Protests of Partisan and Paranoia

9/15/13

Title of Article-"Workers' Protests Highlight Fast-Food Economics"
Date of Article-September 1, 2013
Authors-Candice Choi and Jonathan Falley

This past year, thousands of fast-food workers and supporters have been protesting against the federal minimum wages. The increase in protest activity has raised the question of whether the economics can actually provide these workers with a feasible response to their request.

The industry of fast-food is built on the idea of keeping costs low in order to make money while satisfying America's love of cheap, greasy, satisfying, food. Customers love the fact that they save money at McDonald's, this is what keeps people coming back: the predictability and consistency of the food quality and price. Unfortunately, store owners claim to be surviving on "slim margins" as the menu items are cheap.

Along with that, the corporations have to grow profits to keep shareholders happy. Althought the median hourly wage for a fast-food cook has increased from seven dollars to nine dollars, many workers make the federal mimimum wage at $7.25 an hour, making less than half of the median salarty of an American worker.

New York, Chicago, and Detroit protests are pushing for $15 an hour ($31,000 a year,) but in actuality, the protestors would be happy gaining just a few more dollars, as they are trying more or less, to raise awareness to their minimal wages. However, low wages and a lack of benefits for workers is nothing new at McDonalds, but the large number of people who have jobs at McDonalds is, and the number is growing exponentially. "Nearly 70 percent of the jobs gained since the recession ended have been in low-paying industries such as fast food."

The franchises claim their profit margins are thin so they can't afford to increase the workers pay. Over 90 percent of McDonald's and Burger Kings are owned by franchisees who claim they have to worry about making rent, buying supplies, paying fees to their parent company, while proividing extremely cheap prices to customers, therefore creating a higher wage is nearly impossible. Kathryn Slater Carter, who owns two McDonald's in California, said that what franchisees can pay dependes "on what money you've got left after all (the company's) interference."

As food ingredients and insurance prices increase, the workers pay amount is not one of the franchisees priorities. Other labor groups give a large profit to the CEOs while the workers receive barely anything. However, McDonald's and Burger King claim they do not determine wages for workers as the majority of restaurants are run by franchisees. The company aslo noted that an increase in entry-level wages would mean an increase in overall costs, which would result in higher prices on menus, which could possibly have a negative impact on employment and business growth in the fast-food industry. Labor organizers disagree with the idea that companies cannot influence the worker pay, as they state that the companies have total control of "every other aspect of the operations."

Although many Americans claim to support higher wages for workers, they flock to the cheapest meals in reality, which cut into profits, which is why fast-fppd chains have been stepping up[ deals and promotions in the weak economy. The impact of the series of protests against low wages has been unclear. No stores have shut down even in New York City, after 400 protesters trageted a McDonald's by the Empire State Building this past week, business remained regular.

I think that his specific article is extremely important because of the mass amount of people that are affected. Critically, in today's economy, more and more people have low income jobs, yet nobody seems to be doing anything about their low-wages. It is important to note that Americans claim to want to increase the pay of the minimum0waged workers, but are not willing to pay for more expensive items as a result. Americans claim one thing, making it seem like they care about bettering America as a whole, when in reality, Americans are selfish and care about their own profit more than the nation's average income level. The fast-food economy relies on one of the economic and social goals of the U.S., "economic efficiency" as they spend minimal amounts of money on their workers. In effect, the benefits gained are indubitably greater than the costs incurred. Although economic equity seizes to exist due to CEO's and franchisers who spend fast-food profit elsewhere, it is a trade-off made for economic efficiency. I think that these industries should try to focus more on providing their workers with better pay. Otherwise, the inconsistency and unpredictability of the staff will continue. Plus, as America's economy as a whole continues to to evolve and become more expensive, the wages of the workers should coincide and increase as well, otherwise they are unable to support themselves r their families and are unable to buy products therefore the markets would not be as high and those people working for those products would not have as many job opportunities. In conclusion, the economy runs on a ripple effect. Everything that one company does somehow affects someone else somewhere.