Wednesday, September 04, 2013

Yet More on the $15 Minimum Wage

In the Tribune, a good article on the demands of fast food workers to get a minimum of $15.00 an hour for doing low-skilled or unskilled work.

Our definition of a good article: one that quotes us a lot.

It does quote leftist Law School professor Paul Secunda (we suggested to the writer that she contact Secunda to get an alternative view, and being a good journalist, she did).

According to the article:
Paul Secunda, a Marquette law professor, points to other countries to argue in favor of raising the minimum wage.

“McDonald’s and other restaurants’ fast food workers make closer to $15 per hour by law in other countries, and McDonald’s and these other companies still choose to open restaurants there,” Secunda said in an email. “I am all for the workers striking for fairer wages.”

Secunda said unless protesters act collectively, they won’t receive national attention.
Of course, everybody in a free country has a right to seek attention. But they don’t have a right to be viewed as anything more than representatives of a moocher culture that thinks you get ahead, not by working hard or getting training or education, but by “acting collectively” and demanding free stuff at other people’s expense.

Secunda’s claim about other countries that have high minimum wages fails to mention that he is talking about socialist countries of Europe that have chronically higher unemployment than the U.S. does.

How high minimum wages drive unemployment is vividly illustrated by a 2011 article from MSN Money:
McDonald’s (MCD) is trying to make fast food even faster.

The Financial Times reports that the world’s largest fast-food chain plans to replace many of the cashiers at its 7,000 European restaurants with touch-screen terminals that allow customers to order and pay electronically.

The system is similar to what many consumers experience in supermarkets, retailers and gasoline stations that have opted for self-checkout to save on labor costs. McDonald’s says the move is about making its European restaurants more convenient and efficient. It’s also clearly about keeping down costs. If it succeeds, you can bet the trend will come soon to the U.S.

The decision is being driven by margin concerns. McDonald’s is still growing its sales, reporting a 5.7% increase during its first quarter in Europe compared with a year ago. But margins are being eaten up by higher commodity costs -- beef and dairy in particular. (Mickey D’s recently debuted new chicken menu items to fight beef inflation.)

Outside the restaurant, consumers everywhere are struggling to pay bills under the weight of rising gasoline and food prices, and a Big Mac or McCafe coffee is quickly becoming an expense many folks cannot afford as often as they might once have. That may be even more the case now that McDonald’s has said it will raise menu prices to cover rising food costs.

But while the ordering experience may not change, the labor market could feel an impact. During the Great Recession, many consumers turned to McDonald’s -- one of the few employers still hiring -- for employment. McDonald’s recently held a national hiring day to fill 50,000 jobs. There may be some risk in rolling out a cashier-free system after touting the restaurant’s footprint as an employer. And if there are not enough accessible employees around to complain about when folks use the self-checkout for the first time, that could really give customers the impression that McDonald’s is just looking to cut corners to squeeze out a few more euros.

McDonald’s didn’t mention any immediate plans to make touch-screen ordering and payment more widespread in the United States. But if it’s successful in Europe, it won’t be long before U.S. consumers find themselves reading or talking to a screen.
This has yet to come to the U.S., but any large increase in the minimum wage would guarantee that it does.

Which brings us to the dirty little secret of the leftists who want a much higher minimum wage. They want markets distorted. They want wages. salaries and profits to be distributed on the basis of politics, because they are the kind of people who have little ability to perform in a market, but substantial political power.

They are people like (just for example) law school professors.

When a higher minimum wage creates unemployment, that becomes a reason to demonize businesses that lay off workers, all for “their obscene profits.”

Unemployment increases the demand for social welfare benefits, and makes more people dependent on government. And the liberals and leftists know perfectly well that dependence on government helps them politically.

So when the liberals and leftists claim to be acting with “compassion” and “concern for the workers” they honestly have convinced themselves of that. But underneath is the raw fact that they are promoting their own political welfare at the expense of workers and consumers.

Labels: , , , , , , ,

3 Comments:

Blogger Amused said...

Australia has a significantly higher minimum wage than the U.S. and its economy seems to be doing fine. A higher minimum wage also increases the buying power of workers, which will increase demand.
Let me say I find it somewhat ironic and amusing that a unionized college professor with a tenured position for life criticizes people for trying to obtain a living wage.

10:49 AM  
Blogger John McAdams said...

Amused,

Re Australia: you can prove anything you want if you just pick and choose your examples. The fair comparison is the U.S. versus the Eurozone, and their unemployment is nearly 5% higher than our high (Obama) level of employment.

Marquette professors, like most professors, are not unionized. And I got my job by getting the qualifications for a good job (a Ph.D) and not by demonstrating and joining a union and demanding things.

11:20 AM  
Blogger KeynesianPacker said...

Dr. McAdams:
If you are such an expert on the minimum wage, why did you delete an entire thread in which we debated the subject? Quite sad, really.

2:12 PM  

Post a Comment

Links to this post:

Create a Link

<< Home