Paying Fast Food Workers More . . . “Moo Cluck Moo”
Picture by K Manley
With all the activity by fast food workers to increase their salary, one fast food restaurant located in Dearborn Heights (just outside of Detroit) and north of 94 on Telegraph is leading the way with increased hourly wages for its workers. Presently at $12.00/hour, “Moo Cluck Moo” is planning to increase its worker’s salaries to $15.00 starting October 1. Daniel Gross (hi Daniel) reports on the planned increase at The Daily Beast:
“In August, I spoke with the owners of Moo Cluck Moo, a Detroit-area burger and chicken fast-food joint that is aiming to do something revolutionary: pay far more than the minimum wage. In an industry that treats labor as a commodity, co-owners Brian Parker and Harry Moorhouse decided to turn the conventional wisdom on its head. They’d start workers at $12 an hour, and design their business so that it could run profitably at those wages. Rather than take advantage of the epic slack in the Detroit-area labor market, they’d aim to set a slightly higher standard.Now, Moo Cluck Moo is doubling down on its high-wage strategy. Brian Parker says that beginning October 1, the company will start employees at $15 an hour. That’s a 25 percent increase from $12, and it represents the living wage level that workers are demanding and that many critics regard as foolish.”
Moo burger combo meal (fries and a drink) is $6.00 and not that much more than McDonalds Quarter Pounder with similar sides. Lettuce, Tomato, and Cheese come free with the Moo burger while McDonalds will charge for the extras. It sounds like improved throughput to me which would negate the increase in Labor cost. I would love to get a hold of the breakdown of Labor, Materials, and Overhead for Moo Cluck Moo to see cost impact on the ratios. I suspect it is not much greater than what it is today.
“Moo Cluck Moo” plans to open another restaurant in Fall.
I really know nothing about the food industry, but I do know something about human nature and people who get paid more tend to work harder and be a whole lot more supportive of their employer. It is a bit like the old joke about the Soviet Union–they pretend to pay us and we pretend to work. It is really the prime defense of capitalism–people work/take risks because of incentives. With the minimum wage where it is now the people in those jobs are only there because they have no alternative. There is no incentive other than not to lose the job. It is the old idea of you get what you pay for.
Moo Cluck Moo is to fast food what Costco is to big box. They show it is possible to pay a living wage and still make a profit.
If the regulated minimum wage was $15, would it be an incentive to work harder?
I think the economics in favor of doing it are solid, I think the psychology of saying people work harder because X is sketchy.
I guess we could use Maslow’s Hierarchy of needs to explain it. If you satisfy physical needs of Labor, they tend to migrate to other needs such as safety, love, etc. Then too this was not really a post about the minimum wage. I would suggest it is a post about a restaurant owner getting past profits. Here is one worker’s explanation along very similar lines of working hard to eliminate physical needs; How She Lives On Minimum Wage: One McDonald’s Worker’s Budget http://www.forbes.com/sites/laurashin/2013/07/19/how-she-lives-on-minimum-wage-one-mcdonalds-workers-budget/
Interesting point J.Goodwin. I think they would because they would see the job as a means of getting ahead. With the minimum wage where it is now, the job is just a means of survival which I agree is an incentive, but the same one that applies to slave labor.
The strategy appears to be a supremely self interested one. In that paying people a wage that supports not just bare survival but actual middle class household formation and maintenance gives them the ability to… buy meals at places like Moo Cluck Moo. So maybe these guys just rediscovered Ford’s idea that the best way to improve his sales figures would be to make sure all his employees could afford one.
The idea that minimum wage supports even young single people in being self sufficient was pretty much demolished by McDonald’s pitiful attempt to create a workable budget for a typical worker.
Excellent post. I can attest to MooCluckMoo as I eat there often.
One minor correction: MooCluckMoo is located on Telegraph SOUTH of I-96, but north of I-94.