Op-ed pick: Many big companies can’t afford to pay more than minimum wage

We asked our Roundtable guests to suggest an article they think our audience should read.

Syl Jones called this column by James Surowiecki “the best analysis I’ve seen about the fast-food living wage issue. It’s short but potent.”

(Retailers and fast-food chains) make plenty of money, but most have slim profit margins: Walmart and Target earn between three and four cents on the dollar; a typical McDonald’s franchise restaurant earns around six cents on the dollar before taxes, according to an analysis from Janney Capital Markets. In fact, the combined profits of all the major retailers, restaurant chains, and supermarkets in the Fortune 500 are smaller than the profits of Apple alone. Yet Apple employs just seventy-six thousand people, while the retailers, supermarkets, and restaurant chains employ 5.6 million. The grim truth of those numbers is that low wages are a big part of why these companies are able to stay profitable while offering low prices.

Brian Rosenberg says that the Itasca Project report on higher education in Minnesota is an important read:

Future economic growth and prosperity will require deeper and more relevant skills from the workforce and increased innovation from researchers, entrepreneurs, and businesses. It is estimated that Minnesota jobs requiring post secondary education will grow by nearly 8% from 2008 to 2018, while jobs requiring not more than a high school diploma will grow by only 3% over the same period. By 2018, 70% of Minnesota jobs will require post secondary education.

  • Paul Weimer

    If these big companies can’t afford to pay more than minimum wage–then its our duty as a society, then.

    The plight of the nickel and dimed gets shoved under the rug as “only teenagers get paid this” or “people move up the ladder”. In the meantime, people are struggling to make it at the lower end of the economic food chain.

    Aren’t we more enlightened as a society than “For ye have the poor with you always”?

    • sethw76

      Society already does pay for benefits for these low-wage workers. Most of these workers qualify for federal programs provided by taxpayer dollars. The Walmarts, Targets, and McDonalds are essentially receiving US-paid welfare so they don’t have to provide benefits or a living wage.

      • Paul Weimer

        And yet even though Federal and State programs are falling short. Worse, many state governments seem to think that such programs should be slashed or cut back, or are actively doing so. (see the restrictions put on Unemployment Insurance)

        The “cut back benefits and they will be motivated to find work” philosophy I see around just doesn’t fit what sort of bind the lower quintile of American households are in.