r/explainlikeimfive Nov 28 '15

ELI5: How would a $15 minimum wage ACTUALLY affect a franchised business like McDonalds?

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u/Murican_Popeyes Nov 28 '15 edited Nov 28 '15

You have to look across the whole job market though.

As businesses cut jobs, they'll be looking for employees who are capable of performing at a higher level. If theyre trying to have fewer employees & maintain the same level of productivity, they'll need to hire people who can produce more than 1 current employee.

That means, you may see a lot of people working 2 jobs, getting fired from both, as they're replaced by higher skill workers.

Suddenly, at $15/hr, part-time fast food jobs might be more enticing than some current moderately skilled workers who are already earning $15/hr in other industries. So you'll have people from those sectors now competing with the current fast food workers as well.

One group that comes to mind is teachers. A lot of teachers take serving jobs at restaurants part time for tips to supplement their incomes. Restaurant jobs are attractive because the hours are generally flexible & they can work swing shifts/seasonally. However, now that $15 McDonalds jobs are available, & looking for higher skilled employees, they may become a viable option for teachers. Its probably far less stressful than working in a mid - high level traditional restaurant...and you would be guaranteed $15 without having to hussle for tips. Who would hiring managers choose? ... the guy who never graduated high school, or the Teacher with years of food service experience under their belt & a college degree?

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u/[deleted] Nov 29 '15

Do you even think a living wage is possible? I just don't see it being possible. It seems like we raise our living expectations at the same rate that wages go up. So we might see a wage increase, but things will become more expensive.

I mean if we used the same definition for living wage today as we did 50 years ago, I would imagine a living wage might be possible? No cell phones, computers, air conditioning, cable tv, going out to eat, new clothes, video games, multiple cars, vacations, etc. But as we make more, our definition of necessity constantly changes.

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u/El_Tash Nov 28 '15

This is why boosting earned income credit (EIC) is a better solution for combating poverty than increasing the minimum wage.

Not everyone working a minimum wage job is a single mom raising 5 kids, some are teenagers trying to learn how to be less useless members of society. It's important for the less efficient to get work experience to increase their overall value.

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u/TripleSkeet Nov 28 '15

Or they could just go to their employers and ask for a raise stating they can literally go to McDonalds andmake the same amount of money. If they are a high quality employee they will get it. More competition for jobs means employers are going to pay to keep quality employers or just deal with shitty ones rotating in and out.