6-25-2006 The pretend minimum wage

Being that it‘s warm outside and all, making rancorous waves on the internet interests me less and less these days. Do you really want to rumble away here in cyberspace? Catch me when it gets cold outside all over again. Rats.

Anywho, I was not going to post anything today until I ran smack dab into this short, but interesting question sent my way by way of an electronic pulse.

Let’s rock!

From the e-mail inbox Mark

As a former restaurant manager what do you think about raising the minimum wage?


Wow. What a political hot potato that one is. Did you ever happen to notice that the minimum wage debate only rages as an important election looms on the horizon? The Democrats openly lust to reclaim their power during the upcoming midterm elections, so…all of a sudden, we need to address the minimum wage issue and right now! What a ruse.

The “progressives,” the do-gooders will tell you we need to raise the minimum wage in the name of economic justice or economic fairness. The evil meanies, the pro-business Republicans will counter with arguments that raises in the minimum wage do little more than to increase the cost of doing business, and by trickle down effect, employ less of those unskilled workers the do-gooders envision themselves helping..

Does a raise in the minimum wage really benefit lower paid, unskilled workers? The answer is a resounding no.

Before we delve into any of this, you need to understand that the corporate executives of national restaurant chains have profit levels that they demand of their regions, districts and ultimately, from each individual restaurant manager. If the federal or state minimum wage rises significantly, they don’t want to hear that as an excuse for under-performing whereas labor costs might drag down the overall profit level. The bottom line is, at the end of each reporting period, they want the lofty 30% (my target once upon a time) profit expectation either reached or exceeded. If you cannot reduce your labor costs to offset the damage done by the higher minimum wage, then you have to reduce one of your other costs that are variable and not of the fixed variety. And no matter how you achieve that, it has a negative effect on the working conditions of the employees giddily celebrating their recent raise.

Franklin‘s Kidder Street, Wilkes-Barre

This is how you go about controlling your labor costs, achieving the desired profit level and keeping yourself--the manager--employed for any length of time.

You have to predict your weekly sales. You have to calculate how many employee hours you need to schedule to please your guests, etc., etc., etc. You need to determine your average hourly rate. And, lastly, you do the math. If you’re predicting $20,000 in sales in a given week and scheduling 1,000 employee hours at an average hourly rate of $5.00 an hour, you would end up with a labor cost percentage of 25% if…if you reach the sales goal of $20,000, and if you manage to end the week without using significantly more employee hours. A 25% labor? Yippee! Give that man a quarterly bonus.

But, if the minimum wage jumps to $7.00 an hour, based on the numbers we were using, your end-all labor percentage comes in at 35%. Yikes! Give that man a triplicate warning report. You can’t artificially inflate the sales prediction without justification. You can’t reduce the average hourly rate without tinkering with the percentage of waitress hours scheduled ($2.01 an hour in those days) versus the percentage of scheduled hours devoted to the much higher paid employees. So, what do you do? You reduce the scheduled hours of the employees on the higher end of the pay scale.

With that said, you can’t cut your nose off to spite your face by reducing the hours of your top-flight cooks, dishwashers, hostesses or prep people. They need their 40 hours and if they don’t get them they’ll jump to another restaurant guaranteeing them 40 hours and a quarter raise to boot. The only thing you can do to reach the desired profit level is to cut the hours of the part-time employees and hire less of them in the future. And with that move the full-time employees have less support and have to work even harder. And by reducing said part-time support you run the risk of not meeting the expectations of your customers and your higher-ups.

While the full-time, higher paid employees might initially jump for frickin’ joy when some legislators somewhere boost the minimum wage, it comes back to bite them on the ass in a number of ways.

The market should be allowed to set the wages and not some clueless legislator, or some clueless do-gooder. Wages constantly go up. That’s what they do irregardless of whatever the la-la land minimum wage is set at. When I was a teenaged cook at Percy Brown’s, I earned significantly more than the minimum wage dishwashers and potwashers. I was worth it. When I was hired as a short order at Franklin’s, I was hired at a rate well above minimum wage and was rewarded with three raises during the first six months with that outfit. Again, I was worth it, but still others were not. And they were the employees always complaining about their low wages. Fret not for their former plight, because the do-gooders came along and gave what amounted to a raise to the slackers among us.

Before my brother ran into some serious health issues about a year or so ago, he was cooking at a local restaurant and earning something approaching $11 an hour. And a raise in the minimum wage will not have an impact on the wages of any employee currently working at that restaurant. In fact, during the mid ‘80s when the minimum wage was set just below $5.00 an hour, the salaries of my best short order cooks were a full $2.50 an hour higher than that. What the minimum wage was set at or what it might be raised to was not an issue that would ever affect them. Oh, but it was a big issue to the part-time teenaged dishwashers always prone to calling off or goofing off. Yeah, they were always clamoring for a raise they didn’t deserve. Thankfully (?) for them, the clueless do-gooders came along and forced me to give them one. And then I promptly looked for a legitimate reason to terminate their employment. Overpaid slackers all.

Since poorer folks and younger folks vote in very, very low numbers, the more important question you should be asking aloud is why legislators predictably get to sounding off about raising the minimum wage come election season? The dishwashers don’t vote. The vast majority of the cooks won’t vote. The business lobbies won’t support the politicos suddenly clamoring for the wage increases, which is laughably self-serving at best. So why does the minimum wage become an election issue so often?

Franklin‘s South Main Street, Wilkes-Barre

Well, the touchy feely do-gooders generally do not know what they are talking about, so there’s nothing insidious going on there. When they’re not running people over in their ghastly SUVs, they typically get to feeling better about their ridiculously opulent lives by redistributing others wealth. They mean really, really well, they’re just stupid and easily led.

The insidious part of all of this comes into play when you examine the true, but unstated motivations of the politicians instantly turned phony champions of the poor when glad-handing season fast approaches. They care not about the plight of the lowly dishwashers struggling to make ends meet. What they care about is paying off their biggest, most loyal supporters--organized labor. The unions.

Sound crazy? Too Republican, perhaps? Put your partisanship aside for a moment and educate yourself. I promise, it won’t hurt a lick.

Each and every time a politico proposes an increase in the minimum wage, the AFL-CIO and every other union across these fruity plains of ours will quickly come out in support of said proposed wage increases as part of their clever ruse wherein they supposedly support the common working man. Truth be told, that politico and that union just slapped you upside the head and you didn’t even know it.

What the minimum wage does for organized labor is to provide a base from which they can upgrade their compensation by way of collective bargaining, cost of living adjustments and suchlike. Some unions even use the minimum wage as a multiplier wherein they demand twice, thrice, sometimes four times what the unskilled minimum wage earners are being paid. Plainly stated, when the unskilled, unorganized laborers have their incomes boosted by a minimum wage increase, the unions quickly seize upon that to further enrich their highly skilled, highly paid organized laborers. Their motives are carefully concealed, while they lie to an unsuspecting public. But that was the second lie told. The first was told by a self-serving politician.

If we were being truthful, we’d advocate the immediate abolishment the minimum wage altogether and allow the free market to pay people what they are worth in a given market. In Wilkes-Barre, the teenaged girl at the McDonald’s drive-thru window is worth more than the minimum wage anyway. A girl doing the very same job in, say, San Francisco is paid significantly more. The cook at Denny’s earns even more, while the cook at Ollie’s makes a heck of a lot more still. And so it goes.

Out there in the trenches, minimum wage adjustments mean little or nothing to the people who are honestly trying to be productive and working to better themselves. But it means a lot more to the folks who will not try. And whether they are provided with a “living wage” or not, in the end, it’s a zero sum game. If you boost their salaries by a dollar, their public assistance will be reduced. If you do not artificially boost what they should be earning based upon their skills, employment history and job performance, their public assistance remains static. On one hand, you add to the govmint’s cost of supporting those on the public dole to some extent. On the other hand, you add to the costs of those trying to conduct business. And as a result of the latter, less unskilled workers will be hired, again raising the govmint’s cost of supplementing their incomes. It’s a zero sum game.

What do I think about raising the minimum wage?

Hell, it’s a friggin’ great idea for the purposes of electing less than honest Democrats and secretly rewarding their undying supporters commonly referred to as organized labor. As for the lowest workers on the economic pond, it don’t mean spit and it never will.

Do we really want to raise the minimum wage in this country? Try educating the populace like we used to years ago. Oops, I almost forgot. The teachers are unionized, so we can’t demand too much from them if what really motivates us is electioneering. Just keep on with producing illiterate dummies (and having sexual relations with the good-looking ones) at a increasingly frightening pace and we’ll fight the good fight in pursuit of a “living wage” for all Americans.

(Wink, wink)

You asked.

And them’s my thoughts.

No, point blank…them’s theres the facts.

Franklin‘s Edwardsville

Just for the fun of it, I visited Paul Kanjorski’s election Web site so as to determine where he stands on the minimum wage issue. Trust me on this, I could have predicted his position almost word for word. He’s a Democrat and he’s counting on the support of organized labor.

Raising The Minimum Wage

Congressman Kanjorski feels that Pennsylvanians should earn a livable wage and that it is time to give workers at the bottom of the economic ladder a pay raise.

The minimum wage has been stuck at $5.15 an hour since 1997. To fix this problem, Congressman Kanjorski strongly supports and helped to introduce the Fair Minimum Wage Act. This bill will increase the minimum wage to $6.65 an hour by the start of 2003. Congressman Kanjorski believes that raising the minimum wage will benefit tens of thousands of working American families by helping them become more self-sufficient and less dependent on federal assistance programs.

Vote for Uncle Kanjo

Hmmm. Real quick like. What’s a three-letter word for prevaricate?

Yours Truly, Percy Brown's 1973