What will be the consequences of paying fast food workers and other low skill jobs $15.00 as some are pushing? Well as may be expected it will put upward pressure on all wages … which of course may be the real agenda in any case.
The cry for fair wages will snowball. Here is an example:
According to the U.S. Bureau of Labor Statistics, or BLS, all paramedics and EMTs made an average annual wage of $34,030, or $16.36 per hour. The middle 50 percent of this group earned between $24,420 and $40,440, or $11.74 and $19.44 per hour. The median salary was $30,710 per year, equaling $14.77 per hour.
Do you think EMTs deserve more than the guy making your fries? How ironic, eat a lot of fast food and your chances of needing an EMT may go up 😳
QUINNSCOMMENTARY 
Unintended Consequence of Wal-Mart’s Raise: Unhappy Workers
http://www.bloomberg.com/news/articles/2015-08-06/an-unintended-consequence-of-wal-mart-pay-raise-unhappy-workers
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I understanding the need and the want for any minimum wage however such a drastic rise in minimum wage can only cost jobs. Free market forces drive wages. It has been two decades since I was a paid EMT but back then it took over 200 hours of training, paramedics training was basically an associate’s degree. The only reason the reported wages are so high is that the emergency medical services operate 24/7 and to cover around the clock shifts overtime is required often bumping up their income by 30-40%. The 30-40% is a good figure for any 24 hour operation where when someone is off sick or on vacation, the job position still must be filled unlike in an office environment where they are left unfilled.
The reason for the low wages for an EMT is because of the supply. In very rural areas in NJ where the call volume are low they still depend on volunteer EMTs. This keeps cost low for those towns and provides faster response times. This is a good thing for tax payers and insurance companies. As long as people are willing to do this for free, wages will remain low for EMTs and there a lot of EMTs.
In most cases ambulance service is covered by insurance and usually free if you cannot afford it so people do not even consider the cost because it’s “free”. If they had to pay up front for the service they would not and they would call a taxi.
So back to the fast food workers, they are not skill workers but people are willing to pay some amount to eat their fries. Fast food workers are paid what it takes to get them to show up on a regular schedule. Raising their wages will do neither to improve their performance or the food quality. There will come a tipping point where people can’t afford to eat out or they want more value for their money and fast food sales will decline and so will their jobs. The difference here is people need EMT’s, but they can cook at home.
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To follow-up, wanted to quote Peter Senge, a senior lecturer at MIT, who wrote The Fifth Discipline: The Art and Practice of the Learning Organization (Senge 1990) which includes some really good guidance for politicians seeking solutions to today’s issues like inadequate wages.
You can have some fun reviewing what he calls “learning disabilities” – including the parable of the boiling frog, and the illusion of taking charge.
But, my favorite from his work is Rule #1 of his 11 laws of the Fifth Discipline – “Today’s problems are nothing more than yesterday’s “solutions”.”
Some of the other 11 laws include:
The easy way out usually leads back in.
The cure can be worse than the disease.
Cause and effect are not closely related in time and space.
Small changes can produce big results…but the areas of highest leverage are often the least obvious.
You can have your cake and eat it too —but not all at once.
Dividing an elephant in half does not produce two small elephants.
Worth your time investment.
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At $15 an hour (probably indexed in future years), plus time and a half for overtime, you will see elimination of jobs that don’t deliver $15+ per hour in productivity (the cost of the labor, plus margins for employment taxes and other expenses, plus a margin for profit). So, what will replace those humans – expect to see two trends – new electronic applications (what Hillary Clinton calls the “gig” economy), and automation. Where competition for your fast food dollar is limited, such as in campus locations (airports, shopping malls, etc.), expect to see price increases.
Will there be “wage compression” and the applicable response? Chances are, many of the EMT’s you use in comparison are already represented, or will conclude they must become represented employees – to restore the differential. Who pays the EMT’s? Well, seven years ago an ambulance call in Manhattan, four blocks to the residence, five blocks to the hospital, resulted in a charge > $800.
Any wonder why health care costs go up – it isn’t the cholesterol in the fries, it is the indigestion from all of our various policies that cause self-inflicted wounds. Today, it is “fixing” prior minimum wage legislation. Here’s my vote – today, 29 states and the District of Columbia have minimum wage requirements that are higher than the federal minimum wage – DC is the highest at $9.50. I don’t think that is enough of a difference to prove the point – $9.50 vs. $7.25. So, let’s encourage states and local governments that want to introduce $15 minimum wage requirements to do so, while maintaining the federal minimum wage at its current level, $7.25. Right now, get it done. Then, sit back five years and evaluate the results.
See whether the higher minimum wage lifts more people out of poverty than it dumps from the workforce. See if it reduces or increases unemployment among the less skilled. See if it reduces or increases unemployment among young workers. See if it triggers inflation – wage push inflation – as employers attempt to reduce wage compression and raise prices for their products and services.
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There will certainly be future knock on effects when the “State” insinuates itself into the free market by mandating a wage floor including the “me too” effect for higher earners in the labor market. Under the guise of “fairness”, populist vote buying politicians will try to hoodwink the public into seeing them as being “for the little guy.” Wage and price controls always have market distorting consequences. There have been newspaper stories written recently about how the predictions of higher prices and job losses in places that have adopted new wage floors have not materialized but you have to remember that economics 101 teaches us that prices are “sticky”, meaning that changes take time to work through the system and that wages are the price for labor. As the cost of labor goes up, employers raise prices to compensate which eventually drives up inflation. Inflation can be viewed as a hidden tax on everyone, especially those who have saved, because it reduces their future buying power. The higher cost of labor also makes new job replacing technologies a better option for employers. The main point is, don’t expect the negative consequences of wage control to be felt immediately. Given time it will come.
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