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McJobs and the Minimum Wage[W:123,226]

sawdust

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Food is a lost leader at McDonalds. They make all of their profit from sodas. A large soda, with syrup, ice, water and cup lid and straw probably costs them a quarter and they sell it for a buck and a half or so. When Burger King ran their Whopper jr special for a dollar, lots of franchisees companied that the burger cost them a dollar ten to make. Wiki answers says the average profit margin for a McDonald's franchise is 10%. I'm going to assume that's net profit.

The Huffington Post has this to say about increasing the wage of fast food workers.

A typical fast-food restaurant spends 30 to 35 percent of its income on labor, according to a recent release from the Employment Policies Institute, a research organization whose work is often cited by those who argue against increasing the minimum wage. The institute estimates that small-business owners who run McDonald's franchises spend about a third of their income on wages, which would mean the price of a Big Mac would go up by $1.28 to $5.27.

And this:

By the reckoning of Bonnie Riggs, a restaurant industry analyst at market information and advisory firm the NPD Group, a doubling of wages for all McDonald's workers is "not even in the realm of feasibility." With fewer and fewer Americans eating out at restaurants due to factors like the payroll tax hike and increases in gas prices, Riggs said restaurants like McDonald's are trying to discount prices as much as possible to get customers through the door. This means the company's profit margins could not withstand a labor cost increase of this magnitude, she added.

Errors in McDonald's Wage Analysis

While I understand seven bucks an hour is tough to live on, an increase in wages of this magnitude would certainly decrease volume at these fast food stores. Decreasing volume means fewer jobs because restaurants have to balance labor against gross volume to stay in business. In some cases decreased volume would mean store closings and further loss of volume.

Everyone who works needs to understand that their jobs are dependent on the health of the business they work for. Their ability to earn money is directly related to the value of the production they do. The value of the production they do is directly related to the complexity of the tasks they perform. Brain surgeons make more than line cooks. That's just the way the world works.

Fast food work is intended to be entry level employment. You can be trained for your job in an afternoon. It's also supposed to be a bridge to better employment as entry level workers build a resume that indicates they are dependable and responsible workers.

Here's the real problem. We've lost millions of good paying jobs to recession and the ability of the internet to move technology overseas. We've lost jobs due to increased labor costs and a regulatory culture that has crept into Washington. Many of the jobs we've created in the Obama years are McJobs and now there is a disproportionate number of employees flipping burgers. Coupled with increasing numbers of part time jobs due to Obamacare, many fast food workers have no where to go to better themselves other than school and jobs training programs.

It's a tough world right now, made tougher by a government that seems to be intent on making poverty comfortable rather than entrepreneurism easier. I started my first company in the seventies. It was hard work but it's one hell of a lot harder now. I understand the problems faced by employer and employee. I also understand that an employees earning ability isn't based on need. It's based on their ability to turn their time into profit for the company. If there is no profit, there is no company and there is no job. It's as simple as that.

Rant over.
 
Food is a lost leader at McDonalds. They make all of their profit from sodas. A large soda, with syrup, ice, water and cup lid and straw probably costs them a quarter and they sell it for a buck and a half or so. When Burger King ran their Whopper jr special for a dollar, lots of franchisees companied that the burger cost them a dollar ten to make. Wiki answers says the average profit margin for a McDonald's franchise is 10%. I'm going to assume that's net profit.

The Huffington Post has this to say about increasing the wage of fast food workers.



And this:



Errors in McDonald's Wage Analysis

While I understand seven bucks an hour is tough to live on, an increase in wages of this magnitude would certainly decrease volume at these fast food stores. Decreasing volume means fewer jobs because restaurants have to balance labor against gross volume to stay in business. In some cases decreased volume would mean store closings and further loss of volume.

Everyone who works needs to understand that their jobs are dependent on the health of the business they work for. Their ability to earn money is directly related to the value of the production they do. The value of the production they do is directly related to the complexity of the tasks they perform. Brain surgeons make more than line cooks. That's just the way the world works.

Fast food work is intended to be entry level employment. You can be trained for your job in an afternoon. It's also supposed to be a bridge to better employment as entry level workers build a resume that indicates they are dependable and responsible workers.

Here's the real problem. We've lost millions of good paying jobs to recession and the ability of the internet to move technology overseas. We've lost jobs due to increased labor costs and a regulatory culture that has crept into Washington. Many of the jobs we've created in the Obama years are McJobs and now there is a disproportionate number of employees flipping burgers. Coupled with increasing numbers of part time jobs due to Obamacare, many fast food workers have no where to go to better themselves other than school and jobs training programs.

It's a tough world right now, made tougher by a government that seems to be intent on making poverty comfortable rather than entrepreneurism easier. I started my first company in the seventies. It was hard work but it's one hell of a lot harder now. I understand the problems faced by employer and employee. I also understand that an employees earning ability isn't based on need. It's based on their ability to turn their time into profit for the company. If there is no profit, there is no company and there is no job. It's as simple as that.

Rant over.

This is nothing but an attempt by organized labor to unionize fast-food workers. If it weren't? They'd be lobbying Washington instead of shutting down McDonald's outlets.
 
This is nothing but an attempt by organized labor to unionize fast-food workers. If it weren't? They'd be lobbying Washington instead of shutting down McDonald's outlets.

i wish you were right
by organizing workers into bargaining units, they would be doing something
they're not
they only give the appearance of doing something, while encouraging striking UNREPRESENTED employees to paint a target on their right-to-work backs

in short, you are being too kind to labor bosses, by pretending they are actually doing something
 
This is nothing but an attempt by organized labor to unionize fast-food workers. If it weren't? They'd be lobbying Washington instead of shutting down McDonald's outlets.

That's one hundred percent correct. Unions have taken a real beating in the last few years with an increase in the numbers of right to work states and the loss of industrial jobs. Unionizing fast food joints would be a coup for them. They talk about the billions of dollars in profits McDonalds makes and claim they could share that profit with employees. McDonalds isn't really a restaurant company. They are primarily a real estate holding company that franchises restaurants, owns most of the real estate and very few of the restaurants. They derive most of their revenue from land leases.
 
Wow all those people who seem to have figured out that paying $15/hour at McDonalds will still let the owner make a nice profit. They should buy some franchises and follow their own advice, they'll make a killing.
 
i wish you were right
by organizing workers into bargaining units, they would be doing something
they're not
they only give the appearance of doing something, while encouraging striking UNREPRESENTED employees to paint a target on their right-to-work backs

in short, you are being too kind to labor bosses, by pretending they are actually doing something


Labor bosses? Places like McDonalds, Wendy's, and Burger King are made up of mostly franchise owners. This isn't unions going after 'big corp.' it is unions going after small business owners, and will drive them out of business.

Good Grief, it already costs $8, 9, 10 dollars to get a quick meal at one of these places, what's next? paying $15. for a Big Mac? Can you say out of business? Because that'd be the end of a lot of people going there anymore.
 
This is nothing but an attempt by organized labor to unionize fast-food workers. If it weren't? They'd be lobbying Washington instead of shutting down McDonald's outlets.

My God, low-wage workers using their freedom of association to attempt to bargain for an economic situation better than "work 90 hours a week if you want to eat."

The horror.
 
Labor bosses? Places like McDonalds, Wendy's, and Burger King are made up of mostly franchise owners. This isn't unions going after 'big corp.' it is unions going after small business owners, and will drive them out of business.

Good Grief, it already costs $8, 9, 10 dollars to get a quick meal at one of these places, what's next? paying $15. for a Big Mac? Can you say out of business? Because that'd be the end of a lot of people going there anymore.

No, doubling wages for those workers wouldn't raise prices anywhere near that much.
 
McJobs and the Minimum Wage

No, doubling wages for those workers wouldn't raise prices anywhere near that much.

Somebody is clueless about economics and small business cost structure.
 
$15 an hour to flip burgers?

LOL, prepare for the $10 Happy Meal.

Economists, these folks ain't.
 
Food is a lost leader at McDonalds. They make all of their profit from sodas. A large soda, with syrup, ice, water and cup lid and straw probably costs them a quarter and they sell it for a buck and a half or so. When Burger King ran their Whopper jr special for a dollar, lots of franchisees companied that the burger cost them a dollar ten to make. Wiki answers says the average profit margin for a McDonald's franchise is 10%. I'm going to assume that's net profit.

The Huffington Post has this to say about increasing the wage of fast food workers.



And this:



Errors in McDonald's Wage Analysis

While I understand seven bucks an hour is tough to live on, an increase in wages of this magnitude would certainly decrease volume at these fast food stores. Decreasing volume means fewer jobs because restaurants have to balance labor against gross volume to stay in business. In some cases decreased volume would mean store closings and further loss of volume.

Everyone who works needs to understand that their jobs are dependent on the health of the business they work for. Their ability to earn money is directly related to the value of the production they do. The value of the production they do is directly related to the complexity of the tasks they perform. Brain surgeons make more than line cooks. That's just the way the world works.

Fast food work is intended to be entry level employment. You can be trained for your job in an afternoon. It's also supposed to be a bridge to better employment as entry level workers build a resume that indicates they are dependable and responsible workers.

Here's the real problem. We've lost millions of good paying jobs to recession and the ability of the internet to move technology overseas. We've lost jobs due to increased labor costs and a regulatory culture that has crept into Washington. Many of the jobs we've created in the Obama years are McJobs and now there is a disproportionate number of employees flipping burgers. Coupled with increasing numbers of part time jobs due to Obamacare, many fast food workers have no where to go to better themselves other than school and jobs training programs.

It's a tough world right now, made tougher by a government that seems to be intent on making poverty comfortable rather than entrepreneurism easier. I started my first company in the seventies. It was hard work but it's one hell of a lot harder now. I understand the problems faced by employer and employee. I also understand that an employees earning ability isn't based on need. It's based on their ability to turn their time into profit for the company. If there is no profit, there is no company and there is no job. It's as simple as that.

Rant over.

Well, good rant.

Everybody in America gets a shot at the big time. Everybody in American gets a shot at the middle. Everybody in America gets a shot at less.

A job at a fast food joint could be a persons shot at the big time, if used wisely. A job at a fast food joint could be a persons shot at the middle if used well. A job at a fast food joint could be a persons shot at less if they don't use their head.

Expecting 15 bucks an hour for cooking French Fries are the types they are not using their heads.
 
Somebody is clueless about economics and small business cost structure.

Somebody didn't even read the freaking OP.
 
My God, low-wage workers using their freedom of association to attempt to bargain for an economic situation better than "work 90 hours a week if you want to eat."

The horror.

Astroturf....
 
In June, there were 3.9 million job openings, including fast food.
Job Openings and Labor Turnover Survey News Release
About 400k of those are "accomodation and food industry. Not all of those are minimum wage, of course, but a good chunk will be. So subtract these openings from the total, because according to some people here those jobs are for lazy idiots and if you have one you fail at life. Call it 3.7 million maybe.

There are 11.5 million unemployed people. And as the right-wingers love to point out, "real" unemployment is higher due to people who have stopped looking, and those who are "underemployed." (like many of these minimum wage workers you all seem to despise so much) Let's pretend you can fill every job opening instantly.

So what is your magic free market bootstraps idea for those other 8 million (or more) people?
 
Astroturf....

Cop-out...

It's easier to just wave off millions of people than it is to actually discuss the issues they face.
 
My God, low-wage workers using their freedom of association to attempt to bargain for an economic situation better than "work 90 hours a week if you want to eat."

The horror.

The problem with this "solution", making the bottom 3% of wage earners get more than double their current pay, is that simply mandating U.S. wage inflation will change nothing for the better. The U.S. annual median wage fell to $26,364 in 2010, so increasing the lowest full-time (minimum) wage from $15K to $31K is obviously not going to happen without a serious ripple effect.

Assuming that U.S. wage parity is maintained, all that accomplishes is inflation, since every U.S. wage will then increase as must prices of U.S. goods/services to match those increased labor costs. This makes imports even more desirable to U.S. comsumers, U.S. exports more costly on the world market and the U.S. employer is forced to try to reduce their labor costs even further.

U.S. Median Annual Wage Falls To $26,364 As Pessimism Reaches 10-Year High [CORRECTION]
 
Cop-out...

It's easier to just wave off millions of people than it is to actually discuss the issues they face.

:lamo No it isn't....You progressives got busted astroturfing small business owners, and trying to push some outlandish "living wage agenda" and now when called on it, you claim 'cop out'....:lamo Now that is funny....
 
The problem with this "solution", making the bottom 3% of wage earners get more than double their current pay, is that simply mandating U.S. wage inflation will change nothing for the better. The U.S. annual median wage fell to $26,364 in 2010, so increasing the lowest full-time (minimum) wage from $15K to $31K is obviously not going to happen without a serious ripple effect.

Assuming that U.S. wage parity is maintained, all that accomplishes is inflation, since every U.S. wage will then increase as must prices of U.S. goods/services to match those increased labor costs. This makes imports even more desirable to U.S. comsumers, U.S. exports more costly on the world market and the U.S. employer is forced to try to reduce their labor costs even further.

U.S. Median Annual Wage Falls To $26,364 As Pessimism Reaches 10-Year High [CORRECTION]

Missing variable: worker productivity. We should factor this in, yes?
 
Instead of raping the fast food industry, we could be drilling for energy we need here, and those jobs pay rather better than slinging french fries. Of course, those jobs are also a little more demanding....
 
$15 an hour to flip burgers?

LOL, prepare for the $10 Happy Meal.

Economists, these folks ain't.

Maybe a manager gets that just asked my McD's by my work the average worker get 8.50 this came from the manager. So lets stop with the 15 hr. stuff
 
No, doubling wages for those workers wouldn't raise prices anywhere near that much.

If a widget costs $15 now, and 1/3 of that cost is labor, then the widget would cost $20 if only the direct labor cost was doubled. However, the raw material costs for a widget also include labor (indirect labor costs) so the actual price new widget price would be higher than that, perhaps $24. So your doubled pay allows you to buy not twice as many widgets but only 1.25 times as many widgets. Of course, if widgets are exported, you may instead just get fired since U.S. widgets are no longer competitively marketable for export. ;)
 
Missing variable: worker productivity. We should factor this in, yes?

Show me how more productivity occurs by paying the same worker twice as much to do the same thing. We can use running a cash register as an example of a "typical" minimum wage job. Crickets...
 
In June, there were 3.9 million job openings, including fast food.
Job Openings and Labor Turnover Survey News Release
About 400k of those are "accomodation and food industry. Not all of those are minimum wage, of course, but a good chunk will be. So subtract these openings from the total, because according to some people here those jobs are for lazy idiots and if you have one you fail at life. Call it 3.7 million maybe.

There are 11.5 million unemployed people. And as the right-wingers love to point out, "real" unemployment is higher due to people who have stopped looking, and those who are "underemployed." (like many of these minimum wage workers you all seem to despise so much) Let's pretend you can fill every job opening instantly.

So what is your magic free market bootstraps idea for those other 8 million (or more) people?

Minimum wage workers we all despise so much? Where the hell do you get your perspective? What makes you think "right-wingers" despise minimum wage workers? Get a clue dip****, a lot of us started off in those jobs until we gained the skills to move up. Just because there are people who do not improve their position in life does not mean they deserve $15 to do a $7 an hour job. It is no surprise to those of us who understand business that those pushing for doubling their pay can't understand the dynamics, that's why they make minimum wage.
 
Years ago I worked with a guy at a dealership who changed oil. That is all he did, oil changes. He tried to get a pay increase to the same level that those of us who were highly trained technicians made because he had 15 years experience changing oil. My service manager (who is extremely liberal and still a good friend of mine years after we both left the dealership) told him that wasn't going to happen and explained it very well in a way that certainly applies to this argument.

"Billy, there is no such thing as 15 years experience changing oil. What you have is 6 months of experience 30 times. The job is just not that complicated. If you want to make what these guys do learn to do what they do."
 
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