Over the last six years, budget-conscious Americans' demand for inexpensive services has increased. In an uncertain economy, an inexpensive meal at McDonald's, for example, was preferred by many to a more pricey meal at an upscale restaurant. Often, it was preferred even to eating food prepared at home.
The traditional narrative of fast food being a job market for teenagers looking for some spending money is no longer true. Most fast food workers are adults, and by at least one study, their median age is 28. By some estimates, 52% of fast food workers require welfare.
It is understandable, then, that some fast food workers are protesting what they feel is an unfair and unrealistic wage. Several labor campaigns across the country are demanding that fast food workers be compensated with a living wage of approximately 15 dollars per hour.
According to the Heritage Foundation, increasing fast food workers' wages to 15 dollars per hour would force fast food restaurants to raise prices on food served by 38 percent simply to cover that additional cost. Many studies have shown that fast food customers are very price sensitive, and large price increases would significantly drive down consumer demand for those goods and services. Fast food companies would have to look to technology to streamline processes and reduce costs, which would eliminate jobs for some workers.
It is impossible to ignore the human element to this story. The people that work these jobs are real people, with real problems, doing what they feel is their very best to provide for themselves and their families. Many of these people must work multiple jobs just to make ends meet.
In one sense, a living wage is already available to these workers, in the form of government welfare. With so many fast food workers already living on welfare, this is an important piece of this puzzle. The economics of fast food may very well make it impossible for companies to provide a living wage to their employees, but as it is, the government is already subsidizing this particular industry, as it does with others.
But is this right? I argue that it is not. The reason that wages are low for fast food workers is that demand for this industry is high, but supply for these unskilled workers is also high. These companies would prefer to retain their talented employees, but when they leave, they rarely have problems filling their positions.
The problem is that America has too many unskilled laborers. If it were not so easy for fast food companies to hire new workers, these companies would have to provide a higher wage to attract qualified workers. Maybe not yet a living wage, but a better wage.
America needs more skilled laborers. Many, many industries are booming in this country: technology, computer programming, web development, human resources, senior care, child care, health care, pet care, engineering, architecture, financial services, education, research, and accounting are just a few examples. But all of these fields require skills that must be acquired through training and education.
Living wages are important, but the unintended consequences of forcing artificial wage increases on industries will end up hurting those that they intend to help. Rather than subsidize unskilled labor, as our government welfare system does now, America should apply greater resources to actual skills development to give those that would like a living wage a way to realistically achieve those goals.
