Wednesday, February 20, 2013

Minimum wage. It's the least we can do.

About 1.7 million people earn the Federal minimum wage of $7.25 per hour. Let’s pretend they each work 40 hours a week, and 50 weeks a year, which is to say that they each work 2,000 hours per year. (They don't because most minimum wage jobs are also part-time.) Raising the minimum hourly wage $1.00 would therefore cost employers of these workers, $3,400,000,000. Where’s it going to come from?

Let's take a look at the top fifty employers of minimum wage workers. The average compensation of the CEOs of these companies is $9,397,302. Ninety-two percent of these companies were profitable last year, and 78% were profitable over the last three years. Compared to pre-recession levels, 75% have higher revenues, 63% have higher profits, 63% have higher operating margins, and 73% higher cash holdings. The recession is over and everything is looking up for these companies. Except the wages of minimum wage workers, which haven't seen an increase since 2009. 
The fast food industry is one of the biggest employers of minimum wage workers. Here’s the executive compensation of some of the best paid CEOs in the fast food business.

MacDonalds                  18,403,830
Burger King                   17,072,427
Wendy’s                        10,174,638
YUM                           142,069,337
Starbucks                     483,279,878
Sonic                             17,630,484
Domino’s Pizza              47,821,255
Total:                           736,451,849

Wal-Mart paid its CEO a mere 14.4 million, and we don’t know how much the CEO of Subway made. We do know that he is worth 1.5 billion, and is reputed to be compulsively frugal. Let’s just put him down for making 5% on his money, and call him good for 75,000,000. Add them all together and you get well past one and a half billion dollars.

It’s kind of hard to believe that these guys (they are all men) wouldn't find it worth their while to get out of bed and do whatever they do for half that amount.  If the other half went to increasing the pay of the minimum wage workers, there would be over 22% of what was needed to give every single minimum wage worker in the United States a $1.00/hr raise.

Take a minute to drink that in. By paying 9 CEOs something just south of Croesus, we can finance a quarter of what it takes to pay workers not quite enough to live on. Of course, if the CEOs want to make more money, their path is clear. Hire more low-paid workers and wring your wealth from the sweat of their brow.

“… and tell ’em Big Mitch sent ya!” 

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