possible harms of the minimum wage

In a previous post, I quoted economist Don Bordeaux concerning possible ways employers deal with an increasing minimum wage. One commenter stated that minimum wage employers offer few fringe benefits so it is unlikely that they could decrease fringe benefits to deal with increased costs in compliance with the minimum wage. I do not think this is accurate. Many fringe benefits for workers are largely undetected by the data.

I will use my own work experience as an example. I worked two jobs that would be applicable to this example. I worked a minimum wage job for two years as a dishwasher for a golf course country club ($5.15 per hour), after which time I worked as a server for less than the minimum wage as a family restaurant server for seven years ($3.00 per hour plus tips).

Both these jobs had various “perks” that were undetectable to normal wage data. At the country club (the worst job I ever held), I was given free lunches as part of the lunch buffet and free unlimited pop while I worked. There may or may not have been golfing benefits as well, but my father worked as the accountant so I did not directly realize any that I would have had otherwise. I am sure the servers and cooks were given memberships if not reduced rates for golf fares. For this job I worked heartily for 2 years. This was backbreaking labor; it included dragging around floor mats, moving tables, setting up for events, stocking pantries, and carrying huge amounts of dishes. It took me a couple hard days of labor to purchase a new N64 game (I remember standing in line for Perfect Dark on its release date). Do I think I was overworked for the pay? I do and regret going back to work for the second year.

My next job was as a server. One thing about the server markets in a town of 20 thousand people: there is not much competition for good servers. The market allowed the restaurant for which I worked to use servers for endless menial tasks. I would stay on the clock for 1-2 hours after I was “off the floor” (not taking new tables) in order to clean fridges, fill ketchups, roll silverware and vacuum. The restaurant would use servers for any task they could muster because at $3.00 per hour, we were the cheapest labor they had. The fringe benefits were plenty. Smoke breaks (for the smokers), free food (I never left hungry), half off all meals, half off all bakery items, plenty of time to talk to my fellow waiters and waitresses (this was a perk in itself), unlimited pop, liberal overtime, etc. With tips, I made excellent money.

So both these jobs were subject to labor costs, directly and indirectly. If the minimum wage rose on my dishwasher job, they may have responded by cutting my hours, shifting work from the cooks to the dishwashers (the cooks were paid more), cutting any golfing discounts, requiring me to work harder during the time I was working. Etc.

For my job as a server I actually did experience their reactions to rising costs. They definitely became more cost conscious. I was not allowed to work overtime (unless absolutely necessary), we saw our workload increase (extra menial tasks), they were more likely to send us home on slow days, they were most insistent that we work instead of chat during our working hours, they cracked down on food consumption (even enacting a no-eating rule of mistake food), they increased demands on the servers (mixing our own ranch dressing, baking our own breadsticks, or slicing our own lemons and tomatoes), they eliminated smoke breaks (when the no smoking in restaurants law was enacted), they limited half-off on meals to only days individuals actually worked (then changed it to only during a shift), and they started pressuring sales (hurting my tips by requiring me to charge for what should be free extras, like sides of Ranch).

All this is not captured by the traditional “fringe benefits” calculations. I never had any “health” or “paid leave” benefits. Those things didn’t even mater to me at the time. Talking to waitresses and eating, those were my fringe benefits.

About christopher fisher

The blog is meant for educational/entertainment purposes. All material can be used and reproduced in any length for any purpose as long as I am cited as the source.
This entry was posted in Economics, Goverment, Labor. Bookmark the permalink.

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