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Paying Fast Food Workers $15 Per Hour - 4 Capitalist Thoughts...

There's been a lot of press recently about raising the wages for fast food workers to $15 an hour.  If you want a sampling, click here for some quick aggregation via Google....

The move to raise wages in this fashion polarizes the dialog.  Most people generally belong to one of two camps:

1. You're a capitalist.  You think the market decides, and any artificial, non-market related move to raise these wage levels is complete BS, or; Fast times

2. You've got a big heart.  You like the idea and think it needs to happen.  Who pays?  Who cares?  Get it done and let the economic impact fall where it may.

Of course, as with anything, there's a middle ground.  Related to raising the wages of fast food workers to $15 an hour, I don't think it's safe to assume that employers would just pay the money and everything would remain the same.

Things I wonder about include:

1. The employment scene is a marketplace.  If fast food workers are paid $15 per hour, does that mean fast food franchise owners now can hire different people?  If so, that really doesn't help the people we thought we were helping.

2. What do owners get for their bigger investment?  Seems like all the advocacy groups really don't talk about this.  I think they should.

3. What's the impact on turnover?  Cost of turnover studies are notoriously opinion-laded, swag-style guesses.  If turnover doesn't really go down, the change would be a failure.

4. If owners get more productivity, can you staff a location with fewer people?  That's a better way to get to the math.

Like the moderate Republican I am, I'm somewhere in the middle on this debate.  I think the liberals making this call are missing the boat by not attempting to answer some of these questions and frame the argument as such.  I think the pure Capitalists who are refusing to consider and cite the pure market forces are tone-deaf from watching too much Fox News.

The truth is somewhere in the middle.  What business benefits happen with the move to $15 per hour?  Prove the benefits or simply get to break even, and most reasonable people would support.  

Refusing to talk about what business owners get for their money?  Good luck with that stance - I wouldn't want you representing me.


Todd Noebel

By break-even, presume you mean that increasing the pay is somehow budget neutral and/or has no negative business impact? Because we all know that no business would rationally support increasing costs so long as the business breaks-even. It has to make a profit.


I think these are great questions to help address why wage raises and/or benefits could help an employer in their business. But using them for the current wave of minimum wage-related activism might actually undermine the efforts being made.

When the conversation is framed around what McDonalds or Walmart will gain from paying a livable wage, it shifts the goal-posts to "Convince me why you should get a raise" instead of raising expectations for the bare-minimum responsibilities of employers.

It's not so much, "How will I benefit from giving you a raise?", as much as it is "I pay my full-time workers so poorly they need government support and benefits to make ends meet. The government is subsidizing/supplementing my employee's wages--I should fix that so that I'm not wasting taxpayer money."

That being said, one of the most basic benefits of large employers raising their minimum wage is that they are injecting more money into the economy, so more people have more money to spend. Trickle-up economics, I guess. =)

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