Posted on 02/25/2015 10:26:11 AM PST by shove_it
Hi Mike, The federal minimum wage is $7.25 and hour. A lot of people think it should be raised to $10.10. Seattle now pays $15 an hour, and the The Freedom Socialist Party is demanding a $20 living wage for every working person. What do you think about the minimum wage? How much do you think a Big Mac will cost if McDonald’s had to pay all their employees $20 an hour? Darrell Paul
Hi Darrell Back in 1979, I was working as an usher for United Artists at a multiplex in Baltimore. The minimum wage was $2.90, and I earned every penny.
When I wasn’t tearing tickets in half and stopping kids from theater hopping, I was cleaning out the bathrooms, emptying the trash, and scrapping dubious substances off the theater floor with a putty knife. I wore a silly outfit and smiled unnaturally, usually for the entirety of my shift. I worked 18 hours my first week, mostly after school, and earned $62.20. Before taxes. But I was also learning the importance of “soft skills.” I learned to show up on time and tuck my shirt in. I embraced the many virtues of proper hygiene. Most of all, I learned how to take shit from the public, and suck up to my boss.
After three months, I got a raise, and wound up behind the concession stand. Once it was determined I wasn’t a thief, I was promoted to cashier. Three months later, I got another raise. Eventually, they taught me how to operate a projector, which was the job I wanted in the first place. The films would arrive from Hollywood in giant boxes, thin and square, like the top of a card table, but heavy. I’d open each one with care, and place each spool on a separate platter. Then, I’d thread them into the giant projector, looping the leader through 22 separate gates, careful to touch only the sides. Raging Bull, Airplane, The Shining, Caddyshack, The Elephant Man – I saw them all from the shadowy comfort of the projection booth, and collected $10 an hour for my trouble. Eventually, I was offered an assistant manager position, which I declined. I wasn’t management material then, anymore than I am now. But I had a plan. I was going to be in the movies. Or, God forbid, on television.
I thought about all this last month when I saw “Boyhood” at a theater in San Francisco. I bought the tickets from a machine that took my credit card and spit out a piece of paper with a bar code on it. I walked inside, and fed the paper into another machine, which beeped twice, welcomed me in mechanical voice, and lowered a steel bar that let me into the lobby. No usher, no cashier. I found the concession stand and bought a bushel of popcorn from another machine, and a gallon of Diet Coke that I poured myself. On the way out, I saw an actual employee, who turned out to be the manager. I asked him how much a projectionist was making these days, and he just laughed.
“There’s no such position,” he said. I just put the film in the slot myself and press a button. Easy breezy.” To answer your question Darrell, I’m worried. From the business owners I’ve talked to, it seems clear that companies are responding to rising labor costs by embracing automation faster than ever. That’s eliminating thousands of low-paying, unskilled, entry level positions. What will that mean for those people trying to get started in the workforce? My job as an usher was the first rung on a long ladder of work that lead me to where I am today. But what if that rung wasn’t there? If the minimum wage in 1979 had been suddenly raised from $2.90 to $10 an hour, thousands of people would have applied for the same job. What chance would I have had, being seventeen years old with pimples and a big adams apple?
One night, thirty-six years ago, during the midnight showing of The Rocky Horror Picture Show, I sat in the projection booth and read a short story by Ray Bradbury called “A Sound of Thunder.” It was about a guy who traveled back in time to look at dinosaurs, but against strict orders, ventured off the observation platform and accidentally stepped on a butterfly. When he returned to the present, everything in the world had changed. “The Butterfly Effect” is now an expression that describes a single event that leads to a series of unanticipated outcomes, resulting in a profoundly unintended consequence. (Ironically, it’s also a movie with Ashton Kutcher, which I had to pay to see 30 years later.) Anyway, I’m not an economist or a sociologist, but I’m pretty sure a $20 minimum wage would affect a lot more than the cost of a Big Mac. Beyond the elimination of many entry-level jobs, consider the effect on the skills gap. According to the BLS, they’re about three million available positions that companies are trying to fill right now. Very few of those jobs require a four-year degree, but nearly all require specific training. And all pay more than the current minimum wage. If we want a skilled workforce, (and believe me, we do,) should we really be demanding $20 an hour for unskilled labor?
Last year, I narrated a commercial about US manufacturing, paid for by Walmart. It started a shitstorm, and cost me many thousands virtual friends. Among the aggrieved, was a labor organization called Jobs With Justice. They wanted me to know just how unfairly Walmart was treating it’s employees. So they had their members send my foundation over 8,000 form letters, asking me to meet with unhappy Walmart workers, and join them in their fight against “bad jobs.” While I’m sympathetic to employees who want to be paid fairly, I prefer to help on an individual basis. I’m also skeptical that a modest pay increase will make an unskilled worker less reliant upon an employer whom they affirmatively resent. I explained this to Jobs With Justice in an open letter, and invited anyone who felt mistreated to explore the many training opportunities and scholarships available through mikeroweWORKS. I further explained that I couldn’t couldn’t join them in their fight against “bad jobs,” because frankly, I don’t believe there is such a thing. My exact words were, “Some jobs pay better, some jobs smell better, and some jobs have no business being treated like careers. But work is never the enemy, regardless of the wage. Because somewhere between the job and the paycheck, there’s still a thing called opportunity, and that’s what people need to pursue.”
People are always surprised to learn that many of the subjects on Dirty Jobs were millionaires – entrepreneurs who crawled through a river of crap, prospered, and created jobs for others along the way. Men and women who started with nothing and built a going concern out of the dirt. I was talking last week with my old friend Richard, who owns a small but prosperous construction company in California. Richard still hangs drywall and sheet rock with his aging crew because he can’t find enough young people who want to learn the construction trades. Today, he’ll pay $40 an hour for a reliable welder, but more often than not, he can’t find one. Whenever I talk to Richard, and consider the number of millennials within 50 square miles of his office stocking shelves or slinging hash for the minimum wage, I can only shake my head.
Point is Darrell, if you fix the wage of a worker, or freeze the price of a thing, you’re probably gonna step on a few butterflies. Doesn’t matter how well-intended the policy – the true cost a $20 minimum wage, has less to do with the price of a Big Mac, and more to do with a sound of thunder. Frankly, it scares the hell out of me. Mike
PS I looked into the Freedom Socialist Party and their demand for a universal, $20 an hour living wage. Interesting. You’re right – they’re serious. But not long after they announced their position, they made the interesting decision to advertise for a web designer….at $13 an hour. Make of that what you will.
At some point in my employed life,I would probably have had to agree with most of that. After many years in a certain skilled trade,I would have some issues with SOME(certainly not all)of it now. Due to changes that were beyond my control,it just became totally unsatisfying at some point in time. After so many years in the business at a subsistence income,there was no opportunity to make any worthwhile changes;no direction to go that was even slightly feasible. I doubt I am the only one who has ran into this situation. I am retired now & can’t find anything suitable,or I would go back to work.
PS I looked into the Freedom Socialist Party and their demand for a universal, $20 an hour living wage. Interesting. You’re right – they’re serious. But not long after they announced their position, they made the interesting decision to advertise for a web designer….at $13 an hour. Make of that what you will.
If that doesn’t tell you everything you need to know...
Thanks for noticing the hypocrisy of the the FSP but those are Mike Rowe’s words, not mine.
In reference to item #3, sometimes making the best of the job is finding its replacement.
The opportunity in that job will be learning when it is time to recognize the lack of a future and fix it yourself with other employment rather than complaining about it while staying.
Does that figure include all the associated labor cost in the items purchased by McDonalds? Every item they purchase from the meat to the napkins has a similar cost rise impact.
Mike really, really, really nails it.
I just did a web search on restaurant labor costs and got eh 35% figure. The price of the burger/mac includes advertizing, overhead, energy, raw ingredients, management and profit.
Actually, I guess Mike Rowe already covered my #3 comments with his #8.
The point is whining and complaining tend to make everyone miserable, including the whinner. It is okay to point out suggested changes for your job to your employer. And if unresolved, politely and professionally address the topic again. But at the third time, possible 4th, on the same problem, it is often time to move on. Your mileage may vary.
Here's a clue to what Rowe is talking about - raises in the minimum wage have a direct impact on the SPEED that automation is implemented. Rowe (nor anyone) is saying minimum raise is the ONLY cause of automation.
Let's see if I can keep this simple enough for even you....a fast food employee makes $8/hour. The cost of a machine to replace what he/she does costs $12/hour. Employee keeps job until the cost of the automation gets below the wage cost. Now, via increase in the minimum wage, the same employee has to make $15/hour. Guess who is now out of a job?????
The reason to automate are many, the cost of minimum wage is near the bottom of the reasons.
I suspect the 35% is direct labor. But there is an impact in minimum wages in most of the items they purchase.
I think there would be greater impact to the total price/cost.
What the employee makes is not the full cost of employing them either.
There are not MANY reasons to do something when you're running a business, there's ONLY TWO - the new "thing" in the long term either reduces costs and/or increases revenue (both of which increase net profit).
Sheeeesh....
Absolutely correct. I was just keeping my example as simple as possible.
Labor factors into everything.
good idea. A thread title like that could attract some libertarians, so gotta keep the scenarios as simple as possible.
The formula is pretty simple. Anything you do requires investment. You pay for a machine, you pay to make it work. You pay for training. What makes the most sense?
What's the most expensive? What's the most complicated?(expensive?)
Do you know how much investment dealing with employees justifies? Raise the minimum wage to $20...then see how many low and no skill positions exist.
Explain why you can make that judgment...does it involve anything besides something you read once?
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