Biden: Middle Class Sunk Hillary's Campaign?

In a PBS interview, Joe Biden stated that Hillary lost because she didn't "talk" to the middle class.  His actual statement was:

"What happened was that this was the first campaign that I can recall where my party did not talk about what it always stood for -- and that was how to maintain a burgeoning middle class..."

The problem I have with that statement, is the phrase, "burgeoning middle class" The middle class isn't growing, it is shrinking; and those in the middle class know it. Pew Research found that the middle class has fallen from 62% of our population in 1970 to just 43% in 2014.  And, Democrats still fail to understand that it is their policies that have weakened those in this coveted social class.  For example, when you heavily raise the minimum wage, money is drained away from the middle class to give those at the bottom a larger-than-normal raise.  In another example, the affordability clause of the employer mandate of Obamacare states that when an employer must offer health insurance, it cannot cost any more than 9.56% of an employee's household income.  So again, the middle class is hurt because in order to limit the cost of insurance for low-end workers, other classes of workers, such as the middle class, are forced to pay more for their insurance.

In my opinion, Hillary lost because people in the middle class did not benefit from Democrat governance under Barack Obama.  It wasn't because of "talk".  Talk is cheap.  It is always actions that ultimately matter, not words.

References:

Joe Biden indirectly knocks Clinton's failed campaign: http://edition.cnn.com/2017/03/30/politics/joe-biden-donald-trump-hillary-clinton/index.html?sr=twcnni033117joe-biden-donald-trump-hillary-clinton1152AMVODtopPhoto&linkId=36046121

The American Middle Class Is Losing Ground | Pew Research Center: http://www.pewsocialtrends.org/2015/12/09/the-american-middle-class-is-losing-ground/

ObamaCare Employer Mandate: "Coverage offered to employees must be considered affordable (can’t cost more than 9.56% of employee household income) and must provide minimum value (must have an average cost sharing of 60%). If coverage isn’t affordable employees can use the Marketplace and the employer can be fined" http://obamacarefacts.com/obamacare-employer-mandate/
 
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Job Creation and Slow Wage Growth

Click on Image to Enlarge

According to the Bureau of Labor Statistics, nearly 60% of all workers in this country are paid hourly.  But, when I look at the graph above, showing extremely low wage growth for hourly workers since 2009, it tells me that it is nearly half of what it should be.  It also tells me that the economy is suffering from an employment condition known as a "slack workforce".  In other words, there are too many workers chasing too few jobs.  As a result, employers aren't competing with each other to fill jobs and retain personnel through higher wages.

Essentially, organic wage growth all comes down to vigorous job creation which appears to be seriously missing.  There can be several reasons for this.  The lack of funding to create startup businesses and entrepreneurship.  Government over-regulation such as ObamaCare which forces businesses to convert workers to part time employment or to use contract labor.   Or, low wages themselves which results in slow business activity and less job growth.

What I am trying to stress is that, since Obama has been in office, wage growth has been well below normal from about 3.5% to 4.5% annually.  Now, while there has been an up trend that started last year, I believe that it had more to do with the fact that 29 States and the District of Columbia imposed minimum wages higher than the Federal minimum of $7.25. If so, this is not indicative of normal or sustainable growth. Only time will tell if true wage growth is restored to normal levels.

References:

Chart Source: St. Louis Federal Reserve:  https://research.stlouisfed.org/fred2/graph/?g=1Jf5#

What Is an Appropriate Annual Salary Increase?: http://work.chron.com/appropriate-annual-salary-increase-16035.html

Characteristics of Minimum Wage Workers, 2014: http://www.bls.gov/opub/reports/minimum-wage/archive/characteristics-of-minimum-wage-workers-2014.pdf

American Entrepreneurship: Dead or Alive?: http://www.gallup.com/businessjournal/180431/american-entrepreneurship-dead-alive.aspx

35% of Workforce Unemployed in 20 Years

It seems like almost everyday, there are new concerns and warnings about the coming reality of replacing workers with Artificial Intelligence (AI) coupled with robotics.

Now, the latest news comes in a joint report from the consulting firm Deloitte and experts at Oxford University that suggests that 35% of the workforce will be replaced in just 20 years. This is a less aggressive prediction than last year's estimate of a 30% replacement  -- including white collar jobs -- by 2025.

But, supporting those predictions are real life stories that prove we are -- right now -- on the path of high unemployment due to robotics.  In China, the electronics contractor Foxconn Technology Group just announced the replacement of 60,000 factory workers with robots.  At the same time, the former CEO of McDonald's, Ed Rensi, pointed to this year's National Restaurant Show and the number of working robots on display as a forewarning of the future of the restaurant industry; especially fast food.  As he noted, it is cheaper to buy a $35,000 robotic arm to bag fries than to pay someone $15/hour to do the same.  By the way, the annualized salary at $15/hour is $31,000; meaning a ROI (Return on Investment) in just a little over a year.  Even less, if the cost of providing health insurance is added in.

This is just further proof that those pushing a $15 minimum wage are, in fact, pushing the minimum wage worker right off a cliff.  And, once again, the unions are the ones doing the pushing.  In fact, unions have done more to decrease their own membership in the last 50 years; down from 35% of the workforce in 1964 to just 10% today.  Fast food workers should make note of that fact when union workers are picketing outside their workplace for a $15 minimum wage.

References:

Foxconn replaces '60,000 factory workers with robots': http://www.bbc.com/news/technology-36376966

Building robot McDonald's staff 'cheaper' than hiring workers on minimum wage: http://www.mirror.co.uk/news/weird-news/building-robot-mcdonalds-staff-cheaper-8044106

Experts predict robots will take over 30% of our jobs by 2025 — and white-collar jobs aren't immune: http://www.businessinsider.com/experts-predict-that-one-third-of-jobs-will-be-replaced-by-robots-2015-5

Union, not workers, behind push for $15 wage: http://www.heraldnet.com/article/20160417/OPINION03/160419427

The incredible decline of American unions, in one animated map: https://www.washingtonpost.com/news/wonk/wp/2015/02/24/the-incredible-decline-of-american-unions-in-one-animated-map/

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Average Wage Growth Below 1% Again for 2016 ?

From 2000 to 2008, the Houston Chronicle reported that average wages grew from between 3.8% and 4.4% across the United States.

According to the Bureau of Labor Statistics Employment Situation reports, in the first four months of this year, the average weekly salaries rose just 2.6 tenths of a percent from $878.49 in January to $880.79 in April.  When annualized, this means that we are on track to have a wage growth of only 7.8 tenths of a percent over the next 12 months.  This less than 1% annualized growth, is just 20% of even the worst growth of 3.8% in the years from  2000 to 2008.

Once again, this proves that we are creating jobs and not increasing wages under the Obama administration.  I, for one, am tired of his constant touting of job growth.  As if having a job is more important that having one that pays well.  In 7 years, wages under  have only risen 7% or about 1% per year.  When you subtract the 27%+ increase for the top 1%, the bottom 99% had an average increase of only 4.3%. Raising the minimum wage in 29 states has not produced wage increases.  Nor has Obama's raising of the salaried overtime rule by double, produced higher wages.   Instead, low wage growth is indicative of how weak this economy is.  The proof of that came in the first quarter when Gross Domestic Product (GDP) only grew by 5 tenths of a percent; just one-eighth of the normal non-recessionary growth rate of 3.79% since 1790.  Assuming growth is still slack throughout the year, Obama is on track to have the fourth worst presidential average of just 1.55% growth in his 8 years in office.

References:

What Is an Appropriate Annual Salary Increase?: http://work.chron.com/appropriate-annual-salary-increase-16035.html

The Employment Situation - April 2016 - Bureau of Labor Statistics (Table B-3): http://www.bls.gov/news.release/pdf/empsit.pdf

The Employment Situation - January 2016 - Bureau of Labor Statistics (Table B-3): http://www.bls.gov/news.release/archives/empsit_02052016.pdf

Obama touts job growth, asks Congress to take action on tax evasion: http://www.usatoday.com/story/news/politics/2016/05/06/obama-economy-money-laundering/84017722/

State Minimum Wages | 2016 Minimum Wage by State:  http://www.ncsl.org/research/labor-and-employment/state-minimum-wage-chart.aspx

Obama overtime rule could raise wages for 5 million: http://www.politico.com/story/2015/06/obama-overtime-rule-wage-raise-119566

U.S. economy slows, with GDP growing 0.5% in first quarter: https://www.washingtonpost.com/news/wonk/wp/2016/04/28/u-s-to-release-data-showing-gdp-growth-for-first-quarter/

Barack Obama's Sad Record on Economic Growth | RealClearMarkets: http://www.realclearmarkets.com/articles/2016/02/01/barack_obamas_sad_record_on_economic_growth_101987.html

State of the Union: Obama's Economy in 7 Charts - Fortune: http://fortune.com/2016/01/12/obama-economy-charts/ 

A $15 Minimum Wage? Try $4.25 a Day in Mexico!

I think a lot of people in this country take for granted how fortunate we are to live in this country.

While entry level workers in this country are marching in the streets for a near doubling of the federal minimum wage to $15 an hour,  workers in Mexico just got a 4.2% raise in their minimum wage to 73.04 pesos a day as of January 1st.  On that day, that was the equivalent of just $4.25 a day in U.S. dollars.

Mexico is a poor country with the World Bank estimating that 53.2% of the country living in poverty.  Worse yet, the World Bank estimated that, in 2012, 10.3% of that country's population lived on $3.10 a day or less.  Think about that when you're spending $5 at Starbucks for your daily venti frappucino.

The point here being is twofold.

First, these numbers explain why most of those coming across our southern border are Mexicans.   They aren't so much wanting to come here but, instead, more interested in escaping severe poverty in their own country.

Secondly, I hate it when a company like Ford or Nabisco or Carrier is forced to move manufacturing to Mexico in order to be more competitive on costs with products made in other countries.  But, when they do, it is really a kind of humanitarian aid.  Today, nearly 1 million Mexicans are building U.S. and European cars in that country with the average hourly wage of 90 pesos.  About $5.64 an hour in U.S. dollars. And for those workers, the need to come to this country is abated.

So, the bottom line is that we could do ourselves a favor by, somehow, instituting something akin to the post-World War II Marshall Plan to build that country's economy, reduce poverty, and help Mexicans earn a fair wage.  In doing so, we could slow illegal immigration into this country.

References:

Mexico Approves an Increase to the Daily Minimum Wage for 2016: https://www.littler.com/publication-press/publication/mexico-approves-increase-daily-minimum-wage-2016

Mexico Data: http://data.worldbank.org/country/mexico

Poverty Headcount by Country: http://data.worldbank.org/indicator/SI.POV.2DAY

US, Mexican and Canadian autoworkers face common fight: https://www.wsws.org/en/articles/2015/08/12/mexi-a12.html

New York & California Just Killed Entrepreneurship

In just 16 years, the minimum wage in the State of California will see a rise of 222% from $6.75 in 2006 to $15 in 2022.  That is an average annual increase of nearly 14%.  In New York, the increase to $15 from, again, $6.75 in 2006 is more complicated as follows:

• For workers in New York City employed by large businesses (those with at least 11 employees), the minimum wage would rise to $11 at the end of 2016, then another $2 each year, reaching $15 on 12/31/2018.
• For workers in New York City employed by small businesses (those with 10 employees or fewer), the minimum wage would rise to $10.50 by the end of 2016, then another $1.50 each year, reaching $15 on 12/31/2019.
• For workers in Nassau, Suffolk and Westchester Counties, the minimum wage would increase to $10 at the end of 2016, then $1 each year, reaching $15 on 12/31/2021.
• For workers in the rest of the state, the minimum wage would increase to $9.70 at the end of 2016, then another .70 each year, until reaching $12.50 on 12/31/2020 – then  continue to increase to $15 on an indexed schedule to be set by the Director of the Division of Budget in consultation with the Department of Labor.

The reality is that no other class of workers has seen that kind of increase.  In fact, assuming a 2% raise a year, it would take the middle class worker an average of 111 years to have a 222% rise in their salaries.

The point is that many people will find themselves less able to afford products and services that are heavily dependent on low wage workers; such as fast food businesses, retail, hospitality, and leisure.  The same goes for this nation's 55 million seniors, who, at best have seen increases of just 1% a year in their Social Security checks.  Additionally, millions more, such as waiters and waitresses, won't be eligible for minimum wage because they earn tips.  And, so too, for the three quarters of 47 million Americans in poverty who aren't even working.

More importantly, the $15 wage will accelerate the death of entrepreneurship and its ability to create jobs.  It will be much more expensive to start new businesses that generally depend heavily on entry level employees.  Entrepreneurship has already been in decline for decades, but now it will become a much higher risk proposition.  Even before instituting this excessive wage, 1-in-4 startup businesses failed in the first year.  50% will be kicked to the curb in just 4 years, and operational costs are one of the 4 main reasons for failure.

I hope I'm wrong, but I think the $15 minimum wage will be a real job creation killer.  And, in fact, a job killer for businesses who must raise prices, and in turn, lose customers who can't afford those price hikes. Also, the $15 minimum wage will bring in automation to replace the humans making that wage.  Already, you can rent a robo-security guard that can hear, smell, and has 360 degree night vision for just $6.25 an hour.  So, if you can already automate a security guard, it only seems logical that other lesser tasks, such as flipping burgers, will follow suit.

References:

Governor Cuomo Signs $15 Minimum Wage Plan and 12 Week Paid Family Leave Policy into Law: https://www.governor.ny.gov/news/governor-cuomo-signs-15-minimum-wage-plan-and-12-week-paid-family-leave-policy-law

California, New York enact $15 minimum wages: http://www.foxnews.com/politics/2016/04/05/california-new-york-enact-15-minimum-wages.html

California Minimum Wage 2006: https://www.google.com/search?q=california+minimum+wage+in+2007&ie=utf-8&oe=utf-8

New York Minimum Wage 2006: https://www.google.com/search?q=minimum+wage+in+new+york+in+2006&ie=utf-8&oe=utf-8

Minimum Wage - United States Department of Labor: Questions and Answers About the Minimum Wage: http://www.dol.gov/whd/minwage/q-a.htm

The Mysterious Death of Entrepreneurship in America: http://www.theatlantic.com/business/archive/2014/05/entrepreneurship-in-america-is-dying-wait-what-does-that-actually-mean/362097/

The Slow Death of American Entrepreneurship: http://fivethirtyeight.com/features/the-slow-death-of-american-entrepreneurship/

Startup Business Failure Rate By Industry: http://www.statisticbrain.com/startup-failure-by-industry/

The Four Major Reasons for New Business Failure: http://smallbusiness.chron.com/four-major-reasons-new-business-failure-51924.html

Rent A Robot Security Guard for $6.25 an Hour: http://www.psfk.com/2014/12/rent-a-silicon-valley-security-bot-for-6-25-per-hour.html

Friday's Job's Report: Another Month of Slow Wage Growth

Last Friday, the employment report for March stated that the country added 215,000 new jobs.  The White House and other Democrats were quick to promote the fact that this was a record 73 months of consecutive job creation.  However, missing in this so-called "record" is the fact that we also had 73 months of record low wage growth as noted by this chart from the St. Louis Federal Reserve's Economic Data (FRED) database:

Click on Image to Enlarge or Click on Link Below

The simple fact is that, even during the recession, year-over-year wage growth was higher than under Obama since his time in office.  This is despite the fact that as of January 1st of last year, 29 states and the District of Columbia had increased their minimum wage.

The reality is that creating a job and creating a good paying job are two different things.  65% of the jobs created in this latest report were low paying, in the categories of retail, hospitality and leisure, and in health services like visiting assistance to the elderly.  Higher paying manufacturing lost 29,000 jobs in the month. 

The bottom line is that low pay increases are resulting in declining buying power for the average American worker.


References:

73 Straight Months of Private Sector Job Growth: http://www.dpcc.senate.gov/?p=blog&id=462

Chart Source: Interactive Chart: https://research.stlouisfed.org/fred2/graph/?g=1Jf5

Where The March Jobs Were: The Minimum Wage Deluge Continues: http://www.zerohedge.com/news/2016-04-01/where-march-jobs-were-minimum-wage-deluge-continues

State Minimum Wages | Minimum Wage by State: http://www.raisetheminimumwage.com/pages/minimum-wage-state

Were Voter's Denied A Vote On The Minimum Wage In California?

Before it was announced that Governor Brown and the California State legislators had come to an agreement with labor unions to raise the minimum wage to $15 an hour by 2022, there was already a ballot initiative set for this Fall to raise the wage to $15 by 2021.  So this begs the question;  is delaying the $15 wage by one year a victory for businesses?  Not hardly.

In my opinion, the agreement between the labor unions and California's liberal Democrat Governor and its liberal state legislators, only makes sure that the ballot initiative is not defeated  by the voters. Thus insuring that the labor union's wish for the highest minimum wage in the nation, and in the world would be guaranteed.

But, why would the labor unions even care about the minimum wage since no union pay scale pays anything near it?  The simple fact is that most union contracts and their embedded pay scales in those contracts are linked to the minimum wage as either some percentage over it, or by hiking union wages equal to the amount of the increase.

So the bottom line is that the Democrats want to maintain their symbiotic relationship with the unions by insuring that they too, get a wage hike when the minimum wage is increased.  In return, Democrats get votes from the union membership; money for their campaigns; and get-out-the-vote activities that only benefit Democrats. It has nothing to do with what they call a living wage. As a result there will be lost jobs through automation; more unemployment; higher costs that affect those, like seniors and others not subject to minimum wage legislation, that won't see their incomes rise; and fewer new businesses due to higher startup costs.

References:

California "Fair Wage Act of 2016" $15 Minimum Wage Initiative (2016): https://ballotpedia.org/California_%22Fair_Wage_Act_of_2016%22_$15_Minimum_Wage_Initiative_%282016%29

California raises minimum wage to $15 an hour: http://www.usatoday.com/story/money/2016/03/28/california-raises-minimum-wage-15-hour/82348622/

Why Unions Want a Higher Minimum Wage - Wall Street Journal: https://www.google.com/search?q=Why+Unions+Want+a+Higher+Minimum+Wage+-+Wall+Street+...&ie=utf-8&oe=utf-8 

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The Average Senior Lives on Less than the Minimum Wage

For months now, we have been told by the "raise-the-minimum-wage activists" and by both Hillary Clinton and Bernie Sanders that the federal minimum wage of $7.25 is not adequate for the 1.3 million Americans earning that amount.  Many arguing that an increase to $15 an hour is much needed.

But tell that to more than half of our nation's 55 million seniors living on Social Security and existing on less than $7 an hour.

Right now, the average monthly Social Security check is $1180 with nearly half getting less than that. Mathematically, that is the equivalent of only $6.86 an hour; and, for 23% of married and 46% of single social security recipients, that  check constitutes almost all of their income.

Maybe we should be talking about $15 an hour for the nation's seniors so, that 12% of  women and 7% of men aren't living in poverty anymore?  You know, a living wage.  Of course then, Social Security would go bankrupt.  Though, I suppose its alright to bankrupt struggling businesses with a $12 or $15 wage. 

References:

The Tightwire Act of Living Only on Social Security: http://www.nytimes.com/2012/09/12/business/retirementspecial/living-only-on-social-security-is-a-tightwire-act.html

Poverty Among Seniors: http://kff.org/medicare/issue-brief/poverty-among-seniors-an-updated-analysis-of-national-and-state-level-poverty-rates-under-the-official-and-supplemental-poverty-measures/

Characteristics of Minimum Wage Workers: Among those paid by the hour, 1.3 million earned exactly the prevailing federal minimum wage of $7.25 per hour: http://www.bls.gov/opub/reports/cps/characteristics-of-minimum-wage-workers-2014.pdf

Why Middle Class Incomes Haven't Increased

As of the end of 2014 and with the latest data available from the Census Bureau and the Bureau of Labor Statistics, the average middle class family's buying power is about where it was in 1996; barely moving up from its 2012 lows.

Click on graph to enlarge

While all too many Democrats think the solution to the wage stagnation problem for the middle class is to give people pay increases by raising the minimum wage, just the opposite is happening.  Giving entry level workers big raises only drains the funds the employer would use to give everyone else a decent raise.  As of January 1, 2015, 29 states and the District of Columbia have minimum wages that are higher than that of the federal minimum wage; and many went even higher as of January of this year.

Simply, the way to grow middle class incomes is to allow the free market system to do its job. The fact that the middle class isn't seeing their incomes rising is symptomatic of just one thing:  Too few new jobs being chased by too many unemployed and underemployed workers.

In order to truly give all Americans a raise, government has to get out of the way.  The Dodd–Frank Wall Street Reform and Consumer Protection Act passed by the Democrats and signed into law in 2010 by Barack Obama, has raised the bar for new businesses and existing ones to borrow money for startup and expansion.  The minimum wage increases that seem to be all the rage right now, have too, raised the cost of any new business start ups. Then the employer mandate of ObamaCare has made it more costly to start or expand an existing business when it has or will have at least 50 full time employees.  Also understand that, in a way, the middle class raises are the cost of having to provide health care.  So, in essence, the money that would have flowed into the economy to stimulate it, is going to the health insurance companies.

When I hear Bernie Sanders and Hillary Clinton talk about raising the national minimum wage to $15, I cringe.  That will only result in the further death of the middle class.  When the two of them talk about going after the wealthy, the banks, and Wall Street, that's a lot of seed-money that will be attacked that otherwise would have been used to start new businesses and grow existing ones.  We can already see what Dodd-Frank has done to the economy.  We have the slowest growing economy since World War II.

The bottom line is that we need a new President who understands how the free market system works.  While that might be someone like Donald Trump, that may be a bitter pill for the country to swallow as far as all other aspects the Presidency are concerned.  I think any of the current Republican candidates would be smart enough to bring a team on board that could restart our economy, and, in the long run, really give America a raise.


References:

Source of the Above Graph: https://research.stlouisfed.org/fred2/series/MEHOINUSA672N

The Dodd–Frank Wall Street Reform and Consumer Protection Act: http://www.investopedia.com/terms/d/dodd-frank-financial-regulatory-reform-bill.asp

ObamaCare Employer Mandate - ObamaCare Facts: http://obamacarefacts.com/obamacare-employer-mandate/

State Minimum Wages | 2016 Minimum Wage by State: http://www.ncsl.org/research/labor-and-employment/state-minimum-wage-chart.aspx

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The Big Minimum Wage Lie: Raising It Will Reduce Poverty

Most on the political left, believe that raising the minimum wage will lift millions out of poverty, and that by doing so, government spending on welfare, food stamps, and other poverty related paid-benefits will also decline.  One liberal estimated that low wages are costing tax payers $153 billion a year.

Until 2014, it had been impossible to prove or disprove that assertion. The last time the minimum wage was raised in the years 2007-2009, we were in the midst of the so-called Great Recession where thousands lost their jobs causing the poverty rate to rise.

However, in 2014, there was no recession.  In fact, the unemployment rate fell from 6.7% in December of 2013 to 5.6% in December of 2014; the lowest rate since before the Great Recession.  The economy grew at the fastest rate ever (2.4%) in the last 8 years.  On top of that, 13 states entered the new year with minimum wages that were higher than the current federal wage of $7.25 an hour.  Washington, Oregon, and California led the pack with wages over $9 an hour. So, with all that, it would only be logical to believe that poverty would be reduced.

Unfortunately, the number of people in poverty actually rose by a half million in 2014 to 46.7 million. This after having fallen in 2013 from a high of 48.8 million in 2012.  But, more importantly, California, which has the highest poverty rate in the nation of nearly 24% and which has 20% of all those in poverty in the United States, saw their poverty rate also rise; despite a $9 minimum wage.

While I could name several reasons why this happened, the facts speak for themselves.  13 States raising the minimum wage didn't reduce poverty one iota.  In fact, poverty increased in what was supposedly a good year for the economy and jobs.

In 2015, the number of states with higher-than-federal minimum wage rose to 29.  It will be interesting to see if poverty rises again when the info becomes available in the fall of next year.

References:

Raising The Minimum Wage To $10.10 Could Lift Nearly 5 Million Out Of Poverty: http://thinkprogress.org/economy/2014/01/03/3115831/minimum-wage-poverty/

2014:  13 states raising pay for minimum-wage workers: http://www.usatoday.com/story/money/business/2013/12/29/states-raising-minimum-wage/4221773/

Americans are spending $153 billion a year to subsidize McDonald’s and Wal-Mart’s low wage workers: https://www.washingtonpost.com/posteverything/wp/2015/04/15/we-are-spending-153-billion-a-year-to-subsidize-mcdonalds-and-walmarts-low-wage-workers/

Unemployment Rates by Month: http://data.bls.gov/timeseries/LNS14000000

 California’s Housing Costs Hurt Economy, Increase Poverty, Report Finds: http://www.wsj.com/articles/californias-housing-costs-hurt-economy-increase-poverty-report-finds-1426623141

U.S. 2.4% Economic Growth In 2014 Strongest Since Recession: http://www.forbes.com/sites/samanthasharf/2015/01/30/u-s-economy-grew-2-6-in-fourth-quarter-2-4-in-2014/

Poverty: 2000 to 2012: https://www.census.gov/prod/2013pubs/acsbr12-01.pdf

2104: Typical American family earned $53,657 last year: Poverty Remains High: http://money.cnn.com/2015/09/16/news/economy/census-poverty-income/

Census Bureau: California still has highest U.S. poverty rate: http://www.sacbee.com/news/politics-government/capitol-alert/article2916749.html

State Minimum Wages | 2015 Minimum Wage by State: http://www.ncsl.org/research/labor-and-employment/state-minimum-wage-chart.aspx

 

Can You Afford A Big Mac Meal Date on a $31,000 a Year Salary?

The Los Angeles City Council recently voted in a $15 an hour minimum wage by 2020.  Therefore, the lowest paid McDonald's worker will be paid that wage; but, because nearly all McDonald's employees make less than $15 an hour, all workers should, and probably will, get a similar increase.

Back in 2013 and based on 2012 prices, it was determined that the average  Big Mac would jump $1.28 if the minimum wage increased from $7.25 to $15.  This was based on the average price of a Bic Mac at $4.20.  Mathematically, this means a  30.4% increase in price.  It also means a roughly 4% increase  for every dollar of minimum wage increase, and this is before any other inflationary costs for food, utilities, etc. are factored in.

 Of course,nobody just buys a Big Mac.  They usually buy a "Meal" which includes the burger, fries, and Coke.  Today, with a $9 minimum wage in California, the average "Meal" costs $7.67.  Now, if I'm a single guy and the minimum wage is now $15 or around $31,000 a year, my after tax income will be about $12/hour.  Total taxes being roughly 20%. With the increase to $15, that once $7.67 "Meal" should be about 24% higher; assuming an increase of $6 from the current $9.  Thus, to treat myself and a friend, it will now cost $20.73; assuming a 9% sales tax in Los Angeles.

Therefore, I would have to work almost 2 hours in order to pay for this simple date.  It's no wonder their losing business.  No one can afford to eat there anymore.  Especially millennials with their incomes around $37,600.  A $15 minimum wage just may be the death knell for McDonald's and the rest of the fast food industry.  A primary source of minimum wage jobs in this country.

References:

Los Angeles is the largest city in America with a $15 minimum wage: http://money.cnn.com/2015/06/14/news/economy/los-angeles-minimum-wage-15-garcetti/

McDonald's Hourly Wages By Job Type: http://www.glassdoor.com/Hourly-Pay/McDonald-s-Hourly-Pay-E432.htm

Taxes on a Worker Making $30,000 in California: http://www.taxformcalculator.com/tax/30000.html

2012 Big Mac Price: http://big-mac-index.findthedata.com/

About that 68-Cent $1.28 Big Mac Price Increase: https://www.minimumwage.com/2013/07/about-that-68-cent-big-mac-price-increase/

McDonald's Fast Food Prices: http://www.fastfoodmenuprices.com/mcdonalds-prices/

Average millennial income: https://www.google.com/search?q=average+millenial+income&ie=utf-8&oe=utf-8

A Record: American Wage Growth Near Zero

According to the Bureau of Labor Statistics, wages only grew by 2-tenths of a percent in the second quarter of this year.  A record low in the 33 years that this report has been generated.  For an average household making $52,000, that's just 29 cents extra per day (based on their quarterly pay).  Even lower after paying FICA and state and federal taxes. Probably, not enough to cover the higher prices for food in the last 3 months.

I don't think it is any coincidence that this record low growth in wages has happened in the same year that the employer mandate of ObamaCare took effect; forcing tens of thousands of employers to offer health insurance or pay a fine.  Nor, is it any coincidence that 29 states now have a minimum wage that is higher than that of the federal minimum.  A fact that was supposed to increase wage growth; not slow it.

Simply, companies don't have some secret stash of money they can use to cover increased expenditures being imposed on them by government.  As a result, in order to keep prices down and remain competitive, they must back off on wage increases.  This report clearly reflects this reality.

References:

Quarterly Increase in U.S. Worker Pay Smallest on Record: http://www.bloomberg.com/news/articles/2015-07-31/worker-pay-in-u-s-rises-0-2-smallest-gain-in-records-to-1982

Consumer prices rise for fifth straight month as avian flu boosts egg costs: http://www.latimes.com/business/la-fi-consumer-price-index-inflation-20150717-story.html

Obamacare and the Employer Mandate: Cutting Jobs and Wages: http://www.heritage.org/research/reports/2011/01/obamacare-and-the-employer-mandate-cutting-jobs-and-wages

State Minimum Wages | 2015 Minimum Wage by State: http://www.ncsl.org/research/labor-and-employment/state-minimum-wage-chart.aspx

Is New York Trying To Kill Fast Food Businesses?

It's no secret that many in the U.S. -- especially those in the liberal political class -- blame fast food restaurants for America's obesity problem.

It's no wonder then, that New York State's proposed minimum wage increase to $15 will only be applied to fast food operations throughout the State. The primary argument for doing so won't be about obesity (wink...wink!), but instead, because McDonald's and Burger King underpay their employees. New York must pay out millions of dollars each year in various forms of welfare for these workers.  Of course, the State doesn't mind that other minimum wage workers like busboys, dishwashers, hotel workers, etc. will continue to be supported with welfare payouts. 

So what's the impact on, let's say, McDonald's food prices once the wage hits $15:

• A $15 minimum wage is a 71% increase from New York's current  $8.75.

• That $15 wage is higher than every current McDonald's worker's pay except for Shift Manager and Store Manager; both salaried.  Thus, every worker, including the salaried, will also have to see a proportionally-based 71% increase. Therefore, we can assume that whatever a McDonald's store's total cost of labor is today, it will be 71% higher once the $15 kicks in.

• According to the website MinimumWage.com, the average cost of labor for every dollar you spend at McDonald's is 32%.  So, if you spend $10 today at a New York McD's, $3.20 will go to cover the cost of labor.  When the 71% increase is finally applied, the cost of labor will be $2.27 higher.  Or, in other words, that formerly $10 meal will then cost you $12.27 or 22.7% more.  That's before any other inflation that may also affect pricing.

So, the question is:  How many people are going to be able to afford a Big Mac, fries, and a Coke when the price goes from the current $7.85 to $9.63?  Probably, well over $10 with inflation. Especially since real wages (those adjusted for inflation) have only been going up three-tenths of a percent per year.

Simply, going to McDonald's or any other fast food store may still be fast but no longer cheap.  For some people, the cost to eat there may just be too steep; especially since traditional sit-down restaurants won't be hit by the minimum wage increase. Thus, expect business declines and business closures as people relegate eating fast food to being a luxury.  Make no mistake, this imposed wage is like any tax on liquor and cigarettes that is used as a means to deter the buying of those products.  To me, that looks like the real intent here.

Lastly, as far as the obesity issue goes, it's not true.  Seven years ago the City of Los Angeles banned any new fast food restaurants in South Los Angeles as a way of curbing the growing obesity problem in that part of the city.  Obesity wasn't abated.  Instead, it got worse; going from 63% to 75%. Also, regarding fast food, poverty, and welfare;  this country has 45.3 million people in poverty and on welfare.  The fact that there are only 3.7 million fast food workers hardly proves that the industry is placing some massive burden on the country and the State of New York; especially, since 61% of all fast food workers are part-timers working before and after school or as a means to earn some extra money.

References:

New York Plans $15-an-Hour Minimum Wage for Fast Food Workers: http://www.nytimes.com/2015/07/23/nyregion/new-york-minimum-wage-fast-food-workers.html

McDonald's Menu Pricing for New York: http://www.fastfoodmenuprices.com/mcdonalds-prices/

McDonalds Salaries in New York, City: https://www.google.com/search?q=McDonald%27s+Salaries+in+New+York+City%2C+NY+|+Glassdoor&ie=utf-8&oe=utf-8 

Real Earnings: http://www.bls.gov/news.release/pdf/realer.pdf

Cost of McDonald's Labor: https://www.minimumwage.com/2013/07/about-that-68-cent-big-mac-price-increase/

Ban on fast-food eateries in South L.A. hasn't cut obesity: http://www.latimes.com/local/california/la-me-food-study-20150319-story.html

In 2013, the official poverty rate was 14.5 percent, down from 15.0 percent in 2012. This was the first decrease in the poverty rate since 2006. In 2013, there were 45.3 million people in poverty: http://www.census.gov/hhes/www/poverty/about/overview/

http://www.statista.com/statistics/196630/number-of-employees-in-us-fast-food-restaurants-since-2002/Employees in the U.S. fast food restaurant industry:

Characteristics of Minimum Wage Workers, 2014:http://www.bls.gov/opub/reports/cps/characteristics-of-minimum-wage-workers-2014.pdf

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Proof: Raising the Minimum Wage Doesn't Raise Overall Wages

Many Democrats believe that raising the minimum wage will help improve salaries for everyone.  In fact, a year ago last March, President Obama went to Connecticut where he gave his speech focusing in on the minimum wage called "It's Time To Give America A Raise". Note that he said give "America" a raise and not just the lowest paid workers.

Well, this year, 29 states followed the President's suggestion and they now have a minimum wage above the Federal level of $7.25.

So, this begs the question: Did America get a raise? Not based on the last jobs report.

In the last three months, the average hourly wage went up a whole 6 cents from April's $24.89 to $24.95 in June.  In fact, June's wage remained the same as May's.  When annualized, this is a 1% increase. That's a rate that is half the normal 2% growth that this country has seen since the end of the recession, and a third to a fourth of the normal wage growth before the recession and before the 40% hike to the current $7.25 in the years 2007 to 2009 (see data link below).

What liberals and the President don't seem to understand is that raising the minimum wage actually has a negative impact on other, non-minimum-wage earners.  Forcing an employer to pay a higher minimum just puts the employer in the position of not being able to hand out normal raises.  Thus, other employees are being punished by this government action by lawmakers who, generally, never ran a business and don't seem to understand how they must struggle whenever higher wages are thrust upon them.

References:

President Obama: It's Time To Give America A Raise: https://www.whitehouse.gov/blog/2014/03/05/president-obama-its-time-give-america-raise

The Minimum Wage By State in 2015: http://www.ncsl.org/research/labor-and-employment/state-minimum-wage-chart.aspx

June's Employment Report - Table B: http://www.bls.gov/news.release/pdf/empsit.pdf

Year-Over-Year Wage Growth Since 2007: http://www.stateofworkingamerica.org/charts/hourly-wage-growth/

Strong Retail Sales Does Not Mean A Growing Economy

Last Thursday, the retail sales numbers saw a surge; prompting the news agency Reuters to state this:

U.S. retail sales surged in May as households boosted purchases of automobiles and a range of other goods even as they paid a bit more for gasoline, the latest sign economic growth is finally gathering steam.

What I take issue with is the "finally gathering steam" statement.  Quite simply, a retailer can have stronger sales, not just because of more foot traffic to their store, but also because they may have been forced to raise prices.  If a retailer doesn't have enough sales to pay the bills, it will have no other choice but to close its doors.  This is a reality that is growing in strength, and which, belies the "gathering steam" comment.


The fact is, that American national retailers are suffering. Dozens of them are announcing store closures.  CNBC predicted this a year-and-a-half ago with their story titled  "A 'tsunami' of store closings expected to hit retail".  Since that story was run, Radio Shack has announced the closure of 1784 stores due to bankruptcy.  McDonald's is shuttering 700. The combined Office Depot/Office Max operation is closing 650 retail operations, and their chief competitor Staples, 225. Others include 200 Walgreens; 338 Wet Seal; 77 Sears; 100 Pier One's, 300 Deb Shops; 40 J. C. Penney's; and on and on with a list too long to enumerate (See References). 

In addition, shopping malls are also shuttering their doors.  Forbes is predicting 300 Mall closures in the next 10 years, mostly because they are losing their "anchor" stores like J.C. Penney,  Sears, and Macy's.  But, when a mall closes its doors, so do the dozens of small retail stores that probably won't survive without the large amount of foot traffic a mall provides.

We're six years passed the end of the Great Recession and we are seeing national chain store closures as if we were still in the midst of it; leaving us to question whether or not small local retailers are also closing at that same high rate.

I personally believe that "retail" is hitting the proverbial "brick wall".  You have a consumer who has so little money to spend after necessities, that you would have to go back 20 years to see the real median household incomes this low.

Then, retail prices are being driven higher by a variety of factors.  For starters, this is the first year that the employer mandate of ObamaCare kicked in.  Thus large national chains are being forced to provide health care insurance or pay a fine of between $2000 and $3000 for each employee not properly covered.  On top of that, liberal state legislators and city councils are raising the minimum wage.  For example, California's minimum wage was raised to $9 this year; and will go to $10 as of January 1st.  Additionally, President Obama, through executive order, is expected to force any employer, whose salaried workers make less than $52,000 a year, to pay overtime (time-and-a-half) when they work more than 40 hrs/wk..

The increase in retail sales is more about higher prices and not increased sales. Simply, the consumer is cash strapped and marginal retail operations are being forced to close their doors due to declining foot traffic.  

References:

Strong U.S. retail sales boost growth outlook: http://www.reuters.com/article/2015/06/11/us-usa-economy-idUSKBN0OR1H720150611

A 'tsunami' of store closings expected to hit retail: http://www.cnbc.com/id/101353168

Store Closings Index 2015 of Largest US Brick-and-Mortar Retail Chains: http://retailindustry.about.com/od/USRetailStoreClosingInfoFAQs/fl/All-2015-Store-Closings-Stores-Closed-by-US-Retail-Industry-Chains_4.htm

Some 300 malls should close in the next decade: http://fortune.com/2015/01/28/2015-mall-outlook/

Real Median Household Income in the United States - FRED: https://research.stlouisfed.org/fred2/series/MEHOINUSA672N

ObamaCare Employer Mandate - ObamaCare Facts: http://obamacarefacts.com/obamacare-employer-mandate/

State Minimum Wages | 2015 Minimum Wage by State: http://www.ncsl.org/research/labor-and-employment/state-minimum-wage-chart.aspx

White House plans to force business to pay more overtime: http://www.washingtonexaminer.com/white-house-plans-to-force-business-to-pay-more-overtime/article/2556692

The Rapidly Evolving Living (Minimum) Wage

In 2007, Congress incrementally raised the $5.15 an hour minimum wage by 40% making it $7.25, effective July of 2009. At that time we were told that $7.25 an hour was a "fair" wage; or, in other words: a "living wage".  In fact, the law responsible for the increase was called the "Fair Minimum Wage Act of 2007". Now, if that $7.25 wage was truly a "fair wage" in 2009 and, if it had been automatically adjusted for inflation each year, then the "fair wage" of today should be about $8.

Instead, in 2013, President Obama kicked off a national debate on what is a "fair wage" by campaigning around the country promoting a 24% increase to $9 an hour.  A year later, he  was pushing a 40% increase to $10.10; or, more than $2 above a supposed fair wage if that $7.25 had been inflation-adjusted all these years.  Meanwhile, unions, who don't have a single minimum wage earner as part of their membership, have decided $15 is a living wage and picketed company stores like those of McDonald's and Walmart to give their cause public attention.

As a result of all this, the public is left with the impression that millions of Americans earn the minimum wage and are, literally, living in poverty.  Believing all this, 63% of those surveyed in a recent Hart Research poll support a $15 minimum by the year 2020.

The truth about the $15 minimum wage was exposed when the unions in Los Angeles asked the city council to provide an exception to the law for unionized operations in the City.  This, after those very same unions had pushed hard by picketing and lobbying to pass the $15 wage in that city.

Suddenly, they realized that a bunch of inexperienced 16-year olds, working part time at cash registers at fast food restaurants, would earn as much or more than their supposed experienced union members.  This is because 71% of the 1.25 million workers earning the minimum wage in this country are part-timers.  In Los Angeles,  union members can make as little as $12/hour.  That apparently was a good enough "living wage" for their union members.  Let's hear it for the brash hypocrisy of the union living wage argument.


References:

Fair Minimum Wage Act of 2007: http://en.wikipedia.org/wiki/Fair_Minimum_Wage_Act_of_2007

Feb 12, 2013 · President Obama wants to raise the minimum wage to $9 an hour, the first increase since 2009: http://money.cnn.com/2013/02/12/news/economy/obama-minimum-wage/index.html

March 5, 2014: Obama pushes for $10.10 minimum wage: http://wtnh.com/2014/03/05/obamas-minimum-wage-campaign-comes-conn/

Unions and the $15 Minimum Wage: http://www.nationalreview.com/corner/418936/unions-and-15-minimum-wage-kevin-d-williamson

Hart Research Poll on Minimum Wage: http://www.nelp.org/content/uploads/2015/03/PR-Federal-Minimum-Wage-Poll-Jan-2015.pdf

Bureau of Labor Statistics: Characteristics of a Minimum Wage Worker for 2014: http://www.bls.gov/opub/reports/cps/characteristics-of-minimum-wage-workers-2014.pdf

Hypocrisy Thy Name Is Union; Unions Demand Exemption From LA's $15 Minimum Wage: http://www.forbes.com/sites/timworstall/2015/05/27/hypocrisy-they-name-is-union-unions-demand-exemption-from-las-15-minimum-wage/

Elizabeth Warren's $22 Minimum Wage Pitch?

Whether or not Elizabeth Warren, the liberal Senator from Massachusetts, will jump into the race for the Democratic nomination is anyone's guess.  But, if she does, expect to hear a wide range of far left and progressive ideas during her campaign. I can say that with certainty since she has already demonstrated this with such comments like the following in her attempt to justify higher debilitating taxes on businesses:

"Now look, you built a factory and it turned into something terrific, or a great idea? God bless. Keep a big hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along."

Of course, that comment completely ignores the primary and "underlying social contract" for  businesses -- if there is such a thing -- which is to create jobs for most Americans so they can feed themselves and not depend on government handouts. 

However, the most far left idea she has presented to date, is the belief that the minimum wage shouldn't just be $10.10 or even $15 an hour.  Instead, it should be $22 an hour based on the assumption that, by now, it should have been indexed to productivity gains.  In arguing that point, she presented this chart sourced from a progressive think tank known as the Center for Economic Policy and Research:

Graphic Shown Without Seeking Author's Approval On The Basis of Fair Use For Commentary and Criticism

What the above graphic fails to explain is "why," starting in 1968, the minimum wage and, for that matter, all wages, started to diverge from productivity increases.  Oddly enough, the simple answer to that is actually World War II, which ended more than two decades earlier.

At the end of the war, many of today's industrial powers such as Japan, Germany, England and France suffered devastating damage to their industrial infrastructure.  Unemployment was high, wages were low; and, their currencies were weak.  Only by the 1960's did their industrial activity recover enough to start exporting products.  Because of this, the United States businesses found themselves unable to compete with cheaper imported goods.  Cheaper because of lower wages in Europe and Japan and because our currency was stronger than many others. As a result, the U.S., starting in the late 1960's, went from being a net positive exporter to a net negative importer of foreign goods (see the balance of trade report referenced below).

In order to compete, businesses had to find ways to lower costs. This entailed eliminating jobs by increasing the productivity levels through automation and, in many cases, moving their manufacturing operations overseas.  And, it has been the fear of losing more jobs that has, in the past, kept politicians from raising the minimum wage in the face of increasing productivity.  Yet, politicians like Warren are willing to tempt fate by pushing it even higher.  A fact that could result in increasing job losses through automation in the form of artificially intelligent robotics.  Already, experts are predicting that 30% of American jobs could be replaced by robots within 10 years.


References:

Elizabeth Warren: "There is nobody in this country who got rich on his own": http://www.cbsnews.com/news/elizabeth-warren-there-is-nobody-in-this-country-who-got-rich-on-his-own/

Elizabeth Warren: Minimum Wage Would Be $22 An Hour If It Had Kept Up With Productivity: http://www.huffingtonpost.com/2013/03/18/elizabeth-warren-minimum-wage_n_2900984.html

Seattle's $15 Minimum Wage Is Still Far From What It Should Be: http://www.huffingtonpost.com/2014/06/03/seattle-minimum-wage_n_5437916.html

The Center for Economic and Policy Research (CEPR) is an economic policy think-tank that was founded in 1999 by economists Dean Baker and Mark Weisbrot. It has been described as both progressive and left-leaning: http://en.wikipedia.org/wiki/Center_for_Economic_and_Policy_Research

Trade Balances: https://www.census.gov/foreign-trade/statistics/historical/gands.pdf

Experts predict robots will take over 30% of our jobs by 2025 — and white-collar jobs aren't immune: http://www.businessinsider.com/experts-predict-that-one-third-of-jobs-will-be-replaced-by-robots-2015-5

The 'Fair Use' Rule: When Use of Copyrighted Material is Acceptable: http://www.nolo.com/legal-encyclopedia/fair-use-rule-copyright-material-30100.html 

Seattle's $15 Minimum Wage and the Liberal Spin

On April 1st, Seattle, Washington's $15 Minimum wage law technically went into effect.  Already, the liberals have attacked Republicans who had claimed that raising it that high would cost jobs and shutter businesses. The argument is that none of that has happened.   In fact, on April 10th, the far left think tank, "Think Progress", wrote an online article titled: "Seattle Restaurant Data Demolishes Conservative Argument Against $15 Minimum Wage."

The problem with the "Think Progress" article is that it leads people to believe that a $15 minimum wage completely went into effect April 1st.  It didn't.

If you are a small business of less than 500 employees, you have seven years to gradually raise it to $15.  That's about an 81 cent per hour raise per year from the previous $9.32 in Washington state.  All other businesses have just three years to increase it, and since most small business like restaurants and retail operations employ minimum wage workers, overall impact will be minimal; at least this year.

There's another reason that Seattle can handle the $15 minimum wage over time without a lot of impact on jobs. Seattle is wealthy.  The average per capita income is $43,237 (in 2013).  That's much higher then our nation as a whole at just $28,155 (again, in 2013). Because of its wealth, and the city's ability to keep people working, the unemployment rate was just 3.9% in December of 2014.

So, I guess from the 'Think Progress" article, we're supposed to conclude that raising the national minimum wage to $15 won't do any harm.  That reminds me of that old adage: "But, will it play in Peoria."  In Peoria, Illinois the average per capita salary is only $28,438 (in 2013); or, about $13.67 an hour (based on a 40-hour work week).  In terms of the unemployment rate, Peoria is already hurting at  6.9% as of December 2014.  Compared to Seattle's poverty rate of 13.6%, Peoria sits at 17.2%; meaning that 1-in-6 wouldn't see their salaries increased anyway.

Let's not have a national minimum wage of $15.  If Seattle, with its high standard of living, does it...then, fine.  But not every community can afford the price hikes that will result from it.

References:

Seattle approves $15 minimum wage: http://money.cnn.com/2014/06/02/news/economy/seattle-minimum-wage/

Seattle Restaurant Data Demolishes Conservative Argument Against $15 Minimum Wage: http://thinkprogress.org/economy/2015/04/10/3645268/new-evidence-buries-lie-about-seattle-minimum-wage/

We Are Seeing The Effects Of Seattle's $15 An Hour Minimum Wage: http://www.forbes.com/sites/timworstall/2015/03/16/we-are-seeing-the-effects-of-seattles-15-an-hour-minimum-wage/

USA Quick Facts: http://quickfacts.census.gov/qfd/states/00000.html

Seattle Quick Facts: http://quickfacts.census.gov/qfd/states/53/5363000.html

Seattle Unemployment Rate: https://www.google.com/search?q=seattle+unemployment+rate&ie=utf-8&oe=utf-8

Peoria Quick Facts: http://quickfacts.census.gov/qfd/states/17/17143.html

Peoria Unemployment Rate: https://www.google.com/search?q=peoria+unemployment+rate&ie=utf-8&oe=utf-8

Will it Play in Peoria: http://en.wikipedia.org/wiki/Will_it_play_in_Peoria%3F

McDonald's Struggles To Survive

I am of the belief that raising the minimum wage during the Great Recession made it both deeper and wider than it had to be.  The reason for that is simple.  If you, as a business owner, are forced to raise wages when you are already losing money in the midst of a recession, your only choice is to lay people off; or, worst case, close your doors.  During the recession years of 2007 to 2009, the minimum wage was raised 40%.  Over that time,  more than 200,000 small businesses -- the type that hire many minimum wage workers -- ceased to exist.  It is anyone's guess as to what percentage of those places had to close because of the higher salaries, but, for sure some -- maybe many -- had to.

Now, in 2015, fast food giant McDonald's is struggling.  Hundreds of their under-performing stores have already been closed; with hundreds more slated to shut down later this year.  As each one closes, an average of 61 workers will lose their jobs.  Yet, many of those McD's employees seem to think their wages should be doubled to at least $15 an hour as this picture from the New York Post clearly shows.

Maybe they should rethink that.  In my opinion, having a job is a lot better than not having one at all. Especially in an economy that still has 17 million workers still unemployed based on the U6 alternative measure of employment.

References:

McDonald's to Shutter Hundreds of Stores As it Bleeds Money: http://www.eater.com/2015/4/22/8467915/mcdonalds-shutter-hundreds-locations-china-us-report

April 15th: Fast-food workers picket, demanding wage hikes: http://nypost.com/2015/04/15/fast-food-workers-picket-for-wage-of-at-least-15-hourly/

Economy lost more than 200,000 small businesses in recession, Census shows: http://www.foxnews.com/politics/2012/07/26/economy-lost-more-than-200000-small-businesses-in-recession-census-shows/

McDonald's Statistics from Michigan: http://www.mcmichigan.com/2661/30770/default-page/

Bureau of Labor Statistics Employment Situation Report for March 2015: Table A-15. Alternative measures of labor underutilization: http://www.bls.gov/news.release/empsit.t15.htm