The battle for a $15 minimum wage began in New York City, when a few fast food employees went on strike for $15 an hour and union representation (Cotti & Tefft 137). The biggest explanation was that fast food corporations, such as McDonald’s, made big profits in the billions of dollars while their employees were underpaid, causing them to fail to survive. The fast food companies that held the strike at first were the employees working in Burger King, McDonald’s, Domino’s, Pizza Hut and Kentucky Fried Chicken among others. The percentage of fast food jobs that pay the required minimum wages is very small in various parts of the world where employees have low wages with no benefits and no guaranteed hours. The amount of wages paid to such employees is usually not adequate to cater for their families.
The minimum wage of $15 meant that most of the fast food workers would be at the same level with the biochemists, auto mechanics, biologists, teachers and bank tellers among other professionals. At least 52 % of the employees in the fast food companies received the assistance from the public in order to meet their needs. Some of the employees had to commute from homeless shelters to work due to the little pay that could not meet their basic needs (Basker & Khan 140). Most employees employed in the food companies especially in the busy branches tend to work for long hours both in night and day shifts and the compensation is little. This results to lack of motivation among the employees since they receive very little pay compared to the work they do.
Key Outcome of the Campaign to Date
The largest union in the country has been losing members slowly since it started the campaign of raising $15 minimum wage five years ago (Pollin &Wicks-Lim 718). The 2016 analysis shows that the union spent more than 90 million dollars fighting for the minimum wage since the year 2012 without having a single victory on the major policy. After the union this amount of money for those five years on the campaign the SEIU has not made any progress on the matters that are important. Despite the increment of the members in the union in 2015 from 1,88,7941 to 1,901,161 in 2016, there has been a decline in the membership over the previous years.
The campaign for the rise in the minimum wage is still being viewed as not being the best option by most leaders since some argues that the rise would result to most franchisees raising the prices of their products or reduce the number of workers in their outlets or the combination of both. In 2016 prior to the elections, the employees had planned to back up the candidate who would support their campaign. The group would hold the neighborhood parties and voter registration drives to coax the workers to the polls. SEIU has at least 2,000,000 members and has been funding the campaign for years. However, three years down the line, there is no clear information on where the campaign is headed or on how it has figured out in becoming a model that is sustainable for labor activism. Despite all its movements in embarrassing the employers who pay low wages to the employees for instance McDonald’s as well as improving the local wage floors, the strikes and the campaign have not led to more unions to support the cause financially. To date, SEIU has used millions of dollars in supporting the effort of the campaigning workers. The campaign has in some places resulted to victories for instance in New York, the rate is gradually being phased in the entire state where an order was given by the board in charge of the wages. Meanwhile, in the coming years, San Francisco, Seattle and Los Angeles are planning to raise their minimum wages to $15.To date, the campaign has been focusing more on the industries where workers have been organized by SEIU particularly fast foods as well as home care and child care.
Have Legislatures at The State and Local Level Increased Minimum Wages to $15?
Most of the democratic lawmakers at the federal and state level have paid attention on the raising of the raising of the minimum wage. After the 2015, there was an introduction of at least 12 ballot measures and 200 minimum wages bills in various states. Various states increased the minimum wage where for instance California agreed that by 2022 the increment would have risen from $10 to $15 per hour. However, in 2016 some states faced Republican opposition in terms of the minimum wage increment where there was the generation of the various conflicts between the Democrat controlled cities and the Republican led state legislatures. AL H.B 174 was passed by the Albama legislature where the local government was prohibited from the imposition of the minimum wage requirements on the private employers (Eguchi 131).
Various studies reveal that there is no much evidence on the issue of the raising the minimum wages resulting to employment losses although it can result to modest negative and positive effects. The fast food companies that were affected by the measures of higher minimum wages mostly absorb the labor costs through various adjustments within the company other than cutting the workforce. In this case cutting the workforce would result to the reduction of the ability of the company to serve its customer base. On average, the fast food restaurants in the U.S are likely to see their operation costs increase to at least 3.4 % yearly if the minimum wage is increased to $15 (Dolton & Bondibene 141). The raise of the $ 15 wages per hour for the minimum wages would be quantitatively huge compared to the previous experiences in the U.S. although it will be different qualitatively.
Most of the fast food companies carry out their operations in very competitive markets which mean that they have low profits margins. In this case, most of the restaurants cannot pay the wages from their profits even if they would like to. The increment of the minimum wages to $15 means that the cost will be passed to the employees and the customers. Some of the employees tend to receive higher pay at the expense of others who are made to fewer hours (Basker & Khan 145). Moreover, the increment in the wages affects prices negatively where customers are forced to pay more for some of the products they bought at lower prices.
What Does The Preliminary Data Indicate About Job Loss Owing To Increases In The Minimum Wage?
Cotti and Tefft explain that the wage standards in any country do not do any harm to the economy and is good for the taxpayers and workers (Cotti & Tefft 145). In this case the costs that come up with paying high minimum wages can be offset by improving the performance of the workers through reduced absenteeism, lower turnover costs as well as high productivity. For instance in a fast food restaurant, the turnover of an employee can be 120 % while the restaurant can incur a cost of $4700 every time the worker has to leave the job. The fast food companies can easily absorb the costs of the $15 minimum wage increment through the combination of various factors such as increment in the number of sales, reduction of the turnover among workers and modest increment in the sales. Notably, it would be advisable for the fast food companies to reduce the level of employment or reduce profits as a result of the increment in the wages. Basker and Khan observe that the rise in the wages does not lead to the loss of the jobs as most of the critics claim (Basker & Khan 146). While most of the increments in the wages previously were of smaller magnitude, the studies show that larger increments can also be achieved without adverse effects on the levels of employment. The analysis of 2015 in Los Angeles indicated that the rise of the $ 15 per hour over four years would lead to a reduction in the total employment by only 0.2% which compares to the annual growth rate of 2.5%.
The issue of the rise in the minimum wages not affecting the loss of jobs has made policy makers across various states and cities to adopt the increment. Since 2013, San Fransisco, Washington, Sea Tac and California among others have had an approval on the policies so as to raise the minimum wages for the workers in various fast food companies and other companies. The campaign on the minimum wages has risen in age thus making the education attainment to be greater as well as spreading occupations that are beyond the fast foods occupations (De Melo para 3). The most crucial factor is having an idea on the effects of the rise in the minimum wage in terms of the cost of living. This is essential since the increment can meet the basic needs of some earners in certain places while keeping them below or at the poverty level.
Basker, E. and Khan, M. (2016). Does the Minimum Wage Bite into Fast-Food Prices?. Journal of Labor Research, 37(2), pp.129-148.
Cotti, C. and Tefft, N. (2013). Fast food prices, obesity, and the minimum wage. Economics & Human Biology, 11(2), pp.134-147.
De Melo, F. (2015). The Minimum Wage Campaign in Brazil and the Fight against Inequality. Global Labour Journal, 6(3).
Dolton, P. and Bondibene, C. (2012). The international experience of minimum wages in an economic downturn*. Economic Policy, 27(69), pp.99-142.
Eguchi, K. (2010). Minimum Wages and Trainers’ Dilemma. LABOUR, 24(2), pp.128-138.
Pollin, R. and Wicks-Lim, J. (2016). A $15 U.S. Minimum Wage: How the Fast-Food Industry Could Adjust Without Shedding Jobs. Journal of Economic Issues, 50(3), pp.716-744.