High Turnover Jobs Paying More Than Ever
If you've been to any sort of fast food restaurant in the past few weeks, you may have seen signs outside of their establishments advertising to people that they need help and that they're willing to pay good money for it. McDonald's, for instance, is offering to pay people $18 an hour, which is $3 more than the 'fight for 15' that politicians have been going on about for nearly a decade. These pay rates seem to be increasing in these high turnover industries like fast food, retail, and other jobs that are typically considered menial labor. Ice cream shops, delis, convenience stores, etc; if they're chains or corporate franchises, most are paying a lot more now than your typical minimum wage. While this isn't doing much to stimulate the economy, or even helping the employed people due to inflation, it's still an amazing site to see. Companies that have been adamant for years that they won't pay more, suddenly paying more.
Why are these locations paying more money? There's a national labor shortage now. There are over ten million open positions in these sorts of jobs, but people simply don't want to work them. It's a mixed bag here in terms of reasons people are opting not to work. First and foremost, people are worried about vaccine mandates. At any time a corporation or company wants, they can insist you get vaccinated, and your choice is either to go get multiple shots or be fired. Another big reason is that these jobs require too much work from people without enough pay. Even with the extra money thrown in, the fact is that inflation offsets that and what's $18/hour today is basically like $10/hour in 2020. That's how much inflation has mathematically increased, without the false average used by the government.
How Can They Afford Higher Wages?
For decades in America, high turnover jobs like retail and fast food would push back against the claims that they should be paying higher wages by stating that they simply couldn't afford to. They would suggest their profit margins were too slim to pay more money. So, what's changed now? Why can they suddenly afford to pay more? They're not really paying more, simply put. McDonald's and Walmart and all these other huge corporations paying more money per employee now are still paying from the same labor pool. In fact, they're paying less out now than they were before, even though they're paying more money per employee.
The math is very easy to follow. Say that a company's employee budget is 30% of its operating budget, so let's call it $1 million per week to simplify it. Now, say the company has 2,000 employees to pay with that $1 million. That's $500 for each employee. Though say that labor has dropped to only 800 people. From that same pool, the money each employee can theoretically be given is $1,250, without the company having to pay a single penny more than when they had 2,000 employees. Now, multiply this number by an order of magnitude to understand that the companies paying more wages today aren't actually using money apart from their operating budgets. The fewer employees they have now are being asked to do more; work longer hours, pick up more tasks, etc. Since they're still dealing with labor shortages, that percentage that typically went to employees now just becomes profit.
So, yes, these corporations can easily afford to pay more, mathematically speaking.
Pay Not Keeping Up with Inflation
Another fact to consider is that the rate of pay is in no way keeping up with inflation. While the government likes to gaslight Americans by claiming that inflation is only 7%, anyone who lives paycheck to paycheck knows that's a lie. Gas is up over 50% in the past 18 months, while groceries have gone up over 30%. Rent is up. Utility bills like water and electricity are drastically up. In over 2,000 American counties, electricity rates are up over 100% in little more than a year. So if you're making 40% more on your paycheck, but need to pay 60% more to live, then the fact that McDonald's is paying you more doesn't mean much of anything. You're a gainfully employed American who cannot afford to live, and this is a drastically depressing thing and something entirely unsustainable for the economy.
Until which point prices go down or pay goes up a lot more, the labor shortage will continue.