Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
It is interesting that you didn't respond to my counter argument.
Why bother? It is clear you and I fundamentally disagree with each other. I understand your position, and I disagree with it. I can't tell if you understand my position or not -- let me give you the benefit of the doubt and say you do -- but regardless, you disagree with me.
Yes , thank you for posting that.
This is what i've been mentioning for a while.
It's amazing that the facts and reality are right in people's face, yet they are in denial.
I'll listen to the former CEO of McDonald's versus some politician that has never run a business.
The Pro $15hr crowd seems to want to take away incentives for people to operate these types of businesses.
As McD's CEO says that's just less employment opportunities for workers..
An interesting observation from a former CEO of McDonald's regarding their business model: Among those opposing the wage hike is Ed Rensi, the former president and CEO of McDonalds. He wrote about the effect that a $15 minimum wage would have on his old company in Forbes on Monday, suggesting that: Then he does the math, which will leave entry level workers in a bad spot:
If wages go up, they don't only go up for McDonald's but for competitors as well. That leaves room for the industry to raise prices to offset the wage hike without losing competitive advantage.
If wages go up, they don't only go up for McDonald's but for competitors as well. That leaves room for the industry to raise prices to offset the wage hike without losing competitive advantage.
Yes, it's always so simple right?
Just raise prices!
Or just raise taxes!
If wages go up, they don't only go up for McDonald's but for competitors as well. That leaves room for the industry to raise prices to offset the wage hike without losing competitive advantage.
That is not always the case. Large employers like McDs and Walmart are often targeted and smaller employers are exempted or have a delayed phase in. Even if the playing field is level, it may not be feasible to raise prices. The fast food and most restaurants have low profit margins. Turnover has traditionally been high. Some of the large chains are already hanging by a thread. The bottom, Quiznos, Blimpies and a couple of others are likely to go out of business even without additional pressure. Even McDs is not in great financial shape. This year they pulled the magic rabbit out of the hat when they offered all day breakfasts. They still need another magic rabbit for next year. McDs is a franchise company. They depend on investors who are willing to buy franchises. A tougher market will make that less likely and more investors will want to give up their franchises.
Personally I think fast food is already way over priced in addition to typically unhealthy menus. I often go many months between visits and then I usually regret eating there again. Studies show a MW of $9 or $10 is not going to have a huge effect. That is not likely to be the case for a MW of $12-15.
Another big point that is overlooked / ignored.
Many middle class and poor families are invested in McDonald's , WalMart and these other companies even if they never set foot in one of their stores.
Their 401k is going to most likely be invested in their store through an index fund ,etc.
Destroying these companies will destroy the retirement accounts of millions of Americans.
Also just think..imagine if McDonald's went out of business. The loss of confidence in the economy?
An interesting observation from a former CEO of McDonald's regarding their business model:
Among those opposing the wage hike is Ed Rensi, the former president and CEO of McDonalds. He wrote about the effect that a $15 minimum wage would have on his old company in Forbes on Monday, suggesting that:
Then he does the math, which will leave entry level workers in a bad spot:
So 6 cents per dollar. Upping the minimum wage would eat up 3/4 of it. So a 4.5% increase in costs to the customer would cover the higher minimum wage. A $5 item would have to go up by $0.25 to cover it. On the other hand, a worker that was making $7.25 hour is now making $15 hour. Twenty five cents on $5 to get you double the pay to the bottom end. Cheap.
The whole idea of a sharp increase in MW just seems misdirected. The goal is to help those at the bottom of the economic ladder. Unfortunately for half of the households in the bottom quintile, no one is working.
Then we find that most of the workers getting MW are young and white and work part time. That covers a lot of work study, internships and yes fast food workers either just getting started or making money while they go to high school or college. If you want to help this group, put the resources into making college and college loans more affordable.
And finally there are some unfortunate unskilled adults working MW jobs. Again wouldn't we all be better off to put some resources into helping those individuals get skills and find better jobs? Let us leave those MW for the new crop of kids or even for the retirees who want to pickup a bit of extra money. Trying to artificially raise salaries just makes little sense and provides little in the way of help to those who really need it.
... Trying to artificially raise salaries just makes little sense and provides little in the way of help to those who really need it.
My argument doesn't rest on improving the lot of low end workers. My argument is about increasing demand for labor. They are out of work because there isn't any demand for their labor. We are adding population but not jobs. So the unskilled or challenged are pushed out of the workforce.
The unskilled in the US are competing with the unskilled in foreign countries. Reduce that competition and demand for labor here should go up.
..... My argument is about increasing demand for labor. ......
So you have decided that increasing the costs of low skilled labor will increase demand? You deserve your handle as a contrarian.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
