Fast-food workers: Do they deserve a living wage?

last updated 8 January 2015

Americans like to believe that “if you work hard enough, you’ll make it,” said Richard Brodsky in HuffingtonPost.com. That “happy notion” is no longer true for many Americans in low-wage retail, service, and food-industry jobs, especially fast-food workers. That’s why thousands of workers at major fast-food chains—including McDonald’s, Wendy’s, Burger King, and Taco Bell—staged one-day strikes throughout the country last week during peak mealtimes to demand an increase in their wages, which now average a shockingly low $7.40 an hour. The workers want their pay to double to $15, so they won’t have to survive on food stamps and other public assistance. As if to make the protesters’ case for them, said Tom Philpott in MotherJones.com, McDonald’s inspired “much hilarity” by issuing a helpful new “Sample Monthly Budget” for its employees, explaining how to make ends meet on only $1,105 a month. The budget allocates no money at all for child care, clothing, gasoline, or food, and assumes $955 from “Income (2nd job).”A low-paying job beats “no job at all,” said Jillian Melchior in NationalReview.com. If fast-food chains had to double salaries, they’d make do with far fewer workers. The business model for McDonald’s and its competitors is based on a high volume of sales of low-cost burgers and fries, with very thin profit margins. Paying workers more would mean either raising the cost of a burger—by about 25 percent, if workers’ wages went to $15 an hour—thus alienating its low-income customer base, or cutting the number of employees and replacing them with touch-screen computers and robotic sandwich-makers. “Is that what unions and restaurant workers really want?” You’re not supposed to be able to support a family working the drive-through window at Wendy’s, said Deborah Simmonsin WashingtonTimes.com. Fast-food work requires virtually no education or prior skills, and has always been an entry-level job for teens and 20-somethings looking for extra income. “The wages are—and should be—commensurate with that fact.”

If profit margins are so thin, said Daniel Gross in TheDailyBeast.com, how did McDonald’s CEO Don Thompson make $13.8 million last year? Fast-food companies have peddled the myth for years that the brutally low wages they pay are a simple function of market forces, but it’s “emphatically not true.” Several burger chains, including In-N-Out in California, start employees at a supposedly ruinous $10.50 an hour, and give them medical benefits, paid vacations, and a 401(k) plan, too. If McDonald’s workers were paid at least $10.50 an hour, the price of a Big Mac would rise by only a nickel. Employees might stick around longer, feel better about their jobs, and provide better service—attracting more customers.

That “magical world” already exists, said Jordan Weissmann in TheAtlantic.com. It’s Australia, where McDonald’s adult workers already earn the U.S. equivalent of $14.50 an hour. As a result, burgers and other menu items cost about 70 cents more, and the franchises save on labor costs by squeezing more productivity out of each worker and replacing some with touch-screen ordering kiosks. Fast-food chains in the U.S. probably couldn’t double wages overnight—but a raise to $10.50 an hour could be absorbed with some small price increases, use of more technology, and cuts in staffing. It would hardly be a panacea, but workers might no longer need to hold a second 35-hour job to survive. Wouldn’t that be worth the trade-offs?