2013 December 08 Sunday
Push For Min $15 Per Hour For Fast Food Jobs

My greatest pleasure from reading the Gray Lady is that New York Times articles cover so many topics that are ripe for reframing. Take, for example, this story above a movement for $15 per hour fast food worker wages. Gotta say: great idea! But most of the benefits come from reasons the Gray Lady is not going to mention.

The benefits, oh the wonderful benefits:

  • The public health benefit: Since fast foods are harmful higher prices will discourage people from eating them.
  • Smaller welfare state: People who make more money will qualify for fewer social welfare programs. We net taxpayers will save money. The Gray Lady's article actually mentioned this benefit.
  • The immigration benefit: The average skill level of immigrants will go up when the supply of low skilled jobs suitable for low skilled immigrants gets radically curtailed by high prices.
  • The innovation benefit: High prices for labor are a great incentive for innovation. Look at what manufacturing unions did to boost investments in equipment that raises productivity.
  • Cheaper restaurants in the long run: The automation of food preparation will ultimately lead to cheaper restaurants (so, yes, the public health benefit will be transitory).

Curiously, I expect a high minimum wage to shift some Hispanics against immigration because a a high minimum wage will reduce the supply of jobs they can do even as it boosts the pay for those jobs. It is less clear to poorly paid people that they are in competition with immigrants. They just know they are paid little. But cut the supply of jobs and suddenly they'll see immigrants as competing with them for the limited supply of jobs.

Ron Unz is putting a $12 per hour minimum wage referendum on the California state ballot. While $12 doesn't deliver as big a benefit as $15 it is a big step in the right direction. So go Ron! He reveals just how low paid Hispanics are in America:

Hispanics would gain the most, with 55 percent of their wage-workers getting a big raise and the benefits probably touching the vast majority of Latino families.

Ron's own op-ed in the Gray Lady avoids mention of immigration . However, Bruce Bartlett points out that back in 2011 Ron made clear the impact of a higher minimum wage on immigration.

Ron's ballot initiative has generated a huge debate which he reports on. If this initiative passes in California my hope is that others will put higher minimum wage initiatives on the ballot in other states. Many Western states allow direct ballot initiatives. Oregon, Arizona, and Colorado seem like obvious candidates for a higher minimum wage ballot initiative.

Share |      By Randall Parker at 2013 December 08 08:32 PM 

DoJ said at December 9, 2013 1:56 AM:

Er, how effectively is the minimum wage enforced in California right now? Illegal immigrants are in a poor position to complain about minimum wage violations. All other things being equal, I am generally opposed to laws that will predictably fail to be enforced.

bbartlog said at December 9, 2013 6:50 AM:

I would expand on one part of your analysis: you write 'It is less clear to poorly paid people that they are in competition with immigrants.'. It's not so much *this* that would make a difference, but the fact that at the current market-clearing wage, the competition with others is very low stakes. People who have these jobs don't regard them as any great prize, because the pay is so close to the minimum they're willing to accept (generally speaking). Raise the minimum wage to $15 per hour, and you'll end up with situations like the ones we currently have for certain plum positions in the public sector (firefighter...), where an opening gets hundred of applicants - or isn't even advertised at all, absent regulation, because it will always go to a friend of someone who works there.
Also, I agree with DoJ. This law would only be enforceable against large targets like McDonald's (and they might lobby behind the scenes to make the enforcement toothless). No one would be likely to enforce it against street cart food vendors and the like.

Black Death said at December 9, 2013 6:35 PM:

Unlike an across-the-board minimum wage increase, $15 for fast food workers would probably be pretty enforceable, since the big corporations that own these places make fairly easy targets. The same cannot be said for agriculture and construction.

Here's some of the things that would result, in addition to what you say:

* Marginal outlets would close. Their employees would all lose their jobs.

* Automation would eliminate many other jobs.

* The small savings in welfare state goodies resulting from the higher wages would be swamped by increased payments to those who lose their jobs.

* The youth unemployment rate, currently about 21%, would increase substantially, maybe even double. Few of these folks would ever find jobs again.

So it's definitely a mixed bag. By the way, what's magic about $15? Who decided on that number? If a small increase is good, why isn't a bigger one better? Not that I really care anymore. This country is throwing all the folks at the bottom under the bus.

Randall Parker said at December 9, 2013 11:42 PM:


Agriculture and construction represent very small percentages of those getting minimum wage. Retail is big. Ditto education. Ditto leisure and hospitality. I'm guessing that includes restaurants and hotels. Here is some background on those minimum wage job numbers.

My take on cheating on minimum wage rules: In some kinds of business cheating is difficult. So we won't see much cheating. In other businesses cheating is easier. But there's a twist: The higher the minimum wage the greater the incentive to build up a case against cheating employers. We might see lots of employees ratting on their employers once the minimum wage is increased.

map said at December 10, 2013 12:47 AM:

This whole minimum wage and McDonalds issue dovetails nicely with the matter of how alt Right thinking is really superior to much of mainstream Right thinking. From Limbaugh to Medved, there is constant kvetching about this, about how everyone should be on McDonald's side, especially the Right.

The question is, why, exactly? McDondald's used to be a business that employed white American teenagers. They decided that third-world peasants, over the age of 30 , with no other prospects and socialist tendencies, who are earning money to live on, not pocket change to go on dates and buy prom dresses, would make better workers than those lazy, stupid, American teenagers. Everyone is the same, right?

Could they not anticipate that this would be the result of their policies? Did they hope to convince these marginal workers that Ayn Rand is correct?

Furthermore, what exactly makes McDonalds a "conservative" company that other conservatives should defend? By all appearances, the daily operation of McDonalds and its public image seems as left-wing as any university campus. They have the token black CEO. They have the constant marketing to minorities. They have the same left-wing political causes they donate to. They have the same Soviet-style corporate culture that enforces diversity and multiculturalism along with its army of HR commissars.

How is McDonalds not yet another left-wing commercial interest? Why is the Right defending it? How exactly is this company a representative of the free market the Right is supposed to support?

Randall Parker said at December 10, 2013 8:47 PM:


Even worse: McDonald's food is lousy. About 4 years ago I started doing long walks in the town I lived in to go to a different fast food place every time. I decided to get my exercise by trying to see if there are any good fast food places. Outcome: I liked Quiznos best. Carl's Jr is barely okay. McDonalds is worse. Most of them are unmemorable Overall I found the fast food places made untasteful burgers and used crummy buns. Quiznos bread was best.

What we need are companies that are innovating in ways that boost productivity and provide far better services. McDonald's seems pretty stagnant.

Convincing marginal workers about Ayn Rand: The basic problem with Objectivism and Libertarianism is that the vast majority of people can not be convinced to accept moral codes that make either of those philosophies the basis for society. I mean, I've tried. I know these arguments can't be won with the vast bulk of the population.

ErisGuy said at December 11, 2013 4:00 AM:

While many western states allow ballot initiatives, hostile judges have found many tricks to overturn the will of the people.

map said at December 11, 2013 11:43 AM:


I don't think McDonalds' food is lousy at all. They have the best fries in the fast food business. The quality is actually pretty high when you consider the price point. Where else can you get a double cheeseburger for $1.50? Youcan even eat healthfully there if you choose.

No, I think it is a mistake to argue against McDonald's because of the food. The food is good, relatively cheap and delivered in an environment that is extremely sanitary.

I would not start out arguing against the food.

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