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minimum wage

Pop Culture

Here’s a paycheck for a McDonald’s worker. And here's my jaw dropping to the floor.

So we've all heard the numbers, but what does that mean in reality? Here's one year's wages — yes, *full-time* wages. Woo.

Making a little over 10,000 for a yearly salary.


I've written tons of things about minimum wage, backed up by fact-checkers and economists and scholarly studies. All of them point to raising the minimum wage as a solution to lifting people out of poverty and getting folks off of public assistance. It's slowly happening, and there's much more to be done.

But when it comes right down to it, where the rubber meets the road is what it means for everyday workers who have to live with those wages. I honestly don't know how they do it.

Ask yourself: Could I live on this small of a full-time paycheck? I know what my answer is.

(And note that the minimum wage in many parts of the county is STILL $7.25, so it would be even less than this).

paychecks, McDonalds, corporate power, broken system

One year of work at McDonalds grossed this worker $13,811.18.

assets.rebelmouse.io

This story was written by Brandon Weber and was originally appeared on 02.26.15

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Economist says that the U.S. minimum wage should be $26 and proves it with a simple chart

via New America / Flickr

Over the past decade, activists have been fighting for the U.S. to raise the federal minimum wage to $15 an hour. The $15 threshold, which is more than double the federal minimum wage of $7.25, is seen by many as a "living wage."

Some states have higher minimum wages than the $7.25 standard, with California being the top at $14. However, 21 still linger in the $7.25 zone.

Given such paltry wages, it's no wonder why the U.S. is currently having a "labor shortage." Maybe it'd be more appropriately labeled a wage shortage?

A dramatic new report from Dean Baker, the founder of the Center for Economic and Policy Research, shows that if the federal minimum wage had kept up with U.S. productivity, it'd be at a staggering $26 an hour.

Baker is an economist who received his B.A. from Swarthmore College and his Ph.D. in Economics from the University of Michigan. His work has appeared in the Atlantic Monthly, the Washington Post, London Financial Times.

via Center for Economic and Policy Research

The federal minimum wage was first established in 1938 and Congress repeatedly raised the amount to correspond with U.S. productivity. In 1968 it was the equivalent of $12 in today's dollars. However, since 1968, U.S. productivity has dramatically increased, but the minimum wage has remained relatively stagnant.

"Furthermore, a minimum wage that grew in step with the rapid rises in productivity in these decades did not lead to mass unemployment," Baker wrote. "The year-round average for the unemployment rate in 1968 was 3.6 percent, a lower average than for any year in the last half-century."

If Congress had kept the minimum wage to match productivity we'd live in a much different world.

"Think of what the country would look like if the lowest paying jobs, think of dishwashers or custodians, paid $26 an hour," Baker speculates. "That would mean someone who worked a 2000 hour year would have an annual income of $52,000. This income would put a single mother with two kids at well over twice the poverty level."

However, Baker argues that such a dramatic, overnight shift would result in an economic disaster because we've "restructured the economy in ways that ensure a disproportionate share of income goes to those at the top."

Baker cites several examples of how the economy has been restructured, including "government-granted patent and copyright monopolies" that have inflated the cost of drugs, medical equipment, and software which would "all be relatively cheap in a free market."

Baker says that CEOs are vastly overpaid because "the corporate boards that most immediately determine CEO pay are largely selected by the CEO and other top management." So a lot of the company's money is wasted in CEO compensation when it could be spread amongst the rest of the employees.

He also believes that the financial sector benefits people who make "little or no contribution to the productive economy." Specifically, he says that the banking industry charges people tens of billions in fees when we could just as easily have digital bank accounts with the Fed.

Baker thinks that we can get back to a country where wages match productivity and the changes we'd need to make to get there are worthwhile.

"It would be a great story if we could reestablish the link between the minimum wage and productivity and make up the ground lost over the last half-century," Baker concludes. "But we have to make many other changes in the economy to make this possible. These changes are well worth making."

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A Mississippi caterer raised the minimum wage at his company and sales are higher than ever

via Fit Chef Catering

The minimum wage has been one of the most hotly debated political issues in the country over the past decade. Those that are against raising the wage claim it will lead to unemployment and business closures.

Supporters of an increase in the minimum wage believe that it will not only benefit workers but help small businesses by increasing consumer spending, spurring productivity, and lowering workplace turnover.

Business owners tend to be against raising the minimum wage because it raises the cost of doing business. However, a small business owner and chef in central Mississippi raised the minimum wage at his company and things couldn't have gone better.

It's a great lesson on how people will provide you even more value when you show they're valuable.

Two weeks ago, Kevin Roberts, the owner of Fit Chef Catering in Vicksburg raised the entry-level wage from $9 an hour to $11 across his entire company.

While many in the U.S. are fighting to raise it to $15, Mississippi has the lowest minimum wage at $7.25 an hour, so the rise to $9 is considerable. Plus, Mississippi has the lowest cost of living in the United States. Hawaii, which has the highest, has a minimum age of $10.10.

Roberts didn't just give a lot of people a raise, but some great perks as well.

"This new payscale structure also includes a free daily meal, monthly tip outs, monthly performance bonuses and options for employer based group medical insurance," he wrote in a Facebook post that has gone viral.

All of these new incentives meant he had to raise the price of his products by 11 to 13% which adds up to about $.50-$.75 per meal.

After improving his employee's compensation, he noticed that there were eight very positive changes to his business.

  1. Employee tardiness is down
  2. Callouts have been reduced
  3. Employee morale is at an all-time high
  4. Teamwork is at an all-time high
  5. Product quality is at its absolute best
  6. Employees are stepping up in leadership
  7. We have more applications on hand than in the last three months
  8. Production is at an all-time high.

"And, since we are a business," Roberts wrote. "Last week was the HIGHEST grossing sales week we have had as a company since opening 3 years ago. And we are expected to have a growth of near 30-40% about to occur in the next month with the opening of a new location."

The whole experience has changed the way Roberts sees himself and his business.

"The best thing I ever did for my company was take a long hard look at how I was leading and began working on my leadership," he wrote. "I went from leading with an 'iron fist' to now a compassionate heart. Needless to say, the results speak for themselves!"

The Fit Chef Catering story shows that there doesn't always have to be an adversarial relationship between business and labor. It proves that sometimes raising wages can be a win-win for everyone involved.

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Business

Chipotle's decision to raise minimum wage to $15 may push other restaurants to follow suit

via Mike Mozart / Flickr

The Biden administration was prevented from inserting a $15 per-hour federal minimum wage in its $1.9 trillion coronavirus relief package in February due to a ruling by the Senate parliamentarian. It was the closest the federal government has come to raising the minimum wage to a level that activists have been fighting for over the past decade.

However, an unusual set of circumstances have aligned that could push the private sector into creating a de facto $15 minimum wage without any government mandate.

The restaurant business was shaken on Monday when Chipotle announced it was raising its current average wage of $13 an hour by another two dollars, bringing it to around $15. The change should be in full effect by June.

The Newport Beach, California-based company currently has 2,800 restaurants in the U.S. and Canada and employs nearly 100,000 people. The chain is looking to expand by another 200 restaurants this year.

Chipotle made the move to get a competitive advantage over its fast-food rivals at a time when there is a labor shortage in the restaurant business. Many people in the industry lost their jobs due to the pandemic, and a lot of them aren't returning due to low wages, childcare conflicts, closed schools, and an increase in unemployment benefits.

The restaurant chain believes that it can pay for the increase in labor costs by raising the prices of its food by a modest 3%.

Chipotle hopes that a pay raise along with new programs that put employees on track to become store managers within four years, earning an attractive $100,000 a year salary, will lure the best employees away from other chains.

"Wage inflation is real and employee availability is very tough and Chipotle is trying to stay ahead of the curve and maintain its human capital advantage by moving average wages to $15/hour by June," explained Jefferies restaurant analyst Andy Barish in a research note to clients.

"This raises bigger questions as demand is surging and some people have left the industry and/or are on the 'sidelines,' given the current Federal unemployment supplements that run until September," Barish added.

Chipotle's move to stay ahead of the curve could prompt other businesses to raise their minimum wage to the $15 an hour range just to stay competitive.

A similar change is happening in the world of big-box retailers. Target and Amazon both upped their minimum wage to $15 an hour, pressuring Walmart to do so for about a third of its employees.

Chipotle's decision shows how giving workers a raise can create a win-win situation for both owners and employees. Chipotle will now get to hire the cream of the crop when it comes to restaurant workers, and by implementing new programs that put workers on a management track, will also benefit from lower turnover.

It's also a great business move because there are a lot of consumers who want to spend their money at businesses that take good care of their employees. The wage increase gives consumers another reason — besides the awesome guac —for people to choose Chipotle over other fast-casual Mexican restaurants.

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