McDonald’s has been under fire over its Practical Money Skills Budget Journal, a planning tool designed to help employees organize their personal finances. The tool’s sample budget fails to account for a variety of first-world expenses, leading to a predictable cacophony of folks calling for newer, fresher, more enlightened price-fixing tricks. Stephen Colbert channels the sentiments well.

McDonald's Budget

Sample Budget for McDonald’s Employees

On the finer points, it can be tempting to get into the weeds, and many already have. Some have focused on the budget itself, debating everything from the actual cost of heat to the necessity of a $100 cable bill. Others have aimed to play the CFO, imagining how Big Mac prices might be impacted if McDonald’s paid its workers the $15 per hour they demand. It’s all been thoroughly deconstructed, but rest assured, the next hypothetical is well on its way.

Yet as fun as all this back-and-forth may be, it misses the larger reality: Prices are not play things.

As economist Art Carden has pointed out, raising the minimum wage is likely to lead to a host of deleterious effects:

The basic introductory economics story holds that when you raise the minimum wage, people increase the amount of labor they are willing to supply while reducing the amount of labor they demand. This creates unemployment: more people want to work, but firms want to hire fewer people. In spite of evidence suggesting that minimum wages do not cause large disemployment effects, a January 2013 study by David Neumark, J.M. Ian Salas, and William Wascher “conclude(s) that the evidence still shows that minimum wages pose a tradeoff of higher wages for some against job losses for others.”

It’s possible that we can get a disemployment effect even if there is no actual change in the unemployment rate or if no one loses his or her job: firms may not actually fire anyone or may not change the number of people they wish to employ, but they might reduce the number of hours of labor they want. A McDonald’s that had ten people working eight hours each on Tuesday might cut that back to ten people working seven and a half hours each on Tuesday.

Further, even if the tradeoff weren’t a tradeoff — i.e. even if McDonald’s retained labor levels while absorbing significant wage increases — different prices attract different people. If entry-level burger-flipping spikes to $15 per hour, you can bet that everyone from unemployed factory workers to newly unleashed B.A. graduates will begin to apply, each competing quite handily against the non-English-speaking immigrant, the single mom without reliable transportation, the inexperienced teenager, or the ex-con looking for a fresh start.

But in addition to the more mundane economic ignorance, the reach and roar of such backlash demonstrates a deeper spoiling of the soil: a widespread preference for pretending rather than progressing. For instead of observing the price and aiming to increase our output to society, such an approach subverts the signal altogether, demanding that society give us what we believe we are due. Rather than viewing human persons as creative beings with creative potential designed to serve and contribute to creative purposes, the bourgeois chatterclass paints low-skilled laborers as hopeless serfs, trapped and beholden to the cauldron-stirring of domineering cheeseburger overlords. Human industry is overrated, and the prospect of mobility is nothing more than a grand old myth. And alas, in a world as bleak as this, what else is one to do but clamor for certain static somethings from certain statused someones?

I recently observed that peace and prosperity are underappreciated, using our widespread scorn for places like McDonald’s as Exhibit A. Quite unfortunately, the point stands affirmed.

Businesses like McDonald’s offer low-skilled workers a place to begin a larger, lifelong process of personal development and social contribution, yet in response, we now prefer to elevate and legislate an ethos of sitting, settling, and begging for more. Only on the heels of modernity and at the peak of unprecedented prosperity can Americans treat a $7-per-hour gig in an air-conditioned burger joint with more disdain than my immigrant great-grandfather would’ve lent his coal-shoveling duties on the railroad. We’d do well to remember from whence we came, but even better to know how we got where we got.

GOLDEN ARCHES

Prosperity is a messy thing to come by, and though it’s less and less messy by the day, this wonderful world of cell phones and cheap groceries didn’t happen by accident. It was built from a basic view of human dignity and opportunity that reached higher than the types of low-ball thinking and cheap gimmicks that permeate the conversation on mobility. We can bully the fat cats to give us our due till we’re green with envy, but this is characteristic of a people grounded in temporality and fatalism, not hope and possibility.

The moment we get all of this backwards, confusing the beginning with the end, the floor for the ceiling, is the moment we trade the authentic for the artificial across the board. The human spirit was destined for much more than minimum-mindedness such as this.

 


  • Clare Krishan

    “Prices are not play things” except when they are; in the hands of minimum-mindedness such as that of the Chairman of the Federal Reserve entertaining certain well-placed crony corporatists with mercantalists’ cheap money. Such a reductionist worldview fails to embrace the corrupting effects of moral hazard to the rich and complex interlocking social structures of subsidiarity. When those in exalted positions of power abuse their priority access to factors of production — money supply prime amongst them, but commodities and indemnification market manipulations seen in recent weeks are telling symptoms of the regulatory capture that ails America’s capital ‘mal’investments — that lower the prices they’re required to pay passing on attenuated risks and higher costs to those playing lower down the toy pile… see discussion at http://www.theamericanconservative.com/dreher/the-rent-millennials/ How many of your grandchildren do you expect to be on food stamps when they leave home if they ever do? That’s the new normal: your glib analysis of the technicalities betrays a certain isolation from Main Street, you need to get out more… its getting ugly… Private Equity Payout Debt Surges http://online.wsj.com/article/SB10001424127887323420604578650350584438488.html while http://theeconomiccollapseblog.com/archives/40-percent-of-u-s-workers-make-less-than-what-a-full-time-minimum-wage-worker-made-in-1968 and “A revisionist British political perspective now blames everything on
    pesky North American speculators. The chart … shows the extent to which a culture philosophically
    committed to living beyond its means has infected its host”
    http://www.cobdencentre.org/2013/08/still-waiting/

    Subsidiarity of human institutions is the where moral conduct in human relationships imparts value to real world constraints of economic calculus. However your analysis fails to address it entirely instead relying on the GOP establishment saw of class warfare pitting solidarity of the undeserving (what I prefer to call the underprivileged) against that of the better endowed strata of contended suburbia. Solidarity applies to all equally (or would if the US operated under a natural law regime which it quite transparently does not); what builds the advanced dependencies that add value to the social product (rather than crude aggregate GDP figures that fails to distinguish wealth-creating activity from its capital-draining opposite) are the responsibility tor long term commitments in commercial relations that span non-domestic clients reliant on global markets. Suburbia isn’t so contended anymore… concrete doubts as regards the path we’re steering our families and communities into are forming in the folks who turn to Steve Colbert for light relief from the anxieties they’re facing.

    • Joseph Sunde

      I share your disdain for cronyism, and agree that it is a strong factor at play in inhibiting mobility among the poorest among us. Indeed, the type of price-fixing I’m critiquing here applies all the way up the chain, so I’m not sure where your critique is going. Alas, I’m talking about a certain something so I stuck to certain somethings.

      The big whigs at McDonald’s and their various vendors are surely benefitting from price-fixing schemes (ag subsidies come to mind), but I’m not sure how that changes, or would lead me to support, price fixing of other varieties (the minimum wage). It all stinks, and it’s all a slam on mobility.

      I certainly agree that solidarity applies to all equally, and I don’t believe I ever painted the low-wage worker as “undeserving.” The whole point of my post was that the poor /are/ deserving, and forces like the minimum wage paternalize and inhibit folks from aligning their work with their worth; you either lock people out or distort the signals where they sit. But as much as such forces decrease our opportunity, I don’t prefer to wallow in doubt or hopelessness about it.

      I’m not sure what your metric is for “Main Street” — few can probably live up to it — but I myself worked at McDonald’s from age 15 to age 20, during the height of the GWB years. As you likely know, no small amount of Big Business cronyism persisted at this time (mid-2000s). These forces did not stop me and many others like me — from the ex-con to the family of Spanish-speaking immigrants — from going from minimum wage to significantly higher wages in a matter of years. Both myself and the more underprivilged I worked alongside didn’t need the government to manipulate people to know what we were worth. That was in our hands. We knew our worth and we moved on when we acquired the skills and experience we needed.

      Cronyism exists, but mobility still persists. It requires a healthy view of the obstacles (price-fixing, cronyism, etc.), but it also requires a healthy optimism.

    • Joseph Sunde

      I share your disdain for cronyism, and agree that it is a strong factor at play in inhibiting mobility among the poor. Indeed, the type of price-fixing I’m critiquing here applies all the way up the chain, so I’m not sure where your critique is going. Alas, I’m talking about a certain something so I stuck to certain somethings.

      The big wigs at McDonald’s and their various vendors are surely benefitting from price-fixing schemes (ag subsidies come to mind), but I’m not sure how that changes, or would lead me to support, price fixing of other varieties (the minimum wage). It all stinks, and it’s all a slam on mobility.

      I certainly agree that solidarity applies to all equally, and I don’t believe I ever painted the low-wage worker as “undeserving.” The whole point of my post was that the poor /are/ deserving, and forces like the minimum wage paternalize and inhibit folks from aligning their work with their worth; you either lock people out or distort the signals where they sit. But as much as such forces decrease our opportunity, I don’t prefer to wallow in doubt or hopelessness about it.

      I’m not sure what your metric is for “Main Street” — few can probably live up to it — but I myself worked at McDonald’s from age 15 to age 20, during the height of the GWB years. As you likely know, no small amount of Big Business cronyism persisted at this time (mid-2000s). These forces did not stop me and many others like me — from the ex-con to the family of Spanish-speaking immigrants — from going from minimum wage to significantly higher wages in a matter of years. Both myself and the more underprivilged I worked alongside didn’t need the government to manipulate people to know what we were worth. That was in our hands. We knew our worth and we moved on when we acquired the skills and experience we needed.

      Cronyism exists, but mobility still persists. It requires a healthy view of the obstacles (price-fixing, cronyism, etc.), but it also requires a healthy optimism.

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