News & Research Archive

Minimum Wage Debate with Fast Food

Dec 18, 2013

 

The SEIU union has embarked on a national fight to increase the minimum wage for fast food workers to $15.00 an hour. From McDonalds to Burger King, workers have had walkouts and protests causing facility shutdowns across the country.

On one hand, this is a classic union organization effort to tap into a large non-union represented workforce as well as the blight of poor workers who live on minimum wages, which no longer is able to support the 4.1 million workers in the industry.

On the other hand, you have jobs that are providing young adults and middle-aged employees with part- time and full time work. According to the Bureau of Labor Statistics, one in four of fast food employees are working to support their family of at least one child or more. These jobs also provide employment opportunities for one third of their workers who are in the process of earning their college degree. Lastly, the fast food industry provides products that service a large population of economically deprived Americans.

Currently, the federal government minimum wage is $7.25 an hour with cities and states across the country offering higher wages including San Francisco, which pays $10.55 an hour for minimum wage.

So what are the potential consequences of having fast food operators paid $15.00 an hour? Payment for fast food operators will certainly go up. At $15.00 an hour, operators will likely see the next higher level of employees now willing to work for them. This could lead to a large round of layoffs, affecting the younger or currently underemployed workers, which will greatly affect their livelihood.

If unions are successful in organizing the fast food workers into unions, employees may gain better protection under the union negotiations. However, these union negotiations will come at a cost of paying union dues and competing for jobs with those currently uninterested in working for the fast food industry and who might be better qualified for the positions. Younger people could be the most negatively affected, as they currently make up thirty percent of the fast food employees in the United States.

So how do we solve this dilemma? Very simply, we could allow tips to be earned by fast food workers. For years, full service restaurant workers have made minimum wage. However, they make the majority of their income on tips. This model is also extended to food delivery employees, who receive minimum wages, but also earn tips upon deliveries. Fast food operators, however have never been offered tips to employees.

There is no doubt that fast food personnel work extremely hard. Food service in general, is not easy. Patrons are accustomed and understand that tips are required as an added cost when dining at restaurants. If fast food operators begin to promote tipping, then workers will enjoy the benefit of an increased income without having to unionize and risk changing the system, where losing their jobs could be a greater possibility.

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Written by: Hans Hansson

E-mail: hans@starboardnet.com


Hans Hansson is President of Starboard TCN Worldwide Real Estate Services as well as a member of the Board of Directors for TCN Worldwide Real Estate. Hans has been an active broker for over 28 years in the San Francisco Bay Area and specializes in office leasing and investments. If you have any questions or comments please email hans@starboardnet.com or call him at (415) 765-6897. You may also check out his website, www.commercialspacefinder.com.

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