Let's Talk About the $20 an Hour Fast Food Minimum Wage

Sectoral bargaining gazes towards the future.

Ronald McDonald, you scum. Give us the money. (Photo via California Fast Food Workers Union)

Today, half a million fast food workers in California are getting a raise, thanks to a new $20 per hour minimum wage. The new wage is the result of a long fight led by California labor groups, particularly SEIU. They have also founded a California Fast Food Workers Union, which is not really a “union” but rather a group of workers who serve as the face of an ongoing policy and political and PR battle—something SEIU specializes in. The wage hike also comes with a state-created fast food industry council made up of labor and business interests that will in essence act as a wage board for fast food workers in California.

It’s a pretty fucking major tangible economic gain for low income workers, and a structural gain for labor in the sense of establishing a long-term state-backed institution that can mitigate the supremacy of corporate control in that industry. It also (and I hate to use this construction because it sounds wishy-washier than How Things Work generally aspires to be, but in this case it is appropriate) raises a lot of interesting points of discussion about models for expanding labor power. So let’s touch on them—as the beginning of a strategic conversation about the future of work, or just as stuff you can say at the next socialist house party to sound as though you have given this issue more thought than you have.

Pluses

California’s overall minimum wage is $16 a year, meaning a lot of fast food workers could see a $4 per hour raise today. Increasing pay by 25% for hundreds of thousands of service workers is no small thing. Big accomplishment on pure economic terms. In this sense what is happening in California is really an extension of the Fight For $15 campaign, which has been rolling for more than a decade now, and which itself is due a good part of the credit for getting many state and local minimum wages into the $15 range in the first place. Likewise, establishing state wage boards is a big step up from “nothing,” which is what most fast food workers nationally have. Theoretically, SEIU could just continue using this formula forever, building statewide PR/ lobbying/ labor-ish campaigns in blue states across the country, kicking up minimum wages place by place and industry by industry. Comparing the money the union invests in these campaigns to the total wage gains they put in workers’ pockets shows that they are an effective investment.

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(Potential) minuses

The California fast food council can be seen as a step towards sectoral bargaining. Is sectoral bargaining good? This is a good topic to bring up if you want to hear labor nerds make very long and boring arguments. The answer, I think, is yes, sectoral bargaining is very good compared to the default American model of, as mentioned above, “nothing.” Sectoral bargaining as the primary goal of the labor movement has some drawbacks—particularly the fact that it does not really create what we typically think of as “unions” or unionized industries. It is a way of leveraging the political power of big unions at the state and national level to achieve material gains for workers but it does not tend to lend itself to, for example, the sort of tight, store-level unions that the Starbucks campaign has produced, and all of the good things that go with those. (The conventional wisdom that store-level unions are a waste of time in industries like fast food has also been shown to be untrue by the Starbucks campaign.)

Some in the union world believe that grassroots-level union drives, with all of their democracy-building people power in the workplace, are the most valuable substance of organized labor. Others have long believed that in difficult industries there is no way to achieve large scale power for workers with shop by shop organizing, and therefore sectoral bargaining should be our focus. The truth is that there is no reason you can’t have both—that is really a question of how you design the sectoral bargaining system. You have to build the democratic workplace shop floor union alongside it, rather than just winning a wage board and then considering the matter finished. Still, in the wasteland that is the reality of American fast food work today, anything is better than nothing, so this argument is somewhat academic. Progress is progress. Wage gains are only part of the picture of building labor power, but they are an important part!

Minimum wage, job losses, and automation

The classic debate over raising minimum wages features right wingers saying “if you raise wages jobs will disappear” and left wingers saying “no they won’t, you are just greedy.” If you are interested in reading actual economic studies on this question then, by all means, do so. If you instead would like to just acquiesce to hearing my own conclusions that I have formed by following this stuff as a labor reporter (here I assert my right not to be yelled at by economists), I will say that the consensus seems to be “it’s a complicated question but there is good evidence that raising minimum wage just not just cause job losses and price rises in the straightforward way that “Econ 101”-spouting Republicans and internet commenters like to argue.” On the other hand it is, of course, possible that raising wages will cause some number of businesses to cut some number of jobs. Generally, though, pursuing minimum wage gains is a worthwhile goal, because A) those wages effectively represent a total lack of labor power and therefore they are probably lower than they need to be and employers just keep them there as a means of preying on the desperation of a vulnerable work force, and B) minimum wage laws are a moral as well as an economic issue, and they should be decided not just by economists and charts but also by our collective conscience on what lifestyle human beings working as hard they can should be forced to endure in a wealthy country.

More to the point, the standard argument that raising minimum wages will cause business owners to raise prices, cut jobs, and pursue automation with greater fervor is a little absurd because it leaves out one key fact: Business owners under capitalism will always try to raise prices, cut jobs, and pursue automation, no matter what. They want to increase their profits, always! If their labor costs are one dollar per month, the logic of profit maximization will still dictate that it would be better if their labor costs were zero dollars per month. The trick of this argument is that it includes an unstated assertion that if we don’t raise the minimum wage then employers will not voraciously seek to cut their labor costs, which is not true. Yes, there is clearly some number (a million dollars per hour?) at which a minimum wage would be truly detrimental but as long as businesses are still able to be profitable, it makes sense to focus more on the worker welfare aspect of the minimum wage debate than the corporate profit maximization part.

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Industry-level lawmaking

You may ask: Why raise the minimum wage in the fast food industry specifically but not every other industry? This is a good question. The actual answer is “because there are politically potent groups like SEIU working specifically on behalf of fast food workers and other industries lack this sort of political force.” (Unions have pursued this strategy in a few other industries as well.) As a matter of fairness, it makes more sense to just raise minimum wages for everyone—remember the moral aspect of the minimum wage, which applies equally to all workers. Compared to an across-the-board wage hike for everyone, this kind of industry-by-industry lobbying is inefficient and a bit unfair. On the other hand, if you compare an industry-wide wage increase to the normal union method of negotiating a wage increase at a single company at a time inside of each industry, then an industry wage board looks much faster and more efficient. So from a political and lawmaking perspective, I find industry-specific wage boards to be inferior to just pouring political capital into raising minimum wages for all, but from a labor movement perspective, it is impossible to deny that wage boards offer a scale that individual union contracts do not. Pick your perspective.

You can’t escape the need for labor organizing

Finally, at the risk of stating the obvious, it is worth emphasizing that technocratic solutions like state wage boards—which do indeed help out needy workers and should be celebrated!—still exist as a result of, and will be obliterated without, power that is rooted in classic worker organizing. The more policy wonk-esque portion of the world can sometimes be seduced into believing that passing a law like California did to help fast food workers is the end of the mission. No. The fast food council exists within the state government of California and is therefore subjected at all times to the competing interests of the political world. The ability to create it ultimately came from SEIU’s power that exists because SEIU is a labor union with 700,000 members in California, and without the continued application of that power, business interests will certainly defang and/ or obliterate the council, as they are always and everywhere trying to do to pro-worker aspects of the government. Even the biggest technocrats, serene in their belief that policy change is the fastest path to solving labor’s problems, must always keep in mind that there will never be the power to enact such policy change except by organizing workers as workers. Labor organizing is not some intermediate step on the way to the creation of perfect political policies that will render American capitalism humane; labor organizing is a constant necessity to maintain the wall that holds American capitalism back from eating all of us alive. If wages are low, we need to organize to raise them. If wages go up, we need to organize to keep them. We can never stop organizing. That’s the price of the power.

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More

—Previously, on wages: Every Pay Bump Is an Admission of Guilt; To Whom Go The Spoils?; Wage-Setting Algorithms Are an Abomination.

—Yesterday the New York Times Book Review published its review of my book “The Hammer” in the print edition. Isn’t that nice? I have been on book tour for more than a month now and it has been awesome to meet many of you across the country. Thank you to everyone who came out to the events in Boston last week. Here are my book events coming up in April—please come through if I’m in your city:

• Tuesday, April 9: Sacramento, CA—At Capital Books. 6 pm. Event link here.

• Friday, April 12: San Francisco, CA—Stay tuned for details.

• Monday, April 15: Los Angeles, CA—At Stories LA, 7 pm. In conversation with Adam Conover. Event link here.

• Sunday, April 21: Chicago, IL— “The Hammer” book event and Labor Notes Conference after party at In These Times HQ, 2040 N. Milwaukee Ave. 5 pm. Get your free ticket here.

• April 23 and 24: Minneapolis—Stay tuned for details.

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