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Workers on strike in Houston (Metro Video/KROI)

Your fast food dining experienced could be curtailed today by a walkout of workers, demonstrating for higher wages. The national strike of fast food workers is being organized primarily by the Service Employees International Union, and targets restaurant chains including McDonald’s, Taco Bell, and Wendy’s. At the southwest Houston Jack-in-the-Box on Gulfton, protesters gathered before daybreak to carry signs, chant slogans, and bring attention to the “Fight for $15″ campaign to raise the Federal Minimum Wage.

“What do we want? Fifteen! When do we want it? Now!”

A crowd of less than 50 people chanted in loose unison, dressed in matching red t-shirts, emblazoned with white slogans–in English on the front, and in Spanish on the back. Two protesters carried bullhorns, leading the group in phrases that have reverberated in other parts of the country before. “Show me: $15! If we don’t get it: Shut ‘em down!” the group of predominantly late-teen and 20-something’s shouted in the pre-dawn darkness.

One protester stood out.

Beatrize Saldana works two jobs–at one time was working three jobs–and raising five kids. In broken English she tells our videographer, “The minimum wage is not enough to support a family, so I have to be working for two–two jobs at the same time, taking time from my kids,” she says. Clearly, she’s older than the rest of the group, with one or two exceptions.


(Metro Video/KROI)

Also in the crowd, an older, tall, slender white man with graying, curly hair–also carrying a placard reading, “On Strike to Lift Our Families Up; #StrikeFastFood.” Wearing sneakers and calf-length white socks below shorts and a t-shirt, he looks more like a university professor on break than a minimum wage worker seeking a better hourly rate. And, in the crowd an older gentleman that clearly resembles one of Houston’s homeless denizens, caught up in the activity on the parking lot.

Looks can be deceptive, but certain assumptions can be safely considered in contrasting the crowd at the morning rally. Saldana says, “I raised 5-kids already, working three jobs, and I have, the little one is 17-years old, she’s in high school.” Demographically, she is another anomaly in this crowd.

Several large employers in the US already pay a wage that is far more generous than the Federal Minimum of $7.25/hour.

  • Costco already pays a starting wage of $11.50/hour, and a recent Bloomberg survey reveals the average employee at the buying club earns $21/hour.
  • Whole Foods Market starts workers at $11/hour; the average wage last year was closer to $19/hour.
  • The New York Post reports Trader Joe’s workers start out at $13.29/hour, and also get free dental and vision care, paid time off and a retirement plan.
  • IKEA pegs its wages to a cost of living index. On January 1, 2015, its minimum hourly wage will rise 17% to $10.76.
  • Gap, Inc raised its minimum rate this year to $9/hour, and increases it to $10 next year.

It’s important to note that these companies made a conscious business decision to adjust their business models to provide generous wages for their employees.

The City of Pasadena, Texas is raising its minimum wage for 600 hourly employees from $7.25 to $12.50 on October 1. Not every city in America has a few refineries in their backyards, and Pasadena, with its rich tax base of petroleum refineries and energy companies, clearly is not the norm. “We’re a pretty healthy little city, here in Pasadena,” says Mayor Johnny Isbel. “We’ve got good reserves, and we just feel like the $12.50 an hour helps…their living standards, and we’d like to see everybody be above the minimum wage,” Isbell says. “We’re in a competitive world, the city is, and we’re competing against businesses, also,” he says. “Sometimes it’s hard to find people at the lower wage, and we hope that this will attract some additional, potential employees for us,” says Isbell.

Interestingly, at the beginning of 2014, thirteen states increased their minimum wage.

Economists at Goldman Sachs conducted a simple evaluation of the impact of these state minimum-wage increases. GS compared the employment change between December and January in the 13 states where the minimum wage increased with the changes in the remainder of the states. The GS analysis found that the states where the minimum wage went up had faster employment growth than the states where the minimum wage remained at its 2013 level. No one is claiming the study establishes causality, but it does provide some evidence against theoretical, negative employment effects of minimum-wage increases.

Still, a government fiat to raise wages could have economic repercussions.

“When the Government requires a higher minimum wage, if businesses can’t pass that off thru higher prices, they have to figure out a way to essentially provide the same product with less service,” says Michael Saltsman, research director at the Employment Policies Institute, a Washington, D. C. think tank. EPI generally focuses on entry level employment issues, anything from policies from the impact of the minimum wage, to welfare-to-work policies. In reality, the minimum wage issue really doesn’t touch most businesses. “If you talk about most businesses, it’s not going to have an impact because, most businesses don’t have minimum wage employees,” Saltsman says.

That points to a critical breakdown in the minimum wage debate that’s raging across the land and into most drive-thru lanes today: The difference between a minimum wage and a living wage–and the kinds of jobs that are paid accordingly. “Minimum wage workers tend to be young, and we say that because people who are 16- to 24 represent about 20-percent of the labor force,” Saltsman says.

There are more wrinkles in the demographics that delineate minimum wage from living wage pay structures: “The larger component of those who are being covered by [a] higher minimum wage are those living at home with family, or they’re in a household where a spouse also works, the EPI study shows.  That’s very telling. Many in the crowd at the Houston Jack-in-the-Box could reasonably be described as teens living at home. Saltsman says EPI research shows “the average family income of someone would would get a raise is actually quite high–it’s about $42,000 a year.”

In Texas, the demographics are such that the share of households comprised of single parents with children who’d be covered by President Barack Obama’s recent proposal to raise the minimum wage to just $9/hour is only about 11-percent. “For the larger component of those who are being covered by the higher minimum wage are those living at home with family, or they’re in a household where a spouse also works,” Saltsman says. “If you raise the minimum wage, you know, let’s say by 40- or 50-percent, you know, ten or eleven or twelve dollars an hour, you’re going to create a situation where, in many industries that hire minimum wage employees,  it’s going to be much more cost-effective for them to go to self-service alternatives,” he says. One example: having a customer bag their own groceries instead of hiring someone to bag them.

The EPI instead recommends more targeted adjustments to the tax code to incentivize lower income workers. “Conservatives tend to like the Earned Income Tax Credit because you actually have to have earned income–you have to work–so it’s an incentive for employment,” Saltsman says. “Democrats tend to like it because it’s a, sort of, progressive tax policy, and so, it’s something that, one of those policies that’s rare in Washington that both sides tend to support,” he says.

The EPI predicts counter-productive consequences from a Federally mandated higher wage–forcing companies to pay workers more than their business can sustain. “Economists have looked at this issue and generally said that each ten-percent increase in the minimum wage is going to reduce employment for affected groups by anywhere from one to three percent,” Saltsman says.

The bottom line would hit this morning’s fast food workers hard: Some of them would lose their jobs so that others could be paid more. “That means about 20,600 fewer entry-level job opportunities in the state of Texas,” Saltsman says.

Fast Food Worker Protests Hit Houston  was originally published on