AS DEFICIT EXPLODES, GOP DEMANDS EMERGENCY TAX CUT FOR THE RICH

[skepticalbip]

It looks like McDonald's is taking the lead in resolving the issue of low wages for its employees. They are automating the drive-thru and there is a McDonald's restaurant in Phoenix, Arizona that is going completely robotic. Apparently they will eventually no longer paying those 'slave wages' and will only need a couple employees at each franchise, a robot tech and someone to refill the bins holding the food.

 

[KeepTalking]

It looks like McDonald's is taking the lead in resolving the issue of low wages for its employees. They are automating the drive-thru and there is a McDonald's restaurant in Phoenix, Arizona that is going completely robotic. Apparently they will eventually no longer paying those 'slave wages' and will only need a couple employees at each franchise, a robot tech and someone to refill the bins holding the food.

I agree, soon UBI will be the only reasonable solution.

 

[skepticalbip]

or that I claimed that fast food restaurants have the same margin as non chain restaurants.

Here is where I point out that I never said that you did. In fact, I said just the opposite, that you were comparing apples (fast food restaurant chains with huge margins) to oranges (restaurants in the small business sector).

Corporate McDonald's is not a fast food restaurant. It does not hire fry cooks, etc. It is a business that sells franchises and it has huge profits. Each franchise is an independent small business sector restaurant that just 'buys' the name McDonald's and agrees to make the meals as specified under the franchise. Those franchises do not make the huge profits that the corporate McDonald's does.

 

[Loren Pechtel]

I'd need to see the figures.

Here's some figures that seem pretty relevant, but Harry, Loren, and the others on the "pay them shit wages" side of the argument won't be referencing this any time soon:

https://www.macrotrends.net/stocks/charts/MCD/mcdonalds/gross-profit

McDonald's annual/quarterly gross profit history and growth rate from 2006 to 2019. Gross profit can be defined as the profit a company makes after deducting the variable costs directly associated with making and selling its products or providing its services.
McDonald's gross profit for the quarter ending December 31, 2019 was $2.846B, a 5.54% increase year-over-year.
McDonald's gross profit for the twelve months ending December 31, 2019 was $11.115B, a 3.05% increase year-over-year.
McDonald's annual gross profit for 2019 was $11.115B, a 3.05% increase from 2018.
McDonald's annual gross profit for 2018 was $10.786B, a 1.56% increase from 2017.
McDonald's annual gross profit for 2017 was $10.621B, a 4.08% increase from 2016.

Yeah, they are barely getting by.

Note that you're using gross profit, that's not a good yardstick as it excludes plenty of costs. Cutting those numbers by 40% gets you much closer to the truth. On a per employee basis that's about $3k per employee they are making.

 

[DBT]

Why would anyone buy into a franchise if it was not expected to be profitable? Are these franchises selling lemons by using false market research and demographics?

 

[Loren Pechtel]

These wage vs profit arguments end up mostly circular, imo. They never seem to get into the crux of the argument, which is - why should a business pay more when they're able to find a reasonable amount of employees to agree to the conditions of employment.

That might sound like a simple and obvious question, but when you get into it it's extremely complex, and really at the heart of the issue. My answer would be that a minimum wage should go up when it's empirically too low for the strength of businesses it provides. The question then is how do we know when it's too low.

The original idea of minimum wage is that it's the minimum you need to live on assuming you're working 40 hr/wk. It's what the left keeps pretending is "living wage".

The real problem is not minimum wage, the real problem is so many jobs are part time. Part time jobs are good for those in school but other than that they're bad for the economy. Government should be putting it's thumb on the scale a bit towards full time work rather than this obsession with minimum wage.

 

[Loren Pechtel]

or that I claimed that fast food restaurants have the same margin as non chain restaurants.

Here is where I point out that I never said that you did. In fact, I said just the opposite, that you were comparing apples (fast food restaurant chains with huge margins) to oranges (restaurants in the small business sector).

Corporate McDonald's is not a fast food restaurant. It does not hire fry cooks, etc. It is a business that sells franchises and it has huge profits. Each franchise is an independent small business sector restaurant that just 'buys' the name McDonald's and agrees to make the meals as specified under the franchise. Those franchises do not make the huge profits that the corporate McDonald's does.

A lot of the stores are owned directly.

 

[skepticalbip]

Why would anyone buy into a franchise if it was not expected to be profitable?

That is a silly strawman. People buy a franchise because it is expected to be profitable.

Are these franchises selling lemons by using false market research and demographics?

No. They are selling a name that is recognized by potential customers... a ready made clientele. They are also selling the solution to a lot of headaches that make most independent restaurants fail like advertising, inventory supply chain, marketing research, etc.

 

[ZiprHead]

or that I claimed that fast food restaurants have the same margin as non chain restaurants.

Here is where I point out that I never said that you did. In fact, I said just the opposite, that you were comparing apples (fast food restaurant chains with huge margins) to oranges (restaurants in the small business sector).

Corporate McDonald's is not a fast food restaurant. It does not hire fry cooks, etc. It is a business that sells franchises and it has huge profits. Each franchise is an independent small business sector restaurant that just 'buys' the name McDonald's and agrees to make the meals as specified under the franchise. Those franchises do not make the huge profits that the corporate McDonald's does.

Sorry but there are many corporate owned McDonald's restaurants. 12% of them are corporate owned.

https://www.fool.com/investing/general/2016/04/03/what-percentage-of-mcdonalds-restaurants-are-owned.aspx

 

[skepticalbip]

Corporate McDonald's is not a fast food restaurant. It does not hire fry cooks, etc. It is a business that sells franchises and it has huge profits. Each franchise is an independent small business sector restaurant that just 'buys' the name McDonald's and agrees to make the meals as specified under the franchise. Those franchises do not make the huge profits that the corporate McDonald's does.

Sorry but there are many corporate owned McDonald's restaurants. 12% of them are corporate owned.

https://www.fool.com/investing/general/2016/04/03/what-percentage-of-mcdonalds-restaurants-are-owned.aspx

So you agree that if you are driving through the 'hamburger alley' in your home town and see a McDonald's and your blood pressure rises at the thought of the salary of the employees, that there is almost 90% chance that it is a privately owned small business?

 

[ZiprHead]

Corporate McDonald's is not a fast food restaurant. It does not hire fry cooks, etc. It is a business that sells franchises and it has huge profits. Each franchise is an independent small business sector restaurant that just 'buys' the name McDonald's and agrees to make the meals as specified under the franchise. Those franchises do not make the huge profits that the corporate McDonald's does.

Sorry but there are many corporate owned McDonald's restaurants. 12% of them are corporate owned.

https://www.fool.com/investing/general/2016/04/03/what-percentage-of-mcdonalds-restaurants-are-owned.aspx

So you agree that if you are driving through the 'hamburger alley' in your home town and see a McDonald's and your blood pressure rises at the thought of the salary of the employees, that there is almost 90% chance that it is a privately owned small business?

Shifting the goalposts.

 

[DBT]

Why would anyone buy into a franchise if it was not expected to be profitable?

That is a silly strawman. People buy a franchise because it is expected to be profitable.

Are these franchises selling lemons by using false market research and demographics?

No. They are selling a name that is recognized by potential customers... a ready made clientele. They are also selling the solution to a lot of headaches that make most independent restaurants fail like advertising, inventory supply chain, marketing research, etc.

You seem to have missed my point....which was that people do buy into a francise because it is likely to be profitable. Which is related to fair pay and conditions for those doing the necessary work.

 

[skepticalbip]

So you agree that if you are driving through the 'hamburger alley' in your home town and see a McDonald's and your blood pressure rises at the thought of the salary of the employees, that there is almost 90% chance that it is a privately owned small business?

Shifting the goalposts.

Not at all. Businesses are generally described by their primary business. McD's is selling and servicing franchises. I certainly don't and wouldn't refer to them as a philanthropic organization even though they have the "Ronald McDonald house" charity and contribute to other charities.

 

[ZiprHead]

So you agree that if you are driving through the 'hamburger alley' in your home town and see a McDonald's and your blood pressure rises at the thought of the salary of the employees, that there is almost 90% chance that it is a privately owned small business?

Shifting the goalposts.

Not at all. Businesses are generally described by their primary business. McD's is selling and servicing franchises. I certainly don't and wouldn't refer to them as a philanthropic organization even though they have the "Ronald McDonald house" charity and contribute to other charities.

Wondering who it was that said this. ???

Corporate McDonald's is not a fast food restaurant. It does not hire fry cooks, etc. It is a business that sells franchises and it has huge profits.

 

[skepticalbip]

Not at all. Businesses are generally described by their primary business. McD's is selling and servicing franchises. I certainly don't and wouldn't refer to them as a philanthropic organization even though they have the "Ronald McDonald house" charity and contribute to other charities.

Wondering who it was that said this. ???

Corporate McDonald's is not a fast food restaurant. It does not hire fry cooks, etc. It is a business that sells franchises and it has huge profits.

Then, I guess, by your nit-picking you would have to call McD's a philanthropic organization.

 

[ZiprHead]

Wondering who it was that said this. ???

Then, I guess, by your nit-picking you would have to call McD's a philanthropic organization.

Nope, I said nothing at all about anything like that. Just pointing out that you were wrong and now you're just being too pig-headed to admit it.

ETA: There are more than 1,400 corporate owned McDonald's restaurants in the US.

 

[Canard DuJour]

These wage vs profit arguments end up mostly circular, imo.

Well, yeah. Because wages and profits are, indeed, circular. One firm's labour costs are another's revenues. It's kinda the point.

They never seem to get into the crux of the argument, which is - why should a business pay more when they're able to find a reasonable amount of employees to agree to the conditions of employment.

See above.

That might sound like a simple and obvious question, but when you get into it it's extremely complex, and really at the heart of the issue. My answer would be that a minimum wage should go up when it's empirically too low for the strength of businesses it provides. The question then is how do we know when it's too low.

Look at productivity growth and capacity utilisation over time. Both have fallen during the neoliberal era (since Reagan/Thatcher) despite promises to the contrary.

 

[KeepTalking]

or that I claimed that fast food restaurants have the same margin as non chain restaurants.

Here is where I point out that I never said that you did. In fact, I said just the opposite, that you were comparing apples (fast food restaurant chains with huge margins) to oranges (restaurants in the small business sector).

Corporate McDonald's is not a fast food restaurant. It does not hire fry cooks, etc. It is a business that sells franchises and it has huge profits. Each franchise is an independent small business sector restaurant that just 'buys' the name McDonald's and agrees to make the meals as specified under the franchise. Those franchises do not make the huge profits that the corporate McDonald's does.

So you think that McD's corporation can make those kind of profits without their actual restaurants being profitable? They don't just "agree to make the meals as specified under the franchise", those meals must be identical from franchise to franchise, so they require them to purchase those goods from corporate. That is one way they suck the profits from the franchises. They could easily siphon less money from the franchises and require them to pay a living wage. The franchises being small business is just plain bullshit, masked by corporate shenanigans.

 

[skepticalbip]

Corporate McDonald's is not a fast food restaurant. It does not hire fry cooks, etc. It is a business that sells franchises and it has huge profits. Each franchise is an independent small business sector restaurant that just 'buys' the name McDonald's and agrees to make the meals as specified under the franchise. Those franchises do not make the huge profits that the corporate McDonald's does.

So you think that McD's corporation can make those kind of profits without their actual restaurants being profitable? They don't just "agree to make the meals as specified under the franchise", those meals must be identical from franchise to franchise, so they require them to purchase those goods from corporate. That is one way they suck the profits from the franchises. They could easily siphon less money from the franchises and require them to pay a living wage. The franchises being small business is just plain bullshit, masked by corporate shenanigans.

Wow. What a dark fantasy world you live in. But then some embrace conspiracy theories.

 

[rousseau]

These wage vs profit arguments end up mostly circular, imo. They never seem to get into the crux of the argument, which is - why should a business pay more when they're able to find a reasonable amount of employees to agree to the conditions of employment.

That might sound like a simple and obvious question, but when you get into it it's extremely complex, and really at the heart of the issue. My answer would be that a minimum wage should go up when it's empirically too low for the strength of businesses it provides. The question then is how do we know when it's too low.

The original idea of minimum wage is that it's the minimum you need to live on assuming you're working 40 hr/wk. It's what the left keeps pretending is "living wage".

The real problem is not minimum wage, the real problem is so many jobs are part time. Part time jobs are good for those in school but other than that they're bad for the economy. Government should be putting it's thumb on the scale a bit towards full time work rather than this obsession with minimum wage.

My point goes a little deeper into more of an ought question. When parents are responsible for whether their children exist, does the moral responsibility for those children's well-being fall on those parents, or the greater community? Right now we're not just seeing problems with wages, but also an excess of people and a deficit of meaningful work for them to do. In a lot of ways this mirrors a kind of cycle of any other species where there aren't enough resources to go around for the number of offspring being produced. Which raises the question of whether we as a species are even capable of transcending such a cycle, and if we could - what it would look like. IOW, if a person is born and there is no meaningful niche for them to inhabit do we support them indefinitely or put the onus on the family.

Clearly something has to be done eventually as a greater proportion of our population becomes irrelevant to the production of the necessities of life. But what that something is isn't as obvious in the short-term as people increasingly have kids despite a declining economy, and where the allocation of resources to those people can't be accomplished very easily.

So what do we do? What ought we do? What is our end goal in the action we take? Can we even set a meaningful end-goal in a world of competing groups? These are enormous questions, and not easily answerable. Probably most nations will be politically dead-locked, do nothing, and will be forced to act when things get bad.

Well, yeah. Because wages and profits are, indeed, circular. One firm's labour costs are another's revenues. It's kinda the point.


See above.

That might sound like a simple and obvious question, but when you get into it it's extremely complex, and really at the heart of the issue. My answer would be that a minimum wage should go up when it's empirically too low for the strength of businesses it provides. The question then is how do we know when it's too low.

Look at productivity growth and capacity utilisation over time. Both have fallen during the neoliberal era (since Reagan/Thatcher) despite promises to the contrary.

Not sure if I follow.