Fast-food wage protest: Is $15 an hour asking too much?

Supporters advocate a 'living wage' for fast-food jobs. Opponents say it would distort a free market and could easily backfire by wiping out many jobs now held by workers with few skills.

David Ryder/REUTERS
Demonstrators make their way up Pike Street in Seattle during a strike aimed at the fast-food industry and the minimum wage. Fast-food workers went on strike and protested outside restaurants in 60 cities on Thursday, in the largest protest of an almost year-long campaign to raise service-sector wages.

Fast-food workers protested this week for higher pay in cities across the US, highlighting the economic squeeze that low-wage workers are feeling during a period of protracted weakness in the labor market.

The workers and labor allies are holding signs protesting, among other things, the national minimum wage of $7.25 an hour. Many are calling for outlets including McDonald’s and Wendy’s to bump their pay up to roughly double that amount, to $15 an hour.

Supporters of that goal say it would make these “living wage” jobs. Opponents say it would distort a free market that sets pay largely according to skill – and could easily backfire by wiping out many jobs now held by workers with few skills.

At the very least, the $15 goal looks unrealistic against the backdrop of what people earn in other occupations.

According to the latest numbers from the Labor Department’s National Compensation Survey (for 2010), here are some examples of jobs that pay in the range of $15 per hour: preschool teacher, barber or hairdresser, tailor, insulation worker, and library assistant (clerical). Most of those, arguably, call for higher skills than are needed in the typical fast-food position.

Similarly, a $15 rate would push fast-food pay above the following occupations: home health aide (about $12), bailiff or correctional officer ($12), child-care worker ($9.80), telemarketer ($13.40), and emergency dispatcher ($13.60).

And according to the Labor data, a $15 wage could put entry-level workers almost on par with their supervisors. The occupational survey pegs supervisor pay in the food-service industry at about $16 an hour.

The 2010 data put the occupation “fast food cook” at $9 an hour.

Legions of jobs in other low-skill occupations, including at retail stores, have similar pay.

All this doesn’t answer the question of whether current pay rates for these jobs are appropriate, or what can be done to better the lot of low-wage workers. But it does suggest that the $15 goal is ambitious, and probably unrealistic in the current job climate.

President Obama, for his part, has called for boosting the national minimum wage to $9 per hour. A move like that tends to boost the pay not only of minimum-wage workers but also of workers on the next rungs. A Wendy’s employee now making $9 might see a pay boost, over time, as a result.

The question of wages is an important one for millions of Americans, many of whom have seen household wages stagnate in recent years.

“There are a lot of these jobs. A lot of them have been created recently, in the last couple of decades,” says Arne Kalleberg, a University of North Carolina sociologist who is author of the book “Good Jobs, Bad Jobs,” published by the Russell Sage Foundation.

Seven of the 10 occupations projected to see the fastest job growth are also low-wage ones, he adds.

These days, jobs like those in fast food are only partly for “entry level” workers. The median age of fast-food workers is about 28.

With a national unemployment rate of 7.4 percent, it’s harder for workers of any age to parlay experience in a low-wage job for a higher-paying one.

The high jobless rate also raises flags, in some quarters, about whether the protesters have much leverage to exert by striking.

“It is certainly the fast food workers' prerogative to go on strike in order to better their circumstances. But this is not the time to be demanding double wages,” Jonathan Heller, president of KEJ Financial Advisors, wrote in an opinion column Friday for TheStreet.com. “If the economy was booming, and labor markets were tighter, wages would rise naturally as there would be greater competition for labor. But not in this tepid economy.”

Many factors, economists say, have contributed to a long stagnation in wages – both at the bottom and the middle of the pay scale. These include the way automation has made some jobs obsolete – especially ones that used to offer middle-class wages for relatively unskilled work. Other factors include competition in many fields from a growing labor pool overseas, the declining power of labor unions, and infrequent boosts in the minimum wage relative to inflation.

As Mr. Heller’s comment points out, one of the biggest solutions to weak pay growth is just to get the economy growing faster. Many economists expect a modest pickup next year, but to meaningfully accelerate long-term growth might require a range of efforts – from investments in education, research, and infrastructure to efforts to streamline regulation, simplify the tax code, and resolve persistent federal budget deficits.

With so many Americans relying on low-wage jobs to support their households, safety-net programs for things like health insurance are very important, Mr. Kalleberg says.

He also says an emphasis on boosting education and training could help employers add higher-skill jobs – and help low-wage workers find better jobs to migrate toward.

“The middle-level jobs that went away are not coming back,” Kalleberg says. But new jobs will come, including in a manufacturing sector that’s much more technologically advanced than it used to be. “We're going to need a more skilled workforce.”

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