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Thread: McDonald's boss says he's "proud" of wages as thousands of workers call for a rise

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    Re: McDonald's boss says he's "proud" of wages as thousands of workers call for a ris

    Quote Originally Posted by Glen Contrarian View Post
    Why don't you look to see how much it really would raise prices according to The Motley Fool.
    I have a question for you after looking at this and a couple other sites that said a big mack would increase .68 by doubling the minimum wage. How much in labor burden on fifteen bucks? You can't use just fifteen bucks in your analysis, you have to include labor burden.
    "A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury." Attributed to Alexander Tytler

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    Re: McDonald's boss says he's "proud" of wages as thousands of workers call for a ris

    Quote Originally Posted by sawdust View Post
    I have a question for you after looking at this and a couple other sites that said a big mack would increase .68 by doubling the minimum wage. How much in labor burden on fifteen bucks? You can't use just fifteen bucks in your analysis, you have to include labor burden.
    If you'd really read my reference, you'd have seen that labor is not the highest contributor to the cost of their product - food is.

    That, and if more people make more money, that's FEWER people on the public dole. You have to pay ANYWAY - either through slightly higher prices to pay the higher wages for the people, or through your taxes to pay for the public assistance programs that those people need to put food on their own tables. But you pay ANYWAY.
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    Re: McDonald's boss says he's "proud" of wages as thousands of workers call for a ris

    Quote Originally Posted by Glen Contrarian View Post
    If you'd really read my reference, you'd have seen that labor is not the highest contributor to the cost of their product - food is.

    That, and if more people make more money, that's FEWER people on the public dole. You have to pay ANYWAY - either through slightly higher prices to pay the higher wages for the people, or through your taxes to pay for the public assistance programs that those people need to put food on their own tables. But you pay ANYWAY.
    What? where in the hell did you get that information. The highest operating expenses in any business is labor. Have you ever seen a profit and loss statement? Why don't you start your own business and pay unskilled workers exactly what you think is fair, spending your own money vs. someone else's? Are you telling us that the costs of a burger exceeds 7.25 per hour?

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    Re: McDonald's boss says he's "proud" of wages as thousands of workers call for a ris

    Quote Originally Posted by Glen Contrarian View Post
    If you'd really read my reference, you'd have seen that labor is not the highest contributor to the cost of their product - food is.

    That, and if more people make more money, that's FEWER people on the public dole. You have to pay ANYWAY - either through slightly higher prices to pay the higher wages for the people, or through your taxes to pay for the public assistance programs that those people need to put food on their own tables. But you pay ANYWAY.
    I am in the restaurant business. I have two stores and this summer will have three. I am familiar with restaurant accounting. Your reference has a number of factual errors one of which is labor burden which is a question you didn't answer. In addition, I don't believe that they ran a twenty percent labor cost including management labor. So please tell me what labor burden is on fifteen dollars an hour or stick to talking about something you know about.
    "A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury." Attributed to Alexander Tytler

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    Re: McDonald's boss says he's "proud" of wages as thousands of workers call for a ris

    Quote Originally Posted by sawdust View Post
    I am in the restaurant business. I have two stores and this summer will have three. I am familiar with restaurant accounting. Your reference has a number of factual errors one of which is labor burden which is a question you didn't answer. In addition, I don't believe that they ran a twenty percent labor cost including management labor. So please tell me what labor burden is on fifteen dollars an hour or stick to talking about something you know about.
    Liberals have absolutely no problem spending someone else's money without consideration to the consequences or the realities of business ownership.

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    Re: McDonald's boss says he's "proud" of wages as thousands of workers call for a ris

    Quote Originally Posted by Conservative View Post
    Liberals have absolutely no problem spending someone else's money without consideration to the consequences or the realities of business ownership.
    It's a problem. Everyone who can use google is suddenly a genius. In my other business I used to have people tell me what kind of raise they needed because of what their expenses were. They were generally marginal employees because the really good ones made lots of money. I always told them that the best way to make money in any job was to make themselves indispensable. Some of them had the mindset they were paid x so they would only do y. Most of them ended up looking for job z.
    "A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury." Attributed to Alexander Tytler

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    Re: McDonald's boss says he's "proud" of wages as thousands of workers call for a ris

    Quote Originally Posted by Conservative View Post
    What? where in the hell did you get that information. The highest operating expenses in any business is labor. Have you ever seen a profit and loss statement? Why don't you start your own business and pay unskilled workers exactly what you think is fair, spending your own money vs. someone else's? Are you telling us that the costs of a burger exceeds 7.25 per hour?
    Did you read my reference? I guess you didn't. Here's another that shows that yes, food and paper costs are higher than labor costs for a McDonald's restaurant.

    And FYI we do own two small businesses - one's the storefront I'm in right now where we sell airline ticketing, package shipping, and money remittance, and the other business is in our home where we care for an elderly woman with dementia and for a medically-fragile young adult.

    Next time, try asking first before you make assumptions. But then, that's part of what made me become a liberal....
    To do evil, a human being must first of all believe that what hes doing is good" - Solzhenitsyn

    "...with the terrorists, you have to take out their families." - Donald Trump

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    Re: McDonald's boss says he's "proud" of wages as thousands of workers call for a ris

    Quote Originally Posted by sawdust View Post
    I am in the restaurant business. I have two stores and this summer will have three. I am familiar with restaurant accounting. Your reference has a number of factual errors one of which is labor burden which is a question you didn't answer. In addition, I don't believe that they ran a twenty percent labor cost including management labor. So please tell me what labor burden is on fifteen dollars an hour or stick to talking about something you know about.
    YOUR labor may cost relatively more in comparison to food costs than it does for McDonald's. It may also depend not only on the type of food that is sold, but also on the volume of what food is sold at what prices relative to one's labor force. I didn't make the claim that food costs more than labor for McDonald's (though I should have said "food and paper") - you can find it here. I'd say that McDonald's higher food-to-labor cost is probably because they sell a heck of a lot of food relative to the size of their labor force.

    And good for you that you own two - and soon, three - stores. I've only got one store (though not a restaurant) and a business at home. Also, you may want to take a look at your labor turnover costs - if your turnover costs are high, you may be interested to know what the Harvard Business Review found about paying higher wages - Costco actually saves money by paying higher wages.
    To do evil, a human being must first of all believe that what hes doing is good" - Solzhenitsyn

    "...with the terrorists, you have to take out their families." - Donald Trump

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    Re: McDonald's boss says he's "proud" of wages as thousands of workers call for a ris

    Quote Originally Posted by Glen Contrarian View Post
    YOUR labor may cost relatively more in comparison to food costs than it does for McDonald's. It may also depend not only on the type of food that is sold, but also on the volume of what food is sold at what prices relative to one's labor force. I didn't make the claim that food costs more than labor for McDonald's (though I should have said "food and paper") - you can find it here. I'd say that McDonald's higher food-to-labor cost is probably because they sell a heck of a lot of food relative to the size of their labor force.

    And good for you that you own two - and soon, three - stores. I've only got one store (though not a restaurant) and a business at home. Also, you may want to take a look at your labor turnover costs - if your turnover costs are high, you may be interested to know what the Harvard Business Review found about paying higher wages - Costco actually saves money by paying higher wages.
    Thanks for answering my question about labor burden. Wait, you didn't.

    There are industry numbers which apply to every restaurant, regardless of company. Labor is labor. regardless of concept labor has to be in the mid twenties and if it's higher the restaurant doesn't make money. Food cost depends on menu. Pizza and pasta places run a food cost in the mid to high twenties. Steak houses run food costs in the low 30's. Occupancy costs should be under ten percent. There are lots of other costs from debt financing to disposable costs. McDonalds doesn't make anything to speak of on food. All of their profit is in soda which costs pennies and sells for dollars. It doesn't matter whose restaurant we are talking about, the numbers are common.

    Labor is a semi controlable, so is food. The only thing you've said that is close to correct is gross volume affects net profit. Being semi controllable however, it doesn't affect labor percentage. In McDonald's case there is also a difference in corporate stores and franchises. Any article that says their labor cost is twenty percent is playing you for a fool. They won't hit twenty percent with labor burden and management. Their food cost is at least twenty four percent with those items if they are a high volume store and they are managed tightly. You can look for studies from liberal institutions that attempt to paint a rosy picture about the minimum wage but, just as the Motley Fool did, they cherry pick data I've been in the restaurant business several times in my life and the rest of it owned a business that built furniture for chain restaurants, some of the largest in the world. I know thousands of operators and quite a bit about actual numbers..

    The restaurant business has the highest failure rate of any small business. The government has already crippled it with insurance costs and more restrictive dram shop laws. Adding additional labor costs is just going to cause closures, as it has in Washington. Increasing the minimum wage is a bad idea.
    "A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury." Attributed to Alexander Tytler

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    Re: McDonald's boss says he's "proud" of wages as thousands of workers call for a ris

    Quote Originally Posted by Glen Contrarian View Post
    Did you read my reference? I guess you didn't. Here's another that shows that yes, food and paper costs are higher than labor costs for a McDonald's restaurant.

    And FYI we do own two small businesses - one's the storefront I'm in right now where we sell airline ticketing, package shipping, and money remittance, and the other business is in our home where we care for an elderly woman with dementia and for a medically-fragile young adult.

    Next time, try asking first before you make assumptions. But then, that's part of what made me become a liberal....
    please show me those costs on a financial statement. Costs of goods aren't an expense and are paid for out of the revenue for that item. Over and above those costs are the monthly operating expenses so before spending someone else's money I suggest you employ some people, create a financial statement, and learn about business operating expenses.

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