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Jon Talton

Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.

August 1, 2013 at 10:47 AM

Behind the fast-food protests

Picketing to highlight low-wage fast food jobs and so-called wage theft are set to intensify today in Seattle, including a 4:30 p.m. demonstration at Westlake Park, according to the group Working Washington. Thousands of workers in New York and the Midwest have held one-day strikes this week and picketed such chains as McDonald’s, Burger King, Subway, KFC and others,  seeking a $15 an hour wage instead of minimum wage or little better.

It’s not a surprising development considering the weak recovery, high unemployment, rising inequality and the large number of jobs in the restaurant industry — rising much faster than most other employment sectors — many of them paying low wages:

RestaurantFRED

It is also driven by the changing composition of the fast-food labor force. When I was young, most of the people behind the counter were teenagers. Now one would be hard-pressed to find a teen, much less a middle-class student. To be sure, some of these older employees want some extra income and flexible hours. But for most, in this economy, it is the best job they can find. The jobs tend to be part-time and lack benefits. Workers must stitch together a couple of jobs to get by. Companies — and not just those in fast food — can “socialize” costs to taxpayers, as workers must use food stamps and Medicaid, while enjoying ever-higher profits.

They also lack mobility up within the industry, according to a study from the National Employment Law Project. For example, in the general economy 31 percent of jobs are in managerial, technical and professional occupations. In fast food, it is only 2.2 percent. Only 1 percent are franchise owners. Most companies require owners to have $500,000 in net worth. The problem isn’t just the unlikeliness of a cashier at McDonald’s going on to own her own McDonald’s. It is that opportunity has narrowed so much  that the good jobs elsewhere that once awaited people, especially those with only a high-school degree, have been decimated by offshoring and technology.

With such a high turnover rate, it’s unlikely these advocacy organizations are going to lead a unionization movement. Instead, their activities are highlighting a key problem: The inability of the service-driven economy to create enough good jobs and replace lost rungs of the ladder into the middle class.

If McDonald’s — which makes about $8 billion a year — were to raise wages to $15 an hour, how much would a Big Mac cost? According to a report in Forbes, about 68 cents more.

And Don’t Miss: Congressional hearing will look at Bonneville Power Administration’s ‘systemic’ problems | The Oregonian

Today’s Econ Haiku:

No China slowdown?

Even if the data lie

Live fast on Wall Street

 

 

 

Comments | More in Jobs/Unemployment | Topics: fast food strikes, Wages, Working Washington

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