Consequence of $20 minimum wage for fast food workers?

[Loren Pechtel]

It's better to be evidence-based FIRST and sanity check second...not sanity presume first and fail to look up numbers second. Sorry, I am not trying to be a jerk here. Take a look at some links.

Or, McDonald's Could Double Wages For Employees, Not Raise Price Of Big Macs, And Just Make Less Money ...

www.businessinsider.com

McDonald's spends 24% of revenue on salary and benefits. Health benefits and bonuses are not wages. So wages are quite a bit less than 24% of revenue. Besides, some employees are management whose wage >> $20/hr and have other benefits. Imagine management is 10% of employees but in benefits and wage makes 4x as min wage employees. That's significant portion. Also, I deliberately put the number at min wage of $15.50. Many employees make $16 or $16.25 or $16.50. I was deliberately being conservative, adding a big cushion. To show even when making large impactful (counterfactual) assumptions in McDonald's favor, they'd still only have to increase price a small amount.

Benefit costs typically are a higher percentage as wages go up. Thus simply counting them as if they were wages actually improves your position.

Ok, you raised the profit from 1% to 2%. Either way, you still ensure no more McDs open up and the more marginal ones close.

I do agree they can react by raising prices--but in the long run that simply leads to inflation and puts things back where they were.

(labor/plant/materials/profit) distribution. 30% increase in the 30% bucket is 9%. Now you have 39/30/30/1. You basically killed their whole profit.

There's also royalty to global McDonald's which is 5% of sales:

https://www.cnn.com/2023/09/22/business/mcdonalds-franchise-fees/index.html#:~:text=For%20the%20first%20time%20in,a%20monthly%20percentage%20of%20sales.

You can add that to profit bucket.

Why? They can't take the money.

You can't dump this on "productivity improvements", that would have been done anyway.

They are accelerating that. Derec says more kiosks.

Agreed--but that would happen even without raising wages.

 

[Loren Pechtel]

Most great wealth has a different source: ownership and management of assets. Having large amounts of capital on hand is a necessity for building factories and warehouses and mines and ships and server farms and other such big things, but the owners and managers of such capital are all too often Yet Another Arrogant Ruling Class.

True, but the alternative is worse. People do better when they have skin in the game. (And this is why stock options are bad--no skin.)

 

[barbos]

Speaking of automation, what about US postal service? You idiots still use hand written zip codes?
In USSR we have been using machine sorting since forever. I am talking about standard letters.
Why can't you do the same? Now, of course, you use bar codes and such, but ordinary human letters are all handwritten and sorted by hands.

We machine-read addresses these days.

You need machine reading before posting so that you don't spam discussion with irrelevant trivia facts.

Postal codes in Russia - Wikipedia

en.wikipedia.org

 

[TV and credit cards]

The Russian post office? WTF?

People in California will soon be paying more for Chipotle, McDonald's, and other fast-food

California's minimum wage for fast-food workers is set to increase to $20 per hour in April, so restaurants are raising prices as a result.

www.businessinsider.com

Good. This crap oughta be expensive.

McDonald's has already raised menu prices by 20% over the last two years and has started to lose some low-income customers as a result.

Lord knows what they're eating now. Probably Oscar Mayer bologna and Kraft macaroni and cheese from Walmart.

 

[lpetrich]

People in California will soon be paying more for Chipotle, McDonald's, and other fast-food

California's minimum wage for fast-food workers is set to increase to $20 per hour in April, so restaurants are raising prices as a result.

www.businessinsider.com

Good. This crap oughta be expensive.

McDonald's has already raised menu prices by 20% over the last two years and has started to lose some low-income customers as a result.

Lord knows what they're eating now. Probably Oscar Mayer bologna and Kraft macaroni and cheese from Walmart.

That's what happens when they don't cut top-level compensation and stock buybacks.

 

[Derec]

Good. This crap oughta be expensive.

Why? It's probably better than the downmarket alternatives. Like the bologna sandwiches you mentioned.

Also, people will lose jobs. Unintended consequences.

 

[lpetrich]

Good. This crap oughta be expensive.

Why? It's probably better than the downmarket alternatives. Like the bologna sandwiches you mentioned.

???

Also, people will lose jobs. Unintended consequences.

But it's important to keep people out of work to fight inflation, right?

 

[TV and credit cards]

Good. This crap oughta be expensive.

Why? It's probably better than the downmarket alternatives. Like the bologna sandwiches you mentioned.

Also, people will lose jobs. Unintended consequences.

At 3.7% unemployment, there are other jobs to be had.
These fast food chains required to raise their wages are by and large in shopping areas surrounded by other low paying jobs, many of which will not be required to raise their wages.
Let’s see what happens.
I’ll also be interested to see the McEarning statement a couple quarters from now. Let’s see if anyone on the monied end of all this suffers.

 

[laughing dog]

Good. This crap oughta be expensive.

Why? It's probably better than the downmarket alternatives. Like the bologna sandwiches you mentioned.

Also, people will lose jobs. Unintended consequences.

Why do you think that consequences is necessarily unintended?

 

[Jimmy Higgins]

Good. This crap oughta be expensive.

Why? It's probably better than the downmarket alternatives. Like the bologna sandwiches you mentioned.

Also, people will lose jobs. Unintended consequences.

Some are in poverty with the jobs they have. You talk like the existing system is working for them and this will ruin it.

 

[Jimmy Higgins]

It's better to be evidence-based FIRST and sanity check second...not sanity presume first and fail to look up numbers second. Sorry, I am not trying to be a jerk here. Take a look at some links.

Or, McDonald's Could Double Wages For Employees, Not Raise Price Of Big Macs, And Just Make Less Money ...

www.businessinsider.com

McDonald's spends 24% of revenue on salary and benefits. Health benefits and bonuses are not wages. So wages are quite a bit less than 24% of revenue. Besides, some employees are management whose wage >> $20/hr and have other benefits. Imagine management is 10% of employees but in benefits and wage makes 4x as min wage employees. That's significant portion. Also, I deliberately put the number at min wage of $15.50. Many employees make $16 or $16.25 or $16.50. I was deliberately being conservative, adding a big cushion. To show even when making large impactful (counterfactual) assumptions in McDonald's favor, they'd still only have to increase price a small amount.

Benefit costs typically are a higher percentage as wages go up. Thus simply counting them as if they were wages actually improves your position.

Ok, you raised the profit from 1% to 2%. Either way, you still ensure no more McDs open up and the more marginal ones close.

I do agree they can react by raising prices--but in the long run that simply leads to inflation and puts things back where they were.

How does inflation do that? You've said the signal is too weak to even detect the employment issue at that low of wages, yet it is substantial enough to increase inflation across the board from housing, agriculture, health care, schooling?

 

[Derec]

Why do you think that consequences is necessarily unintended?

Are you alleging that Goodhair and the legislature intended this bill to cause a decrease in fast food employment?

 

[Derec]

At 3.7% unemployment, there are other jobs to be had.

That unemployment rate is unlikely to be permanent.

I’ll also be interested to see the McEarning statement a couple quarters from now. Let’s see if anyone on the monied end of all this suffers.

Is this the real goal? Damaging these companies?

 

[Derec]

???

It was in reference to TV's statement that people priced out of fast food (which includes stuff like Chipotle or Moe's, not just burger joints) will now eat stull like bologna and instant mac and cheese from Walmart.

But it's important to keep people out of work to fight inflation, right?

Who is keeping people out of work to fight inflation? Are they in the room with us now?
If you mean increasing the interest rates by the Fed, the Fed at least tries to bring down inflation without unduly impacting the economy and the labor market. So far it is succeeding.

 

[laughing dog]

Why do you think that consequences is necessarily unintended?

Are you alleging that Goodhair and the legislature intended this bill to cause a decrease in fast food employment?

I did not allege anything. I asked a question about your thinking

 

[Loren Pechtel]

At 3.7% unemployment, there are other jobs to be had.

That unemployment rate is unlikely to be permanent.

I’ll also be interested to see the McEarning statement a couple quarters from now. Let’s see if anyone on the monied end of all this suffers.

Is this the real goal? Damaging these companies?

Pretty obviously.

 

[TV and credit cards]

At 3.7% unemployment, there are other jobs to be had.

That unemployment rate is unlikely to be permanent.

That's a hell of a statement.

I’ll also be interested to see the McEarning statement a couple quarters from now. Let’s see if anyone on the monied end of all this suffers.

Is this the real goal? Damaging these companies?

No. The real goal is as it has always been, that a person working a third of their day for an employer deserves a living wage. Everything else, profits, share price, dividends, etc. falls in line behind that.

 

[Don2 (Don1 Revised)]

Why do you think that consequences is necessarily unintended?

Are you alleging that Goodhair and the legislature intended this bill to cause a decrease in fast food employment?

Why are you bringing Trump into this?

 

[thebeave]

At 3.7% unemployment, there are other jobs to be had.

That unemployment rate is unlikely to be permanent.

That's a hell of a statement.

I’ll also be interested to see the McEarning statement a couple quarters from now. Let’s see if anyone on the monied end of all this suffers.

Is this the real goal? Damaging these companies?

No. The real goal is as it has always been, that a person working a third of their day for an employer deserves a living wage. Everything else, profits, share price, dividends, etc. falls in line behind that.

While in theory, giving everyone a living wage sounds like a great idea, how would you implement it in practice? For example, in the following link:

New California law raises minimum wage for fast food workers to $20 per hour, among nation’s highest

“That was a tectonic plate that had to be moved,” Newsom said, referring to what he said were the more than 100 hours of negotiations it took to reach an agreement on the bills in the final weeks of the state legislative session.

Mary Kay Henry, president of the Service Employees International Union International, said the law capped 10 years of work — including 450 strikes across the state in the past two years.

The moment was almost too much for Anneisha Williams, who held back tears as she spoke during a news conference just before Newsom signed the bill. Williams, a mother of six — seven if you count her beloved dog — works at a Jack in the Box restaurant in Inglewood.

“They’ve been with me on the picket line, and they’ve been marching with me as well,” Williams said of her children. “This is for them.”

Should Jack in the Box pay a living wage to a woman with six kids and a dog? It would require a huge payout from them to give her a living wage in California. And how much does JitB give to her coworkers? For example, a young single guy sharing an apartment with 2 other guys? Is it fair for her to get, say, $120,000/yr to support her family and give him only $40,000/yr to support just himself even though they may have similar experience and work histories? And why should JitB (or any employer for that matter) be obligated to, basically support someone (and their kids) who obviously made some very poor choices in life?

 

[ZiprHead]