Wednesday, August 7, 2013

Minimum wage, minimum life

The assumption that poor people are somehow doing something wrong, that they could just work harder or live more frugally, seems ubiquitous.
    Almost as if in reaction to that sense, McDonald’s and Visa decided to help their employees learn that they could get by, they could do better, by living on a budget based on the very low wages McDonald’s pays them. Unfortunately, the budget made up to teach them includes no money for childcare and includes two jobs, leaving no time to spend with those children.    Bosses lecturing employees is not new. Henry Ford, whose company manufactured the first automobile, routinely told his people how they should behave. Ford, however, actually paid wages sufficient to allow for a decent lifestyle and to someday own a new Ford.
    Although a recent blog post hypothesizing that McDonald’s would only have to charge 68 cents more for a Big Mac if it doubled wages has now been discredited for faulty analysis, higher wages would certainly not be fatal and probably not even harmful for the “golden arches.”
    Fast-food restaurants have added jobs at a faster pace than the U.S. average since mid-2009. The new workers hired for these jobs are older than the previously typical 16- to 19-year-old front-line employee.
    Rising demand for workers plus a more mature workforce usually translates to higher wages but not in the current environment.
    The disparity between workers and corporate executives has doubled at McDonald’s Corp. in the last 10 years, according to data compiled by Bloomberg. A front-line McDonald’s employee would have to work more than a million hours to make the $8.75 million paid to former CEO Jim Skinner in 2012, all while the corporation’s net income has risen by double digits.
    The magnitude of that pay gap and the prosperity of McDonald’s and other fast-food corporations and low-price retailers, such as Walmart, should provoke public support for low-paid workers. It should provoke support for current proposals to raise the minimum wage by such a small amount that families earning it still will remain in or near poverty.
    McDonald’s is hardly alone in paying wages that no one can live on. Whether the company intended to or not, it deserves thanks for making the plight of the working poor a subject for discussion. After all, the incongruous phrase “working poor” has been a reality long enough.

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