Fairer McPay for McWork

Fast food workers are striking for better pay – and while many media outlets are dutifully burying this worldwide event, a trickle of information is coming in, with the usual anecdotes about impoverished single mothers flipping burgers for $8/hr, year in and year out, on public assistance, struggling to buy groceries and pay rent.

Conservatives often come back with the smarmy insight that fast-food jobs werent “intended” to be lifelong careers. To which we ask: intended by whom?!? Y’see, one slap-in-the-head aspect of the invisible hand (which conservatives love, honor and obey, if not understand) is that markets dont have intentions, any more than they have fingernails. Employers advertise jobs, and by market magic, workers appear, offering their labor. And it so happens that adults with dependent children, and not just high school kids, are a large fraction of the fast-food workforce.

The good news is that when conservatives deem a market outcome or market-participant behavior to be “wrong,” they unwittingly take a giant conceptual leap forward. Because in order to reject classical economics, one must first accept the premise that markets sometimes screw the pooch, making it necessary for Keynesians to step in and apply a fix. Seems many conservatives, in their limited way, already appreciate that we have a national problem with many single heads-of-households trying to support families on minimum wage jobs.

Conservatives just have to take the next step. Complaining that an increase in the minimum wage will force fast-food firms to raise prices misses the point: their prices are held artificially low through a kind of corporate welfare. Income that fast food workers receive in the form of public assistance (through medicaid, EITC, food stamps, housing, etc.) must be regarded as a government subsidy to fast food firms, who, in its absence, would have to pay more in compensation. Thus, raising the minimum wage will serve primarily to shift that burden off of taxpayers, and onto those firms and its customers, where it belongs.

Earlier this year, CBO came out with a report that both puffed up and pooped on Obama’s plan to raise the minimum wage. While they predict that an increase in the minimum wage to $10.10 will succeed in increasing the wages of most low-wage workers (raising many families out of poverty), they also predict that some will lose their jobs, and that the overall rate of employment for low-wage workers will likely drop a bit (0.3%).

CBO is a respectable non-partisan source, so we will for the moment politely ignore the fact that a long line of empirical research has failed to observe any such drop in low-wage employment rates following a modest increase in the minimum wage. We might focus instead on CBO’s bottom line: the prediction that an increase in the minimum wage to $10.10 will send an additional $17 billion of income to workers making less than triple the poverty line. In a time of high poverty and sky-high inequality, that might not be a whopper of a increase, but surely it would be a modest mcpositive.











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