What does a burger cost?
What does a burger cost?
These kind of tradeoffs involving the working poor represent an inneficiency in our system. It doesn’t serve the economy’s needs efficiently to have a large section of the population doing jobs they don’t like at all and buying as little as possible. What is the tradeoff there? Alternatives to working high turn-over, minimum wage jobs include college, manufacturing jobs, criminal work or homelessness. Less people in manufacturing and college means a smaller middle class. When companies hire young uneducated citizens they are doing so instead of hiring illegal aliens, children, living-wage earners, or interns. What if these companies had un paid interns or illegal aliens at less than minimum wage? How would their labor force look, and how would production costs be effected? Smaller food service businesses that must compete against large chains are also effected by the labor/production cost of a fast food burger. The central idea in the understanding of tradeoffs is the interconnectivity of decisions. Doing one thing means not doing something else and the effects can be far-reaching.
When large parts of the population are a small periphery part of the economy against their will, this represents a tradeoff for the larger economy in general. Unskilled part-time labor is usefull to many businesses. In the fast food and theater industries, it is not unusual to make all tasks as simple as possible so labor costs can be kept down by maintaining a high rate of turn-over. The corporate executives for these large chain businesses can increase stock value and keep product prices low. The tradeoff comes in the form of negative externalities. If these low paid employees have to pay rent and bills they will often work two places. This means working over 40 hours a week with no overtime pay and no benefits of any kind. Statistically high numbers are effectively trapped in a lifestyle they never wanted. These working poor are twice as likely to have problems with drugs and mental illness. If they have children, they are eligible for social services but don’t usually have a weekday every two weeks available to take care of the necessary paper work. If someone works full time and don’t buy anything except with food stamps, it means that the public sector is indirectly paying to cover the savings of the corporations that employ the working poor. Businesses that sell things like cars, sports equipment, personal grooming services, new clothing, or real estate can’t sell anything to a population that pays rent with 70% of their total take-home pay. In the end, what looks like a good way for a large company to save on labor costs actually hurts a large number of people. That is an unwise tradeoff.