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McDonald's, Nixon and the minimum wage

Back in the days when I worked part-time or summer jobs such as hot dog vendor, library clerk and shoe salesman, I remember being outraged upon learning that McDonald's Corp. had showered President Richard Nixon with campaign donations to persuade him not to raise the minimum wage. As Bloomberg News reports in this excellent piece on two McDonald's employees - Tyree Johnson, who works in two Chicago location, and Jim Skinner, who served as chief executive officer - not much has changed. Leslie Patton reported:

Fast-food restaurants have added positions more than twice as fast as the U.S. average during the recovery that began in June 2009. The jobs created by companies including Burger King Worldwide Inc. and Yum (YUM)! Brands Inc., which owns the Pizza Hut, Taco Bell and KFC brands, are among the lowest-paid in the U.S. -- except in the C suite.The pay gap separating fast-food workers from their chief executive officers is growing at each of those companies. The disparity has doubled at McDonalds Corp. in the last 10 years, according to data compiled by Bloomberg. 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.

The story provides a portrait of Tyree Johnson, who earns $8.25 an hour, the minimum wage in Illinois. He has worked for McDonald's for 20 years. "Johnson would need about a million hours of work -- or more than a century on the clock -- to earn the $8.75 million that McDonalds, based in the Chicago suburb of Oak Brook, paid then-CEO Jim Skinner last year," Bloomberg News reported.The story, which ran Dec. 12 (and which I later learned about when the writer received an award from the Sidney Hillman Foundation), demonstrates that the minimum wage deserves to be a much larger issue than it has been on the political landscape. Basic fairness calls for it.The minimum wage I received as a 17-year-old serving hot dogs at a beach in the Rockaways during the Nixon administration was worth 15 percent more, adjusted for inflation, than the $8.25 an hour Illinois minimum wage that Chicagoan Tyree Johnson receives for flipping burgers - and 30 percent more than the current federal minimum wage of $7.25 an hour.

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I wonder if this should revive the debate between having a minium wage and a living wage? I guess that's kind of a dead issue.

NYT had a story about low wage employees in high end hotels who were no longer getting tips by business travelers and foreign visitors. The worker retaliation will be/was just the same as a short Hemingway advice line in For Whom the Bell Tolls. "never be captured because they do things to you'. Beware Fast food frachises.

On the whole, a very good article.I couldn't agree more that these are workers who should unionize. What can the church do to assist?The game of resetting employees' wages to minimum wage when a franchise changes hands is not one I had heard of before. It's pretty outrageous. This is a clear-cut example of where a union could add value by putting a stop to this practice.The so-called wage gap is potent rhetoric, but it's somewhat problematic to the story. The author does a fair job in trying to untangle some of the complexity. But ultimately, the CEO's and Johnson's places in the labor market are very difficult to compare directly to one another. I believe they are fundamentally in different labor markets, i.e. they are living on different supply and demand curves, and are working for different employers besides. (The author abets this confusion by implying that Johnson is a McDonald's employee, although he does clarify later in the story that Johnson works for a franchisee). Cutting the CEO's pay in half most likely would have no effect whatever on what Johnson earns.The vignette in the story of the woman who has downgraded her career to work at the Protein Bar tells an important part of the story. People are coming into the labor market for McDonald's jobs who, ten or fifteen years ago, would have been in jobs with significantly better wages. Naturally, this works to the benefit of franchisees, as higher demand for jobs keeps wages low.

Huge numbers -- depends on who is counting -- of Wal Mart and fast-food employees are eligible for food stamps. This applies even to those who are in what their employer considers full-time work, which usually isn't enough hours to force the employer into overtime or fringe-benefit situations. This condition of work-plus- food stamps is widely attributed to the feckless lack of education of the fast-food workforce. However there is another way to see this picture.One could see it as a corporate compensation system that consists of the food-stamp-eligible wage plus the government subsidy provided by food stamps. If one sees it that way, of course, McDonald's and Wal Mart and their like turn out to be the most happily dependent among the "takers" Mitt Romney said would never vote for him. And their employees turn out to be share croppers.Their CEOs are certainly worth every cent of their bloated salaries for their ability to keep their government subsidies while laying the blame on their employees for excessive government welfare spending. Not just anyone can do that and keep a straight face.

Tom, that's some good analysis re: food stamp subsidies. It certainly hearkens back to the question that Paul raised in the original post re: what is the purpose of a minimum wage, and where should it be pegged? What if it were pegged at a level such that a person who works 30 hours/week at that wage level receives sufficient wages that food stamps aren't necessary?

In "Undercover Boss" the CEO of Modells was shocked to see how some of his sales employees were homeless and how low paid his warehouse personnell were. These people have no rights. Compare them to the comfortable chanceries who have the gaul to complain about their freedom.

One would hope that employers do not factor in food stamp eligibility as an employee "benefit" for which they have no financial responsibility, but Tom Blackburn is correct that there are many minimum wage earners who are eligible for the USDA's food stamp program. The current eligibility requirements and benefits are set forth on the agency's website:http://www.fns.usda.gov/snap/applicant_recipients/eligibility.htm#income... food stamp benefits are a lifeline that many families cannot do without, there is, unfortunately, significant fraud in the benefits distribution system. For some time there have been no paper coupons or stamps for a beneficiary to redeem; instead, an eligible food stamp recipient is issued a debit card that is electronically primed each month with the recipients benefits amount. The card can be used to purchase eligible food items. Some unscrupulous recipients and storeowners engage in a practice known as trafficking, however, whereby the storeowner pays the recipient cash (e.g., $75) for the amount on the card (e.g., $100) that is swiped for a phony purchase. The storeowner ends up with $100 electronically deposited to a bank account, and the recipient gets a discounted amount that can be spent for whatever purpose, including the purchase of USDA-ineligible items such as alcohol and tobacco products. The USDA has implemented fraud-fighting techniques that have had substantial success, but fraudsters continue to develop strategies for beating the system. Obviously, their efforts are detrimental to honest benefits recipients on many levels.

Minimum wage laws treat all employees the same. By that I mean, a 30 year old with work experience and a family to support is treated the same as a 16 year old who is working for spending money. Those employees don't have the same 'living wage' needs nor the same 'minimum wage' productivity. A single minimum wage standard does not recognize those differences.

It's a minimum, Bruce. Nothing prevents an employer from paying more for experience or greater productivity.

It is startling that McDonalds got away with this for so many years. Usually people will avoid companies or actors who appear unjust. Then again Walmart seems to do alright with such a reprehensible practice as did Modells before the owner intervened.

It's also instructive to look at minimum wage as a function of per-capita GDP. From 1938-1978, 2000 hours (50 wks x 40 hours) at minimum wage earned an average of 62% of per-capita GDP. That number now stands at 31%. This didn't happen by accident--we went through two ten-year stretches (1981-1989, 1997-2006) when the minimum wage was unchanged.Simple arithmetic suggests that the minimum wage should be doubled.This would have several salutary effects. Poverty would decrease. Expenditures on food stamps, medicaid, etc., would be reduced, and income tax revenue would increase--thus, we reduce the federal budget deficit. The working poor would feel less pressure to work ridiculous hours just to put food on the table.Yes, it might cut the profits of employers that depend on cheap labor. But why should the taxpayer subsidize Wal-Mart and McDonalds through food stamps and the Earned Income Credit? Why shouldn't they pay a decent wage in the first place?

"Its also instructive to look at minimum wage as a function of per-capita GDP."Why is that instructive?

"Yes, it might cut the profits of employers that depend on cheap labor. But why should the taxpayer subsidize Wal-Mart and McDonalds through food stamps and the Earned Income Credit? Why shouldnt they pay a decent wage in the first place?"Spot on analysis, Greg. But then who would go to the annual Alfred E Smith Dinner?

I very briefly worked at McDonalds as a teenager and seem to recall I made less-than-minimum wage as a restaurant worker (like waitresses). Maybe I misremember that. I also worked one Summer for a Poconos resort as an "emergency chamber maid" I filled in when a maid was out (but didn't get any tips; the tips went to the "regular" maids). I received much, much less than minimum wage on the grounds I was being given room and board. The food was okay, but the room was Grapes of Wrath. We were all in shared cubicle bedrooms in plywood barracks. We were allowed to swim in the resort lake during certain hours, but weren't allowed to sit on the deck chairs.I kind of lost interest in hospitality after those experiences.

Here's this from the plus ca change file: "Let the working man and the employer make free agreements, and in particular let them agree freely as to the wages; nevertheless, there underlies a dictate of natural justice more imperious and ancient than any bargain between man and man, namely, that wages ought not to be insufficient to support a frugal and well-behaved wage-earner. If through necessity or fear of a worse evil the workman accept harder conditions because an employer or contractor will afford him no better, he is made the victim of force and injustice.... If a workman's wages be sufficient to enable him comfortably to support himself, his wife, and his children, he will find it easy, if he be a sensible man, to practice thrift, and he will not fail, by cutting down expenses, to put by some little savings and thus secure a modest source of income. Nature itself would urge him to this. We have seen that this great labor question cannot be solved save by assuming as a principle that private ownership must be held sacred and inviolable. The law, therefore, should favor ownership, and its policy should be to induce as many as possible of the people to become owners. Many excellent results will follow from this; and, first of all, property will certainly become more equitably divided. For, the result of civil change and revolution has been to divide cities into two classes separated by a wide chasm." Rerum Novarum, Leo XIII, 1891, starting at No. 45.NB: the right to private property, while "inviolable," is connected not to the right of employers to pay less than a living wage, but to the ability of workers to advance to the propertied class. Or if this isn't strong enough language, here's the same document, in No. 20:"wealthy owners and all masters of labor should be mindful of this - that to exercise pressure upon the indigent and the destitute for the sake of gain, and to gather one's profit out of the need of another, is condemned by all laws, human and divine. To defraud any one of wages that are his due is a great crime which cries to the avenging anger of Heaven. 'Behold, the hire of the laborers... which by fraud has been kept back by you, crieth; and the cry of them hath entered into the ears of the Lord of Sabaoth.'"

I've been told that to defraud a worker of his wages is a reserved sin, that is, one so terrible that only the bishop can grant absolution for it. I usually think of the Church as progressing from imperfect to better moral principles. However, in the matter of the rights of workers we seem to be going backwards -- the Holy Spirit is not being listened to.

Ann - you may be right, although in this case I don't think it is the church that is regressing, so much as society.

"The minimum wage I received as a 17-year-old serving hot dogs at a beach in the Rockaways during the Nixon administration was worth 15 percent more, adjusted for inflation, than the $8.25 an hour Illinois minimum wage that Chicagoan Tyree Johnson receives for flipping burgers and 30 percent more than the current federal minimum wage of $7.25 an hour."Let me pose this question to the group, as I'm not completely sure how to think about this.Paul's point from the original post, which I've pasted here, as it pertains to the minimum wage's not keeping up with a reasonable pricing index, is valid and extremely important.What I want to think about is the fact that he made minimum wage as a 17 year old.What constitutes a "living wage" for a 17 year old may not be the same as a living wage for the subject of the Bloomberg piece. I assume that guy is in his 30s or 40s. A 17 year old needs some money for whatever expenses come up for kids of that age who live with parents:keep a car running, and some savings for college, and reasonable leisure/entertainment. (I am purposely ignoring, perhaps unfairly, family situations in which a 17 year old's wages are needed to keep his parents' household afloat). 17 year olds should not need medical plans, as the parents' plans and/or Obamacare and/or Medicaid should be providing these.I trust it's obvious that a 40 year old's living wage requirement are very different: he needs to be able to pay for a place to live, and medical care, and food, and clothing, and education-related expenses for his family, and so on and so on.Here is the point: while I have no evidence for this, I have to assume that McDonald's made the strategic decision, decades ago, that its workforce would consist of 17 year olds like Paul was back then. Actual careers at McDonalds restaurants would be management-track careers (a lot of which also are low-paid, btw; I know that homeless shelters in our area have had McDonald's assistant managers among its occasional clientele). McDonald's wouldn't be, and never would be, a place that pays a living wage to adults who work on the line. It positioned itself in the labor market (I'm guessing) as addressing the labor niche for the high school kid saving for college, or the juco student, or the guy who dropped out of school or didn't go to college and is trying to figure out his life. And I'm guessing that, from McDonald's point of view, there are trade-offs to this strategy: in return for low pay (but pay which is at or even a bit above the legally required minimum wage), it gets a workforce that is what a teenager workforce always is: immature, unreliable, high-maintenance with regard to shift scheduling, and so on. The kids get enough money to keep gas in the tank, and a couple of years of work experience that can be parlayed into a better-paying job, even if that is simply a better-paying job in the food service industry.Is this morally wrong of McDonald's?

Jim P. ==I don't think it's wrong. Anyone who has ever had to supervise a young person without work experience knows that it takes a good bit of time to supervise their work -- teach them how to do the simplest things well, then the not so simple stuff, and teach them such things as the importance of arriving on time and cooperating with others. In other words, such jobs are also learning experiences, and the employer does give the worker something more than wages. The problem is that the jobs are dead end ones. That is where the rest of us are responsible for seeing that there are training opportunities for more challenging work. I have read that there are now some joint programs of businesses and local schools to teach and train kids in more advanced work, some of which leads to actual jobs, and they can work quite well. They're real world education, so to speak. They should be paid apprentice wages -- more than the MacDonald's kids, but less than workers who do advanced work without the need for constant supervision. There are of course many levels of work and many levels of ability. I suspect that this calls for a big variety of educational/training choices, choices that might have to change somewhat from decade to decade as the local industries/opportunities change. How to integrate general education -- education in the Humanities for all the workers regardless of career prospects -- is the big challenge. They need to know a lot more than just how to do a particular job, e.g., how to be a good citizen. Not to mention religious education.

Jim said:

Is this morally wrong of McDonalds?

In a word, yes.They may have had worthy intentions of hiring only 17 year olds, but unless that is all they have on the line, then their intention is irrelevant.What happens instead is that they end up hiring adults. These adults don't get health care, so the ones with children often have to go on Medicaid. The ones that get sick have to go to the emergency room. The ones with larger families may have to go on food stamps. Maybe they need rent support. In other words, they become part of a state subsidized working poor.Under capitalist logic, the "subsidy" for the worker's health and welfare would come from the cost of a hamburger. But instead, in the US, it's "socialized" and spread to all of us. We can pretend that McDonalds simply has a business model that requires them to pay slave wages. But their business model factors in what they don't have to pay because it is covered by other sources. McDonald's, in other words, is a parasite who wants adult workers (because they hire them) paid at teenager wages and subsidized by other people.I don't know whether you eat at McDonalds. But I do know that you have paid for a lot of hamburgers.

unagidon ---Let's say you're a MacDonald's personnel manager. Two people come in to apply for work, one a single mother of three and one 17 year old. The single mother tells you she has tried for 6 months to get a job, but no luck.Whom would you hire? Why?

I'd almost always hire the adult whether she had been looking for work for six months or not. But I hope you are not saying that this makes McDonald's a charitable outfit. They are exploiting their workers, including the teenagers.They are exploiting the adults by paying them a sub-minimal wage. We know that it is a sub-minimal wage at least to the extent that any necessity of life has to be subsidized by the greater public. We know that these things that are subsidized are necessary, because we as a society will not tolerate people starving, dying in the streets, etc.If McDonalds is exploiting its adults, it should be paying them more. If they should be paying them more, then they should be paying the teens more under the principle that they are doing identical work. If they want to pay teens less, they should give them less to do. I don't see it as just that two people working side by side because (all things being equal) one is younger and more than because one is black or one is a female.

U ==I'm not saying MacDonald's is a charitable organization. I'm saying that the obligation to provide for those who cannot provide fully for themselves is not the obligation of employers. So when the single mother gets the job, then we, the community, rightly pays for the welfare that subsidizes her employment. It is not corporate welfare. I am presupposing that people ought to be paid for the value of their work, not for their familial woes. It's easy to blame MacDonald's when it is we who are the stingy ones.I think that Walmart is a somewhat different case. ISTM that the work that Walmart clerks do is more demanding than simply making change and handing out burgers. (I don't doubt, however, that within MacDonald's there is also work above the lowest degree of difficulty, and the people who do it should be paid more.)There are two separate moral issues here, I think: 1) whether employers ought to set wages on the basis of the difficulty of/skills required by the work, and 2) whether the community is responsible for providing welfare for those who cannot/do not fully provide for themselves.

I agree with Bruce & Jim that a Living Wage is different for a teenager then a person with a family. I agree with U. too that McDonald's and places like it are exploiting teenagers. When I was teenager, I had an endless series of sh*t jobs, many under the table, some violating certain restrictions on hours young people can work. As a kid, I was just happy to have the money, but looking back as an adult, I have to say, I think it is even lower to take advantage of children than it is to exploit adults. This is not to say inexperienced teenagers should have the same pay as adults, but companies that purposefully recruit a workforce like that in order to underpay them are not doing the right thing. And re: people having different wage requirements, in the small agencies I've run, everyone was underpaid but, when I could,I would sometimes try to find some more money for someone who was struggling to raise a family. I have colleagues who strongly disagree with that approach, though, saying personal circumstances shouldn't come into play. And there are obvious parity issues, right? I certainly couldn't do that when there were other people in the agency doing the same job with the same experience. But I don't see anything wrong with accommodating individuals worker's circumstances when you can. We make reasonable accommodations for people with disabilities, why not for other circumstances?

Ann said:

Im saying that the obligation to provide for those who cannot provide fully for themselves is not the obligation of employers.

I will contest this statement.There is a myth that the job of the business owner is to provide for the owner/stockholders. In the case of stockholders, we know that this is a fiction, because the senior management of companies takes as much for themselves as the market will bear. But this myth also says that it is the obligation of management to pay as little to its workforce as they can get away with. Within this myth, the worker then becomes responsible if they are underpaid. The myth requires us to deny that there is such a thing as a just living wage (argue about it as much as we want to). But the fact that the country and the general public subsidizes the working poor in many areas tells me that there is in fact such a thing as a just living wage. We just don't think that the employer needs to pay it in our society. We think instead that it is right and proper for society to subsidize the wages of workers at McDonalds and Walmart. I think that these subsidies (as opposed to paying a just living wage) go against the spirit of capitalism. I think that the true costs of things (which includes a non-subsidized just living wage) should be contained in the commodity, not socialized among the general public. This way, I can choose to support McDonalds by buying their stuff or not. Right now, I don't have a choice; I subsidize McDonalds and other workers and McDonalds management gets to keep wages down (because of this subsidy) and reap the profits; and to a great degree this profits them personally. In short, McDonalds management is transferring liabilities (a just living wage) and risk (that their workers will unionize in the absence of the subsidy) to the rest of the public. I don't think they should be allowed to do this.I also find this business of blaming the workers for their low wages (since management can't be blamed) to be infuriating.

Irene said:

When I was teenager, I had an endless series of sh*t jobs, many under the table, some violating certain restrictions on hours young people can work. As a kid, I was just happy to have the money, but looking back as an adult, I have to say, I think it is even lower to take advantage of children than it is to exploit adults. This is not to say inexperienced teenagers should have the same pay as adults, but companies that purposefully recruit a workforce like that in order to underpay them are not doing the right thing.

In terms of full disclosure, I worked for a Chicago food store chain in the 1970's that was unionized and that did not distinguish between teenagers and adults when paying wages. Wages were paid on a strict system of seniority. I was also the union steward for the store I worked at for a time.While I worked there, the union sold out the workers by agreeing with the company to reduce the wages for teenagers. They claimed that they could make this equitable by "grandfathering" the existing teenagers under the old wage agreement. I know that they were thinking that most of these teenagers would rotate out of the stores in time. What they claimed would not happen (but did) was that the store management would start finding reasons to rotate out the higher paid teenagers ahead of time. It struck me as inequitable that I would work side by side with someone my age who was making less and would always make less than I was while doing precisely the same work.

Unagidon, you're doing a good job with this, and I don't want to knock this discussion off your course. But If McDonalds business model (as Jim Pauwels suspects, and I do too) is to employ 17-year-olds, this question arises: McDonald is open during school hours. So, does the business model also depend on encouraging school drop-outs? Or does it depend on overlooking the model and employing that mother of three children at 17-year-olds's wages when its workforce isn't available?Look, the community provides roads to bring customers to the drive-through windows, police to drive by periodically and detectives to investigate late-night shootings, defensible property rights, zoning protection, curb cuts, clean water -- and customers pay for their burgers. At least, the employer shouldn't require subsidies for its workers and (depending on how you answer the question above) compete with education, and then send its lobbyists to the state capital to get out of paying its share of the taxes for the community goods.I mean, before we get into morality, Ann, wouldn't it be nice to get to simple decency?

Tom said:I mean, before we get into morality, Ann, wouldnt it be nice to get to simple decency?I hesitate to use the word "decency" in these discussions, because it relates to intention and in my experience the intentions of management are always good. It's just that their hands are tied by the market. It is the market that requires them to look at labor as a simple cost of production like any other cost; it is the market that demands that labor be paid as little as possible; and it is even the market that demands that management be paid as much as the market will bear. Management wants to do the right thing, but the market (which is the democratic expression of price) ties their hands. So they do what they can, which turns out to be rather little unless they are forced to.

"The problem is that the jobs [on the McDonald's line] are dead end ones."Yes; but I've known a number of people (including, FWIW, my pastor) who started their work careers by salting french fries at McDonald's and then moved out, on and upward to better things - at other employers. And a couple of people in particular I'm thinking of do not speak ill of McDonald's; they believe they learned a lot of important work lessons and life lessons - insistence on quality, attention to detail, a fanatical focus on serving the customer, keeping a constant eagle eye on cost control, and so on.So part of my question would also be, "Is it morally wrong of McDonald's to (again, I'm guessing here) make the strategic decision that its line jobs also would be dead-end jobs - that the expectation is that McDonald's workforce would be a high-turnover workforce, and it almost explicitly disclaims any long-term career responsibility for its employees? The response to a McDonald's employee who wants more money would be, "Go find a better job somewhere else. Thanks for your service. Do me a favor and hand me that stack of job applications on your way out the door."

' Its also instructive to look at minimum wage as a function of per-capita GDP. ''Why is that instructive?'---Allow me connect the dots. We can look at the value of the minimum wage in terms of a) unadjusted dollars, which doesn't tell us much, or b) inflation-adjusted dollars, which tells us if it has maintained its absolute value, or c) percentage of per-capita GDP, which gives us the relation between the minimum wage and the overall prosperity of the nation. We often hear about a) or b), but not so much about c).The minimum wage is not a law of physics, or even economics. It is a political choice. For forty years, the choice that was made was that even unskilled labor deserved a slice of the economic pie that grew with that pie, with increasing prosperity shared, to some degree, by all. For the last thirty years or so, the political decision was that the minimum wage should only keep up with inflation, maybe. (For grounds of comparison: if the 1938 minimum wage of $0.25 were only adjusted for inflation, it would have been $3.94 in 2011) Thus, the working poor have not shared in economic growth. This has knock-on effects; in part because the minimum wage serves as a floor for the entire wage structure, the median income, adjusted for inflation, has hardly budged in thirty years. What's more, this problem is creeping up the economic ladder and starting to hit the professional class--according to the American Chemical Society, the median income of PhD-holding chemists, adjusted for inflation, has declined over the last decade.As I said, it is a political choice. Some will argue that we should have no minimum wage; others that it is too high now. I contend that for forty years, we chose to have a wage structure that kept pace with our nation's growing prosperity, and we can make that choice today.

"[McDonald's] may have had worthy intentions of hiring only 17 year olds, but unless that is all they have on the line, then their intention is irrelevant. What happens instead is that they end up hiring adults. These adults dont get health care, so the ones with children often have to go on Medicaid. The ones that get sick have to go to the emergency room. The ones with larger families may have to go on food stamps. Maybe they need rent support. In other words, they become part of a state subsidized working poor."I agree that this is problematic.In the spirit of playing devil's advocate, let me respond with the free market advocate's response: that the single mom with three kids who is earning minimum wage at McDonald's freely accepted that job. There were no constraints on either side; this is not the NFL draft. She was offered the wage, and she accepted. If she didn't think she could support her family on it, she didn't have to say yes. But she did. And once she is employed at that wage, there is nothing whatever to prevent her from finding a better paying job somewhere else. And (I'm again presuming to read McDonald's secret, innermost thoughts here) she is getting more than her perfectly legal minimum wage: she is getting valuable work experience and learning the ins and outs of running a restaurant. These are things that she will be able to leverage for that future, better job - somewhere else.McDonald's would claim (I'm still speaking in the vein of devil's advocate here) that it is not responsible for the woman's life situation; McDonald's did not impregnate her nor cause her to stop going to school nor any of the other woes that beset her. McDonald's is not a social service agency, it as an employer. Its expectation of a single mom with three kids is the same as that of a 17 year old who is socking away money to attend Land Grant University: to work competently, to maintain a presentable appearance, to show up when she's supposed to. If either party has a problem with that arrangement, they're free to dissolve it and go find another one.

Jim said:

Is it morally wrong of McDonalds to (again, Im guessing here) make the strategic decision that its line jobs also would be dead-end jobs that the expectation is that McDonalds workforce would be a high-turnover workforce, and it almost explicitly disclaims any long-term career responsibility for its employees? The response to a McDonalds employee who wants more money would be, Go find a better job somewhere else. Thanks for your service. Do me a favor and hand me that stack of job applications on your way out the door.

How easy it seems to be for us to classify some jobs as not fit for adults. And the adults who take these jobs must therefore be punished for being too stupid or lazy or both to find a higher paying job. There is a "take it or leave it" element to any job. But do jobs we consider rightly low paying really have or deserve no dignity? Does a corporate CEO really work harder than a 60 hour a week Mexican busboy?

In the spirit of playing devils advocate, let me respond with the free market advocates response: that the single mom with three kids who is earning minimum wage at McDonalds freely accepted that job. There were no constraints on either side; this is not the NFL draft. She was offered the wage, and she accepted. If she didnt think she could support her family on it, she didnt have to say yes. But she did. And once she is employed at that wage, there is nothing whatever to prevent her from finding a better paying job somewhere else.

You play the devil well. Let me play a different devil and say that the question really is "why would a single mother take a job at McDonalds if there are better jobs for her to take out there". The answer is that it is likely that there are not better jobs out there for her. So then the question is, why not? It could be because she is too stupid or lazy to get an adult job. But if you have ever worked at a fast food restaurant, you find that the lazy don't last (and neither do the stupid). So it may be that there is just a massive class of work out there that we socially accept as being substandard in pay as though this were a natural condition. And instead of mandating a minimum wage that would allow the pay to not be substandard (and incidentally rightfully pass the cost onto the product that the company is producing) we pretend that people in these jobs are hopeless cases who need public charity like Medicare and food stamps. This also has the happy side effect of us being able to congratulate ourselves that WE have jobs that pay well, which must mean that we are smarter and more industrious than those poor bastards who work in the fast food industry.

"I think that the true costs of things (which includes a non-subsidized just living wage) should be contained in the commodity, not socialized among the general public."u --I don't understand this. What is the difference between "the community" and "the general public"?It seems to me there are two sets of rules at play in this problem: 1) the "rules" of capitalism and 2) morality. (Yes, morality, Tom B. Common decency *is* a matter of morality.) Sometimes the two conflict as in the case of the whom to hire -- the 17-year-old or the older single mother. Yes, there is conflict,but there is a resolution that respects both -- the state (the community/general public) provides for difference the mother needs. Or the company can hire the mother and more pe ople will have at least a bit of food.I'm certainly not defending the corporations that do not meet their obligations to the workers and to the buyers of their products. But there are indeed limits to the good that employers can do an still maintain their own rights.By the way, I dislike the term "their workers" in some contexts. Makes the workers sound like peon/slaves/peasants who have natural obligations to certain people, and this implies the old noblesse oblige, which was an improvement over grab-what-you-can-get morality, but it is no longer appropriate in a country in which everyone has a vote (theoretically anyway, but that's another big problem). Yes, the employer has more power in a work situation than workers do. But that needs to change. Unions have to get their legal protection back, especially with regard to the right to unionize in the first place. Breaking into a company is the biggest hurdle of all. Once a company is unionized the problems are usually not as great.Not that unions themselves always conduct themselves morally at all times. They dont' . But that is a diferent problem.

Unagidon: Beautiful!

Ann said:

I dont understand this. What is the difference between the community and the general public?

I didn't say "community". I said "commodity". And simply put, what I mean is that there should be no hidden costs that are subsidized by people not purchasing the commodity. Cheap gasoline is a case in point. Carbon emissions create public health costs that are not contained in the price of gas. Cheap pork is another case. The environmental damage caused by factory pork raising are not contained in the price of the meat.I think we can start with the question of true costs and risks before we get to the question of charity or fairness.

" And simply put, what I mean is that there should be no hidden costs that are subsidized by people not purchasing the commodity."This is quite a conservative position: why should our tax dollars pay for working people's food and shelter? We could get a lot of people off our public-assistance rolls by requiring the employer to pay a living wage.On the other hand, it may be, as Ann has suggested, that Americans are fine with subsidizing workers this way. It keeps the price of hamburgers lower.

Jim said:

This is quite a conservative position: why should our tax dollars pay for working peoples food and shelter? We could get a lot of people off our public-assistance rolls by requiring the employer to pay a living wage.

Surprised? I think that the system continues the way that it does because people don't think in terms of real costs. It doesn't occur to them that they are paying for things that could be paid for by actual consumers.(This doesn't mean, by the way, that I would suppot stopping tax supports BEFORE raising the minimum wage.)

A modest proposal: Deregulate to the bare minimum all transactions in order to expand the economic pie, then redistribute to whatever degree of equality is desired. Practically everyone will be better off compared to the outcomes when a heavy-handed regulatory regime intervenes so that no one is ever oppressed/exploited in any given transaction and when employers are demonized if they hire low-skilled workers.

How would one redistribute like that without heavy regulation?I'm not trying to demonize employers for hiring low skill workers. I'm trying to demonize them for passing on costs and liabilities to the general public.If the working poor must be subsidized by public money, then the minimum wage is too low. It's that simple.

Does this apply to Burger King and other fast food outlets?

Applies to any workers subsidized by the state or the public (because I include the commercial subsidization of medical costs).

"The answer is that it is likely that there are not better jobs out there for her. So then the question is, why not? It could be because she is too stupid or lazy to get an adult job."If we stop to think about it, it's just statistical reality that not all of us are equally intelligent and equally industrious. Take any group of 100 perspective employees, and ten of them will be less smart than the other 90, and ten of them will be lazier than the other 90.And without going to rectifiable character flaws like laziness or rudeness, there are all sorts of factors that make people less attractive as employees: health issues (certainly including mental illness), criminal records, lack of fluency in the native language, citizenship status, and so on. (I'm assuming that McDonald's line jobs are considered low-skill jobs and that McDonald's trains its employees, so new-hire qualifications are relatively minimal).So, to the extent that the labor market is a meritocracy, it seems to me that, over time, some people will end up in better-paying jobs than others. But - the question of the employer's responsibility to pay a living wage doesn't, or shouldn't, depend on these personal characteristics. Even the dumbest, laziest and rudest people ever created, if they can get themselves employed, are entitled to a living wage (however we define it). It's part of the social contract. You hire her, you pay her a living wage. Or so it seems to me.The tension / conflict in all this may be the meritocracy bit. The labor market functions on supply and demand. You want to earn more money, then find another job. Or get promoted. Or get a degree, or another degree, or a certification, or experience, and then find another job or get promoted. Find a way to increase your value. (Or know someone. Or start your own business.) That's the way the system works now.

U,To learn about redistribution without heavy-handed regulation I rcommend some early essays by Milton Friedman, the father of the EITC.If the minimum wage is currently too low and must be doubled, say, so that costs aren't shifted to the public at large, then do you anticipate any increase in the unemployment rate? Who would be responsible for that increase? I assume it would not be Mr. McDonald. Would all those who would exploitatively hire someone to sweep the floor at $10 an hour but not at $20 be socially irresponsible?

"Does this apply to Burger King and other fast food outlets?"Not to mention small businesses, which in my observation are more exploitative of teens and low-skill workers than McDonald's, which I believe boasts about its perks and benefits. At that tier of employment, there are worse jobs out there than flipping burgers for Mickey D's.

"If the working poor must be subsidized by public money, then the minimum wage is too low. Its that simple."... or the cost of living is too high.

The tension / conflict in all this may be the meritocracy bit. The labor market functions on supply and demand. You want to earn more money, then find another job. Or get promoted. Or get a degree, or another degree, or a certification, or experience, and then find another job or get promoted. Find a way to increase your value. (Or know someone. Or start your own business.) Thats the way the system works now.

I don't think it works this way exactly. It's all about what the market will bear. Skillfulness can remain constant while demand can swing wildly as all those poor working class people who expensively retrained themselves as highly skilled computer programmers found when we started outsourcing those jobs to India. The meritocracy myth also supports the idea that all these corporate executives are worth these ever increasing salaries they have been getting as they use their authority to take all the benefits of higher productivity garnered by everyone else these thirty years. Not hard to argue that the Mexican busboy should make less than the college educated chap, but harder to argue that the CEO should make $20M for... what? Working harder? More skill? Really?

Jim said:

or the cost of living is too high.

That's the classic argument of the German school. Wages should never rise. For anyone. Productivity should bring prices down and THAT is what increases the standard of living.

Patrick said:

If the minimum wage is currently too low and must be doubled, say, so that costs arent shifted to the public at large, then do you anticipate any increase in the unemployment rate? Who would be responsible for that increase? I assume it would not be Mr. McDonald. Would all those who would exploitatively hire someone to sweep the floor at $10 an hour but not at $20 be socially irresponsible?

Why should unemployment increase? Profits will decrease, yes, since they are being subsidized by public money now. But if a corporation can afford to eliminate a worker you can be sure that they have done so whatever the minimum wage is. Would employment go up if the minimum wage was lowered? Why should it? But that's the flip side of the same argument.

I appreciate almost all of the comments on this thread. I've learned a lot. A special thanks to Unagidon. The arguments he has advanced here are compelling.

The Wikipedia article on the Minimum Wage is not too bad as such things go. A person with any view on the Minimum Wage can read it and feel vindicated. But it's not a bad little review of some arguments pro and con.My own view is that it is possible to set the minimum wage high enough such that there would be a substantial (un)employment effect. We can all think of instances where we see the labor market responding to lower and higher wages. One clearly is "offshoring" of jobs that formerly were American jobs; if changing the wage rates had no impact on employment, we'd expect that employers would not ship American jobs overseas.I do assume, though, that there is some "play" in the available wage rates, and giving everyone at a McDonald's franchise a dollar-an-hour raise (which would be in excess of a 10% raise) is not going to bankrupt the company - they'll find some way to make up the lost money, or they'll deal with lower profits. The art is in determining how much is high enough without causing real damage to the enterprise.

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