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What fast food workers can learn from Ikea's wage hike


The first rule of free market capitalism is that it works at its own pace. The second rule of capitalism is that it does not take kindly to those who try to subvert the first rule.

Consider the plights of retail workers and fast food servers. Start with Ikea. The makers of Tyler Durden's favorite furniture this week announced that they will be raising the minimum wage for thousands of its retail workers. On January first Ikea's base pay will rise to $10.76 an hour on average. With Scandinavian pragmatism, the exact rate will be pegged to how much it costs to live in the area surrounding the store. In other words, the company is looking to pay a base line living wage.

With the move Ikea joins Gap Stores. Earlier this year Gap announced that it would be raising it's lowest pay level to $10 an hour by 2015. They didn't say so in as many words but Gap implied they made the move because they wanted to attract a better class of workers. Based on the fact that applications are up 10% across the board, and again, these boosts don't go into effect for another six months, the Gap's plan worked. More applications means more selective hiring. Because of the magic of capitalism that will lead to better looking stores, friendly service and more crisply folded shirts.

Contrast these efforts with the Service Employees International Union and its efforts to get $15 an hour for fast food workers. By starting with an unreasonable demand and picking a fight with the forces of capitalism the fast food unions aren't just failing in their mission. They're also losing workers jobs and generally serving as exhibit A of the rules of capitalism.

Wages are rising on the front lines of customer service. Prices are slowly moving higher on discretionary items. Prosperity is slowly taking hold almost despite the best efforts of the government and labor unions and lawyers. As we enter the lazy days of summer, and with the centennial of the event that triggered the Great War occurring this weekend, this is a nice time to sit back and for once just observe without complaint the grandeur of the system our forefather's created.

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