NCPA - National Center for Policy Analysis

"McWages" and the Middle Class

September 6, 2013

Phil Hickey, chairman of the National Restaurant Association, says his first job was at age 14 washing dishes at a Big Boy restaurant in his hometown of Detroit. He says it was a job that gave him a strong work ethic and taught valuable skills that helped him move from the kitchen to eventually owning nine of his own restaurants.

This experience is not uncommon.

  • The first job held by nearly one in three Americans is in the restaurant industry.
  • In addition to teaching personal responsibility, teamwork, discipline and accountability, these positions provide workers with opportunities for successful careers.
  • Many of them advance from their entry-level, minimum-wage positions.
  • Nine out of 10 salaried restaurant employees start off in hourly positions.

Protesters at fast-food restaurants around the country in recent weeks have alleged that fast-food workers can't survive on $7.25 an hour, the national minimum wage, and that restaurants must pay all of their employees a "living wage" of $15 an hour.

The majority of workers who earn a minimum wage in the United States work outside of the restaurant industry.

  • Only 5 percent of the 10 million restaurant employees earn the minimum wage.
  • Seventy-one percent of minimum-wage employees in the restaurant industry are under the age of 25.

The U.S. restaurant industry is vital to the country's economic growth and has helped fuel the recovery now underway.

  • Employment nationwide grew by 1.7 percent in 2012
  • The restaurant industry employment grew 3.4percent -- making 2012 the 13th consecutive year that the restaurant industry has outperformed overall U.S. employment growth.

Efforts to devalue the industry and mandate changes, like raising the minimum wage, hurt workers by preventing businesses of all sizes from creating more jobs. As the U.S. economy continues to recover, let's focus on preparing workers for high-growth positions and helping businesses expand -- not on implementing policies that would eliminate jobs and shutter local businesses.

Source: Phil Hickey, "'McWages' Can Be the Path to the Middle Class," Wall Street Journal, August 28, 2013.


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