Thursday, August 8, 2013

So You Want To Double Minimum Wage At McDonald's? Unintended Consequences, Much?

Various fast-food employees recently made headlines when an SEIU-sponsored national strike resulted in job walkoffs across the country. Their beef? Not getting paid enough. Minimum wage remains $7.25 and these folks want it goosed up to $15. So basically a doubling of their salary because it is not a 'livable' wage. If they don't get it, they strike. Cause if there's one thing unions are good at doing, its encouraging people to not work. Now I'm prepared for the typical liberal, 'my reading comprehension scores are typically low so I just respond with a knee-jerk reaction', but the logic is here if you have the patience.

Now I'm all about people not living in squalor, with syringes all over the floor, cigarette ashes in the microwave, and having your children eat pizza crust out of a dumpster, but what many of these striking people don't realize is that DOUBLING the minimum wage would actually hurt them in the long run. And don't get it twisted - obviously these people are making a statement with this phony $15/hr figure, but even a $1 increase has impacts. Incremental small-scale increases are fine (like a quarter per hour every year), but large-scale jumps have unintended consequences. But what about entering a new tax bracket? You are no longer living below poverty level, so BOOM you get hit with more taxes! Before you get all bleeding heart and emotional, let me lay some truth down for you.

1. McDonald's/Other fast-food joints are not here to make you rich and they sure as hell aren't here to sustain you throughout life.

Much of this controversy came about over the fact that McDonald's recently published a 'proposed budget' for any incoming employees in order to balance their personal finances. 'A' for effort since heaven forbid our school systems teach personal responsibility/finance and most other companies aren't doing this. 'F' for presentation. Take a look at this table:

Notice anything peculiar? THEY LIST A SECOND SOURCE OF INCOME!!!! They are basically saying, "We can't give you a livable wage, you're gonna have to find a second source of income." No shit, Sherlock. If you work at a high school-level minimum brain/minimum wage job, you won't be able to survive on it. That's the reality. Doesn't make McDonald's or Taco Bell evil, it's just the reality. Teachers do the Lord's work and don't get compensated enough for it. As do cops, nurses and firemen. They do a lot more important things than I do in Pharmaceutical Finance. But that's the way the system works. You make that choice when you choose careers. Lots of McDonald's, lots of Taco Bells, lots of teachers, lots of nurses (I'm talking volume here, not quality of job - think scarcity vs non-scarcity). Not as many doctors, not as many lawyers, not as many accountants, not as many chemists, biologists, and finance personnel. It's the way it is. I realize no one is trying to get rich working at fast food joints, but a 'job' is not required to sustain you in every facet of life. It's not in life's expectation list nor the application/job agreement to pay you anything more or less than what is on the dotted line. You sign at your own risk. Don't complain when things don't work out the way you want them to.

2. You probably don't deserve to have your wage doubled.

I don't know about you, but I rarely have a great experience at a fast food restaurant. I get lousy service, unengaged cashiers, wrong orders, uncooked food, forgotten straws, napkins, and plasticware. Why the hell do you think you deserve a pay increase? Do you deserve it? What have you done to make my experience pleasurable? 75% screw-up rate based on the variables just outlined every time I go to a fast food place. I actually ROOT for stupidity at Taco Bell, because 30% of the time I get an extra taco thrown in my bag, not out of compassion for screwed up orders, but BECAUSE they are screwing up the order.

Most of the fast food employees are in the 16-30 range, so the younger end of the spectrum. They don't know shit about working hard, probably are just looking for cigarette money, and have no idea about respectful bedside manner. Instead I get some stiff in goofy Harry Potter glasses and a 2011 Justin Bieber/any asian teenager haircut grunting the words 'have a nice day.' That is not acceptable customer service and it sure as hell doesn't warrant a large wage increase. You are at McDonalds to learn basic blocking and tackling when comes to working. And hopefully it teaches you to work in the private sector where you don't have to deal with the public. I didn't mind working at a pharmacy growing up, but I sure as hell hated some of the dickheads that lumbered into the store. But I sure put on a happy face and made the experience pleasant so they would come back. Began to know them by name too, which you don't see anymore. Long story short, quit your bitchin' - you probably don't deserve a minimum wage increase.

3. There are technological implications. You will be replaced by Wall-E.

Say these boobs get even a 25% wage increase. Let's even it off at $10/hr to be generous. You think McDonald's is going to be happy just goosing up everyone's hourly wage and still get the same shitty work ethic, attitude, and error rate? Of course not. They'll automate you out of job. More R&D will be invested in developing systems that can process your order through a touch-pad. Forget cash transactions - everything will be through a drive-up keypad and card swipe. And fast food restaurants won't gingerly walk to futuristic technology, they will SPRINT because it means less of you striking workers to deal with!!!!! Think about it - error rate decreases, bad attitude gets replaced with no attitude (but no smiles, but who gives a shit about smiles as long as you aren't rude and/or a grunting oaf. Bit o' money up front that ultimately pays off. Supermarkets are hip to the game. Home Depot is hip to the game. Other companies are opening up and expanding the automated checkout options. Humans are expendable.

4. Increased wages = INFLATION

Increased wages are great for those receiving them, but what about the impacts everywhere else? Taco Bell will simply respond to these new demands by charging us more. Goodbye, $1 menu. That now becomes the $2 menu. Your prices just doubled, just like the high school dropout's hourly wage. Combo meals increase 25% to make up for the fact that Mickey D's now needs to pay unreliable adults and their hot zoo garbage work ethic to work the counter and mop the floors. "But....but shouldn't wages increase with inflation?" Yeah, according to the government and Federal Reserve, inflation target is 2%. So add 2% to your hourly wage....thats like 8 cents. But nowhere is it mandated for inflation-pegged hourly wage increases anywhere. That's reasonable at least - to assume annual wage increases consistent with inflation. But private sector jobs don't operate with that mandate. In my ten years in the work force, 3 of them featured no wage increase, and others were simply matching the company-assumed inflation rate. Why should fast food be any different? By the way - you know the 'inflation numbers' are bullshit when your calculated inflation uplift is nowhere near the increasing prices of food/energy/healthcare/car insurance/gas etc. "Oh it's only 2%, it's allllll under control." Yeah, batteries went up 2%. Light bulbs went up 2%. Everything else seems to be skyrocketing. Anyhoo. Increased wages = Inflation. Simply put. You will pay more at McDonald's.

5. Fast food companies will ultimately lay off employees!!!!!

The most important reason I am AGAINST a steep increase to the minimum wage (especially in fast food), is because the long-term impacts are UNEMPLOYMENT for those seeking the increase!!!! Why on earth would McDonald's keep a shift of 10 when they all suck up more revenues with their obnoxious wage increase request? I'd fire four, make the six remaining work their asses off because $15/hr is a lot of money, and the second I got lip from them, I would show them the door, because there are a lot of hungry teenagers/robots out there that could do the job. This would actually be two-fold - food prices would increase (never to decrease - when do they actually decrease?). Wages would be stuck at a high figure. I'd cut staff, deal with longer lines, deal with a slightly more chaotic office, because if wages go even higher than that, I'd have to lay off another employee to stay profitable AND increase prices even more! So now the American public is losing on the deal! Then I just flat out quit. That is what the franchise manager would do. Is that what we want? All because of a skyrocketing hourly wage? Cut the crap, hit the books, and get a second job. Case closed.

Next post will deal with the true leaders of the world.....the globalist banker cartel and the ruling families that set global policy and banking structures to stay in power. Hope you enjoyed today's post.

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