“We see from Denmark that it’s possible to run a profitable fast-food business while paying workers these kinds of wages,” said John Schmitt, an economist at the Center for Economic Policy Research, a liberal think tank in Washington.
Many American economists and business groups say the comparison is deeply flawed because of fundamental differences between Denmark and the United States, including Denmark’s high living costs and taxes, a generous social safety net that includes universal health care and a collective bargaining system in which employer associations and unions work together. The fast-food restaurants here are also less profitable than their American counterparts.
“Trying to compare the business and labor practices in Denmark and the U.S. is like comparing apples to autos,” said Steve Caldeira, president of the International Franchise Association, a group based in Washington that promotes franchising and has many fast-food companies as members.
“Denmark is a small country” with a far higher cost of living, Mr. Caldeira said. “Unions dominate, and the employment system revolves around that fact.”
But as Denmark illustrates, companies have managed to adapt in countries that demand a living wage, and economists like Mr. Schmitt see it as a possible model.
Denmark has no minimum-wage law. But Mr. Elofsson’s $20 an hour is the lowest the fast-food industry can pay under an agreement between Denmark’s 3F union, the nation’s largest, and the Danish employers group Horesta, which includes Burger King, McDonald’s, Starbucks and other restaurant and hotel companies.
By contrast, fast-food wages in the United States are so low that half of the nation’s fast-food workers rely on some form of public assistance, a studyfrom the University of California, Berkeley found. American fast-food workers earn an average of $8.90 an hour.
“It’s very inadequate,” said Mr. Moore, 26, who supervises 10 workers. His rent is $600 a month, and he often falls behind on his lighting and water bills. A single father, he receives $164 a month in food stamps for his daughters, 5 and 2.
“Sometimes I ask, ‘Do I buy food or do I buy them clothes?’ ” Mr. Moore said. “If I made $20 an hour, I could actually live, instead of dreaming about living.”
Mr. Moore’s daughters receive health care through Medicaid, while he is uninsured because he cannot afford Burger King’s coverage, he said.
“I skip the doctor,” he said, adding that he sometimes goes to work sick because “I can’t miss the money.”
(Continued–Read Entire Article Here)
Arlen Grossman, I have heard many conflicting arguments on this issue. Have you ever experienced this particular problem when you discuss this matter with other people?
Arlen Grossman, I am not opposed to the minimum wage. The issue as I see it is that we should also be studying its effects on employment and the economy.
I agree. We should study the consequences of a higher minimum wage. In the meantime,
giving millions of low-wage workers a living wage will go a long way toward reducing the obscene inequality in our economy.
Arlen Grossman, we agree on that. Here is a video for you: https://www.youtube.com/watch?v=tRkz0HBCsyo Many people express concern that human employees will be replaced by robotic entities if there is a minimum wage hike. In all honesty, I would like to see their proof, assuming that they have any such proof, that increased minimum wage causes more unemployment.
“Arlen Grossman, I have no problem if a rich person got that way from investments in some cases. Having said that, I prefer personally the idea of getting rich due to hard work.”
Jeffrey, we all like the idea of getting rich due to hard work. I guess where we differ is just how rich.
When some have billions and many others have little or nothing, then there is something wrong. I understand you feel differently, and that is why we will probably never agree. But mankind alway has and always will always have those philosophic and political differences. That’s just the way it is.
Conceptually, a living wage has an appeal. The problem is that it is purely an artificial construct.
Artificial or not, it makes a real difference in real people’s lives.
Arlen Grossman, what is better for a poor person-artificially increasing their take-home pay through the minimum wage increase or paying them based on how diligent they are? If the former, what is the rationale for it? If the latter, would this not be an incentive to work harder?
And what’s better: for rich people to get extra tax breaks and subsidies and get richer,
or for them to get less breaks and have to work harder to stay rich? I’d be curious what you would say.
Arlen Grossman, I have no problem if a rich person got that way from investments in some cases. Having said that, I prefer personally the idea of getting rich due to hard work.
Good comment. I agree. Americans forget that when unions were strong, the middle class was thriving. As unions have disappeared, so has the middle class.
Arlen Grossman, what if someone got rich by building an enterprise that employed half of the city, depending on its size, in which the owner resided in? If more jobs and bigger paychecks were the end result, how would that be a bad thing?
Not necessarily a bad thing, Jeffrey. . It all depends if the rich guy is paying decent wages and benefits.
Back to you: suppose it were the government doing the same. Is that a bad thing?
Arlen Grossman, if government officials had the ability to dictate what businesses pay their employees, we as a populace should be able to dictate to them how much of their salaries they should get to keep. Just saying that a business owner is required by legal mandate to pay their employees $15.00 an hour, even if some work hard while other employees slack off, is one thing I don’t get. Why should Joe (a hypothetical character) bust his ass to earn a paycheck and get paid $15.00 and Steve (a hypothetical character) get paid the same amount if he does not work as hard?
Jeffrey, $15 an hour should be enough to be considered a livable wage, and that worker would not need government assistance (I know you like that). As for your Joe and Steve example, my response is that hard-working Joe will keep his job and possibly get promoted and make even more money. Lazy Steve, on the other hand, might get laid off or fired.
Arlen Grossman, I have no problem with giving help to people who need it. My issue is with the fact that small government conservative republican types do not seem to understand how raising the minimum wage benefits them in the long run. Yes, I did say that the minimum wage seemed to have an artificial construct. The point behind that statement was to illustrate the absurdity of the arguments that raising the minimum wage is a bad idea. I could have been more specific, yes, so I will concede that point.
Thank you, Jeffrey.
Every generation of Robber Barons in this country since the end of the Civil War has made it their holy mission to make war against trade unions.
No Prisoners has always been their policy with regard to trade unions. That is why in the USA for every ten thousand people you can find who hate trade unions, only three or four people out of the ten thousand have ever had any direct contact with unions. The Robber Barons have conducted most of their war in the arena of propaganda and they won that war at least fifty years ago.
Anybody who tells you different is simply under the influence of that propaganda. The per capita participation in trade unions in Denmark and several other European countries where people earn a living wage and there is not the need for state welfare that there is here in the USA is vastly greater than the per capita participation in unions in the USA —- not by a few numbers but by several factors.
Thanks Arlen for sending this.