The website championing this movement, Fast Food Forward, lists four reasons why this new minimum wage is needed. They are all misleading or irrelevant. Stay with me for just a few lines while I deconstruct these assertions. It is important to understand how weak their arguments are, and then I’ll tell you what they are leaving out.
#1—“200 billion is grossed by the fast food industry annually”
This fact is misleading. They use the amount of money that flows into the industry without telling you how much flows back out, leaving a profit. It is the profit that is important. You can gross a billion dollars, but if you spend two billion in the process, you won’t survive. Their profit margin is in the 10% range. Labor costs are about 25-30% of the business expenses of a fast food restaurant. Let’s put this on the back burner for a just a bit.
#2—“$25,000 is the average daily salary of most fast food CEOs, over 2x what the average worker makes in 1 year”
This is likely not even a fact and it’s irrelevant. The website doesn’t quote its source, but these types of “facts” often include the stock options and bonuses paid that are based on the performance of a company. The company does well; the CEO gets a nice slice. The company tanks; the CEO gets canned.
It is irrelevant because most fast food restaurants are franchised. That means the real CEO of that company is making nowhere near the amount quoted, and is often the guy running the day to day operation. It’s just a way to pit people against people.
#3—“Workers make only 25% of the money they need to survive in NYC while working at fast food companies.”
#4--$11,000 is average yearly salary of fast food workers in NYC”
These fast food jobs are entry level positions. These jobs were never supposed to be used to support a family. These are jobs you take to start a working career. They are equivalent to babysitting the neighborhood children on weekends. These are jobs traditionally filed by high school kids first starting out and working part time, (A reason why #4 is misleading) and still living at home. These are jobs that teach basic employment practices (show up each day, on time, and do what is asked of you and do it very well) and give kids a source of income.