The Delusion Of The Pay Period Is Allowing Leftist Attacks On The Market

I just posted about the lawsuit against McDonald’s and wrote that some aspects seemed frivolous and others might be serious. Some of the accusations are in a middle position in my opinion. I’ve felt the frustration for my family schedule of not knowing exactly when a child has to be at work (though it is minimal for us because it typically only varies by an hour). By the way, neither of my working children is currently working for McDonald’s. McDonald’s is doing nothing exceptional, as far as I can tell. Everyone has to do it to some extent.

So I don’t know to what extent I can blame the manager for the situation. From the New York Times:

The lawyers said most McDonald’s franchisees used software provided by the company that calculates employee-to-sales ratios and instructs restaurants to reduce staffing when sales drop below a certain level in any given hour. As a result, the lawyers said, some McDonald’s workers in the suit were ordered, upon reporting to work, not to clock in for an hour or two and instead wait until more customers arrived.

In several lawsuits, workers contend that they were at times told to clock out but remain in the restaurant or parking lot for an hour to two after business slowed down — perhaps when business slackened after the breakfast rush — so they could be on hand to clock back in when hourly sales picked up.

Jason Hughes, a McDonald’s employee in Fremont, Calif., said sometimes he was ordered to punch out soon after starting work and to hang around unpaid. “I’d have to be ready to punch in as soon as the store gets busy,” he said. “When the store is understaffed, our management would tell us we can’t take our breaks.”

I’m pretty skeptical of the no breaks claim. There is a range of time in which a break can be taken and there is nothing wrong with delaying it until after the surge has slowed down.

But the other part simply proves that McDonald’s is paying workers more than it can afford to offer a satisfactory working environment. $7.25 an hour (or more?) is degrading the work environment and forcing workers into more uncertainty.

Let’s start with some basic economic understanding of what corporations pay for. Contrary to popular opinion, companies (of whatever size) don’t pay you to work but pay you to be available to work. If you are at a McDonald’s you will get paid even if not one customer shows up during your shift (assuming you are one of the essential personnel who has to be there to keep the restaurant open). You will get paid if your shift is insanely busy. In both cases, you will be paid the same amount.

Related to this, if your McDonald’s comes out “in the red” one month, you will be paid just as much as you will on a month when your store turns a profit. While it is true that too many bad months will close down the restaurant, outside of that possibility you will probably keep your job. The owner of the store is assuming a great deal of risk in the hope of turning a profit while you have very little risk. The owner is more or less running an investment fund but giving you regular payments whether the fund gains or loses money.

So your hourly pay is an abstract average.

And right now, these accusations indicate (if they are true) that McDonald’s is required by law to pay more than it can afford. It has been forced to develop software to get employees off the clock when business slows.

This is not what managers want to deal with. They know that steady hours are more likely to get them steady employees. If they weren’t straining at the margins, there is no way they would be motivated to engage in such micro-managing.

Maybe at $7 an hour, the managers would be able to relax and just keep employees at regular shifts.

By the way, if McDonald’s employees are losing hours now because managers don’t want to pay them for unproductive hours, then what makes it possible that this wouldn’t happen more often at a higher pay rate? In fact, the very admission that managers are engaging in this juggling is an admission that raising the minimum wage will indeed increase unemployment. Just like employees are already losing hours, so raising the wage might result in more people losing all their hours.

Unfortunately, our professional resenters refuse to understand or even contemplate any of this. They never ask how much money McDonald’s is losing on employees. They act like it is a self-evident fact that McDonald’s has a large volume of money it is refusing to share.

Eventually, they will kill the goose out of lust for all those mythical golden eggs.