Today was the day of the "fast food worker walkout" in New York, with similar events in several other major cities around the U.S. The organizers would like to form a union, and their primary demand is to double the minimum wage to $15 per hour.

"The fast food workers' movement was born in New York less than two years ago, when a couple of hundred workers from 30 franchises across the city walked off their jobs — a bold move in an industry with no unions... Workers decided that they were fed up with being paid poverty wages, the disrespect that would happen in their stores, the irregular hours, and they just went on strike"

-- Vice News article

In the typical fast food business, labor accounts for about 30% of the cost of the product. If the labor cost doubles, the $6 lunch will then become an $8 lunch. But what about the working-class customers that these places depend on, whose wages are not going up? Can they afford a 30% increase in the price? The operating cost goes up, the sales volume goes down, the store becomes unprofitable, and the owner goes out of business.

To avoid this outcome, restaurant owners are likely to accelerate the use of technology to replace demanding and unreliable workers instead. Customers already place orders using tablets and smartphones, and machines already do most of the cooking. As trends continue and the technology advances, how much longer will it be until McDonald's opens its first fully-automated restaurant? For example, here's a video from China demonstrating a low-cost robot preparing fresh noodles in a small restaurant. This is considered cost-effective even in China, where the wages are closer to $1.50 per hour.

Either way, these low-skilled workers are not likely to get paid $15/hr for flipping burgers or pouring coffee; they will probably wind up with EBT cards instead. At least they won't have to worry about "disrespect" from managers or customers anymore -- and vice versa.

The exorbitant salaries and benefits enjoyed by corporate executives, hundreds of times greater than those of the workers, are not justified by "market forces" either. However, the attempt to artificially inflate the minimum wage level will not solve the problem. It will only result in less employment, higher taxes, higher prices, and the elimination of many smaller businesses -- all of which favor the corporatists that the "workers movement" claims to oppose.

"The advocates of minimum wage rates, whether decreed and enforced by the government or by violent union action, contend that they are fighting for the improvement of the conditions of the working masses. They do not permit anyone to question their dogma that minimum wage rates are the only appropriate means of raising wage rates permanently and for all those eager to earn wages. They pride themselves on being the only true friends of "labor," of the "common man," of "progress," and of the eternal principles of "social justice."...

If the government or the unions succeed in enforcing wage rates which are higher than those the unhampered labor market would have determined, the supply of labor exceeds the demand for labor. Institutional unemployment emerges. Firmly committed to the principles of interventionism, governments try to check this undesired result of their interference by resorting to those measures which are nowadays called full-employment policy: unemployment doles, arbitration of labor disputes, public works by means of lavish public spending, inflation, and credit expansion. All these remedies are worse than the evil they are designed to remove...

What matters is not whether wages are "fair" or "unfair" by some arbitrary standard, but whether they do or do not bring about an excess of supply of labor over demand for labor. It may seem fair to some people to fix wage rates at such a height that a great part of the potential labor force is doomed to lasting unemployment. But nobody can [honestly] assert that it is expedient and beneficial to society."

-- Ludwig von Mises, "Minimum Wage Rates" (1949)