The Guardian has an article up on a couple members of the group advocating for a $15 minimum wage in Kansas City, and it includes the preposterous claim that because fast food restaurants aren’t paying people a wage that they can live on that they are engaging in “economic slavery.” The Guardian quotes Fran Marion, one of the subjects of the article, who has been rendered homeless for a number of reasons, as saying, “It makes me feel like a peasant. In a way it’s slavery. It’s economic slavery.”
This is absurd on the face of it as an employee-employer relationship is based on mutual consent and advantage. The employee values the money that the employer pays them in return for their labor more than they value their leisure or some other pursuit. This concept is known as marginal utility, and if the employee did not value the money more than their leisure or some other activity then they would be free to not accept the job in the first place or to quit the job. The employer is not forcing them to do anything against their will, so we are not discussing anything resembling slavery.
The fact that an employee is free to quit their job whenever they want is evidenced by the fact that Fran Marion herself quit her second, higher-paying job as a janitor.
After she quit her janitorial job, hoping to find something more flexible so she could see more of her children, Marion started interviewing for a second job in fast food. “I have always needed two jobs. You basically need two jobs to survive working on low wages,” she says.
So she is, at least in part, personally responsible for her current state of affairs. She made the choice to quit her janitorial job before she had another lined up and lost an income stream as a result. The idea that Popeyes should be forced to make up the difference because she chose to quit her other job, or that they’re comparable to slavers, is absurd and insulting. As Tom Woods points out, Popeyes is essentially this poor woman’s only benefactor.
Fast-food workers have begun protesting their low wages. (Yes, I know fast food isn’t good for you, but that’s immaterial here.) “We are worth more,” their signs read.
Are they? How can they know? If they were worth more, other firms would have captured their extra worth by bidding them away from the fast-food industry and hiring them themselves. Then we can know they were “worth more,” at least in some other line of production.
Since no one else seems willing to hire them at their current wage rate, it seems to me that the very last institutions they should be angry at are the fast-food restaurants themselves, the only institutions on earth doing anything to improve their standard of living. Why don’t they protest all the places that pay them $0, having refused to hire them at all?
She’s been working in fast food for 22 years and is unable to convince an employer in another field to hire her for more money, or, at least at this point, to convince even another fast food company to hire her at a similar rate as Popeyes for a second job. Since Popeyes is the only place currently willing to employ her for any amount of money it seems like she should be thankful to Popeyes rather than demanding that they be forced to do more for her. And since we don’t actually hear what her managers at Popeyes have to say about her as an employee we can only guess what the fact that she can’t seem to get hired anywhere else says about her.
All that said, it’s clear the biggest reason that Marion is currently homeless is because of the city government she lives under. From The Guardian:
Even with those two jobs, Marion was unable to save – and when disaster struck she found it impossible to cope financially. Last month, the city condemned the house she rented – the landlord had refused to fix faulty wiring and the leaking roof – and she was made homeless.
So in the name of helping her and keeping her children safe, the Kansas City government kicked her and her children out of their home and into the streets instead of forcing the landlord to uphold their contractual agreements to the tenants. In other words, despite her financial difficulties, Fran Marion had a home that she could afford and lived with her children until the government forced them into homelessness.
It’s clear from this article that the true villains in this story are the landlord who refused to uphold their likely contractual obligations, and who should have been held financially liable as a result, and the city government who forced the Marions out of their home. Popeyes, on the other hand, who employs Marion and pays her a wage that both she and they consent to for her labor when nobody else will is possibly the only hero in the story. If not for Popeyes, Marion would likely have been out on the street much sooner than she was when the city government forced her out of her home.
The Guardian then makes the correct statement that wages have not kept up with inflation, but then tries to mistakenly tie this into the minimum wage debate, stating, “Wage growth has barely kept pace with inflation. The national minimum wage ($7.25) was last raised in 2009.” The problem with that analysis is that raising the minimum wage will just create more price inflation and it won’t take long for wages to fall behind again creating still more calls for the minimum wage to go up in a vicious cycle. All the while that is playing out, the economy stays in a permanent state of artificial dislocation as low-income and middle-income workers are constantly being shifted around from job to job as the market tries to adjust to the new realities.
The problem with inflation comes from the monetary policy of the Federal Reserve itself, which engages in an inflationary policy by keeping interest rates artificially low. From the establishment of the Federal Reserve in 1913, with a mandate to keep the value of the dollar stable, to 2017, the dollar has lost more than 95% of its value. According to the CPI Inflation Calculator from the U.S. Bureau of Labor Statistics, a dollar today will buy the equivalent of what $0.04 would buy in 1913. That means that according to the government’s own statistics, 96% of Americans’ wealth has been lost in a little over 100 years while the Federal Reserve was supposed to be protecting that wealth, and, as the Guardian notes, since wages don’t keep up with inflation it’s always the poorest who are hurt the worst by inflationary policies.
Near the end of The Guardian’s article, Marion is quoted as saying, “We are the foot soldiers for these billion-dollar companies. We are the ones doing the work and bringing the money.” This is a fundamentally flawed analysis in that it ignores the role of capital that was supplied to her by her employer at their expense. The article states that at the Popeyes where Marian works, “Staff have a company-mandated 180 seconds to take the order, cook the order, bag the order and deliver it to the drive-thru window.” Without the capital provided to her by the company, how would she do any of this in a timely enough manner to make a profit for herself? She’d have no building to work in, no stove to cook the food, no food to cook, no fellow employees to share the load (regardless of how short-staffed she may even rightfully believe that they are), no utensils with which to cook, no bags, wrappers, plastic silverware or cups for the customers to enjoy their food, and nowhere for the customers to eat their food if they’d like to do so. Furthermore there’d be no branding or advertising to promote Popeyes and cause more people to come spend their money without her employers paying for it.
It seems highly unlikely that Marion herself would be able to make an investment of the sort that her employers did with the amount of money involved up front, the lack of an immediate return on that investment, and the risk that there may be no return on the investment at all. So the idea that she and her fellow low-level employees are the only ones “doing the work and bringing the money” is completely false, and absent her employers’ investments she’d be making no money whatsoever.
The article closes, stating:
More than that, she likes working in fast food. “I love it. I’m good at it. Just like Martin Luther King said, ‘If you are going to be a road sweeper, be the best damn sweeper there is’,” she says. “I don’t know. It’s just this society is all messed up.”
It’s not the fault of society that the job that she loves and is good at is a job that the only necessary skill is a consistent pulse, and that it pays accordingly. Fast food jobs are entry-level positions designed for young workers who are new to the labor force and who have not developed or had the chance to display actual marketable skills, or those who are, for whatever reason, unable to develop higher-level, marketable skills or education that employers value. The reason these jobs don’t pay a living wage in the first place is because they take no skill and can be learned quickly, which is important because there is a higher turnover rate in these types of jobs. If you make these types of jobs more expensive those who need them most, probably someone like Fran Marion, will inevitably be priced out of them as automation takes over and employees with more skills already developed are favored over those who need these jobs to develop or display their skills.
In other words, much like the government policy that forced Fran Marion and her children to become homeless in the name of saving her from a terrible landlord, minimum wage laws increase the amount some low-skilled workers are paid per hour by rendering the rest of them unemployed. Economic laws don’t change just because we think they should to fit our ideology.