Ok. So the prices stay the same. McD's just lays off more people and brings in automation that much sooner. So it would be wonderful for the 3 people working the store that make their $15/hr. I still don't see how that benefits anyone except the 3 people they decide to keep.

8/29/2013 2:03:47 PM

^

Yep, so right now, we live in a world where the only thing that matters is capital. Not who does the work, just who owns what and we're creating a system that only rewards those people.

Is that acceptable? Are people only commodities? What are the new unemployed to do? Sell drugs like in The Wire? Form new black markets?

[Edited on August 29, 2013 at 2:08 PM. Reason : a]

8/29/2013 2:07:15 PM

^^automation software and hardware system workers are now making, high paying jobs. Skilled labor now maintains the systems. You just created, high paying jobs in america.

^We need to find a way to make the tax code favorable for employee-owned companies and give them an advantage over corporations.

8/29/2013 2:18:44 PM

I'm pretty urea CaelNCSU is trolling

8/29/2013 2:30:16 PM

McDonalds employs around 440,000 people.

Annual revenue is $ 27 Billion.

Annual profit is maybe $ 6 billion or so.

So for every employee they made about $ 60,000 revenue and $ 13,000 profit. Although I might have minced the global and US figures. These figures come out to about $9 of profit for each hour of employee's work.

8/29/2013 2:37:13 PM

^^

Nah, I just don't think there are many opportunities for entry level work. The trends I see coming are going to make the poor have a harder time. Free markets coupled with automation just enrich those that have the capital the less they have to depend on labor, "Pardon me, I can't pay you an extra $100 a week, my wife and I enjoy a bottle of Screaming Eagle". Something has to change if you want those people to have a civic obligation to society and feel like they are part of the system. You can't just fuck them harder and write them off.



[Edited on August 29, 2013 at 2:43 PM. Reason : a]

8/29/2013 2:40:57 PM

If you aren't rolling then you need to go and read my posts again.

I'm not saying that "free markets are moral, money is all that matters, blah bah bah," I'm saying, very clearly I think, that raising the wage to $15 will not help the current workers.

8/29/2013 2:47:18 PM

Someone mentioned that the government should just provide all of the basic resources and that salary should only serve as a supplement to basic needs. That is probably the best solution thus far.

8/29/2013 2:51:32 PM

^^^^

http://en.wikipedia.org/wiki/McDonald%27s#Facts_and_figures

Quote :

" McDonald's operates over 34,000 restaurants worldwide, employing more than 1.7 million people."

Profit 5.5 billion (http://money.cnn.com/magazines/fortune/fortune500/2012/snapshots/2262.html)

$5,500,000,000 / 1,700,000 employees = $3,235.29 / employee = ~$1.56 profit / employee hour assuming 52 weeks of 40 hour work weeks.



[Edited on August 29, 2013 at 2:53 PM. Reason : carat]

8/29/2013 2:52:59 PM

Quote :

"that's what concentrating on one variable, price, gets you--shit food, uninspired work, and no respect for the poor bastards doing it."

8/29/2013 3:09:58 PM

^^ Your employee number is global, but how do you know your financial data is global?

8/29/2013 3:21:52 PM

Pretty sure there is no separate financial data for non-US McDonald's. It's a US based country and they report global numbers when they report financials.

http://www.aboutmcdonalds.com/content/dam/AboutMcDonalds/Investors/Investor%202013/2012%20Annual%20Report%20Final.pdf

8/29/2013 3:25:55 PM

minimum wage is effectively a system of tax deduction and credits. knowing that, there are more effective ways to achieve the desired result. a blog i read recently explains it pretty well, so i'm not going to bother with an explanation (since it would be mostly redundant to what they wrote)

Tax Structure vs. Minimum Wage
http://www.americanteeth.org/2013/08/26/tax-structure-vs-minimum-wage/

8/29/2013 3:47:13 PM

Quote :

"If they suddenly doubled the salary for your position, you would probably find yourself out of a job since you would now be competing with much more qualified people"

I don't understand this in the context of working as unskilled labor at a fast food place. Yes, increasing the wage of unskilled workers in a fast food place to 15 or whatever would mean that a lot of people would apply for such jobs, and many of them would be more qualified, such as unemployed students or graduates.

But, if we are talking about unskilled work inside a fast food place, what do those qualifications matter? The work is still unskilled, so why would the fast food place fire its unskilled laborers to replace them with more qualified people, when those qualifications add nothing to the performance of the job? If you are uneducated and working at McD and your salary has been doubled, and I, an unemployed college graduate apply for your position, are you saying that McD would replace you with me? Why? Yes, I am educated, but would still be flipping burgers, so my college degree brings nothing to the job.

Please explain.

8/29/2013 4:08:58 PM

People who have completed college usually bring more to the table than simply having a degree. Many (not all, maybe not even most) have acquired things like discipline, the ability to problem solve, to think independently, etc. Many companies don't even care what your degree is in, just having one shows a lot and brings with it implied value regardless of the skill set required for the job.

8/29/2013 4:14:08 PM

and that's not even mentioning criminal records, etc...

8/29/2013 4:37:44 PM

I'm gonna be pissed if I can't get me a new Deluxe quarter-pounder with cheese today, goddamnit. 'Murica.

8/29/2013 5:17:33 PM

I don't understand why we're so concerned with the health of the fast food industry.

Bottom-tier fast food establishments take a significant hit while their remaining workers get better-paid. This is a win/win scenario.

8/29/2013 6:03:54 PM

And a terrible proposition for those that go from $7.25 to $0. But hey, the other are getting $15.
Double the pay, half the people...seems about how the market works in the real world and not lala feel good land.

8/29/2013 6:22:32 PM

^

Yeah I'm sure a global, billion dollar business can't figure another way to save on costs.

8/29/2013 6:25:13 PM

^ IIRC the number one and number two costs of most fast food businesses is food and labor. While there is a little wiggle room in food costs, there's more room in labor costs. At a certain point automation becomes cheaper than labor (see self check out stations).

8/29/2013 6:44:58 PM

Quote :

"And a terrible proposition for those that go from $7.25 to $0. But hey, the other are getting $15. Double the pay, half the people"

False dilemma.

a) Other industries exist
b) The economy isn't a zero-sum game between wages and employment.

I'm usually concerned about artificially-high wages hurting businesses and employees, but I couldn't care less about employment in the bottom-tier fast food industry. It's an exploitative business model, it relies on gov't subsidies at every level, and it markets shit food to poor people. Its workers would be better off in the long run if they didn't participate in it.



[Edited on August 29, 2013 at 7:00 PM. Reason : ]

8/29/2013 6:59:11 PM

i appreciate that you followed mrfrog's link, but that's not what this is

they will be replaced by people more qualified and will then have to compete with others for unskilled jobs

8/29/2013 7:28:45 PM

Quote :

"i appreciate that you followed mrfrog's link, but that's not what this is they will be replaced by people more qualified and will then have to compete with others for unskilled jobs"

Well we should recognize their argument - that our social support system is paying out because of these wages are too low.

Truly, minimum wage is technically arbitrary. There is no innate reason why it's not $1 more or less, the units are made up anyway.

Libertarians have a point that increasing minimum wage (or implementing it at all) creates a distortion and leaves people out in the cold - a point that liberals have acknowledged in the fact that minimum wage comes with a counterbalance. It's a nonsense and cruel policy without a social safety net counterbalance.

So within a balanced minimum wage policy, what is going on in the fringes? The fact that working people are on assistance shows that it was poorly construed in some sense. It implies that assistance would be needed even with no minimum wage. For sane able-bodied people too. There's something deeply disturbing about that.

Are the employers are just so loathe to hire these people that fair-market for their labor is below the decent minimum of living? Or is it that entrepreneurship is so dramatically encumbered that our market is forever under-saturated with businesses that do the hiring? Naturally I favor the latter.

I mean really, if consumer demand had any effect on wage-setting then we have the demand. Consumer demand is plenty, this is shown in corporate profits. Profits are strong because revenue is strong. That's simple. But there's no feedback.

Minimum wage wasn't supposed to result in 20 million people making within $1 of the minimum. It is supposed to push up all wages, although the distribution should certainly slope down, it shouldn't lump. If business was sufficiently liquid this would happen. It doesn't because business is not sufficiently liquid. The upside can't propagate to the workers.

[Edited on August 29, 2013 at 9:40 PM. Reason : ]

8/29/2013 9:34:50 PM

Quote :

" Profits are strong because revenue is strong. That's simple. But there's no feedback. "

Well, except that revenue really isn't strong right now. If you've followed earnings at all in the last few years it's largely been driven by businesses cutting costs and increasing efficiency. There's been very limited top line growth.

8/29/2013 10:01:43 PM

Quote :

"False dilemma. a) Other industries exist b) The economy isn't a zero-sum game between wages and employment."

Not at $15/hr with a mandatory minimum wage, they don't exist. Any other industry is going to have to pay at least that same 15/hr, so they will be making the same decisions. And any industry that was previously paying more than 15/hr is already off limits to these people, as evidenced by the fact that they are currently nowhere near those industries.

8/30/2013 12:05:42 AM

^^ both revenue and margin have increased by a good margin for McDonalds in 2011 and 2012.

https://www.google.com/finance?q=NYSE%3AMCD&fstype=ii

Surely you're right about some other businesses, and maybe the market as a whole.

8/30/2013 7:16:15 AM

Quote :

"According to the Atlantic, Mcdonald's workers in Australia make the equivalent of $14.50/hour. So I can understand why workers would want to start the negotiations around that price. http://www.theatlantic.com/business/archive/2013/08/the-magical-world-where-mcdonalds-pays-15-an-hour-its-australia/278313/"

8/30/2013 11:47:19 AM

^as has been mentioned multiple times, australia's standard of living is much higher than america's

8/30/2013 12:09:32 PM

or any of the actual responses when it was posted

8/30/2013 12:20:02 PM

Point being... it's possible.

8/30/2013 4:36:45 PM

Quote :

"^as has been mentioned multiple times, australia's standard of living is much higher than america's"

That was extremely unfortunate wording for your point.

8/30/2013 7:49:02 PM

Quote :

"Yeah I'm sure a global, billion dollar business can't figure another way to save on costs. "

What the fuck do you think McDonald's, for example, has been doing all along? They work thin margins and massive volume; particularly in the wake of the "Great Recession", it's not like they haven't done the calculus on pretty much every conceivable cost saving measure. I mean, the reason the McRib is always "limited-time only" is due to fluctuations in the price of pork.

If you double their labor costs, you had better believe that it would become cost effective to have a lot fewer employees.


Saying "they can sacrifice some corporate profits or CEO salary" isn't even slightly viable. McDonald's is a publicly traded company; it exists to maximize shareholder profit. It's not like it's owned by Joe Smith, or the Smith family, and they charitably decide that they're happy with their wealth and want to pay their employees more just for the sake of being nice. McDonald's, etc, are in a bottom-line business. Hell, they can't even be happy with preserving profits--the expectation--that's priced in to the stock shares, and demanded by the shareholders of the company's leadership--is of ever-expanding profits.

...and if McDonald's ever reaches global market saturation, or close enough to it that they can't reinvest all the profits into further business growth, then the expectation will be to increase its dividend, paying more of those profits to the shareholders.

8/30/2013 9:26:24 PM

Raleigh!!1

http://www.theatlantic.com/business/archive/2013/08/why-the-fast-food-worker-strikes-are-doomed/279179/

Quote :

"They're growing fastest among some of the richest and most-educated metros. Bridgeport, Conn., Salt Lake City, Raleigh, Chapel Hill, and Washington, D.C., are among the five areas with the most growth in food service work between 2010 and 2013."

8/30/2013 10:07:21 PM

ITT White privileged people try to talk about surviving and raising a family on minimum wage.

Also, there's this:

8/31/2013 2:33:39 AM

Let's look at this "ermagherd McD Australia pays workerz $15/hr!!1!" argument...

At current exchange rates, that would be $13.3508 American; check the value here (changes day to day): http://www.xe.com/currencyconverter/convert/?Amount=15&From=AUD&To=USD

We still, however, need to adjust for purchasing-power parity (PPP), so let's compare the GDP figures for Australia, computed using exchange rates and PPP.

The 2012 GDP for Australia in US dollars, according to the World Bank, was $1,520,608,083,022: http://data.worldbank.org/indicator/NY.GDP.MKTP.CD
The 2012 GDP for Australia in "International Dollars," each of which has the same purchasing power in each country that the US dollar has in the US (that is, GDP by PPP), was $1,011,639,399,650: http://data.worldbank.org/indicator/NY.GDP.MKTP.PP.CD/countries/order%3Dwbapi_data_value_2012%20wbapi_data_value%20wbapi_data_value-last?order=wbapi_data_value_2012%20wbapi_data_value%20wbapi_data_value-last&sort=desc&display=default

This means that a US dollar buys just under 2/3 as much in Australia as in the US, so the PPP equivalent of a McD Australia base wage in America would be about $8.88/hr; of course this can fluctuate, like when I first looked this up I saw the USD was worth about 1.04AUD rather than today's approximation of 1.12353AUD, and running the numbers would have given a PPP-equivalent US wage of about $9.60/hr.



A more robust calculation can be done with the IMF figures, in which the "International Dollar" was worth about 1.533AUD (as an aside the AUD was worth about $1.0359 on average), meaning the McD Australia base wage for 2012 was about $9.78/hr: http://www.imf.org/external/pubs/ft/weo/2013/01/weodata/weorept.aspx?sy=2012&ey=2012&ssm=1&scsm=1&scc=1&ssd=1&sic=1&ssc=1&sort=country&ds=.&br=1&pr1.x=19&pr1.y=2&c=193&s=NGDP_R%2CNGDP%2CNGDPD%2CPPPGDP%2CPPPEX&grp=0&a=

[Edited on August 31, 2013 at 4:01 AM. Reason : so that's how McDonald's Australia pays all its workers at least $15/hour

8/31/2013 3:41:45 AM

Quote :

"most of the people working the job today will no longer have a job."

as someone who makes ~$15/hr working as a paramedic in a hospital (acctually more like 14.25 since I have a progressive shift diff that just maxes out at 15 for a few hours a shift) with a B.S. in Biology...

I'd peace the fuck out in a heart beat if I could be a line cook at mcdonalds for 15 an hour. I'd beat down the door for a chance to have 1/100th the responsibility, no chance of accidently killing someone, and reasonable working hours all for the exact same pay. Fuck "the job I love" nonsense.

8/31/2013 4:38:48 AM

^This

Those idiots are going to price themselves out of a job, any way you slice it.

8/31/2013 7:47:53 AM

^^^. It is NOT 15 Australian dollars... Did you even click the link? It is usd 14.50, which has been approximated to 15 in the headline.

The link even has a link to a PDF file with actual salaries.
http://www.sdansw.org.au/wp-content/uploads/2013/05/Proposed-Agreement-Wage-Tables1.pdf

Actually, the pay is dependent on age, and for 21 year olds, it ranges from aus$ 19-22+. Not only that, but the pay increases significantly every year, and that 19-22 becomes 21-25 starting July 2016. It is all in the table.

Even 18 year olds are currently getting aus$ 13-16, and this rises to 15-18 in 2016.

That puts a significant dent in your argument, in which you anyway managed to show that the pay is still higher than in the US even in international dollars. You managed to show that the pay is 9.78 int dollars, and that's exactly what the workers in the US would be happy to settle for. Remember, their demand of 15 is an initial starting figure for negotiation, and they would gladly settle for 10.

What the heck, I was going to let you redo the calculations, but I will do them for you.

All dollar figures are in "International Dollars" (for salaries in USD, multiply given values by 1.533)

Pay in McD in Australia for:

21 year olds: 11.00 - 13.23, rising to 12.24 - 14.72 in 2016
18 year olds: 7.70 - 9.26, rising to 8.57 - 10.31 in 2016
16 year olds: 5.50 - 6.61, rising to 6.12 - 7.36 in 2016

For other ages, see table and convert.

Considering those who are career workers or starting to become career workers there, it is safe to assume that they are 20+ years old. The pay in aus in mcd is at least 11 in int dollars, so again, as I said, after starting with a demand of 15, they would be happy to settle for around 10 or 11.

So I don't know, you started off trying to debunk the higher pay, but even with your false (lower) base figures for your calculations, you still proved the point that they are getting significantly higher pay in aus, unless you think 9.78 and 7.25 are approximately equal(?). And actually, it is 11 vs. 7.25.

8/31/2013 9:16:12 AM

I guess what I was really trying to do was show just *how* to take PPP into account, and indeed it looks like McDonald's workers in Australia who are at least 21 were already making at least 18.30AUD per hour, while some teens were making less than our minimum wage in terms of purchasing power.

I'm sorry for assuming the widely-cited "$15/hr" figure was (a) precise to the cent and (b) in AUD; this figure is more significant than it looked before.

8/31/2013 9:54:36 AM

18.94. Not 18.30. See second column, which gives salaries from June. File is from may, so "current pay" is not current any more.

And that 18.94 corresponds to exactly 11 in int dollars using conversion factors you gave.

My real position regarding this issue is in the chit chat thread.

And yes, you did show how to take PPP in to account. Something I think a lot about in my daily life but never bothered to research it. Thanks, I learnt some thing here.


[Edited on August 31, 2013 at 10:27 AM. Reason : ]

8/31/2013 10:22:52 AM

Quote :

"I'd peace the fuck out in a heart beat if I could be a line cook at mcdonalds for 15 an hour. I'd beat down the door for a chance to have 1/100th the responsibility, no chance of accidently killing someone, and reasonable working hours all for the exact same pay. Fuck "the job I love" nonsense."

While I agree that this would probably hurt them, it sounds like it would unambiguously help you. But I still didn't get the feeling that you're for it.

If McDonalds seriously competes for paramedic talent, I don't think the hospital will just say "ok bye". My guess is that they kind of need workers of your skill/pay level, and they will increase pay to avoid a mass exodus to fast food. While higher minimum wage will certainly increase the CPI a bit, there's no way that this would not be offset by increase in the demand for your labor. I don't see where the downside is for you.

8/31/2013 10:23:27 AM

Quote :

"Am I wrong to think that $15/hr for such work is a little high?"

Absolutely not. Raising minimum wage helps the poor short term and screws over the middle class. Money inflates over time and everyone who benefited from the wage increase is back to square one.

Unionization such a socialist thing. It saddens me people push for it.



[Edited on August 31, 2013 at 7:39 PM. Reason : .]

8/31/2013 7:36:42 PM

^^ the chain reaction effect of your proposition (well if those guys are now making $15/hr, then these guys should be making...) is inflation, that's what you are describing.

now I don't know if there are enough mcdonalds employees to have that effect, which is why I was only making the point that the jobs would go to different people, but if the minimum wage was increased or other groups got raised then it would just create inflation. so now those workers would be making twice as much, but the buying power of that salary would be no higher than now.

8/31/2013 8:20:09 PM

^prices overall would likely inflate to a degree, but I think it's unlikely they would increase at the same rate as wages. Prices still need to remain competitive, and former prices will stay in the back of people's minds making competition even more important. Whoever can create the most competitive price (likely by cutting back on franchise fees/shareholders/dividends etc) will win

8/31/2013 8:40:59 PM

Prices for the product/food at Fast food merchants would skyrocket so merchants can still make profits. This would really hurt small business models. places like McDonalds and CFA would be able to get away with it though because they are massive, successful businesses.

8/31/2013 11:01:47 PM

Quote :

"^^ the chain reaction effect of your proposition (well if those guys are now making $15/hr, then these guys should be making...) is inflation, that's what you are describing."

Only if it pushes up all wages by the same amount as what the minimum wage is increased by.

For instance, say the guy was was making $10/hour now makes $12/hour. Perhaps the guy who makes $15/hour now makes $16/hour. There is some wage where the increase is balanced exactly with the inflation effect. The wage increase benefits everyone below that crossover point. Except for the unemployed guys.

[Edited on August 31, 2013 at 11:09 PM. Reason : ]

8/31/2013 11:07:53 PM

and that doesn't change the point that those people will be losing their jobs to more qualified people

8/31/2013 11:27:49 PM

^but you are ignoring the fact that people currently making $15 are going to renegotiate with their boss for more money. Jobs that need higher qualified workers WILL pay more to get those workers, and keep the ones that are currently doing a great job. I do agree that some deadbeat fast food workers are going to suddenly lose their job at higher wages, but it won't be anywhere near the majority if them.

9/1/2013 12:55:36 AM

^ no, McD's and similar business will just being investing more heavily in automation to get rid of uneducated and unskilled workers who are demanding more in salary that many college graduates make.

set em up --------->

9/2/2013 1:42:36 PM