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

posted in: Life, Politics, Stock Market | 19

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

You can see the income of a Major in the Air Force in one of my favorite subreddits r/dataisbeautiful

Income and Expenses of a Major in the US Air Force


Monthly income and expenses for an E-3 in the Air Force with an annual gross income of $27,708. While too little in my opinion, they are able to save an incredible 58% of their gross pay.

r/dataisbeautiful - My Monthly Pay as an E-3 in the US Air Force [OC]


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19 Responses

  1. Lee

    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.

    • K

      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.

      • Blake Porter

        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. bsr

    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

    • Blake Porter

      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.

    • Blake Porter

      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. Kathy

    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.

    • Blake Porter

      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.

  5. Michael J Tawney

    I am First Class Petty Officer in the Navy (E-6) and I concur that the articles claiming our pay is equivalent to a fast food worker is absolutely bogus. My monthly salary is just shy of $3100. Sounds low at first glance. However, I also receive a little over $350 a month for food allowance and $1300 a month for housing allowance (Oklahoma). This makes taxable income around $37,000 but my checks really total just shy of $60,000. Since my allowances are not considered income I qualify for all sorts of benefits since I am considered a family of four with low income. I qualify for earned income credit where a civilian earning the same amount would not qualify. Also have access to exchanges and commissaries that are tax free, completely free healthcare for myself and my family, free dental and vision for myself, free gyms, pools, and all sorts of military discounts from theme park tickets to drive through runs at local fast food joints. Not to mention 30 days of leave every year and unlimited (justifiable) sick days. If surgery put me out of work for 90 days I still get paid.

    Even the E1-E4 who are stuck in the barracks and eating at the mess do not have to deal with housing and utility payments. That $18,000 a year is almost exclusively discretionary income. It is a mere 9 months of service (including boot camp) before you promote to E2 and another 9 months until E3. If the E-1 has a family and stationed in Oklahoma they can expect about $35,000 a year which in a year and a half would increase to $40,000 a year. However, they would fully qualify for Earned Income Credit, Child Tax Credits, etc since they’re taxable wage is so low, earning them even more on top of that, not to mention the free healthcare, discounts, 30 leave days a year, etc.

    Is the work I do worth the money? That’s certainly up for debate. There are weeks *I am not even deployed* and can easily work over 100 hours. Then there are holiday stand downs and such where we only show up for duty days in the course of two weeks. That’s not the point. What I am trying to say is the comparison is bogus. Even the E-1, when considering the full package of benefits, will arguably fare better than the burger flippers making $15 an hour, at least when it comes to total compensation.

    • Blake Porter

      Hi Michael,

      Thank you so much for taking the time to comment and providing all of us with some real numbers about the extra income and other benefits members of our military receive. I think your comment will really aides readers in understanding the article better.

      All the best,
      Blake

  6. Jim

    So wrong you have no idea. I deployed over seas. If you only counted the 3-5 hours a day/night where I actually slept during the initial invasion of Iraq I worked roughly 3500 hours. In that 7 month deployment. No time off, no break, constantly on watch. That YEAR, I made 21000 pay, add these benefits which you only get IF you have a house and we will just call it $28,000 because my LES statement showed “Benefits paid to you by government” equaled about $7,000. Add the other hours for rest of the year that I worked, (640 ish) which equals about 4100 hours for that year at 8 hour days, which I never did and constantly worked 10+ hours a day. Now, divide that into my pay and you have $6.82 an hour. So yeah, I make less than a burger flipper from MD…

  7. Airman, Robinson

    Anyone who agrees with the author of this article clearly doesn’t have any idea as to what they’re talking about. first of all, I came into the NAVY as an E3 and my base-pay, according to my LES statement, was $1847.50 which equates to $923.55 every two weeks. Keep in mind your monthly earnings tend to fluctuate although Personnel is never able to articulate why.

    You do not get BAH (housing allowance) as a single person/sailor, nor is the food free (my deductions indicate $313.50 worth of food allowance was subtracted from the 1847.50 figure I mentioned earlier).

    The medical care is free so long as you only go to your ships doctor and in most cases, they are not helpful. There were times I had 100-degree fevers (bubble guts included) and an HM told to take ibuprofen and go back to work. If I even attempted to visit the ER the ship was alerted, and word got back to one of the higher ups in my division. I was either yelled at or given a counseling chit behind seeking medical attention from the hospitals ER.

    Not everyone who goes into the military is deployed. For the first two years of my enlistment I was not deployed, so that little non-tax snippet that was mentioned is irrelevant. I worked well over 8 plus hour EVERY SINGLE CONSECUTIVE DAY being out to sea, holidays and “sick days” included and I was absolutely NOT compensated in the ways a civilian would be. In fact, I made more income as a civilian prior to enlisting in the military than I did while I was in.

    Now let’s just say for the sake of argument a minimum wage worker receives $7.25 for 8 hours a day every day, just like active duty military, that would mean they earn $20,880. For my first year in service, according to my W2, I earned $21,170.00 which is the difference of $290). Whatever figures you people pulled from as your basis of argument needs to be amended.

    If there was anyway for me to upload my LES statements, just so that you all are informed before giving opinions, I would happily do so.

    • Dr. Blake Porter

      Hi Airman Robinson,
      Thank you for taking time to read the article and to provide your Naval prospective on the issue. I, and I’m sure others, appreciate you clarifying how housing and food allowance works and providing insight into the differences of how medical may look on paper versus what actually happens on a ship. I realize now I really only used information from the Army in my post and didn’t factor in other branches nearly enough.

      If you would like and provide me with written permission, I would happily host your LES statements on my website and link to them for everyone too see and learn from. I will put them with fastfredy1’s E-4 information on this page. Just send them to me with your written permission in an email: blakeporterneuro@gmail.com

      However, I am struggling to follow your math at the end of your comment. If a minimum wage worker was able to work 8 hours every day during every week for an entire year, they’d earn $21,112. However, that would assume minimum wage workers are getting 56 hours of work per week (8 hours a day for 7 days). This doesn’t seem to be the case. For example, fast food restaurants may deny workers full time (40+ hour weeks) to avoid paying full time benefits. Most fast food crew workers get less than 40 hours a week: https://www.statista.com/statistics/320843/average-weekly-hours-worked-in-restaurants-us/
      I don’t think it’s a fair argument to say minimum wage workers would be able to work 8 hours every day.
      Regardless, assuming they do get full time work (standard 40 hour work week), they will earn $15,080 before taxes ($7.25 per hour for 8 hours a day, 5 days a week, working every week of the year). Furthermore, there are numerous lawsuits against companies, fast food especially, for failing to pay overtime to employees (for example. https://www.bluemaumau.org/sites/default/files/Sanchez%20v%20%20McDonald's%20-%20Second%20Amended%20Complaint.pdf)

      I think this is an interesting distinction between the military and civilian work; working for a company your hours and schedule are dictated to you week by week. Could you provide inside in how this works in the Navy? Do you know ahead of time you will always have a full (or more than full) work week? And how far in advance do you know this? Presumably if you’re out to sea for 6 months, you will be guaranteed pay for those 6 months? Are you paid anymore for overtime work or holidays?

      Could you also comment on how accommodation overall works when you’re out to sea? I know you said you have food allowance deducted, is housing deducted as well? If you’re out at sea, did you still keep paying rent on an apartment/mortgage or do you keep things in storage instead and forgo an apartment/house? Are there other expenses you have when out to sea we (civilians) wouldn’t think of? Just trying to gauge your living costs, on average, in the Navy as an E3.

      Still, I hope the overall point of the article is not lost and you don’t actually think I have no idea what I’m talking about in regards to stagnant minimum wages for civilians. The FB post which sparked this article made a straw man argument; just because military personel are paid poorly doesn’t mean minimum wage workers should be paid even worse. As I say in the article, I also think military personnel are underpaid too.

  8. Kenton Forshee

    I suspect the young, poorly paid, fast food worker is intentional. The corporations don’t seem to mind the turnover. What if those jobs pay that little, not because they don’t deserve a living wage, but because it helps to funnel the young and poor into the military?

  9. Krissy

    Thank you, so much for this article . I am a college students and I have worked fast food and restaurant industry. I work in these places beacuase, It flexible to me so I can focus on my schooling. Customers belittle servers and fast food workers way too much. Society has taught us to do this and It not right. It is so pleasing to see someone with your educational background to take the time out of your day to stick up for us and show us some real facts. Thank You!

  10. Jennifer

    I mean, I get where people are coming from and I did the calculations a few years ago, that my husband as an E6, with ALL his entitlements earned roughly 7.50 an hour because why, they are putting in 60 to 80 hours a week. So ok. If he makes 99k a year in benefits, insurance and tax breaks, that’s still only 50k because they are working DOUBLE the hours, not to me too deployments. How do you treat the income of being on the clock 24 hours 180 days at a time or more? They sure aren’t getting overtime hours that others would be entitled to. So yeah sorry, to work like a dog, often for a measly 7 or 8 bucks an hour deserves more respect than burger flipping. It is also true that many fast food workers don’t get but 20 or so hours, thanks to side effects of Obama care, and employees trying to cut costs. So they are working 2 and 3 jobs to get those hours as well. Also getting robbed of overtime.

    Just as a military spouse, don’t speak of things you don’t understand. You can’t limp military pay all together. Officer and warrant and specialty pay greatly skews those numbers as well. And the majority of the military are just enlisted with much lower pay….

    Just some insight from my perspective, not trying to argue with anyone.

    • Dr. Blake Porter

      Hi Jennifer,
      Your insight and perspective is certainly appreciated and helpful. It has been hard to get real data from service members on their pay, hence why I linked the Major’s info. You can probably see from the other comments from service members that I did not get everything correct in terms of how pay and, and especially time worked, ends up happening in real life for military personnel. I’m trying to learn and your comments and others have helped me to understand the topic better.

      Warm regards,
      Blake

  11. Jennifer

    Oh and furthermore, my husband with nearly 20 years earns just over HALF that base pay shown in that picture, on top of we don’t have 1600 a month coming in from a rental property like that picture. So in that example above, this person is earning 4,600 a month more than my husband with, 20 years service lol. Let’s kinda not go with extreme numbers here. I would hope to goodness someone working at the same burger joint for 20 years would be a manager making more than 50k a year and benefits, if we’re trying to do a more unbiased comparison.

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