interdependence of low wages
Note: This is the paper I wrote for this assignment. (I had to do every assignment that you do to be qualified for my position.) Please note that I don’t include number citations because the article format that I used differs from yours, and I did not want to confuse you. My thesis comes at the end of the summary, and is a two-part thesis. This format (beyond MLA) is what you should aim for in the summary-response paper. If you have any questions, or even critiques about how I might make it better (I love feedback!), please let me know.
Changing Minimum Wage and Changing Frugal Shoppers
Minimum wage is too damn low according to James Surowiecki. A focus of Surowiecki’s in “The Pay Is Too Damn Low” is the interdependence of low wages and the changing economy. Part-time workers no longer work for extra money; they work to support a household.
According to Surowiecki, the living-wage bill passed in Washington D.C. sparked McDonald’s workers to call “for an increase in their pay to fifteen dollars an hour” (citation). Because low-wage workers receive few benefits and little opportunity for promotion, they have difficulty contributing to their household’s income; their contribution usually accounts for nearly 46 percent (citation). The driving demand for higher pay is an effect of the poor work environment available to many Americans.
General Motors, Ford, Standard Oil, and Bethlehem Steel were once America’s biggest employers, but the economy has shifted what companies thrive—fast-food chains and retail stores—and how consumers shop. The problem that fast food chains and retailers face is that profit margins are slim; therefore, the opportunity to raise wages is rough (citation). Surowiecki says that Walmart and Target earn between three and four cents on the dollar, and that “the combined profits of all major retailers, restaurant chains, and supermarkets in the Fortune 500 are smaller than the profits of Apple alone” (citation). It is for this reason that consumers need to change their expectations of fast food and retail stores in order for middle-class America to survive: for wages to increase, consumers need to expect higher prices. (two-part thesis)
Recently, I spent three months in Germany with my mother. She lives in Ramstein for work; subsequently, I got to experience Germany from a real-life perspective and not a tourist perspective. Something that I learned while talking to locals is that waiters and waitresses do not expect tips. In Germany, it is rude to leave more than one or two euro on any bill—that’s only $1.30-2.50 American dollars for any bill. The reason that wait staff don’t expect tips is because tips are not calculated in wages. For this reason, food prices are higher.
I personally enjoyed paying more for food that came with no expectations. No longer did I feel pressured by wait staff for extra money—I wonder if other Americans would be willing to adapt to this business model. Surowiecki would most definitely agree that the German business model for tipping and food prices would be a substantial step to helping minimum wage workers in the restaurant industry.
Americans are used to paying only $5.69 for a McDonald’s Big Mac meal; however, Germans pay 7 euro on average; that’s $9.06. Many Americans would find paying nearly ten American dollars for a Big Mac meal absurd, but that absurdness is the reality of reasonably paying fast food workers.
Another solution might be to make an economic shift: make General Motors, Ford, Standard Oil, Bethlehem Steel, and other similar companies the main source of middle-class careers. However, the reason that these companies implemented layoffs was to make factories automated—meaning that American’s pay less for an item.
So, again, prices will have to increase to boost the middle-class. This means that frugal shoppers and eaters, who may be minimum-wage workers, will expect higher prices. The situation is incredibly intertwined, and changing any one price changes all prices.
Surowiecki, James. “The Pay Is Too Damn Low.” The New Yorker 12 & 19 Aug. 2013: 35.