Tag Archives: Minimum Wage

The End of Bad Paying Jobs

For years my job was automating manufacturing systems. During that time I saw very few people lose their jobs because of projects I was involved in but I saw a lot of people reassigned and retrained. Most of them saw an increase in pay, the rest of them retired. None of them were replaced and attrition dropped the payroll of the site.

These jobs that faded away were decent paying manufacturing jobs but they were some of the most tedious jobs I’ve ever witnessed. Automating those jobs was an expensive investment but one that paid for itself within five years.

In high school I worked in a McDonald’s. I can not think of a more tedious job than the one I held there. And even though it was a minimum wage job it was stressful. I would have nightmares about working in that store that was the result of the stress.

Automation has also been arriving on the scene at McDonald’s but not to the extent it has in manufacturing. I’ve seen stores go from 15+ employees on a shift down to 5 over the years. However, this hasn’t seemed to affect the employees on the counter much.

It looks like that is changing:

McDonald’s (MCD) has been testing self-service kiosks. But Wendy’s, which has been vocal about embracing labor-saving technology, is launching the biggest potential expansion.

Wendy’s Penegor said company-operated stores, only about 10% of the total, are seeing wage inflation of 5% to 6%, driven both by the minimum wage and some by the need to offer a competitive wage “to access good labor.”

Source: Wendy’s Serves Up Kiosks As Wages Rise, Hits Fast-Food Group | Stock News & Stock Market Analysis – IBD

A 33% increase in labor costs suddenly gives an incentive to automate that wasn’t there before.

The problem I see here is that there is not many places to reassign a fast food worker to and not much of a reason to retrain them. And while these are crappy jobs they are jobs. You can’t raise a family on what they pay but when they were part-time jobs for teenagers who were being supported by parents they were great places to get work experience. Now that will be gone and I’m not sure where teenagers will turn to get that experience.

$70,000 a year minimum wage? Yeah, that seems about right.

Dan Price read an article stating that about $75,000 per year is all of an income it takes to be happy, everything above that was just for fun. With that advice the founder of Gravity Payments made a commitment to pull all of his employees up to a minimum wage of $70,000 per year and he’s doing it because he wants to, not because he’s being made to.

If it’s a publicity stunt, it’s a costly one. Mr. Price, who started the Seattle-based credit-card payment processing firm in 2004 at the age of 19, said he would pay for the wage increases by cutting his own salary from nearly $1 million to $70,000 and using 75 to 80 percent of the company’s anticipated $2.2 million in profit this year.

via One Company’s New Minimum Wage: $70,000 a Year – NYTimes.com.

I applaud this man. I really do. He’s making a sacrifice, that he is convinced isn’t really a sacrifice, to make sure his employees are happy and, if the article he read is correct, you can’t be happy unless you are making about $75,000 per year.

The story is a really good one. I hope you follow the link.