Evaluating the Case for a Living Wage in Food Service Industry
School
Government College University Faisalabad**We aren't endorsed by this school
Course
ACCOUNTING 3423
Subject
Economics
Date
Dec 12, 2024
Pages
3
Uploaded by ColonelComputerQuetzal16
The video shows the difficulties experienced by people working in the food serviceindustry, particularly those who rely on tips for a large percentage of their income. To determinewhether a living wage should be mandated in the United States, it is necessary to evaluate boththe arguments for and against such a mandate.1. Arguments for Mandating a Living Wage:a. Poverty and Food Insecurity:The film underlines the prevalence of poverty and foodinsecurity among food service workers, even when they work full-time. A living wagerequirement could alleviate financial hardships and reduce reliance on food banks (Blasi et al.,2015).b. Gender Disparity:The food service industry is dominated by women, and there is aconsiderable gender pay gap. A living wage mandate could help to reduce this discrepancy andalleviate income inequality (Jayaraman, 2016).c. Economic Stimulus:Giving workers a decent wage could boost the economy by giving themmore discretionary income, leading to more lavish consumer spending (Reich et al., 2017).2. Arguments Against Mandating a Living Wage:a. Impact on Small Businesses:Opponents claim that legislating a living wage will strain smallfirms, potentially resulting in job losses or higher costs for goods and services (Sherk, n.d.).b. Market Dynamics:Some argue that the existing tipping system provides a flexibleperformance-based remuneration structure. A living wage requirement may diminish thisflexibility and reduce the motivation for excellent service (Lynn & McCall, 2000).
c. Regional Variation:Critics argue that a one-size-fits-all strategy may not be appropriate dueto differences in the cost of living across different regions of the United States (Neumark &Wascher, 2008).3. States with Laws Providing a Living Wage:Some states and communities in the United States have implemented increased minimumwage legislation to address the issue of low salaries. For example, during the period covered bythe video, states such as California, Oregon, Washington, Nevada, Minnesota, Montana, andAlaska had moved away from the federal tipped minimum wage, requiring restaurants to pay afull minimum wage with top tips (Twenty-Three Years and Still Waiting for Change: Why It isTime to Give Tipped Workers the Regular Minimum Wage, n.d.).The living wage debate in the United States is complicated, combining economic impact,gender equality, and regional disparities. While some advocate for a living wage mandate tocombat poverty and inequality, opponents warn of potential negative implications, particularlyfor small enterprises. The existence of more excellent minimum wage laws in states and townsdemonstrates that there are alternatives to the federal approach.
References:Twenty-three years and still waiting for change: Why it is time to give tipped workers the regularminimumwage.(n.d.).EconomicPolicyInstitute.https://www.epi.org/publication/waiting-for-change-tipped-minimum-wage/Blasi, J., Kruse, D., & Freeman, R. (2015). Shared Capitalism at Work: Employee Ownership,Profit and Gain Sharing, and Broad-Based Stock Options. University of Chicago Press.https://press.uchicago.edu/ucp/books/book/chicago/S/bo8056093.htmlJayaraman, S. (2016). Behind the Kitchen Door. Cornell University Press.https://www.cornellpress.cornell.edu/book/9780801479519/behind-the-kitchen-door/#bookTabs=1Lynn, M., & McCall, M. (2000). Gratitude and gratuity: A meta-analysis of research on theservice-tipping relationship. Journal of Socio-Economics, 29(3), 203–214.https://doi.org/10.1016/S1053-5357(00)00062-7Neumark, D., & Wascher, W. (2008). Minimum wages and employment. Foundations andTrends® in Microeconomics, 3(1–2), 1-182. http://dx.doi.org/10.1561/0700000015Reich, M., Allegretto, S., & Godoey, A. (2017). Seattle’s minimum wage experience 2015-16.Social Science Research Network. https://doi.org/10.2139/ssrn.3043388Sherk, J. (n.d.). What is Minimum Wage: Its History and Effects on the Economy | The HeritageFoundation. The Heritage Foundation.https://www.heritage.org/testimony/what-minimum-wage-its-history-and-effects-the-economy