Nearly one hundred cities saw striking fast food workers earlier this week. No longer confined to just major metropolitan cities like New York City, the strikes spread to dozens of other cities that hadn't before seen fast food worker walkouts, like Richmond and Detroit.
A common battle cry among protestors was the implementation of a federal minimum wage hike from the current $7.25 to $10.10 per hour, but there is a strong pushback from fast food leaders who claim the industry thrives on low prices. Wage increases would force those prices to go up. Those in the industry believe such price increases would result in reduced business across the board.
A fair point. However, the workers have a point, too.
Fast food employees in Detroit outside of a McDonald's (NYSE:MCD) could be heard shouting, "Hey hey, ho ho, $7.40 has got to go!" Similarly, workers outside of a McDonald's in New York City offered a comparable chant: "We can't survive on $7.25."
When you account for rapid inflation and the cost of living in these cities, it's definitely understandable why workers are struggling. Working full-time at the federal minimum wage only amounts to $15,000 a year. Factor in the average cost of rent, utilities, health care, and a little important thing called food and there's not much left in the pot. You do the math.
A common rebuttal from the industry is that fast food workers are typically younger folks looking to pick up part-time work while they're in high school or in college. It's not meant to be a career, they say.
While that might have been true 30 years ago, the latest statistics show that the average age of the fast food worker is 29--well above college age. What's more, 31% have completed at least some college, so the stigma that fast food jobs are for high school dropouts should probably be put to rest for once and for all.
The problem here is the continual drying up of higher level positions across every industry. Young people rush off to college, get in massive loan debt, and graduate only to find the jobs they were promised aren't there. "If only you get X degree, you can get Y job," they're told. And the jobs just aren't there anymore. Call it entitlement all you want, but it seems a lot like false promises made to hopeful youth to this Fool.
To make a long story short, the "they're just part-time workers and don't need a livable wage," excuse doesn't hold up. And that being said, those without college degrees arguably deserve a livable wage, too. Whether a minimum wage increase is the fix remains to be seen.
What is apparent, however, is when regular consumers like those working for fast food joints have a bit of extra cash, they're more likely to spend it on consumer goods and services. And that spells increased revenues for companies across every industry, including the fast food companies at the focus of the strike.