It’s finally here- fast food workers across the nation are taking to the streets, holding signs and petitioning for an increase in the minimum wage to $15 an hour.
To what end?
Patrick M. Sheridan writing for CNNMoney highlighted an example of the plight of a man trying to support a family on minimum wage:
“Frankie Tisdale, a 26-year-old worker from a KFC in Brooklyn said he will join the strike with fellow workers next week.
“Tisdale lives in his father’s house in Brooklyn with his girlfriend and two young children. He earns $8 an hour and works between 14 and 23 hours a week.
“With less than $200 a week, he sometimes has to choose between buying food for the family and taking his kids’ clothes for a wash to the laundromat. He said it’s too expensive to eat at the KFC where he works so he never does. ‘Everything costs more. Why can’t my pay go up?’ Tisdale says.”
Because you are not producing more.
I’m sorry Frankie, but that’s the cold, hard truth…
For the record, I have no problem with workers striking or protesting for higher wages. If a group of employees wants to pressure their employers and air their grievances by striking- more power to them.
I have several issues with mandated minimum wages.
Wages on mean rise with productivity. Every rise in income in America came on the crest of a period of increased productivity as a nation.
You can attempt to mandate wages- but you cannot mandate an increase in wages and protect jobs unless you are willing to also mandate employment. In nations that have attempted this, most notably the Soviet Union and Greece, the government must subsidize employers for excess labor.
Eventually, the system collapses under it’s own weight. It’s simple- cash needed to subsidize low productivity jobs at higher wages outstrips the revenues produced by that same labor.
Now specifically to Sheridan’s example…
If you intended to raise sympathy, you should have featured someone other than Mr. Tisdale!
Tisdale is sadly typical of the employee trying to “raise a family” on minimum wage, which, as a point of fact, is a very small percentage of all minimum wage earners.
Tisdale is living with his father and his girlfriend- note “girlfriend,” not wife, and the two children they produced without the means to provide for them.
To make matters worse, he’s working an average of only 14 to 23 hours a week. How many people can care for a family on 23 hours a week at any average job?
You can choose to address this issue on an institutional or societal level and simply mandate that employers pay more…
…or you can look at this on an individual level, which is much more beneficial.
First of all, the bracket that includes minimum wage earners is extremely volatile. The vast majority of people earning minimum wage today will be earning far more in less than four years.
Despite how it might appear on the nightly news, only about 5% of all hourly workers and 3% of all workers employed in the U.S. earn minimum wage.
If you’re currently working for minimum wage, there’s a very good chance that you’re single, under 25 working part time and still part of a family that makes more than $66,000 a year.
There’s also a very good chance that you’re a student. 62% of all minimum wage workers are enrolled in high school, college or vocational training.
That’s great! The single most important factor determining your earning capacity is your education, followed closely by work experience and job performance…
…which is exactly what minimum wage jobs are designed for.
These are jobs- not careers.
Employers don’t want to condemn you to minimum wage either. They know full well that people stuck at or near minimum wage are not satisfied, engaged or productive employees for very long.
I recently spoke with a representative from a growing restaurant chain who has no problem attracting good employees at minimum wage- as a part-time job or a step toward higher wages.
When I asked him about his take on the minimum wage debate, he basically told me that the math was very simple. In his chain, which is typical, the margin of profit to the franchisee is about 11 cents on every dollar. Let’s just round it to 10%.
A hike in minimum wage to even $9 an hour would be a 24% increase in labor costs.
Fewer hirings at the entry level and higher prices to the consumer.
It’s just math…
My focus is not on societal change. I’m getting too old to swing my sword at windmills.
My focus is on the individual…
What can YOU do- as an individual, to escape the trap of minimum wage?
#1 Stay in school… Your education is still the greatest determinant to your earning power. The vast majority of all minimum wage earners lack or have not yet earned a high school diploma.
#2 Don’t have kids…until you can afford them. The vast majority of people trying to support children on minimum wage are single mothers who had their first child under the age of 20.
#3 Develop your talents and abilities… Your earning power is determined by your value to your employer.
It really is that simple…
Or- you can pick up a sign and strike.
Just remember- no matter how high they set the minimum wage, it will always be the minimum.
Don’t settle for minimum- at any rate.