Opinion by Kyle A. Lohmeier
As readers have seen me admit before, among my dumb hobbies is arguing with people in closed Facebook groups about politics and philosophy. I do this because I have an ostensible masochistic bent, and because it serves to give me some idea as to what other Americans are thinking.
One subject young people love to debate is the minimum wage. Of course, minimum wage laws are a huge obstacle between productive people and a good wage, but having gone to government schools, most people want the minimum wage – and therefore the barrier between them and a living – made larger.
Of course, it seems counter-intuitive for me to say that minimum wage laws serve to keep productive people from earning a good wage, or perhaps a living, at many jobs. Leveraging my prior pizzeria experience, I’ll explain.
Pizzerias, like any business, have employees at various levels of experience, skill and general usefulness. Sadly, the most replaceable, least-useful kid makes only about four bucks less per hour than the guy or gal who’s there more than 40 hours a week running the place and who is responsible for everything.
Just beneath those $12/hour managers are the top-level employees. These are non-managers who’ve been with the shop for a while and can handle their station well during a full-on weekend dinner rush. They’re typically high school seniors, recent graduates or twenty-somethings not going to college. To managers, having these types of people to count on when the sewage strikes the impeller is vital. Sadly, the best among them are lucky if they make a whole dollar-fifty an hour more than the idiot kid who got the order wrong on the phone.
Just beneath those are the rank-and-file semi-experienced employees. They’re not dynamos yet, but they can do the job they’re given to do without having to be babysat too much. These are typically high schoolers or recent graduates. They’re over-paid, even though they make the same as the lowest tier employees, but certainly not to the same degree.
The bottom rung at the pizza shop are the kids whose job it is to answer phones to take orders and then wash dishes. Online ordering has made the first half of their job partially unnecessary and a big, automated Hobart dishwashing machine would make the second half of their job redundant. These are typically high school sophomores, maybe juniors. It is at their job tier that minimum wage laws really screw things up.
“If your business can’t afford to pay people a living wage, your company shouldn’t be in business!” – every know-nothing college-educated liberal on Facebook
The very idea that a person should be able to support themselves totally by answering phones and washing dishes 16 hours per week flies in the face of every law of economic reality. The job is offered with the intent that the kid taking it will be using the money to keep himself in video games and gasoline. Then again, these same liberals seem to think jobs are rights and are created by government when they’re really opportunities afforded by private businesses that need something done and are willing to pay market value for said labor. But, in the USA, businesses can’t do that, we’re hamstrung by minimum wage laws.
In Ohio, the state minimum wage is just over $8 per hour. If they’re not playing with their phone or otherwise screwing around, the typical backroom kid generates about $4 worth of value via his labor each hour – fair market value. Of course, he’s still being paid $8 per hour. Typically, a shop has three such backroom kids that rotate weekday shifts and work together all at once only on weekends for a few hours – each might work a total of 16 hours per week. Before theft, they’re absorbing $384 per week in payroll total.
Any pizza shop has managers and experienced staff that ownership would likely love to pay more but can’t as the amount of money any business has available to pay anyone is always finite. Imagine then, if everyone could be paid what they’re worth, how much money that would free up to pay those who deserve more, more, by paying those who earn less what they actually earn?
There are more than nine one-dollar-per-hour raises across a 40-hour week in the aforementioned $384. If the kids were paid what they’re worth, there would be five one-dollar-per-hour raises that could be given out to deserving employees. Clearly then, the biggest barrier between a good worker and a living wage is the fact that their employer has to pay bottom-tier employees an artificially high minimum amount and that overpaying absorbs any money that could have been used to pay those who deserve more, more. Because of minimum wage laws, the wage-gap between dishwashers and make-table masters is much smaller than the skill-gap between them, and this creates all the problems.
Imagine then that minimum wage laws were gone. Now, newly-hired kids who know nothing and can’t generate much value with their labor are paid $4 per hour to start – still quite generous. This alone would do two morale-boosting things. First, it would free up payroll to be paid out to those employees who deserve more than a dollar or two, or four, more an hour than the newly-hired kids that can’t do anything. Second, it provides a means for management to incentivize learning the job quickly and well so as to progress out of the backroom and onto the make line by offering wage increases of a dollar per hour for each step.
Because so much payroll is already used up in overpaying dispensable employees, the indispensable ones tend to get raises measured in pennies per hour, rather than dollars. For those of questionable work-ethic and Generation Z members, this isn’t enough to coax much effort out of them and therefore they tend to stagnate at a certain plateau of experience and utility.
The knowledge that if they work really hard, a guy might get all the way up to $10 per hour isn’t much incentive when he can look over at a kid standing around staring at his phone making only $2 less per hour – and the same as he is now. When they turn and look the other way, they can see the manager busting his backside; knowing that he gets only four dollars more per hour than the $8 he’s making now for all the hassle and crummy hours isn’t much of an incentive to progress and become a manager himself someday. Thus, the company is constantly struggling to find good employees and keep them engaged and happy; a struggle made worse by the government and their nonsensical minimum wage laws.
This is what makes the #FightForFifteen movement so utterly laughable. There are some people in the fast food business who absolutely deserve $15 per hour; there are also a lot more of them that deserve closer to $4 per hour. The market would be able to sort this all out fairly, but, instead we have government making everything worse – the only thing any government ever does to anything.
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