I got my first job in 1980 as a busboy in a hotel restaurant and started at the minimum wage of $3.35 an hour. Over 30 years later the minimum wage has risen to $7.25. Statistics have shown that the service sector, traditionally a lower paying industry, is adding the majority of new jobs and that the demographics of those working in this sector is skewing towards older workers. Take a look at the employees’ next time you are in a fast food restaurant. Do they look a little older than in years past? Is this an issue? Jobs that used to be for high school and college students are now being filled by adults who are relying on their pay as a source of support for themselves and often other family members. Forty hours a week at minimum wage will result in a weekly salary before taxes and other deductions of $290. There has been an effort in some cities and states to raise the minimum wage to $15 an hour which would result in a weekly salary of $600. Could you live on $2,400 a month?

Fastfood Workers and the Fight for $15

Senior woman serving coffeeThe fast-food industry is at the frontline of the fight by workers for a $15 minimum wage. Michelle Chen, in an April 2015 Op-Ed piece for the Washington Post did an excellent job of examining 5 myths about the fast food industry. She points to data from the Heritage Foundation revealing that the “The typical burger-flipper is an independent adult of about 29, with a high school diploma.” Read the full article here: Five Myths about Fast Food Work. Franchisers such as McDonald’s and Burger King insist that they only control wages and working conditions at locations they own and not those operated by franchisees. It seems unlikely that it is beyond their ability to exert influence and establish fair wage policies in all locations.

The Decline of Manufacturing and Rise of Service

A decline in jobs in the manufacturing sector, the primary provider of well-paying jobs and a path to the middle class, has had a major impact on society and forced many to seek jobs in various areas of the retail and service industries. It is important to note that despite a substantial decline in factory jobs, productivity levels remain high. During the 10 year period from January 2006-2016, 1,872,000 manufacturing jobs were lost while during the same period 2,431,000 jobs were added in the leisure and hospitality industries (Source: U.S. Bureau of Labor Statistics). As of 2017, there are almost 3.8 million people employed in the fast food industry.

Bureau of Labor Statistics Manufacturing Jobs Data – 2006-2016

Bureau of Labor Statistics Leisure and Hospitality Data – 2006-2016

Some additional facts  from the Bureau of Labor Statistics about minimum wage workers in 2017:

  • 80.4 million workers age 16 and older were paid at hourly rates
  • Of those, 542, 000 earned exactly the federal minimum wage of $7.25
  • About 1.3 million had wages below the federal minimum

Why?

There are competing ideas regarding the reason for the decline in manufacturing jobs. Some say it is because of free trade pacts like NAFTA while others say it is because of outsourcing and automation. It seems that the decline is a result of a combination of economic conditions that some might call a “perfect storm”. Regardless of the cause, the impact on the economic lives of workers has been severe. The loss of these jobs has been said to be a contributing factor to the ever-widening income gap between workers with and those without a college degree. What will be the future of work be for those who in the past had traditionally worked in manufacturing? How do we know what type of training or education to recommend to young people in today’s quickly changing world? Some have proposed that we must elevate the status of the traditional service sector job and raise the pay.


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