Fast Food Strikes Spread Across The Nation (VIDEO)

Published On September 4, 2014 | By Bob Rowen |

Fast food workers walked off the job in restaurants across the country in over 150 cities today to make their voices heard in a quest for a livable wage.

The minimum, currently $7.25, was last increased in 2009 in a three-step process that brought it up from the $5.15 where it had languished for ten years. The workers, from restaurants like McDonald, Wendy’s, Burger King and others taking place in the strikes want the wage increased to $15. President Obama mentioned the efforts to increase the minimum wage known as the Fight for 15 in his Labor Day speech in Wisconsin on Monday.

Fast Food Workers Strike, Protest Low WagesSome opponents of the move suggest it would lead to inflation. The problem with that argument is simple. Inflation exists with or without a raise in the minimum. Over the last 45 years, inflation has far outpaced rises in the minimum. A study in 2013 made the comparison, concluding that, in order to match the buying power of the minimum wage in 1960, when it stood at $1.60, we would have to raise the minimum to $21.72. We’ve had more than a year of additional inflation since then.

But what about their claims that raising the minimum now would lead to further inflation? Just how much would prices have to increase to cover the cost? The industry standard for payroll is around 25% of the gross. But that figure includes management, not immediately affected by the increase. Non-management wages run closer to 15%. So a 20% increase in the minimum would add about 3% to costs, or less than a dime on to the price of a Whopper or Big Mac.

McDonalds StrikerEven that, though, does not tell the whole story. I spent a bit over 20 years in the fast food restaurant business as a manager and as an owner. In that time, the minimum went up several times and every time it did, I heard the same predictions we’re hearing now. “It will kill my business.” “I’ll have to lay people off.” And every time, they were wrong. I ended up making MORE money after the increase than I did before.

The most ludicrous of those predictions is the one about laying people off. You don’t hire people because you have extra money in the bank and you don’t lay people off because your funds are low. Any business that follows that line of reasoning would soon be a former business. You hire employees for one reason only, because you need them to service the amount of business you project.

Every time the minimum wage went up, I found that my customers had more money to spend and my sales went up more than the increase in costs, even without raising my prices. Who do these business owners think is buying their products? It’s certainly not 1%ers that are standing in those lines. Those are just my experiences, but that is exactly what we are finding has happened across the board in states that increased their minimum wages over the last few years.

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Bob Rowen
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Bob Rowen

A lifelong politics junkie with particular interests in privatization and other business and labor issues like minimum wage and immigration.Robert Rowen is also a writer of fiction.His first novel is called The Ballad of Llewellynn.

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Bob Rowen
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