Raising the Rates for Retail Workers

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What would you do for a 24 percent raise?  Stage a walkout?  A sit-down strike?  Work harder?  Fast-food workers in seven states have staged short-term walkouts in favor of a raise to $15 per hour.  That is much higher than President Obama’s proposal to raise the minimum wage to $9 per hour, the 24 percent payday increase.

A Payscale.com survey of 3,000 fast food workers is graphically displayed in a Bloomberg Businessweek article, “This Is What Would Happen If Fast Food Workers Got A Raise.”  Many fast-food workers are at or slightly above minimum wage.  At the standard 2,080 worked hours per year for a full-time job, that adds up to $15,080 a year!  Even McDonald’s effort to help employees put together a budget assumed that McDonald’s workers would have to have two jobs to make ends meet. 

Most fast food workers only work part-time.  They are students, parents with children, single parents, retirees, and people with day jobs that don’t pay enough to take care of the bills.  So, if you take the minimum wage and cut it in half for a part-time job, you’ve taken a dive way below the poverty level. At $9/hr. these workers would get a boost to $18,720.  Not close to buying the big house with a pool, but it’s a step up.

On the Payscale.com survey, retail workers, personal care clerks and hotel workers were among those who were at the $9/hr. level.  These workers are aiming for $15 per hour.  They could join the ranks of those who are already at that level—medical secretaries, animal control workers and bill collectors.  The wage rate boost would bring in a cool $31,200.  They’re not going to get rich, but two working adults in the same household could be closer to the American dream, pulling in $62,400 a year.  Enough for a small house with a pool out back.

No one can dispute the fact that retail workers are the lowest paid and often the most unappreciated segment of the workforce.  These hard-working, underpaid individuals are often the face of the company to the world, taking care of customers face-to-face every day.  They are the check-out clerks in grocery stores, fast-food workers filling orders at the drive-thru window, making the latte or donuts that get your day started on the right foot.  They man the retail counters at department stores, convenience stores and just about any type of small retail business.  They deserve a raise. 

When wages go up, companies have to find ways to make payroll.  In retail businesses, personnel can take a hefty chunk of operating expenses.  With an overnight 24 percent wage increase, some companies will have to take quick action.  Raise the price of hamburgers and lattes.  Cut the size of the burger or size of the package.  Ice cream, coffee and breakfast cereals have all experienced a downsizing—in package size but not price.

Some companies may just cut jobs to make up for the higher wages.  This would defeat the purpose—what’s the benefit of a wage increase when you lose your job?

Surveys and statistics are interesting, but the bottom line is what can the market bear and what are customers willing to pay?  Retail and customer service jobs are on the rise.  With more of the workforce engaged in these jobs, wages will have to climb to allow people to attain a reasonable and comfortable standard of living.  Otherwise, you may find no one on the other side of the counter, ready to take your order for a sausage/egg/cheese muffin.

Photo courtesy of Freedigitalphotos.net


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  • Mary Nestor-Harper
    Mary Nestor-Harper
    This is a difficult dilemma...how do you raise wages, keep costs down and create more jobs?  New necessities, like cell phones and internet access, pay-for-tv and higher prices for just about everything are expenses our parents didn't have to deal with.  With healthcare going up, a lot of people are going to be desperate to keep up.   Turn back the clock?  Downsize the American Dream?  Tough questions for a difficult reality.  
  • Joseph K
    Joseph K
    Made a rare stop at Burger King - whopper (size has been reduced) fries (size has been reduced) and coke (again size reduced) - cost $5.60 to me plus $.39 tax.  Probable food cost to Burger King about $2.  Probable labor cost to Burger King about $2 (manager and 2 employees on duty).  Probable overhead, variable and other costs about $1.  Probable profit to Burger King about 60 cents.Raise wage to $15 an hour and labor cost would go to about $3 so instead of a 60 cent profit it would be a 40 cent loss.  Result would need to have price increase and further portion size reduction.  Result of that would be fewer customers.$15 per hour for line restaurant workers in fast food is not realistic unless one is willing to pay more and get less.
  • John K
    John K
    Fast food and retail pay their workers, who are the backbone of their companies wages that they cannot live on and survive.  They make billions of dollars and min. wage - $9 and cut their hours to make sure they do not work full time while they pay their CEO' millions  Cut the bs about won't hire etc.  All those working like dogs and not getting a fair wage are beginning to realize this and are  rising up.
  • Jennifer F
    Jennifer F
    If they get that much of a raise why bother working in jobs that  people are earning that much now without a raise for them?
  • Lauren M
    Lauren M
    The low wages that retail workers make has much to do with corporate greed as well as running companies in an inefficient manner.  Corporate CEOs and workers in top tier positions continue to receive bonuses and record profits whjle the low wage workers who are responsible for bringing these companies millions of dollars make a pittance.
  • David P
    David P
    The article talks of two adult incomes, but what about the single people?  Forget it, rent=450,utilities=150 if your lucky, car insurance=100 if again your lucky, I'm not adding a car payment but that's 750 without food or other necessities like cleaning supplies, going out to a movie, clothes, emergencies like car repairs.  So 7.80 hr, arizona mimimum wage is 1280 for 40 hour week, which is dreaming in retail, so 1280 cut in half is 624.  You get the Idea. It sucks, minimum wage should be at least 15 hr to survive.  I wish owners of these companies were sentanced to living on these waqes for 1 year to recognise what they do to people.
  • Michael J. O
    Michael J. O
    Retail sales personnel and fast food cooks are notoriously underpaid for the work that they do under difficult conditions [small conditions, restaurants in crime districts], are exploited. Companies should pay their employees just or living wages irrespective of the "minimum wage"  Has anyone challenged the million-dollar salaries that CEOs and VPs make?
  • Lisa B
    Lisa B
    Yes-the wage increase needs to happen. I only get $8.11 an hour and can barely make it- I need a second job just to survive.
  • David C
    David C
    I live is San Francisco where the minimum wage is above $10/hr, and benefits are mandated.  I can tell you that prices have gone up and available hours have gone down.  Full Time positions are down, and part time positions are spread thin to make-up the difference.  Small businesses, which make up the highest job source, are forced to do more with less; there is more turnover which impacts productivity.  Customers expect more with a sense of entitlement, but always want perfection with a smile at a lower price.  Don't know what the answer is, but an automatic minimum wage increase across the board.... hmmm.
  • Judith W
    Judith W
    Wages will not rise as you say.  Employers like Cole ha an, Nike ect. Continue to cut hours , taking away all benefits. Yet increasing prices to the consumer.  We will continue to be slave labor until the consumer stands up to self service.
  • Mary Ellen T
    Mary Ellen T
    I have a $10 hour job as a food demo worker but some months I only work 1 day a week. Hard to have 2 jobs because they need me 5 days a week so they can schedule me.
  • Thaddeus S
    Thaddeus S
    Some retail workers don't even make $9 an hour, because the minimum is less than $8 and that is too low.
  • Thomas N
    Thomas N
    The author really only makes one good point.  "Some companies may just cut jobs to make up for the higher wages".  Nobody seems to realize that if wages go up, costs of doing business goes up, jobs will be lost and cost of goods will increase.  Simple economics.  So everyone's disposable income will be effected.  Let's face it, the job pays a fair wage for the skill level that is generally brought to the position.  As the author points out, most of these jobs are held by students, parents with children, retirees, etc and most of the jobs are part-time.  These jobs are mostly not meant to be career positions.  They are positions that let unskilled workers develop skills, hopefully to make them more marketable so they can move up the pay scale.  Those that want to make one of these positions a career with hard work and dedication they may be able to move into management.  These people do not deserve $15 per hour to push a button. In fact, I argue there should be no minimum wage.  If I were a potential employee and I was willing to offer my services for $5 per hour, the employer should have the right to hire me at that wage.  The government should not dictate what an employer should have to pay a willing worker.  The free market should set the price.
  • James F
    James F
    Finally, an article that addresses a long-term problem that has existed for years in the service industry. A pay raise is needed otherwise they will continue to be stuck in a permanent underclass lifestyle.
  • crystal g
    crystal g
    Yesss $9 hr great
  •  Jimmy T
    Jimmy T
    Unfortunately in USA prices are rising much faster than wages and this can ultimately have a very negative effect on our economy and its recovery.It seems people  today have less buying power than 10 or even 5 years ago. A worker making decent salary or hourly wages  will be able to purchase more goods and services which in turn will keep the wheel of the economy turning and may even create more jobs.
  • Brenda S
    Brenda S
    I work in retail and it is the hardest job and most under paid job I have had and have not had a raise since I've been here
  • Charles B
    Charles B
    I totally agree that the minimum wage for Customer Service associates has been way to low, Having worked in this field for better than 20 years now I am sick and tired of living payday to payday!

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