.  This was more than 721 times what a worker earning minimum wage would make in a year.  To put it into more context, within the first half-day of working, a CEO will have earned as much as a minimum wage worker will earn in a whole year (provided that they work full-time). 

The National Restaurant Association has frequently opposed a raise in the minimum wage.  They state that restaurants would “limit hiring, increase prices, cut employee hours or implement a combination of all three to pay for the wage increase.”  Congress last voted to increase the minimum wage in 2007.  In 2006, the top CEO’s made 609 times what a minimum wage worker made.  While denying a raise in the minimum wage to millions of workers, CEO’s were able to line their own pockets with cash. 

In 1965, a CEO made 20 times more than a typical worker in 1965, growing to 29.1 in 1978, 58.7 by 1989 and reached a peak of 383.4 by the end of the 1990s.  Right now, the average CEO makes 295.9 times more than the typical worker.  All these statistics are courtesy of the Economic Policy Institute.   
It’s a good thing that the CEO’s and others at such corporations, like McDonald’s, produced a handy budget to help those who are unfortunate enough to be stuck working a minimum wage job.  Of course, it assumes that you are working two jobs.  One job is at McDonald’s at minimum wage which gives you $1105 per month and the second job is basically a full time job (over 30 hours a week) if you are working at the minimum wage.  Good luck working those two jobs with your McDonald’s schedule that probably is not very consistent.  The annual compensation for the CEO of McDonald’s, Donald Thompson is $9.5 million.   McDonald’s Corporation spent over $2 million lobbying in 2013.  
The budget that McDonald’s posted was taken down after criticism from many organizations.   

Because of the number of teenagers and high school aged teenagers who are working at restaurants and in the food service industry, many people cite that as the fact that these jobs are only supposed to be for them.  Unfortunately, the hours of operation of these restaurants significantly disproves this.  For some reason they are open late at night and during the day when children are at school. 

Obviously, not all restaurants are comparable to large corporations to McDonald’s or other franchises.  There are many mom and pop restaurants and other small businesses that could be hurt by raising the minimum wage. Of course, they should look at other factors including whether or not additional buying power by their consumers can help alleviate some of the damage.  

No comments:

Post a Comment