Ready for the $9 Big Mac, for real?

[[size/HUGE] fixed [/size]]

The market sets prices, not some board of directors. I can see them trying to cut back the workforce, but as you point out the board's job is to increase profit margins so they are already trying to cut staff. Wages will not change that goal.

Either way, I think paying kids a "living wage" is a dumb idea. For one thing, it will disincetivize them from going to school or otherwise gaining higher skills. $15/hr will trap a lot of people in poverty.

The funny thing is, by pushing the minimum wage to $15, these people are going to lose their jobs. Mcds in Europe has already begun replacing order takers with touch screens. And they have gotten rid of some staff with robots already. If you double the cost of labor, it will incentivize McDonalds to invest in more automation. Hell, I'd prefer a touchscreen with automated food making over many of these order takers. My food will be cleaner and I know it will be made right and consistent. At least I'd know my order was input correctly. Hopefully at $15 an hour you would get more qualified workers.

https://www.cnet.com/news/mcdonalds-hires-7000-touch-screen-cashiers/
https://www.zerohedge.com/news/2014...t-minimum-wage-crushing-burger-flipping-robot

let them automate.

 

[The Blue Elephant]

https://www.dailykos.com/story/2012...alk-about-the-bottom-50-percent-for-a-minute#

"Between 1989 and 2010, the top 1 percent of the population went from holding 30.1 percent of the wealth to 34.5 percent, while the bottom 50 percent went from having 3 percent of the wealth to having just 1.1 percent. That's right: In 2010, 50 percent of Americans had 1.1 percent of the total net worth (PDF), according to the Congressional Research Service. The share of wealth held by the next 40 percent of people, up to the 90th percentile, had also dropped, from 29.9 percent to 24.3 percent. Put another way (and it's stunning however you look at it), 10 percent of people have 74.5 percent of the wealth."

Every year the rich get richer. Why not take some of that money and give it to the less fortunate? I think one way to do it is to increase the minimum wage.

 

[[size/HUGE] boobs [/size]]

I have question. What happen to tax credit for my comrades when they get big raise at fast food job? I do not trust democrats they are always angling for paying poor very little while masquerading like big time hero. I dont blame them because immigrant from south are very stupid in these things. I was stupid when I first come here.

 

[Hantlers]

Doesn't In and Out pay their employees much more than minimum wage?

Working at In-N-Out is much more difficult than working at McDonalds, and they have a much better product. 75% of the people that work at McDonalds couldn't work at In-N-Out.

 

[Hantlers]

let them automate.

Then we have more unskilled workers without jobs, more welfare, more people not making any money, etc etc…

One of the downsides to being innovative and successful, and yes, even most of the people on welfare in America are successful compared to their peers around the world, is that we have less work for people to do…and then those people without work except the ones with work to support them. I'm fine with raising wages (to a point), but this whole take from the rich and give to the poor thing…it's a bad idea that eventually (many years) makes it easier to go to a system where everybody gets an equal amount of everything no matter what they do. Obviously I'm being a little extreme, but that's what that idea will lead to.

 

[LogGrad98]

In my experiences in UTC, the small business restaurant owners and franchisees pay much higher wages than the corporate owned chain stores. I find no validity in the argument that McDonalds will have to raise prices because they cannot afford to pay workers well. Raising minimum wage will affect their bottom line instead of the prices that are already set by the market. Their stock price has tripled the S&P500 gains over the last decade while paying healthy dividends. I think we can stop worrying about and patronizing Poor Guy Ronald.

I have no idea who you think is "worrying" about Ronald. It is merely a fact of business. You cannot make a sweeping change this big without repercussions. One of which would likely be higher prices as they try to maintain profits and margins. In fact you may see a fundamental shift to a higher-scale menu of sorts to justify higher prices to help maintain profits with declining revenue. It is a dance every business dances. One difference in small businesses is they have only the owners to answer to. In McDonald's case, being public, they have several million "owners" to answer to, and the last thing they want is a dip in stock value, so they will do what it takes to maintain it, whether that be hiring fewer workers, reworking their model, or raising prices, or a combination. Fact is you would see a change, maybe a drastic one. Funny with your economic knowledge you can't (or won't?) recognize the impact.

 

[LogGrad98]

Working at In-N-Out is much more difficult than working at McDonalds, and they have a much better product. 75% of the people that work at McDonalds couldn't work at In-N-Out.

That is as subjective as it could possibly be. I do not like in-n-out at all really. I tolerate it as it is a cheaper alternative to feed a family of 5 a decent fast-good meal. I would MUCH rather have a Big Mac or a filet-o-fish than an in-n-out burger, and in-n-outs fries are just short of pig feed while McDonald's fries are just short of nirvana. It is all in the mouth of the beholder.

 

[LogGrad98]

The funny thing is, by pushing the minimum wage to $15, these people are going to lose their jobs. Mcds in Europe has already begun replacing order takers with touch screens. And they have gotten rid of some staff with robots already. If you double the cost of labor, it will incentivize McDonalds to invest in more automation. Hell, I'd prefer a touchscreen with automated food making over many of these order takers. My food will be cleaner and I know it will be made right and consistent. At least I'd know my order was input correctly. Hopefully at $15 an hour you would get more qualified workers.

https://www.cnet.com/news/mcdonalds-hires-7000-touch-screen-cashiers/
https://www.zerohedge.com/news/2014...t-minimum-wage-crushing-burger-flipping-robot

We found out the difference here with a recent fiasco at McDonald's. My wife went through the drive-thru and ordered a bunch of stuff for our family. She asked for extra pickles on the burgers since we all like them that way. What we found when we opened the packaging was shocking actually. One big mac had no meat, about a full cup of mac sauce (not exagerating) and maybe 50 pickled smashed between the bread. One quarter pounder also had no meat and had the little cardboard box literally filled with pickles against smashed between the bread. Every sandwich had some variation on this theme (we had a couple big macs, a quarter pounder, a filet-o-fish with another full cup of tarter sauce, and maybe 6 dollar cheeseburgers). I took the entire mess back and complained and they refunded our money and replaced the food (I would not have taken it if the layout had not allowed me to watch it being made) and offered us coupons for future visits, but who knows what the food will be like then as well. We won't go back to that location and gave the coupons away.

I doubt a disgruntled robot would make food like that.

 

[The Blue Elephant]

And that's the Elephant in the room. Some of the so called brightest minds in the world are selling everybody down the river while pretending were all going through a 'Third Wave' job transition phase where everybody is going to be Iphone App developers 10-20 years down the world. There's nothing there. It's a black hole masked by massive amounts of debt and funny money for the time being.

Anyone seen the movie Metropolis? I had to watch it for an elective film class. It is a black and white silent film made in 1927. A central theme to that movie is robots taking over all the jobs and people leaving out the poor. People have feared this **** since even then.

 

[One Brow]

How would/could they not increase prices?

Prices would rise, but they would not treble, nor even come close to doubling.

 

[LogGrad98]

lol

What kind of "skills" do you think the average factory worker has had (if you take some kind of average over the past 400 years)? Most of what defines this kind of work is playing a simple role in a much larger assemblage of production. I'd even say that fast food establishments resemble the factory more than any other institution that is ubiquitous in our lives.

Which brings me to my point. What sort of entitlements have factory workers felt over the generations? How did their skills justify these entitlements (most of whom were very replaceable)?

This all comes down to a fair share of profits, plain and simple. These fast food establishments aren't pioneers of a new industry -- and, therefore, in need of coddling/protectionisms so that their insights can fully catalyze new economic growth. Make them pay.

Off the point slightly: these establishments are extremely parasitic in terms of how they acquire their meat and produce. Rainforest beef, etc., you've heard the arguments. They run afoul of the true costs of production as much as any basic industry in the world... right up there with mining and oil. Let's at least make them pay their employees.

Having hired and fired my fair share of factory and warehouse workers over the past 20 years I can tell you that the skillset is definitely higher than most people give credit for. This comment would only come from someone who has never done that kind of work before, or had very limited experience with it. I am not trying to say that everyone is highly skilled craftsmen, but to make a blanket statement that it requires no skill at all is not accurate.

 

[One Brow]

I am not trying to say that everyone is highly skilled craftsmen, but to make a blanket statement that it requires no skill at all is not accurate.

It requires some talent, as well. A temp agency found me unsuitable for factory jobs, because I was far slow at putting some nuts on some bolts in their interview process.

 

[Stoked]

Prices would rise, but they would not treble, nor even come close to doubling.

Based on what? Keep in mind if this minimum wage ****s then all the other fast food, and other minimum wages business, prices are going up as well. How much of an increase are you willing to stomach? An extra $2 on every combo meal? $3?

So I guess you agree with my earlier numbers?

 

[LogGrad98]

Prices would rise, but they would not treble, nor even come close to doubling.

I'm not sure you can say that out of hand. It depends on many factors. I think you can say it is highly unlikely they would double, and less likely they would triple or come anywhere near that, but if you double the cost of your entire labor pool, which for companies like this is the single largest variable expense and often higher than any fixed costs, it is not a huge stretch to see prices doubling or getting close to that. You will see a combination of price hikes and layoffs initially. Which sticks depends on what model the company chooses to go after for the long-haul.

 

[Willie]

Then we have more unskilled workers without jobs, more welfare, more people not making any money, etc etc…

One of the downsides to being innovative and successful, and yes, even most of the people on welfare in America are successful compared to their peers around the world, is that we have less work for people to do…and then those people without work except the ones with work to support them. I'm fine with raising wages (to a point), but this whole take from the rich and give to the poor thing…it's a bad idea that eventually (many years) makes it easier to go to a system where everybody gets an equal amount of everything no matter what they do. Obviously I'm being a little extreme, but that's what that idea will lead to.

A little extreme?

Ideas, enacted, never have linear causalities/histories like you're suggesting. You're being too abstract to be real.... particularly when the balance of power, in this particular case, is moving in the opposite direction.

 

[franklin]

I have no idea who you think is "worrying" about Ronald. It is merely a fact of business. You cannot make a sweeping change this big without repercussions. One of which would likely be higher prices as they try to maintain profits and margins. In fact you may see a fundamental shift to a higher-scale menu of sorts to justify higher prices to help maintain profits with declining revenue. It is a dance every business dances. One difference in small businesses is they have only the owners to answer to. In McDonald's case, being public, they have several million "owners" to answer to, and the last thing they want is a dip in stock value, so they will do what it takes to maintain it, whether that be hiring fewer workers, reworking their model, or raising prices, or a combination. Fact is you would see a change, maybe a drastic one. Funny with your economic knowledge you can't (or won't?) recognize the impact.

If McDonald's' board can raise prices then why aren't they already doing so? Prices are not set inside a board room.

Estimates have 500,000+ people working for McDonalds (simple google search). Let us say that 350,000 of them are at minimum wage and that they will get an increase of $1.75 an hour (average over 3.50k employees) under this new law. That is 350,000 x 1.75 = $612,500 per hour in increased wages.

Let us say that they work an average of 32 hours a week. That is 612,500 x 32 = 19,600,000.00 a week in pay increases. A year is 52 x 19,600,000 = 1,019,200,000 in wage increases.

In 2013 McDonald's profit (according to the Huff Post) was 1.5 billion. So by granting this McDonalds has reduced their profits by 66%. That is devestating to their bottom line and shareholders. Right?

How would/could they not increase prices? Not trying to call anyone out , as I do not have enough knowledge of the economy or finances to do so, but genuinely lost as to how it doesn't land on the customer. Is my math off?

Profit last year was closer to $10 billion, not $1.5. That's a back of the napkin calc but it's close enough for your scenario.

 

[Stoked]

If McDonald's' board can raise prices then why aren't they already doing so? Prices are not set inside a board room.




Profit last year was closer to $10 billion, not $1.5. That's a back of the napkin calc but it's close enough for your scenario.

So the basic figures I got were off to begin with. Well that would certainly change the level of impact that raising the minimum wage would have. That would also decrease any rise in prices I would think.

Also raising prices right now, which they can do, would be foolish. It would be foolish as their competition would not because they have no reason to. But is increasing everyones personel overhead forces them to then they all will. Granted that competition will lessen how much they do ina desire to remain competative.

But McDonalds raising them now v. raising them in this scenario is a bad example as the factors and market determining that change are different.

 

[LogGrad98]

If McDonald's' board can raise prices then why aren't they already doing so? Prices are not set inside a board room.

Prices =/= profit.

Come on frank, you know better than that. Don't play naive.

 

[franklin]

I have question. What happen to tax credit for my comrades when they get big raise at fast food job? I do not trust democrats they are always angling for paying poor very little while masquerading like big time hero. I dont blame them because immigrant from south are very stupid in these things. I was stupid when I first come here.

That's the odd part of the whole debate. We already set a much higher minimum wage through tax policy, and it would be easier to raise work subsidies than it would to require an outlandish minimum wage.

I thought Obamacare was a pretty large steak to throw to our poor ... why don't we let that settle in and then reassess where we are?

Working at In-N-Out is much more difficult than working at McDonalds, and they have a much better product. 75% of the people that work at McDonalds couldn't work at In-N-Out.

Dat In-N-Out burger custom engineered burger design specs doe.

 

[One Brow]

Based on what? Keep in mind if this minimum wage ****s then all the other fast food, and other minimum wages business, prices are going up as well. How much of an increase are you willing to stomach? An extra $2 on every combo meal? $3?

So I guess you agree with my earlier numbers?

I have nothing to dispute those numbers with, and I already pulled my own calculation out of my rear (the increase from $3 to $4.20 on the first page), which I think covers the change in revenue you referred to.