Much research shows that the minimum wage rarely equals a living wage. The term minimum wage refers to the minimum amount an employer must pay a worker without violating the law. The minimum wage in California is $8 per hour. Different from minimum wage, the term living wage refers to the minimum amount of income a person requires to meet basic needs, such as shelter, food, and clothing for themselves and dependents. In most cities, minimum wage for a 40 hour work week will not cover a person’s basic needs, and they will likely have to depend on credit or government assistance to survive.
Fast food restaurants are notorious for paying the majority of their employees minimum wage. However, fast food workers have recently been stepping up and demanding that they receive higher pay—at least a living wage. On August 29, 2013, many non-union fast food workers nationwide, primarily employees of McDonald’s, walked out and began to strike, demanding a wage of $15 per hour. McDonald’s executives have responded that the company cannot afford to increase its wages without substantial layoffs or price increases. However, former secretary of labor Robert Reich has pointed out in a petition on Moveon.org that McDonald’s CEO Don Thompson earned $13.8 million last year. If the CEO earns such a substantial paycheck, it would seem the company could afford to increase wages.
Setting an Example
A Detroit-area fast food joint wants to demonstrate that companies can pay workers a living wage and still make a profit. Burger and chicken restaurant, Moo Cluck Moo, already pays its workers $12 per hour and, as of October 1st, will increase that wage to the $15 per hour that McDonald’s workers currently demand. The owners believe that the 25% increase in wages is only “human” and sets a higher standard for how fast food businesses treat workers.
Furthermore, the owners state they will not lose profits, but actually benefit from the pay increase. First, higher pay inspires harder work and better customer service. In fact, owners state they regularly receive appreciative feedback regarding customer service in their restaurants. The fast food industry is highly competitive and consumers have a lot of options if they crave a burger or chicken sandwich. Quick and friendly customer service helps create customer loyalty. Second, higher pay keeps turnover low, which means less time spent hiring, training, and supervising new employees. Finally, Moo Cluck Moo has received a significant amount of free and positive publicity nationwide due to the impending wage increase. Compared to McDonald’s executives who are on the defensive to justify their refusal to increase wages, the owners of Moo Cluck Moo look almost like heroes.
The battle for the living wage has only begun, and will likely continue for a significant period of time. Workers believe they deserve a living wage, and seem prepared to fight long-term for one. If you believe your employer is violating wage and hour laws or you have another type of employment dispute, contact an experienced employment attorney at Pershing Square Law Firm today.