Whenever I read an article about fast-food workers demanding $15 an hour I have to double check and make sure I am not getting my news from the Onion or some other satirical website.
You’ve seen the headlines as of late. A group of low-skilled, usually low-educated, workers are demanding $15 an hour just so they can get my order wrong at the drive-thru.
Now, I am fundamentally a capitalist and if an employer wants to pay you $15 an hour or $150 an hour to make cheeseburgers, then more power to them. I am all for what a willing employer and willing employee can negotiate. However, when you start talking about using government to mandate what people should be paid, I have a little bit of a problem, especially when it comes to raising the minimum wage.
Let me give you an ECON 101 lesson. If I have 10 employees and I pay them $7 an hour, my payroll costs are $70 an hour. That means my business must generate at least $70 an hour to break even on those costs. If we increase the minimum wage to $15 an hour, my expenses just went up $80, because each employee is now making $8 an hour more. And this doesn’t even take into account the other employees who make more than the original $7 an hour, because I will have to pay them more proportionately.
But let’s stick with $80. To cover those extra costs I as an employer have three options at my disposal:
- Raise my prices to cover my costs.
- Cut back on staff or hours to cover my costs.
- Reduce my own take home pay and profits to cover my costs.
With self-preservation being the first law of nature, I can assure you number three ain’t happening, because odds are my profit margins, particularly in this economy aren’t all that great to start. I am also not raising my prices on my customers either if I can help it. That leaves me with option number two – cutting hours to avoid a loss. Sorry, but that’s how business works. If you don’t like it, start a business and pay your employees $100 an hour if that floats your boat – just don’t insist I do the same.
Now, I would gladly pay $100 an hour to an employee if they had the skill set to go along with the salary. No offense, but flipping a cheeseburger is not the same as splitting an atom, interpreting a 7th Circuit Court of Appeals decision or curing cancer. Actually, if I’m paying $100 an hour for those guys and gals, then I am probably paying way too little. Fast food is not rocket science, nor is sweeping a floor, nor is any other menial labor job, that’s why they pay very little.
And please spare me the “I can’t raise my family on minimum wage!” Minimum wage was not invented to raise a family. It was to help folks get started in the workforce and they would eventually move up the ladder. It was also made to help senior citizens who want to supplement their retirement income. Nowhere in that formula is raising a family.
I fully understand taking a minimum wage job while you are in transition, but the point of transition is that it’s temporary, not permanent. Of course, the best way to avoid being paid minimum wage is to have something other than minimum wage skills. This is why I believe we should ensure that individuals have the educational opportunities to improve their skill sets so they don’t have to take minimum wage jobs. In fact, in Indiana we are experiencing a shortage of skilled workers. Employers are reporting that they are leaving jobs unfilled because the people applying don’t have the credentials.
Let’s face it my brothers and sisters, it doesn’t take a nuclear physicist to make a burger, so don’t expect to make more than minimum wage for doing it.
Abdul-Hakim Shabazz is an attorney, political commentator and publisher of IndyPolitics.org. You can email comments to him at abdul@indypolitics.org.
