|Fast food workers picketed in Austin and Houston yesterday. Both protests happened around midday, at the height of lunch hour, as workers walked out to show their support for a higher minimum wage. 50-60 people each protested at several locations in both cities, including a Popeye's in east Austin and a McDonald's in southwest Houston.
The minimum wage in Texas is the same as the federal minimum wage, $7.25 an hour. Approximately 28,000 fast food workers are employed in Austin, and their median wage is slightly higher than the federal minimum wage, at $8.83 an hour. The average annual salary for a minimum wage worker is about $15,000 a year. This sits just at the federal poverty line for a family of two. It's far below the poverty line for a family that has more than two people. It's even farther below a living wage--an MIT study found that it would take a wage of $19.56 an hour for a full-time worker with one child to make it in the Austin metro area.
Minimum wage growth in the United States has not kept up with the increasingly high cost of living. It's been lower than a poverty wage since 1982. If minimum wage growth had kept up with inflation, the current minimum wage would be over $10 an hour. If it had kept up with productivity growth over the past few decades, the minimum wage would be over $21 an hour. And if it had grown as much as pay for the top 1% has grown, the minimum wage would be over $22 an hour, a whopping 212 percent higher than it is today.
The effects of the ever-increasing amounts of income inequality in the US are devastating. A UC-Berkeley study found that low-wage workers cost taxpayers nearly a quarter billion dollars each year. This is because they are forced to rely on government safety net programs to make ends meet. Fast food workers rely on programs like Medicaid and CHIP much more than employees in other industries. Raising the minimum wage could shift the burden away from taxpayers and onto companies to pay their workers enough money to live on.
Companies like McDonald's are aware of how much their employees struggle to get by. Their recently-published holiday guide suggested that employees sell their Christmas presents to make extra cash to make ends meet. McDonald's made $1.5 billion in profits during the third quarter of 2013. That's strikingly close to the amount of public benefits ($1.2 billion) the McDonald's workforce consumes each year.
Despite the clear harm that a low minimum wage is doing to the economy, many remain staunchly opposed to raising it. This week, Texas Congressman Joe Barton (R-Ennis) said that he believes the minimum wage should be repealed altogether. (And yet nobody has filed to run against him.) Although the minimum wage is below the poverty line now, it has historically helped raise families out of poverty, and could do so again if it were raised to a living wage. It certainly hasn't outgrown its usefulness, as Barton seems to think.
Another group that opposes raising the minimum wage is the Texas Restaurant Association. Its CEO argues that raising the minimum wage would cause a slippery slope of higher wages, and would raise menu prices. It's true that raising the minimum wage would increase menu prices, but not by much. European McDonald's restaurants pay their employees a minimum wage of $12 an hour, and Big Macs in Europe only cost $0.10 more than in the United States.
The fast food protests come on the heels of a powerful speech by President Obama this week speaking about income inequality in America. As he pointed out, "in the past, the average CEO made about 20 to 30 times the income of the average worker, today's CEO now makes 273 times more." He also spoke of decreasing social mobility, highlighting that those born into the bottom 20% of Americans has less than a five percent chance of making it to the top. President Obama and other Democrats have spoken in favor of raising the minimum wage to $10.10 an hour, though most agree such a measure is unlikely to pass the Republican-controlled House. Nonetheless, as income inequality continues to rise, it's promising to see both workers and politicians standing up for a more equitable America.