October 29, 2021

When Melissa and I pulled through the drive through of one of our local fast-food restaurants we were confronted by the marquee.  The sign declared in bold letters that the restaurant was hiring workers.  They were NOW HIRING NOW, RIGHT NOW, WE ARE HIRING NOW.  Apparently, the chain was not only hiring, but having a problem getting people to apply.  As covid cases decline and safety restrictions loosen, fast-food chains are looking to return to business as usual.  The problem is, they cannot find enough workers.  I had to resist the urge to go inside and ask the manager if they were hiring.  Luckily the restaurant was closed to indoor dining.

While some blame the hiring crisis on government programs that provide greater benefits and extended times for receiving them, a better reason may be the low wages paid and the working conditions workers face.  The current Federal Minimum Wage is $7.25, and the Arkansas state minimum wage is $11.00 per hour, and workers are entitled to be paid the higher state minimum wage.  The minimum wage applies to most employees in Arkansas, but there are exceptions, including tipped employees, some student workers, and other exempt occupations.  The Arkansas minimum wage was last changed in 2008, when it was raised from $6.25 to $11.00 per hour.  Tipped wages are set at $2.63 per hour.  That means working 40 hours a week for the non-tipped minimum provides $22,880 a year.  Working 40 hours a week for tipped wages provides $5470.40 a year.  Minimum wage increases are based on a voter approved initiative on November 4, 2014.  Previously, Arkansas had not updated their minimum wage since 2006, and the Federal Minimum Wage took precedence.

Credit Suisse analyst Lauren Silberman says fast-food industry struggled to find enough employees for years before the latest stimulus package.  Restaurants are an “exceptionally difficult business” to work in, Silberman said.  Employees face a high rate of sexual harassment and assault on the job, while Bureau of Labor and Statistics data shows that the median pay is $11.63 per hour.  Workers increasingly have more options outside the restaurant industry that offer a guaranteed $15 per hour, such as Amazon or Target, or more flexibility, like Uber or DoorDash.  And working in restaurants has only become more dangerous and difficult over the last year.  “These are still frontline workers, and we are still in the midst of a pandemic.”

Thoughts:  When I looked online, I found the definition of poverty in the US is an individual with income less than $34 per day ($12,410 per year) or a family of four with income less than $69 per day ($25,185 per year).  When you figure poverty rates in the US by racial classification, 31.9% of Blacks, 29.6% of Hispanics, 29.1% of Pacific Islanders, 23.5% of American Indians, 14.2% of Asian, and 14.1% of whites live in poverty.  Arkansas ranks 46th in Poverty Rate at 18.1%, which is meaningfully higher than the national average of 14.6%.  That means over half a million Arkansas residents (524,211) lived below the poverty line last year.  This includes 20.1% (1 in 5) children.  Systemic poverty is not the result of fast-food restaurants not hiring enough people or paying $15 and hour.  Neither is it the result of stimulus subsidies.  It is the result of an attitude of legislatures and individuals which deem poverty as individual failing, rather than a societal flaw.  Do the work.  Change is coming and it starts with you.

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