The US minimum wage is $ 7.25.  There have been recent efforts to raise this to something more viable, but many (of a certain political ilk) aver that this would devastate business.   But, let’s consider a few real facts.

1.  The federal minimum wage for tipped workers (like waiters, busboys, and bartenders) is all of $ 2.13.  So, that the tips you and I provide can insure they make the minimum wage.
2. Those under the age of 20 who work for 90 days or less can be paid $ 4.25.  If they work more than 90 days for that employer, their wage rises to $7.25.  Which means summer youth workers never get that raise.

Let’s consider a few more facts.   If someone was making the minimum wage (say at WalMart or McDonald’s), they would be earning $ 14,500 a year.  For a single person with no children, that’s above the poverty line- and just above the amount that would provide an Earned Income Credit. Thankfully.

We should also consider the married scenario, where both parents make the same wages.  And, they had one child- one that did not require child care, just so I don’t impoverish them more with this scenario.  This way, they are not below the poverty line. But, they will be getting a federal subsidy- the earned income tax credit.

That’s why the fast food workers across the US undertook their job actions over the past few months.  Why folks try to do the same at Walmart.  Because they ARE working, they are working hard, but have to rely on Federal Earned Income Credits and Food Stamps.  (You know, those benefits that certain people want you to believe are going to lazy, shiftless people.  Their words- not mine.)

Now, if they worked for Trader Joe’s, up until recently they would be able to get some fringe benefits like healthcare- at partial subsidy.  (Not at McDonald’s and those other low-wage payers.)  And, Trader’s pays more than the minimum wage.  You should also know that Trader’s just changed their rule- part-time workers are going to get a $ 500 subsidy from Trader’s to enroll in Obamacare.  The good news is this actually means their healthcare will now cost them less than before, with the partial subsidy- and save Trader’s money, too.

What is not considered by many is that the minimum wage used to be the wage that only kids earned.  Or, women trying to supplement their meager family incomes.  (This was true before the millenium.) Not anymore.  Now, it is the way of life for some 75 million people- with about twice that number of employees (165 million) who earn wages above the minimum.

Here’s another scary number.  Even including the 1%, the average wage earned in the US was $ 24 an hour.  Which means that those not on minimum wage are earning about $ 31 an hour, or some $ 62K a year- if they are fully employed.  (Right now, American workers are averaging 34 hours of work a week, so that income is closer to $ 53K.)

I understand that the profit margin of McDonald’s does not put it in the realm of Apple. The data indicates that if we added together the profits of restaurants, supermarkets and retailers among the Fortune 500, they would not equal the profit of Apple.  Maybe that is because Apple only employs 76K folks around the world (the rest can be found with contractors- with the near slave conditions like those obtaining in China)- while the companies I just mentioned employ some 5.5 million folks.  And, these food companies are profitable on the backs of the employees that they don’t properly pay.

This policy leaves the rest of us responsible to pick up their slack )these numbers will only be for those employed in the fast food industry) with the Earned Income Credit ($1.9 billion) , Food Stamps ($ 1 billion), and Medicaid and CHIP [Children’s Health Insurance program]  ($3.9 billion).  [UC Berkeley in concert with U Illinois, 2013 Fast Food & Poverty Wages.] That’s almost $ 7 billion for the 1.8 million fast food workers in the US (about $ 377 for each one of them).  McDonald’s made a little more than $ 5 billion in profits- and the 7 biggest fast food chains made more than this subsidy, in total.  Oh- and these chains distributed some $ 7.7 billion in dividends to shareholders and paid their executives some $ 50 million.

[I know that McDonald’s and most of the fast food empires are franchises.  But, the McDonald’s take is about 4% of the gross revenue of the franchise- and that’s about the net income for each of the operating stores- which average $ 2.5 million in sales.  So, when I say there is $ 5 billion in profits for McDonald’s, the total take for both franchisee and franchisor is at least $ 10 billion!]

The study indicated that most of these fast food employees are not working full time (which would mean the benefits add 20 cents an hour to their pay), but part-time, so the subsidy is even higher. Oh, and 52% of the full time workers (which p\only comprises 28% of the total fast-food payroll numbers) get these subsidies, too.  (Note that the fast food chains claim they pay a median wage of $ 8.69 an hour- and these subsidies still obtain.)

Yup.  You and me- even if we never visit a McDonald’s- are providing it a subsidy so that McDonald’s can have a profit- and then doesn’t pay its fair share of income taxes, either.

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