Wednesday, August 7, 2013

A Living Wage: Dollars and Sense for Everyone...

Perhaps you've heard by now that in an effort to help it's employees manage their pay, McDonald's produced a money management guide.  Let's just say it's come under plenty of criticism

"McDonald’s has taken some heat for its Practical Money Skills Budget Journal, a financial planning guide for its low-wage workers that suggests monthly spending on a variety of expenses. That’s pretty ironic since heat was one of the things McDonald’s failed to anticipate in the guide’s first iteration—it was later included in the sample budget in response to public pressure."
"News coverage has noted the implausible monthly $600 rent (compared with the national average of $1,048). Many people have pointed out the impossibility of spending just $27 a day on gas and groceries, and the absence of a clothing budget. All of these criticisms are completely valid."
And then there's this from the Economic Policy Institute...
"Even if McDonald’s employees meticulously track all of their expenses, they will still fall short of what is necessary to make ends meet, let alone actually be able to save $100 every month, as the McDonald’s budget suggests. It’s tempting to believe that all America’s low- and moderate-wage workers need to get by is better life skills, when in fact what they really need is a raise."
AOL used EPI's budget calculator and McDonald's sample budget with one for a second budget for a McDonald's employee who is a single parent with one child living in Newaygo County, Mich., which has the average cost of living for the country. The results is what you see above. 
There has been a great deal of talk lately about low wage workers, particularly at WalMart and in the fast food industry. Day strikes are taking place in a number of cities across the country. Some protesters are calling for a minimum wage of at least $15 an hour. Many in the country are completely nonplussed at the prospect of paying such an exorbitant wage for someone to 'flip hamburgers'. 
On the one hand I kind of understand it. When I was around 19-20, I worked at Jack-In-the-Box. I wasn't there long. Maybe 3-5 months. It's the type of work that really is more demanding than it looks. 
But nearly 40 years ago, it was a job primarily for teen-agers and people either on a management track or in transition. These days, it is not uncommon to find these jobs filled by college graduates, or workers laid off from more considerably higher paying jobs with dim prospects in their chosen fields. That's why the calls to 'Get another job, stupid!', as I read in the comment section of one online article, are mocking and cruel. People making such comments are either ignorant of, or intentionally in denial of the reality of the job market. 
Much, much more so today, than nearly 40 years ago, McDonald's, along with many fast-food restaurants and big box discount stores like WalMart are multinational corporations, raking in hundreds of billions of dollars. The complaint that they cannot make a profit by paying their employees a little more, rings hollow. 
In fact, the call for a significant increase in the minimum wage (anywhere from $12-$15 per hour), is not just fair, it really makes economic sense. The idea of these being jobs set by the market and what the market will pay, thus being the value placed on the type of work done by such workers doesn't hold water if you take into account the growth in the service industry. 
Texas, for instance, leads the nation in such low wage jobs (550,000). It partially explains why our state has climbed out of the pit of the Great Recession faster than the rest of the country. At the same time, cuts in education and health care, will eventually come home to decimate that recovery if they are not restored and if wages don't increase. 
Think of it: Let's say an increase in the minimum wage does cause the price of a Big Mac to rise. A higher minimum wage for the 'hamburger flipper', also means an increase in the minimum wage for the sales clerk at the department store who buys the hamburger. The department store clerk won't work in the shoe department for $11 an hour if the person working at McDonald's is making $14. Raises in the minimum wage ultimately raises the pay for nearly all American workers. 
The 'free market' rarely comes to this kind of 'competitiveness' without the force of such regulation. Some multinational corporations like WalMart, claim that they can't raise salaries because it can't make a decent profit by doing so. Interestingly enough Costco has no problem paying it's workers competitively...

According to Cesar Martinez, "The company gives you a decent wage and treats you with respect and takes care of you. That's why we all give 100%."

It is true, business exists in order to make profit, not necessarily provide jobs. But once a company realizes that a business dependent upon customers does a better job if it's employees feel they're compensated in a way that ties their interests to that of the company, it doesn't have to interfere with the bottom line. 

You actually can make dollars and sense at the same time. 

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