Fast Food Worker Strikes!

[Seth]

Fast food joints are entry-level, minimum-wage jobs that teach teenagers how to work. They are not career positions.

Anyone who spends 20 years working in a fast-food job is simply too stupid or too unmotivated to be given any credence.

Fire all the strikers and replace them with the hordes of unemployed youth out there looking for jobs.

[piscator]

Of course. But it's not strictly linear. If the kids want to go to McDonald's [and McDonald's invests heavily to make kids want McDonald's], a $0.22 increase in the cost of a Happy Meal is inconsequential to Mom.

Doubling the cost of labor is going to be more like a $1 increase in the cost of a happy meal. Compare the U.S. and Europe in this graph:

First of all, $7.25 to $11.00 is not doubling anything. $11/hour represents a 51.72% increase from $7.25, so instead of grabbing a hypothetical $1 out of the air to add to a Happy Meal, it's $.52.

Secondly, that graph doesn't help your point. I put a straightedge on it and an increase in the McWage from $7 to $10 (a 42.86% increase) results in about $0.13 increase in the price of a BigMac. Upsell the customer with the profit center soda and fries, and somehow my heart's just not bleeding for McDonald's widow and orphan shareholders.

Thirdly, McDonald's ships US beef patties, potatoes, Special Sauce, and beef flavored grease from US distribution centers over the Atlantic to sell in W. Europe. I don't see that chart breaking out the shipping costs, VAT and other taxes, Euro customs inspections and import tariffs, higher rents and insurance, and lobbying France to allow fetid American swill into their magnificent country. Of course Big Mac prices are going to be higher in Urp, even before you take European labor costs into account. French wine costs twice as much here. Same principles (that, and the Brits buy the shit out of French wine), plus everything's more expensive in Europe anyway.

Even a $0.22 increase is significant, though. You know the reason those managers care about single digit percents, as you mentioned? It's because those single digits matter. If a 5%-10% increase in the price really didn't matter to Mom, then they would have already increased the price by 5%-10%, to get the extra profit margin.

Sure, it's a significant amount of $$ for McDonalds Corp at the end of the fiscal quarter or year, that's why they pay managers bonuses to watch the pennies. Do they "matter" from the standpoint of the annual dividend on a share of preferred stock? Maybe to a mutual fund manager, DeLoitte and Touche, or the SEC, but very few shareholders are going to sweat 1/8 of a cent on a dividend. It's just one of the guiding principles and bywords of McDonald's Corp model that they pay as little as they can possibly get away with in labor. "Watch the pennies and the pounds will take care of themselves"
They'd much rather spend $$ on attorneys and lobbyists and strikebreakers than the kids who cook their products.

And if 5% efficiencies were available, they would have already wrung them out.

Not necessarily. What's more, these big corporations can just as easily put their rooms full of efficiency experts and consultants to work wringing some profit out of this strike and the new higher wage structure.

Considering that labor is about 12% of McDonald's cost to produce a hamburger, a 40% hit in base labor equates to 4-5% decrease in efficiencies, or conversely, all McDonald's has to do is wring 4 or 5% more efficiency from their system to break even. That's nothing for them, and they'd do it anyway for their own benefit.

I think you're conflating the costs to the McDonald's corporation and the costs to the franchise. McDonald's can produce a hamburger without much labor, but the hamburger produced is the frozen patty supplied to the franchise. Labor costs are a much higher proportion of the cooked, served hamburger which is the franchise's product.

So we back out the food cost and then compute labor as a percentage of "adjusted product cost"? That's some clever accounting. I'd imagine that the newly exorbitant cost of labor under this procedure just drives them up the wall. The horror! Do you think they'd be able to sleep nights with $0.10/hour minimum legal wage? Or would that eat these poor franchisee's lunch too?
Burger Flipper Rules apply here. If franchisees and McDonald's execs aren't happy with their compensation, they can find something else to do. No one's holding a gun to their heads, and there's a long line of people who'll do it if they wont. What's sauce for the goose is sauce for the gander too.


But just focusing on McDonald's in this conversation overlooks the fact that this broad strike is against MickeyD's competitors too. So talk of "remaining competitive" with other fast food chains who may also have to increase wages is bullshit.

Prediction: Assuming this strike is 100% successful for labor (which we all know wont happen), prices of fast food will rise trivially and sales volumes and dividends will remain steady. The American consumer might take a hit, but he eats too much fast food anyway, and he knows it. And an entire generation of burger flippers and taco stuffers will have more $$ to take across the street and spend at the fast food places where they don't work.

[Warren Dew]

So we back out the food cost and then compute labor as a percentage of "adjusted product cost"?

Who is backing out the food costs? The franchises pay McDonald's corporation for the frozen burgers and such, which is why labor costs for them are a quarter to a half of their total costs, rather than 90% of them.

The rest of your rant is just as far off base. Bottom line, double the minimum wage or "just" increase it by 50%, and a large proportion of the minimum wage workers will be thrown out of work entirely.

[pErvinalia]

If you honestly think that people tend to want to do harder jobs if they make the same money as easier jobs, and that is a result of your decades of experience in the university field, then so be it.

Who says they are "harder"? You are adding more and more conditions to your earlier statement.

I'm not adding more conditions. You're just being purposefully obtuse.

Stop lying! You never said anything about "hard" in your initial premise that we are discussing. The initial premise was also based on similar levels of pay; then you introduced cases where there were no graduate jobs - like you've done AGAIN in this post. Stop being so dishonest.

As I said, perhaps you know a lot of shallow people. Virtually everyone I know (given I generally only associate with intelligent people) would prefer to use their mind than let it sit idle in some menial job.

Of course they would. But, if you offer them an easy way to make $X and a more demanding way to make the same $X, then plenty of them will tend to want to pick the low hanging fruit.

Yes, so you keep saying. I don't know anyone like this (other than that one PhD (and now that I think of it, another BSc who chucked it in to run his own business - a pub)), and it makes no sense. People of higher intelligence (who tend to be the people who go onto higher education) become listless if they aren't using their minds. I have a suspicion you don't know many intelligent people.

You keep talking about PHDs, which wasn't anything to do with what I said.

I don't "keep talking about PhDs". Stop lying. I'm talking about everyone I have ever known at university minus the PhD guy and the one with the BSc who quit to run his own pub.

I was referring to college graduates, and I was clearly referring to recent college graduates - the ones that would normally be earning about $25k to $35k coming out of college. When these folks see McDonald's type jobs paying the same as jobs that have more responsibility and greater difficulty level, plenty of them will be drawn to the equivalently paying lower level job because low hanging fruit is low hanging fruit. You keep disputing this basic concept, but it plainly applies.

So you keep saying. I only know two people out of hundreds/thousands that that applies to.

That's why when you raise the minimum wage too much, it draws overqualified people into the menial jobs,

Does it? Got any evidence to back this up? And does this evidence account for the fact that it is a choice between a skilled and unskilled job of the same pay? Because that's the concept we are discussing.

College Grads May Be Stuck in Low-Skill Jobs
College educated youth in the US compete for low-paying, low-skilled jobs and push unskilled out of the job market – trend could influence politics

http://yaleglobal.yale.edu/content/coll ... skill-jobs

Raise the minimum wage, and that higher salary for low skilled positions will draw more college grads for the same reason that the article specifies that college educated youth are pushing the unskilled out of the job market.

But as college-educated workers have been forced to take lower-level jobs, they have displaced less-skilled workers, leaving those without degrees with few job options. "You eventually push the lowest skilled out of the market," Mr. Beaudry said.
Tamela Augusta has seen that trend firsthand. She spent close to 15 years as an administrative assistant, mostly in the construction industry. But since losing her job last year, the 42-year-old Chicago resident has found herself losing out on jobs to better-educated competitors.
"In the past they were pretty much looking for people that had a high school diploma," said Ms. Augusta, who spent two years at Northern Illinois University. Now, she said, many of those looking for jobs have college degrees.

I trust you will not deny that if you raise the amount of pay a job commands that the demand for that job will go up. Is that something you take issue with?

Of course it's not. But that article you quote is not related to your initial stupid premise. That article is about graduates taking less skilled jobs BECAUSE THERE ARE VERY FEW JOBS FOR GRADUATES NOW. That's not what your initial premise was. Your premise was that graduates would "prefer" to do a menial job than a job in their field if the pay was the same. They are only taking those jobs now as you have such a high level of unemployment (a point I fucking made earlier, and one you eventually agreed with).

This has nothing at all to do with being "shallow." It has to do with doing what makes sense. People need money. They, of course, also want enjoyable, intellectually stimulating and fun jobs. However, plenty of people sit tight in jobs they loathe because it makes $X and the job they would really prefer to do doesn't pay as much. That doesn't make them shallow. That makes them human beings.

But you were talking about a situation where it was a choice between jobs of the same pay.

Approximately the same pay, but the principle still stands.

A person will, all things being equal, take the higher paying job, right?

No, not fucking "right". How many times must I explain my position and experience to you. As I said, I suspect you don't know very many intelligent people.

Now, if two jobs pay the same, all else being equal, the person will take the easier one, right?

There you go again, moving the goal posts. Where did "hard/easy" come into this?

The people that you refer to doing much more mentally interesting work tend to get paid more than minimum wage, by far. If, however, PHDs started earning little more than minimum wage, you'd see a lot of them wondering what they're staying up nights working on. This is common sense, rEv.

No it's not, it's baseless opinion. Nearly every research scientist I know could earn heaps more money driving an airconditioned truck in the mines. If it was all about money, they'd do that. But they don't.

I never said it was "all about" money. There are, of course, other factors and there are plenty of people who would work their preferred job for less, rather than an easier job for money. That doesn't mean, however, that there aren't also plenty of people who would take the easier, more menial, job for the same money because they would rather work less and get paid the same. You need to understand the difference between the word "plenty" and the word "most."

"Plenty" implies "a lot". I just don't see it. And I've spent decades studying and working at universities.

Sure, and it is a lot. It's the same reason lots of college graduates take unskilled or low skilled jobs now.

No it's fucking not. You seem to have a woeful understanding of the current economic/employment climate. There aren't jobs for university graduates, THAT'S why they have to take unskilled job

They need the money. Double the amount of money that they can get for those low skilled jobs and what happens? What's the basic economics of supply and demand here?

Humans aren't economically rational actors. This is one of the major failings in economic "theory". It fails to take into account human psychology properly.

If you raise the minimum wage to $30k, you are, in fact, going to get "plenty" of college graduates applying for those minimum wage jobs, and they will do so because the pay makes them willing to do the menial job. As the wage for the minimum wage job increases and approaches the wage for the college graduate field, then more and more people from those college graduate fields will be lured by the low hanging fruit.

So you keep saying. Not seeing any reasoning for this, other than money is the big incetiviser. Perhaps the difference between our views is the difference between our societies. We are still considerably less ruthlessly capitalistic than the US is. We are also in a very long period of incredible growth and wealth, so money just isn't the big factor here that it perhaps is in the US.

Money is "a" big incentivizer. I am shocked that you claim that it isn't.

I didn't say that it wasn't, and I'm NOT shocked that you are erecting strawmen. That's your main MO in debating these days. As I said, a certain minimum of money is a BIG incentiviser, but after that the incentive reduces.

Money may not be a big factor for you personally, which may be the difference between our views. People respect it more if they earn it.

Lol, you just can't help making low shots, can you? I've earned plenty of money during the long time I have been employed during my life. The fact that I am unemployed now is irrelevant to the argument at hand. You really are a dishonest debater.

Generally speaking, f you can make $10,000 the easy way or the hard way, which way would you make it?

It's not about "easy" and "hard". As an intelligent person, using your brain isn't "hard". It's about what's most rewarding or pleasurable. I and most people I know find using our minds much more rewarding and pleasurable than driving trucks.

Of course, but driving trucks, particularly big rigs, is not easy and not something college grads can just jump in and do without additional training.

Average wage out of uni in Australia is probably about $40K, if that. Average wage for driving trucks at mines is about $100K. The trucks are auto, fully air conditioned, CD players. It's not a hard job. The hardest part about it is the safety aspect of making sure you don't run over a car or person on the mine.

If you can say with a straight face that being an over the road truck driver is not a hard job, then you plainly do not have a clue what you are talking about.

I'm afraid it's you who doesn't have a clue what he is talking about. I've worked on mines (Coal, Bauxite, Phosphate, Mineral Sands) and truck driving most certainly is an easy job. I've had lunch and dinner in the mess with the very people who do the job. The guy who's got cows on my farm is a truck driver at the mines. You are an armchair quarterback. I doubt you know more than 1 or 2 (if any) who works in the mines.

The key words in your reference to truck drivers in Oz is "at mines." That narrows the field there.

But, it just makes my point anyway. The job is priced that way because that's what it takes to draw people in to do the job. It's not charity.

It doesn't make your point. It fucking disproves it. Science and engineering graduates could make 2.5 times the money they do in their fields by driving trucks. According to you they should be flocking to those jobs. But you are wrong. They aren't. And the reason is that intelligent people who spend years of their life studying would prefer to work in their field using their minds than go make a fortune doing an easy job at a mine.

If you could make it staying home and doing nothing, wouldn't you? All else being equal, that is.

Great hypothetical. That's not a reality and never will be. And I'd prefer to work part-time and earn that money than sit at home and do nothing.

Why? If you could earn the money doing nothing, you could take that deal, and nothing would stop you from working part time on a volunteer basis, giving yourself the maximum flexibility to work when you want and not work when you don't want to. It would be stupid to reject the offer of free money and counteroffer with an offer that is worse for you. Nothing would stop you from "working part time" if you accepted the free money. So why would you say "I'll only take the money if I have to work part time for it." LOL. I don't think one of your decades of courses included "negotiating." Cuz, you're doing it backwards....

I'm really starting to see why you can't understand my point. You can't even remember the conditions you put on your own stupid hypothetical. You said "sit at home doing nothing". Now you are changing that to "doing something". How the fuck am I supposed to have a proper debate with you when you repeatedly do this shit?

I didn't change it to "doing something." I hadn't intended to restrict your general behavior. It wasn't literally "doing nothing" as in you were required to sit there motionless, literally "doing nothing." It was meant as most people would understand it, which is that you were getting paid for performing no services for the person paying you. Free money. You could, of course, still eat, drink, play, do hobbies, or engage in volunteer work. But, of course, you are so set on making this a personal grudge fight, as usual, that you have to make asinine comments like you just made.

The important concept here is doing something active and rewarding with your mind. It wouldn't matter if that was paid work, or volunteer work with hypothetical utopia pay. The point is, that people don't just exist to make money. People exist to set goals and try and achieve them and pursue rewarding experiences. So no, most people wouldn't actually just sit at home and "do nothing".

I never said they just exist to make money. But, plainly money is in important to people, which is why the price for labor is ordered, generally speaking, with the more difficult and demanding jobs, and those requiring more education and experience, as generally commanding higher salaries. (not always, but by and large).

Most people wouldn't sit at home and "do nothing." But most people would take the money paid to them in exchange for nothing. You do it, don't you? You get money from the government for doing nothing. Why do you accept it? Because it's free. And, then you go about other tasks and endeavors that you like. Being paid to "do nothing" didn't mean that you had to sit there montionless literally not doing a single thing, and I think you knew that. You're just being deliberately obtuse.

And I suspect that most people would too. This is typical conservative bollocks. Conservatives generally believe that money is the great incentiviser. Psychology, and real life, shows that above a minimum amount, it isn't. People have personal goals and enjoy personally rewarding experiences. Sitting on your arse all day isn't very rewarding for an intellectually gifted person. (and I speak from experience over the last year).

Of course not, but if someone offers you $50k a year for doing nothing, or, you can take a job that pays you $50k a year, why would you take the latter?

Because "doing nothing" is like prison. Who wants to "do nothing" with their life?

I don't know, you tell me.

The former allows you to take the money and then spend your time doing anything you want

Is it "do nothing" or "do anything" now?

No, you're right, rEv, what I meant was you were being paid to sit motionless, and not eat, sleep, breathe or piss. You literally had to "do nothing."

I never fucking said you meant it literally like that. You really are a fucking dishonest debater. The context of our debate is centred around your claim that people of intelligence would prefer to do a job that doesn't involve their minds than one that does, if the pay was the same or similar. Your "do nothing" here, in that context, means "do nothing with your mind" - I.e pragmatically, don't pursue something with your mind that makes you happy. THAT is the context of this discussion, and you (should) know it. I suspect you know it perfectly well, but chose to wheel out the strawmen and false-dichotomies because you know you made a stupid assertion to begin with. You've been backpeddling and moving the goal posts ever since.

Most people wouldn't sit at home and "do nothing." But most people would take the money paid to them in exchange for nothing. You do it, don't you? You get money from the government for doing nothing. Why do you accept it? Because it's free.

I accept it, because I need to live. If I didn't accept it, I would have to seek charity to survive. I'd much prefer to be working a job. Because of my depression and the job market here (and my absence from the job market for nearly two years) I can't find a job. You really are a conservative. You have absolutely no idea how people at the bottom end live.

Oh, yes, I have worked in kitchens. Early in my work life I worked as a bus-boy, and I worked as a fry cook for a while in college. They were not unpleasant places to work. It's just a kitchen. I also worked in a couple of liquor stores, as well as a deli and a convenience store. I also powerwashed semi-trailers, including horse trailers (if you want to talk about "unpleasant..."), I roofed houses and commercial buildings in 90 degree heat and burning sun, and I did exterior and interior construction, and I worked on assembly lines running welding and CNC machines, etc.

And according to you above, you think an office job is harder than all that. Way to sink your own argument.

I never said that. Some office jobs are harder. My office job is harder than roofing or construction ever was. It's not physically as demanding, but I have far more pressure, it takes far more intellectual energy, I have far more responsibility, etc. You are being way to narrow of your definition of hard, and as usual you are getting too caught up in rhetorical game-playing.

Moreover, roofing and construction, and such, are hard and are not unskilled jobs, generally speaking, and are, therefore, usually way over minimum wage, at least in the US. That's why 30 years ago I was making 4 times minimum wage at those jobs, and I was not in a union.

You clearly have no experience in the real world if you don't understand the basic concept that the more you offer to pay employees for a given job the more applications you will get (and the applicants will tend to have more qualifications and such as the pay goes up). This is, at bottom, the concept that you are trying to tell me is bollocks

No, I'm trying to tell you that your assertion that educated people of intelligence will chose a menial job over a mentally stimulating/challenging job is bollocks. And you know this is exactly what I am telling you, despite all your goalpost shifting and strawmen.

. You think that raising the minimum wage to $30k is not going to attract more people like college graduates who are already having trouble finding full time employment? Really? You've spent "decades" in university and you are missing this basic concept that paying people more for a job makes the demand for that job go up?

If that's the ground you want to occupy, then fine. Your call.

You really are a dishonest debater of the highest order. I've already REPEATEDLY talked about graduate unemployment. YOUR fucking initial premise was not based on a scenario where graduates couldn't get jobs in their field after graduating. Your premise was that graduates would "prefer" to work menial jobs for the same pay. Stop being so fucking dishonest.

[Seth]

So we back out the food cost and then compute labor as a percentage of "adjusted product cost"?

Who is backing out the food costs? The franchises pay McDonald's corporation for the frozen burgers and such, which is why labor costs for them are a quarter to a half of their total costs, rather than 90% of them.

The rest of your rant is just as far off base. Bottom line, double the minimum wage or "just" increase it by 50%, and a large proportion of the minimum wage workers will be thrown out of work entirely.

More importantly, every hike in the minimum wage makes entry-level jobs, and the training they provide to new workers, less and less available to the first-time entry-level worker, resulting in much higher unemployment among teenagers and young adults who are precisely the people we need working in burger joints so that they can begin their working life with the skills necessary to thrive in a competitive job market.

When the minimum wage goes up, business owners will be less willing to employ inexperienced workers because the cost/benefit ratio between the costs of training a new employee and their low initial productivity makes it uneconomical to hire newly-minted workers. Employers will instead seek out older, more experienced workers (including seniors) who require less training, less supervision and are generally more productive because the added costs of a higher minimum wage makes them a better value for the money.

As I said, fast-food is NOT meant to be a career, it's an entry level job and the vast majority of people who earn minimum wage do so for about a year before they move upwards and onwards to better jobs, which is exactly as it should be. Youngsters NEED a place where they can work and make mistakes and learn how to work effectively and efficiently and the ONLY reason fast food managers employ them is because they will work for peanuts, which is just about exactly what they are worth in the beginning.

I'd eliminate the minimum wage altogether and let the employee and employer decide what a fair wage is through the free market. Youngsters might start out at a buck and a quarter an hour, which is what I got paid for MY first fast-food job at McDonalds. And back then you didn't have a computer, you had add a long list of food prices IN YOUR HEAD to come up with the total, and woe betide you if you made too many mistakes. I was glad to have the job, but like most people I didn't stay there long, about four months, before moving on to a position at JC Penny's selling photo equipment because I was a photographer and knew what I was doing.

Working in fast food isn't SUPPOSED to be a living wage, it's supposed to be a starting point and training pay, and that's it.

[piscator]

. Bottom line, double the minimum wage or "just" increase it by 50%, and a large proportion of the minimum wage workers will be thrown out of work entirely.

So this will close a large proportion of McDonald's? Or are you "just" saying that a large proportion the burger flippers at uber-efficient McDonald's are really unnecessary?

You usually make a lot of sense. But you seem to be waving your hands and going all kneejerk ideological on this one.
I'm not particularly inclined to sympathize with entry-level kids who are learning how to show up on time and do what they're told with a will. Like everyone says, 'It's their choice to be there', and I'm pretty sure most hypothetical nouveaux riche McDonald's employees will spend any hypothetical new earnings with EA, Marvel Comics, and Red Bull. I'm just curious to see how "Our trusted friend" behaves when confronted by an organized threat to their current business model, which is a masterwork on many many levels.

They have a choice to make. To fight this with bared fangs like wolves or Pullman Coach and risk some seriously bad PR, or take a softer and longer approach that may win some hearts and minds. This is sort of a critical juncture in the multi-billion dollar fast food business. We shouldn't underestimate it.

[piscator]

As I said, fast-food is NOT meant to be a career, it's an entry level job and the vast majority of people who earn minimum wage do so for about a year before they move upwards and onwards to better jobs, which is exactly as it should be.

...
Working in fast food isn't SUPPOSED to be a living wage, it's supposed to be a starting point and training pay, and that's it.

No. It's supposed to be a means for fast food companies to make money. All this ball snot about, "Teaching youth how to work" is just so much greasy salesmanship and spoogy spin. They are in business to make money, not perform charity. If there wasn't a business economic need to have those kids greeting customers, washing lettuce, and emptying trash, they wouldn't be there for one fucking second.

Let's just be clear: Those kids are there because they're cheap, exploitable and their employers are tight as cat's asses. All the rest is straight Special Sauce to justify child labor.


"On my very first job I said "Thank you" and "Please"
They had me scrub a parking lot, down on my knees
Then I got fired, for bein' scared of bees
And they only paid me fifty cents an hour" -- John Prine

[Warren Dew]

. Bottom line, double the minimum wage or "just" increase it by 50%, and a large proportion of the minimum wage workers will be thrown out of work entirely.

So this will close a large proportion of McDonald's? Or are you "just" saying that a large proportion the burger flippers at uber-efficient McDonald's are really unnecessary?

It would close a significant percent of McDonalds - even the small gap between the $7.25 U.S. minimum wage and the $8 youth wage in Australia helps Australia have 30% fewer McDonalds per capita, despite lower beef prices there. In addition, a higher wage would make automation cost effective for a significant fraction of the remaining jobs; in Europe, this has already happened with self service kiosks replacing employees in the McDonalds restaurants there.

And it's not just McDonalds, of course. An increase in the minimum wage would throw all sorts of minimum wage earners out of work and onto the welfare rolls, which would of course increase the burden on the already shrinking number of employed taxpayers we still have.

They have a choice to make. To fight this with bared fangs like wolves or Pullman Coach and risk some seriously bad PR, or take a softer and longer approach that may win some hearts and minds. This is sort of a critical juncture in the multi-billion dollar fast food business. We shouldn't underestimate it.

I don't think you understand what's going on here. This isn't a unionization drive. It's a bunch of political demonstrations by patsies who mistakenly think their jobs are safe, where in fact an increase in the minimum wage will only hurt them, helping only people who are already unionized by eliminating cheaper competition. If it were a legitimate unionization drive, we wouldn't be hearing this garbage about increasing the minimum wage; they'd just be trying to increase their own wages.

[MrJonno]

Minimum wage is not an 'entry level' job , it basically sets the maximum wage a significant % of the population will ever earn. When you take into account differentials you are getting close to a majority of the population salaries being influenced by it.

The minimum wage also determines benefit levels, a higher minimum wage means lower benefits (ie corporate subsidies) to the the employees.


When it comes to the lower end of the market capitalism does not work as the free market simply can't provide enough jobs/wages for the lower skilled (majority) without subsidies and minimum wage levels (shoot half the population and the problem goes away of course)

[Tyrannical]

What if a business had to pay a tax penalty when it's workers collected benefits?
Would that help? Or would they just fire who ever collects the most benefits, which I assume would be single mothers.

In the US, we have the earned income tax credit. Poor people get more cash back then they pay in taxes, making this a direct cash subsidy to those earning minimum wage. Instead of raising the minimum wage with all the trickle down effects on other wage earners, you could adjust the tax credit and give more money to those earning minimum wage. But that hurts the middle class because they don't benefit from any move in wages.

[Faithfree]

A Big Mac in the US costs around $3.20 to $3.50.

A rise in the price to $4.50 would mean about 30 to 40% increase in price, depending on where the Big Mac is purchased.

How times have changed ...

[SteveB]

Yeah, they used to sell hamburgers by the bag. In Texas they sell them by the barrel.

[piscator]

What if a business had to pay a tax penalty when it's workers collected benefits?
Would that help? Or would they just fire who ever collects the most benefits, which I assume would be single mothers.

In the US, we have the earned income tax credit. Poor people get more cash back then they pay in taxes, making this a direct cash subsidy to those earning minimum wage. Instead of raising the minimum wage with all the trickle down effects on other wage earners, you could adjust the tax credit and give more money to those earning minimum wage. But that hurts the middle class because they don't benefit from any move in wages.

And the EIC maxes out at somewhere close to $400/year if you're single. Though if you work full time at McDonald's for minimum wage and claim a standard deduction, it works out to almost $0.96/day. Minimum wage now skyrockets to almost $7.36/hr!

But if you're married and filing jointly and have 3 or more children and file on $20k/yr, it gets to some real $$. Almost $3/day per person for a family of 5 at the top of the pyramid. Almost enough to buy a Happy Meal each.

Now that's the sort of outrageous massive wealth redistribution Andy Jackson warned us about!! Why should it fall on us taxpayers to involuntarily subsidize McDonald's payroll????

[piscator]

. Bottom line, double the minimum wage or "just" increase it by 50%, and a large proportion of the minimum wage workers will be thrown out of work entirely.

So this will close a large proportion of McDonald's? Or are you "just" saying that a large proportion the burger flippers at uber-efficient McDonald's are really unnecessary?

It would close a significant percent of McDonalds - even the small gap between the $7.25 U.S. minimum wage and the $8 youth wage in Australia helps Australia have 30% fewer McDonalds per capita, despite lower beef prices there. In addition, a higher wage would make automation cost effective for a significant fraction of the remaining jobs; in Europe, this has already happened with self service kiosks replacing employees in the McDonalds restaurants there.

If they work out there, they'll soon be here, regardless of the minimum US law allows McDonalds to compensate most of its employees. McDonald's optimizes all things, and all efficiencies are wrung, remember? If McDonald's can make a couple percent more with kiosks, they'll do it. They're not running McDonald's Corp. as a charity.

As for Australia's apparent per capita paucity of MikeyD's, is there any country that frequents the quintessential American Institution at the same rate as America?
Is there an Australian law that requires McDonald's use Australian beef rather than beef from McDonald's American central processing facility like every other place on the planet McDonald's has a storefront?

The reason I ask is that one of the most important keys to McDonald's success in America as well as the rest of the world is Ray Kroc's fundamental requirement that every McDonald's from one corner of the globe to another taste exactly the same. To effect this, McDonald's has developed their own carefully and minutely controlled cattle feeds and feeding regimes and butchering processes, their own potato hybrids, their own ketchup mustard and cheese recipes, their own cooking oils, their own pickles made with their own cucumbers and vinegars and pickling spices, their own patented artificial beef flavors for fries, their own ice creams and syrups, their own napkin embossing, their own soda straws, their own salt grind, their own shipping containers, etc - which all franchisees and company stores must order and have shipped through McDonald's USA. It's a highly engineered and specified experience with very close tolerances. "The McDonald's Formula". Where do you get the idea that McDonald's Au. defrays their higher labor cost with "cheaper" Australian beef? (And how the heck can Australians raise and process beef cheaper with their exorbitant wage structure in the first place?)

And it's not just McDonalds, of course. An increase in the minimum wage would throw all sorts of minimum wage earners out of work and onto the welfare rolls, which would of course increase the burden on the already shrinking number of employed taxpayers we still have.

No it doesn't. It just translates the grid to a new origin. Everyone makes more $$. This is just you spouting ideological dogma because it's easier than thought. If you want to argue it's inflationary, you'd get more traction. But this boilerplate prattle about low end wage earners losing out big doesn't cut any ice with people who think with their brain cells. This sort of bunkum gets thrown up by certain factions every time the subject of minimum wage increase comes around. As yet, no minimum wage hike has thrown America into a depression or a recession, or even put a significant number of minimum wage earners out of work.
And frankly, if the fast food industry is so inflexible and slow-footed that it can't manage periodic minimum wage hikes, it was an evolutionary dead end to begin with.

They have a choice to make. To fight this with bared fangs like wolves or Pullman Coach and risk some seriously bad PR, or take a softer and longer approach that may win some hearts and minds. This is sort of a critical juncture in the multi-billion dollar fast food business. We shouldn't underestimate it.

I don't think you understand what's going on here...

And I don't think you're informed by much other than that half-baked Atlantic article you selectively read and posted a poor graph from. The point of which, BTW, was that higher Australian wages don't translate directly into higher Big Mac prices to Australian consumers.

Pull your head out of your ideology Warren. This is not up to your usual standards.

[Hermit]

even the small gap between the $7.25 U.S. minimum wage and the $8 youth wage in Australia helps Australia have 30% fewer McDonalds per capita

Maybe the dietary habits of Australians are 30% better. Or is it just a coincidence that the obesity rate in Australia is also 30% lower compared to that in the USA?

In regard to the wage claim: The mantra by fiscal conservatives that wage hikes cause inflation, recession and depression is not just tedious twaddle. It is historically incorrect. Economic downturns are caused higher up the ladder. They come about when bubbles burst, be they stockmarket crashes, mortgage scheme collapses, the successful establishment of oil cartels, unsustainable tariff and customs walls, humongous welfare payments subsidies to big business and agriculturalists and so on. Moreover, recovery from such downturns usually happens when the policy of belt-tightening for the worker is abandoned in favour of Keynesian pump-priming.

So, please don't bother with your (plural) "increased wages will lead to economic doom" blather unless you can come up with convincing evidence that this is generally true. Also, if you can do that, I will believe that the trickle-down effect really does work.