Misconceptions on Minimum Wage of Fast Food Workers and the US Military

posted in: Life, Politics, Stock Market | 9

This “rant” about minimum wage, fast food, and military compensation has been circulating around Facebook for the past few years, one version can be seen here:

Min wage misconceptions

 

Other versions read something like: “Okay, rant – For those fast food employees striking for $15 an hour, let’s do some math. At $15 an hour Johnny Fry-Boy would make $31,200 annually. An E1 in the military makes $18,378. An E5 with 8 years of service only makes $35,067 annually. Hmmmmmm….. So you’re telling me, Sally McBurgerflipper, that you deserve as much as those kids getting shot at, deploying for months in hostile environments, and putting their collective asses on the line every day protecting your unskilled butt! Here’s the deal, Baconator, you are working in a job designed for a kid in high school who is learning how to work and earning enough for gas, and hanging out with their equally goofy high school pals. If you have chosen this as your life long profession, you have failed. I worked at a movie theater as a projectionist when I was 17 years old. I made $3.25 an hour. I didn’t bitch. I was happy to have some money to screw around with. I also knew that I didn’t want to be doing that when I was 30 years old and raising a family!!!!!! Pull your heads from your bottoms and stop being content with your McJob. Leave that for the kids who really need it so they can learn a basic work ethic and realize that’s not what they want to do with their lives. End rant.”

 

These “rants” are absolutely riddled with misconceptions and I took an hour out of my Saturday to clear some things up.

 

I’m just going to go with the benefit of the doubt that Jennifer Harris here didn’t do much homework (read: any homework).
 
Fast food/min wage workers are not hired full time so their employers don’t need to provide them benefits like Obama care; most get 20-30 hours a week. So we’ll go on the high end and say $23,400 ($15 * 30hours/week * 52 weeks) without a single day off (though I’d rather not have someone with the flu handling food). Then there is of course federal income tax which I guess we were just ignoring? Down to about $20,000, if there is no state income tax. If indeed the military members are deployed and getting shot at as stated above, they do not need to pay federal income tax (rightfully so). Still ridiculous though, how are hard working military women and men making the same as the burger flippers? Well they’re not at all if you look a bit deeper.
MinimumWage_productivity_imagelarge
 
The military provides our soldiers with allowances for housing, clothing, food, moving expenses, and the cost of living if they are stationed somewhere expensive/overseas. And this is on purpose! By providing allowances, rather than on salary, the allowance amount is not taxed (except for Cost of Living Allowance). For example, active duty members receive around $14,000 per annum for housing in the continental US; that is nearly as much as their salary. Thereby our service members get compensated more than if it was just included in their salary and they needed to pay taxes. There are also plenty of opportunities for special pay and bonuses in the military along with the education benefits. Congress found the average solider has a total compensation of about $99,000 a year. Measly sum for risking your life and likely being shafted by the VA later, but it is absolutely not $18,378 for a deployed Private E1 (who of course also has the chance to move up in rank).
20150523_woc352
 
Are military personal paid too little? Probably. Are teachers paid too little? Absolutely. Are EMTs and Paramedics paid too little? Of course. But these are all tangential to the fact that minimum wage of $7.25 is too low, has not kept up with inflation, and has stagnated and declined over the past 4 decades. Rather than the {previous} CEO of McDonalds making $7.3M a year (all day breakfast isn’t that good of an idea) and McDonalds spending $8-9 Billion a year on share buy backs, they could pay their workers an inflation adjusted min wage of $12, or productivity adjusted to $18. $12 is about where min wage should be in 2015 and much more money would circulate in the economy rather than be added to the trillions sitting in off shore accounts. Sure shoot for $15 an hour and when you’re forced to work 30hour/week it’ll come out around (but still less than) $12/hour full time. And finally, it is indeed the case most (50%) of min wage workers are 18-24 years old, getting working experience to move onto a higher paying profession, perhaps saving some for college.

U.S. minimum wage value over time adjusted

So Jennifer Harris, whoever you may be, please do your homework next time you berate working Americans with a selectively miss-informed status.

Creative Commons License
This work by Blake Porter is licensed under a Creative Commons Attribution-Non Commercial-ShareAlike 4.0 International License


If you enjoyed this article and found it informative, consider donating! Funds first go to keeping the website running (domain name/hosting) and secondly go to me. Donations are secure and handled by PayPal.




9 Responses

  1. I want to hunch my shouldes and weep at the ignorance of this argument. It is a nonissue. McD’s employees don’t complete bootcamp (do no dismiss that accomplishment as trite) and sucessfully complete a year (or two) of education and training, before they slap together their first buger? Have they taken an oath to protect you, me and the nation (also not trite)? Soldiers and sailors do not compare in ANY WAY to a fast food employee. Military personnel do not get days off, call in sick, challenge a supervisor, or earn respect without extraordinary effort. Nothing is for free. Many E1-E3 have WIC and foodshare, enven wile living in questionable military housing. Fast food workers are not required to leave their families for up to 2 years at someone elses discretion. Being “shot at”, apparently has no value unless you don’t pay taxes for that day. It’s 9/11 everyday at the places where human beings and loves ones “are shot at”. These guys and gals work ANYTIME/ANYWHERE their supervisor requires. Being late or chosing not to show up does not go unpunished. They work in any kind of conditions (and I mean ANY), are team players and carry out their duties in dangerous situations regularly. Want a family, “they don’t come with your seabag” therefore they are the last consideration regarding military personnel orders. The military does what it can for families but at the end of the day they are a footnote. Can’t say that in the civillian world. If war comes to US soil, is our local fry cook going to literally defend us without question? Not likely. They don’t have the skills, BUT are paid as though they do. The men and women who have devoted their lives to ensure ours, (who make $19,000 a year) will, without question.

    • Why should people that work in a restaurant (with no tips) settle for low pay just because people in the military do? I don’t understand this anger at people just asking for a higher wage. Doesn’t everyone in America try to get a raise in pay? Strippers and Casino workers make more than military men, but you don’t seem to have anger at them that you do at McDonald’s people.

      • Of course anyone and everyone is free too, and should, attempt to negotiate a higher wage. However, if the value of their unskilled work is not equivalent to a higher wage then there is little footing to negotiate a higher payer. Is flipping burgers and putting on ingredients really worth $15 an hour? Eventually, and possibly soon, a wage level will be reached where burger making robots (http://momentummachines.com/) will be economically feasible just as self order/self checkout kiosks are becoming today. Some jobs just do not generate much revenue. For example from personal experience, workers sorting garbage for metal/wood/plastics/etc. At $12 an hour with payroll taxes, insurance, and health care cost, it just is not an economically feasible to sort anymore and the garbage is just dumped unsorted.

        Furthermore, many other industries have a limited supply of potential employees to draw from, ie strippers, so wages are of course higher. There is a seemingly unlimited pool for low skill restaurant work. Casino margins are likely much better than a fast food chain. A black jack dealer, who often gets formal schooling, especially one liked by players (proficient in dealing, good conversationalist) can bring in the house very large sums of money while a fry cook, good or bad, doesn’t change the top line.

  2. Pay and allowances? Even in peace-time military pay is too low. Clothing allowance is for uniforms and one pair of boots can eat that up all at once. Try dividing base pay and allowances into 24 hrs a day 7 days a week, field duty, PT, responsibility for 20-30 other people, harassment by complacent senior people, urinalysis at 5am, 24 CQ, barracks inspections, etc.Many times we saw a raise of 1.5%. Let people deal with the way Congress treats the military pay system and then we can talk.

    Many of these so called coffee, sandwich, semi-fast food establishment expect tips just for ringing up a purchase. Minimum wage is a training wage

    • Absolutely agree with everything you say. Soon ringing up a purchase won’t even require a minimum wage worker if automation continues at the rat it is. Thank you for sharing your insights.

  3. Talon Lambrecht

    An E1 most likely doesn’t get much of those allowances your are talking about and live purely off their base pay. Unless you are married or have kids, when you first enter the military and most of the time 2 years after you are living in pretty crappy dormitories, sharing a bathroom with someone else, and everyone sharing one kitchen. You don’t get housing allowance, and you don’t get food allowance either, you have a meal card to really crappy food which honestly is probably about equivalent to the free food most fast food restaurants give their workers during shifts. And not to mention how the fact of being forced to spend months or years away from home and your family on a deployment never knowing if you’ll get back from is totally justifiable as long as you don’t get taxed?? Yeah because saving a few dollars a year makes me want to go risk my life or someone else’s. Most people in the military are there because they want to and they don’t complain about all their hardships, I don’t expect to get paid more because I’m deployed or anything, I’m there because I want to be there to defend the people of this country. It’s when people who honestly are just flipping a burger and sometimes not very well complain about how they’re getting paid, that’s when military members care. I don’t complain about my pay while away from my family performing a very skill based job thousands of miles away, but they’re going to complain about performing a brain dead job, finishing a 6 hour shift to go home to mommy and daddies house 5 minutes away? Many jobs and careers deserve a higher pay, but for a reason, because of further education and skills, and the fact of what you’re doing daily, not because you live in the US and can complain that you want more money. If minimum wage increases, cost of living will most likely increase due to businesses having to increase prices to offset the loss of paying employees more, but I promise you if cost of living and minimum wage increases, military pay will still only go up 1.5% each year and the higher skilled jobs like EMT’s most likely won’t increase at all, earning those people overall less than before.

    • Hi Talon. First and foremost thank you for clarifying things for me and other readers, I appreciate it.

      While I’m sure the housing situation is no where near ideal or comfortable it’s still housing; something tens of thousands are completely without in the US (esp veterans, which is unacceptable) and something tens of millions of Americans struggle to afford. I would like to reiterate I agree with you that military pay is abysmal but any housing benefit, even if it is shitty dorm style living, is quite a cost offset. Food as well, even if it is crappy mess hall food, it’s better than nothing. And while I realize this article focused on fast food workers there are many other minimum wage earners who do not get food on the job, such as cleaners and cashiers (depending on the industry).

      I completely agree with you on the tax and deployment side; it’s nothing for risky your life to fight overseas. I meant to convey that in my “Measly sum for risking your life ” line.

      Lastly, and I imagine we are on the same side of all of this, maybe I did not convey my ideas clearly enough, I do think minimum wage should be raised in general to pace with productivity but not anything above that. Minimum wage and fast food work was never suppose to be a career path. It was a way for teens and young people to save and pay for college or older folks to keep busy. Wages should, in theory, reflect the productivity of the worker. McDonald’s turns a billion a year in profit, spending ten of billions on stock by backs. Raising the wages of those who made such profits possible seems reasonable and will result in circulating money rather than offshore stashes.

      I’ve written extensively on this issue of minimum wage raises in the context of automation http://www.blakeporterneuro.com/the-coming-tsunami-of-automation/ Certainly an increase in wages will necessitate an increase in price, or a cut of staff, or a bit of both, in the short term to maintain profits. In the long run it is not so easy to predict. For example, if fast food wage is the same as the wage of EMTs, some EMTs will say fuck this and work elsewhere for the same pay for less work. This causes a supply shortage and EMT wages go up. However, I think with increasing minimum wage many companies will just abandon humans all together. A 6-axis robotic arm may be worth the cost of replacing a human making $15 an hour flipping burgers. I don’t think there is enough information now to determine if the cost of living increase will outpace the rise in wages. Though there are some good experiments going on now in CA, NY, and DC.

  4. Anyone can work in fast food, so the wages are going to be low. At $7.25 an hour the pay is probably already too high. It doesn’t matter what the living wage is it matters what the job is worth. How much value does this employee bring to the company. Being a cashier at McDonald’s isn’t worth $15 or $12 or $10. Soon it will be worth $0. Many places already use ordering kiosks. They are faster, easier to use, never make a mistake, never call in sick, show up late, or complain, and cost far less. Many jobs besides fast food are also going to be slowly replaced by technology that is able to do a better job for less. By pushing for $15 an hour all these workers are doing are making sure they lose their jobs faster.

    • If it matters what the job is worth than their wages should be even higher than $7.25. McDonald’s has turned a gross profit of roughly $10B per year for the past three years. McDonald’s executive compensation totaled $41M in 2016 over it’s 7 executives. None of this would be possible with the work of the line cooks and cashiers as their current model stands. It seems reasonable that employees could be paid more based on those financials. Paying such a low wage puts a strain on welfare. Fast food workers in the US take in $7B in public assistance each year due to the low wages. McDonald’s corp could, for example, add a profit sharing scheme with its franchises to give back to the workers based on store performance.

      Ordering kiosks simply transfer the work from an employee to the customer. Next you’ll get to bag your own fries, then create your own burger in the kitchen. Kiosks, currently and I’m sure they will improve, do suffer bugs and down time like any other computer and I’ve seen it happen plenty of times at my local McD’s. Also, currently, the kiosks are quite expensive at around $135k each, but that price will fall with wider adaptations. And don’t get my wrong, I completely agree with you on your later points, as I’ve outlined in details here: http://www.blakeporterneuro.com/the-coming-tsunami-of-automation/ But military jobs are being automated too. No need for a massive number of field scouts when we have satellites. Branches of the military and DARPA are spending massive amounts on robotics research to replace soldiers. Just as the fry cook can be replaced with a robot, so can a solider. Unskilled people need some sort of work and living wage otherwise they will just became welfare dependent and drain the state.

      However, for the matter at hand, based on McDonald’s current financials they can afford to pay their employees higher wages for the revenue and profit they generate for the company.

Leave a Reply