You may have heard about workers at McDonald’s, Burger King and other stores staging strikes today in 60 different cities. They want a minimum wage of $15 and increased benefits. Obviously, a minimum wage that high is a pipe dream at this point, but The Atlantic’s Derek Thompson is even more pessimistic of the strike’s potential. He presents a graph that shows the change in share of total employment in the retail, manufacturing and food service industries. Retail has stayed steady over the past 25 years while manufacturing has plummeted and food service has skyrocketed. Here’s Thompson:
This graph doesn’t tell us everything you need to know about why low wages in food services are probably here to stay. But it does suggest that the collapse of middle-income stalwarts like manufacturing has left a glut of young low-skill workers who are rushing into to fill local service-sector needs at big-box stores and fast-food chains. And that, to me, suggests another thing: That there are more people willing to do these jobs than there are people willing to strike.
This is the key point. When there are other workers capable of performing the job, workers have no leverage to demand higher wages. The one exception, as Thompson notes, is if consumers boycott the fast food chains, but that doesn’t seem likely to happen anytime soon. Even negative PR is likely to do little to help the workers’ cause. After all, a small increase in the minimum wage can cut into the companies’ (plentiful) profit margins. Some negative media coverage isn’t going to be enough to pressure the stores into accepting reduced profits.
That’s what makes the timing of this strike too early in the recovery. We still have an unemployment problem and that means there are replacement workers available to firms. Fast food workers have no leverage right now. In a couple of years, when we’re (hopefully) back to full employment and have a tight labor market, then workers can strike and extract concessions from companies. But not right now. It’s not just a waste of energy. It’s counterproductive.
I’m very sympathetic to the impatience of fast food workers. Their wages are tiny and the recovery has been very slow. They’re sick of waiting for the right time to demonstrate their anger. That’s why it would’ve been nice for Congress to help them out in the meantime (like, say, extending the payroll tax cut last January or increasing the Earned Income Tax Credit). But, unfortunately, that help hasn’t come and isn’t coming from this Congress. But that doesn’t mean workers should rush into a premature strike. In the end, I agree with Thompson that this strike is doomed. What’s even worse is that the next time workers look to fight for a higher wage, they may find that many of their coworkers are too discouraged and hesitant to strike again. They may find a media that’s less interested in covering the story. That’s what makes today’s staged strike counterproductive. It has little chance of producing concessions now, but may reduce the potency of future strikes. It’s a bleak outlook all around.