Making more than the minimum

A hike in the minimum wage is all but inevitable. But what will it mean for the industry?

We had a little excitement this week near our corporate office in Chicagoland. More than 100 protesters were arrested Wednesday on the grounds of McDonald’s corporate headquarters, just down the road in Oak Brook. Those arrested were among 1,500 people who had marched on McDonald’s to demand that the fast-food giant raise its minimum wage to $15 an hour.

I thought about the protesters’ demand while watching the news that night and came away with mixed feelings. My first thought was that the current federal minimum hourly wage of $7.25 is just shy of criminal in this day and age. It really doesn’t matter whether you are a high school kid trying to save up for your first car, a college student trying to find a way to reduce the amount you have to borrow for school, or a single parent trying to feed your kids: $7.25 doesn’t go very far.

Politicians in a growing number of cities and states agree; 27 states currently have minimum wage rates above the federal wage. Seattle set the bar recently when city leaders announced a plan to raise the minimum wage to $15 an hour by 2021.

But my second thought was, what will a minimum wage hike mean for the economy? In particular, what could its effect be on the non-commercial foodservice industry?

From my conversations with foodservice employees in hospitals, colleges and the like, I know that in many cases the lowest wages are often above the minimum. But we also know that “doing more with less” is a popular mantra among administrators.

Over the years we’ve seen many institutions cut back on foodservice staff while exhorting remaining employees to work “smarter, not harder” as a way to manage their budgets. It might seem like a sound business decision, but in an industry where people are often the best commodity, reducing staff can only work so well, or for so long, before customers notice the quality drop-off.

It’s not hard to imagine—and be concerned about—the ripple effect of wage increases on non-commercial operators. As with so many beneficial changes, there will be caveats and cautions as the minimum wage increases. Will it be a “rising tide lifts all boats” kind of change or will it have a “climate change swamping coastal cities” effect?

As with all trends, this one bears monitoring, and I’d be interested in hearing or reading your thoughts. What will a rising minimum wage mean for your operations and the foodservice industry in general? Should we welcome it or fear it?

Drop me a note at pking@cspnet.com and share your thoughts.

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