Consequence of $20 minimum wage for fast food workers?

[ZiprHead]

And the US has been using machine sorting for decades too.

not according to google

Link?

 

[Don2 (Don1 Revised)]

Here are some interesting statistics that could be relevant at least in some ways to the op post:

This is how much singles need to live comfortably in every state

A new survey outlines how much someone needs to earn as a “living wage” to live comfortably in all 50 U.S. states.

thehill.com

It is interesting that California is so expensive to live. 3rd most expensive in the country. Compare to where Derec lives--Georgia--California is on its way to being twice as expensive to live.

Here is a section from the article:

The personal finance website GoBankingRates.com looked at data from the U.S. Bureau of Labor Statistics and research by the state of Missouri to determine how much single people, not couples or families, pay in necessities each year. Then, those amounts were doubled to factor in discretionary spending and savings.

States that require the highest living wage for individuals are Hawaii ($112,411) followed by Massachusetts ($87,909) and then California ($80,013).

Let's consider for a moment that we will not accept the estimate that one can double necessity cost to establish a living wage of discretionary spending, savings and retirement etc. Let's just use the original numbers that ONLY include necessities. No retirement. No savings for emergencies. No family vacations. ETC. Doing so, gives about $40K needed to live in California to spend on necessities for a single person.

Let's try to convert that to an estimate of hourly wage. $40K divided by 40 hours in a work week for a full time job is $1K. $1K divided by 52 work weeks in a year is about $19.23 per hour to achieve $40K wage for a year.

 

[Don2 (Don1 Revised)]

Here's another interesting article:

McDonald's CEO warns California minimum wage hike will hurt franchisees

McDonald's is warning that California's minimum wage hike to $20 an hour will have an impact on franchisees as they deal with higher wages.

www.foxbusiness.com

Back-of-napkin calculations:

According to the Internet, the average McD's franchise owner makes a 10% profit. They may also have a standard % they give to the McDonald's global corp.

According to a restaurant manager where I used to work, in the industry there are some buckets: labor, rent + utilities, materials that are about even in cost with remaining being profit. If we assume that McD's isn't that different, then labor might be about 33% of sales. But labor may include, not just wages, but health benefits, bonuses, other benefits etc. The Internet has some other figures like 17% and 20% which are in line with separating pure wage from other labor costs. So, I will use the larger of the two: 20% for wage cost.

The current min wage in California is $15.50. Moving it to $20/hour would be about a 30% increase. So, this would be 30% x 20% ~= 6% of revenue which would cut into the 10% profit. (This is also assuming the worst-case that all employees only get the exact minimum wage, no one gets more than that).

Therefore, they could simply increase all costs across the board by 6% in order to pay for the wage increase if their goal is to maintain their profits.

From the article:

"Certainly, there’s going to be some element of that that does need to be worked through with higher pricing," he said. "There’s also going to be things that I know the franchisees and our teams there are going to be looking at around productivity. How all of that plays out, there will certainly be a hit in the short term to franchisee cash flow in California; tough to know exactly what that hit will be because of some of the mitigation efforts."

If we assume they have meaningful ideas to implement to improve productivity, then perhaps those changes would be on-par with price increases. So, perhaps they could just increase price by 3% and then also implement productivity changes, whatever that means.

 

[Derec]

If we assume they have meaningful ideas to implement to improve productivity, then perhaps those changes would be on-par with price increases. So, perhaps they could just increase price by 3% and then also implement productivity changes, whatever that means.

It presumably means more self-service kiosks and fewer employees.

 

[Don2 (Don1 Revised)]

If we assume they have meaningful ideas to implement to improve productivity, then perhaps those changes would be on-par with price increases. So, perhaps they could just increase price by 3% and then also implement productivity changes, whatever that means.

It presumably means more self-service kiosks and fewer employees.

Are you sure they won't just bump up the prices by 10% and then tell everyone they had to do it because of the wage increase? You know, like our corporate overlords do with gas prices. It seems a lot easier than running around trying to get one of these kiosks and figure out the instructions on configuring it...

 

[bilby]

Did automating mail sorting cause unemployment in the USSR? It seems like there should have still been open jobs handing out free toilet paper.

When the USSR collapsed, the five ruble banknote became free toilet paper.

 

[Derec]

It is interesting that California is so expensive to live. 3rd most expensive in the country. Compare to where Derec lives--Georgia--California is on its way to being twice as expensive to live.

Georgia is not a monolith any more than California is. There are more and less expensive areas of all states. Where I live - Atlanta - is more expensive to live than much of California, despite state averages.
Upthread, all the way in post #15, I posted a map showing the vast differences in rent prices in different parts of California.

Here is a section from the article:

I wonder what basket they used. From the article:

According to the California Association of Realtors, the median price of a single-family home in California was $832,340 in August. Condominiums and townhomes average $645,000. Median rent is $2,912 per month.

Do they use some average of these? Or do they use the types/sizes of housing single people actually use? Few single people with no kids will buy a single family house or rent a 3 bedroom apartment. So going with median housing costs is not right if your goal is to estimate cost of living for single adults.

Let's try to convert that to an estimate of hourly wage. $40K divided by 40 hours in a work week for a full time job is $1K. $1K divided by 52 work weeks in a year is about $19.23 per hour to achieve $40K wage for a year.

Again, not every part of California is equally expensive.
But even if you think $20/h minimum wage is necessary statewide, why are fast food workers so special that they this special treatment by Sacramento?
I have yet to see a coherent defense of that part of the law.

 

[Derec]

Are you sure they won't just bump up the prices by 10% and then tell everyone they had to do it because of the wage increase? You know, like our corporate overlords do with gas prices. It seems a lot easier than running around trying to get one of these kiosks and figure out the instructions on configuring it...

Automation is more of a medium to long term response, but it is happening. I see these kiosks more and more in Atlanta as well. Must be worth it for the companies, even if it makes the experience more annoying for the customers.

 

[Derec]

Did automating mail sorting cause unemployment in the USSR? It seems like there should have still been open jobs handing out free toilet paper.

They still kept the employees. They just pretended to work, and the state pretended to pay them.

 

[Don2 (Don1 Revised)]

It is interesting that California is so expensive to live. 3rd most expensive in the country. Compare to where Derec lives--Georgia--California is on its way to being twice as expensive to live.

Georgia is not a monolith any more than California is. There are more and less expensive areas of all states. Where I live - Atlanta - is more expensive to live than much of California, despite state averages.
Upthread, all the way in post #15, I posted a map showing the vast differences in rent prices in different parts of California.

Here is a section from the article:

I wonder what basket they used. From the article:

According to the California Association of Realtors, the median price of a single-family home in California was $832,340 in August. Condominiums and townhomes average $645,000. Median rent is $2,912 per month.

Do they use some average of these? Or do they use the types/sizes of housing single people actually use? Few single people with no kids will buy a single family house or rent a 3 bedroom apartment. So going with median housing costs is not right if your goal is to estimate cost of living for single adults.

Let's try to convert that to an estimate of hourly wage. $40K divided by 40 hours in a work week for a full time job is $1K. $1K divided by 52 work weeks in a year is about $19.23 per hour to achieve $40K wage for a year.

Again, not every part of California is equally expensive.
But even if you think $20/h minimum wage is necessary statewide, why are fast food workers so special that they this special treatment by Sacramento?
I have yet to see a coherent defense of that part of the law.

I did not know the answer and so I had to google. If you ask more questions from the answer I give, I'd have to google again. Not sure why you are asking me...

The legislation is part of a compromise. In exchange for higher pay, labor unions dropped their attempt to make fast food corporations “liable for the misdeeds of their independent franchise operators in California.” The industry, for its part, pulled a ballot referendum asking voters to repeal a law aimed at improving wages and working conditions.

Newsom said that the negotiations took over 100 hours in the final weeks of the state legislative session.

California Raises Fast Food Worker Wages to $20 an Hour

The law is part of a larger compromise between labor unions and the industry.

www.convenience.org

 

[Don2 (Don1 Revised)]

Are you sure they won't just bump up the prices by 10% and then tell everyone they had to do it because of the wage increase? You know, like our corporate overlords do with gas prices. It seems a lot easier than running around trying to get one of these kiosks and figure out the instructions on configuring it...

Automation is more of a medium to long term response, but it is happening. I see these kiosks more and more in Atlanta as well. Must be worth it for the companies, even if it makes the experience more annoying for the customers.

They will probably also add commercials that blast at you while you are doing it...or while you are waiting like with gas at the pump. Maybe they will do this at the urinals, too.

 

[Derec]

I don't think that things are being presupposed. There is some context, though. I would say that it is common for Derec to do what is called "punching down" at a class of people.

BS.

To use phrases and insults directed at those classes of people. The classes of people go beyond ideological identity, i.e. they are often protected classes.

Burger flippers are a protected class now?

Full stop. The phrase "burger flipping" is a recognized popularized insult. It's a derogatory term. Even if not, it's a minimization of the scope and effort put forth by a cook in the fast food industry.

Fast food items are intended to be quickly and easily cooked and assembled by employees that can start working after little training.

It's not a flattering term, but I do think it accurately captures the low skill level necessary for those jobs. That's why it is often teenagers working these jobs as their first job while still in high school.
There is nothing wrong per se with that, it is just reality of that work. If you make that employment more scarce due to artificially inflating the price of labor, you will reduce opportunities for those workers.

I had posted a link earlier in the thread to this and so it is an established fact that people know the phrase is perceived this way. Now, based on Derec's pattern of posts "punching down" it is reasonable to infer he is likely punching down again at those persons because of the knowledge this is an insult.

So your entire argument is based on your antipathy toward me and this notion that I "punch down".

The sentence appears not to be a robotic literal thing as you are interpreting it, but more an emotional expression because of the minimization of occupations. It's like saying, "Pfft. Burger Flipping. $20/hr?! *roll eyes*"

But Sacramento is doing the opposite. It thinks fast food workers deserve a higher minimum wage than other low skilled jobs. Why?

First, I think that these things could be worth a lot of discussion. Second, I think that attaching them to Derec's sentence or silence is a distraction and counterproductive at best. Derec could be silent for a number of reasons we do not know. He's human like all of us and we ought not assume that he is in the middle of a debate and that all silence on something means he accepts it because he hasn't refuted it. Perhaps, he is very busy, perhaps he is letting you argue for him, or perhaps he began to realize his ideas are not as perfect as he thought and doesn't know how to respond.

It is chiefly a matter of too many threads, too few time. Especially when threads generate many responses it is daunting even to start tackling the backlog.
As far as Pasadena, that is apparently what the market bears in that area. If it only bears $16 in a lower cost town like Bakersfield or something, then that's what they should be paid.

I am not reading into these questions a lot because the foundation for your question is not aligned with (a) context of Derec's posts nor (b) the phrase of "burger flippers" etc being a punch-down insult. It would probably be an interesting exercise to include those two things in the hypothetical question(s).

I do not think it is a "punch down insult". It is a descriptive term, a synecdoche, for the job.

I will also repeat the point that I think deserves greater focus--Derec's sentence and reaction to it is a distraction. There are some things that would be interesting for me to read and lurk in the thread. On a personal note, I have had some problems with "launching" my older son out into the world. One issue he is having right now is his wages are really not a lot but he also is in a trade. It's not considered unskilled work but it's also not extremely highly skilled. In any case, his pay isn't great and we don't live in California with prices THAT high but things are still very expensive, like healthcare.

If he is not making much, healthcare is heavily subsidized via Obamacare. Also, it is normal for wages to be lower when one is first starting out and has little experience.

There's also, of course, an issue of revenue vs wage. How much is my son, for example contributing to revenue each hour vs how much he can make? Then, what about twits like Elon Musk or even 23andme CEO? Do they really deserve their pay?

What trade is he in? In many trades, he could strike on his own, but then he has the burden of all the costs of running a business and also assumes the risk of failure. On the flipside, there is a much higher earning potential too vs. working for a company where he is shielded from all that.

 

[ZiprHead]

And the US has been using machine sorting for decades too.

Not according to Men in Black.

Awww, barbos. Did you get caught with your pants down and had to edit after the fact?

 

[barbos]

Awww, barbos. Did you get caught with your pants down and had to edit after the fact?

No, USSR has had automatic system probably since 50s, whereas you since 1982. And we don't know how reliable it was.
I personally doubt it was that reliable.

 

[ZiprHead]

Fast food items are intended to be quickly and easily cooked and assembled by employees that can start working after little training.

What makes you think there is little training?

This is a McDonald's burger oven, cooking numerous differant meals at the same time.

After the burgers are cooked, they then have to be assembled into a sandwich and packaged for sale. Doing so many different orders, all at the same time, standing on your feet all day long..

Fries are still made the traditional and dangerous way, in deep fryers. Burns are not an uncommon occurrence. You get burned you have to continue working.

Making possibly thousands of dollars of meals every hour.

Strange you think a job you've never done and know little about is an easy job. I'd say sitting in a nice comfy office chair in an air conditioned office writing code is a far easier job

 

[ZiprHead]

If we assume they have meaningful ideas to implement to improve productivity, then perhaps those changes would be on-par with price increases. So, perhaps they could just increase price by 3% and then also implement productivity changes, whatever that means.

It presumably means more self-service kiosks and fewer employees.

That would happen no matter the wage.

 

[ZiprHead]

Are you sure they won't just bump up the prices by 10% and then tell everyone they had to do it because of the wage increase? You know, like our corporate overlords do with gas prices. It seems a lot easier than running around trying to get one of these kiosks and figure out the instructions on configuring it...

Automation is more of a medium to long term response, but it is happening. I see these kiosks more and more in Atlanta as well. Must be worth it for the companies, even if it makes the experience more annoying for the customers.

Has the minimum wage in Atlanta increased so you can blame the kiosk use on that?

 

[bilby]

You get burned you have to continue working.

Why American workers haven't risen up and destroyed their oppressors continues to baffle me.

Any Australian workplace that tried to tell workers that they must continue working if they get a workplace injury, would be in serious legal trouble.

 

[ZiprHead]

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.

If forever is 2009.

Russia's first automated regional sorting center opened in Podolsk, near Moscow in late 2009, using equipment of Italian company Elsag Datamat, SpA. In June 2011 another center was opened, in Saint Petersburg, which serves the Leningrad, Novgorod and Pskov Oblasts.[38

 Russian Post

First Automated Post Office in the U.S. Issue

postalmuseum.si.edu

On October 20, 1960, the Post Office Department placed into service a new mail processing facility at Providence, Rhode Island, and widely promoted it as "the first automated post office in the United States." Intelex, a subsidiary of the International Telephone & Telegraph conglomerate, built the thirteen-acre facility under contract and turned it over to the Post Office Department ready to operate. It incorporated the first automatic, high-speed sorting, facing, and cancelling machines as well as three miles of conveyor belts that moved mail between processing areas within the plant and to the loading docks for transport. This stamp, which depicts an architect's rendering of the new facility, was the first US issue that directly celebrated the Post Office Department.

 

[barbos]

Burger flippers are a protected class now?

The sad reality is, they probably should be. Because it's cheaper to occupy some people with something than to let them be unemployed.