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.
And I ask, again:
- Exactly what DOESN'T raise prices on consumer goods?
- Have prices EVER been known to go up at times when the minimum wage doesn't go up?
- Why is it a good thing for prices to rise steadily and not wages for workers?
- Is there a history of mass (or even any) business failings in the past when minimum wage has risen? (Answ: Uh, no.)
- Has the planet continued to revolve around the sun since last wage increase?
- Is humanity still alive and continuing to overpopulate?
Bottom line is that inflation forces higher minimum wages. These days, $8/hr is not really something you can live on unless you work multiple jobs. Don't blame CA, blame the feds for all the cheap money they pump into the economy since 2008. Local governments are just trying to keep people afloat, there's not some ulterior "KILL BUSINESS" motive when raising the minimum wage. The middle class and down has it very rough right now.
I agree we shouldn't blame California. I don't think we should blame the feds either. I think the blame lies squarely with god for creating human nature as s/he did. Folly. Failed experiment. My dog, as with all other life-forms, is still working for the same wage his ancestors did. And everyday he tells me: "This is the BESTest day EVER!" "This is the BESTest walk we ever took!" This is the BEST bowl of dry dog food EVER!" "I had the MOST fun EVER chasing the cat today!" "That was the BESTest dump I EVER took on the neighbor's lawn!" ... And so forth.
Don't blame CA, blame the feds for all the cheap money they pump into the economy since 2008. Local governments are just trying to keep people afloat, there's not some ulterior "KILL BUSINESS" motive when raising the minimum wage. The middle class and down has it very rough right now.
Without the "cheap money" the economy would be even more depressed than it is now and the fed doesn't control government policy so its not able to control where the "cheap money" is utilized.
This is a description of a failing business. A fast food restaurant with 15 employees on a shift would have a high revenue in the 4~5 million range....to only net $75,000 from that is terrible. In the real world, a fast food restaurant generating this sort of business would have a profit in the $300,000~$400,000 range.
You are talking gross profit, on a higher than normal volume. You are not taking into consideration all the facts.
Lets look at the true figures. An average McDonald's only does 2.7 million not the 4 to 5 million you claim.
Then we go to the typical facts on what the costs are.
And note that $153,900 is Gross operating income. It does not include things like new equipment, remodeling, etc. that an owner has to budget for. McDonald's is constantly changing to keep up with the market, and putting in the new coffee bars for the designer coffee, costs $70,000 for the equipment to be paid by the franchise owner. Frozen drink machines, another $13,000. Remodeling is expensive, and something that the franchise owner must have budgeted to take care of costs. Etc., Etc., Etc.
By the time they get done, and the owner pays their income on personal taxes, they are lucky to take home $75,000 they can actually call personal income. That is why the franchise owners are crying.
With the business slow down and recession we have been through, all franchised restaurants are having a hard time making a decent profit due to higher costs, and lower spending in the restaurant. When they retire and sell out, they will have a nice big hunk of change, and that is all a lot of the owners are relying on today.
And note that $153,900 is Gross operating income. It does not include things like new equipment, remodeling, etc. that an owner has to budget for. McDonald's is constantly changing to keep up with the market, and putting in the new coffee bars for the designer coffee, costs $70,000 for the equipment to be paid by the franchise owner. Frozen drink machines, another $13,000. Remodeling is expensive, and something that the franchise owner must have budgeted to take care of costs. Etc., Etc., Etc.
By the time they get done, and the owner pays their income on personal taxes, they are lucky to take home $75,000 they can actually call personal income. That is why the franchise owners are crying.
With the business slow down and recession we have been through, all franchised restaurants are having a hard time making a decent profit due to higher costs, and lower spending in the restaurant. When they retire and sell out, they will have a nice big hunk of change, and that is all a lot of the owners are relying on today.
I am struggling to envision a better future for mankind than one without a single fast-food franchise restaurant on the face of the earth. Or any kind of franchise business.
You cry for the franchise owners, OT, as if other people are less worthy of concern.
You are talking gross profit, on a higher than normal volume. You are not taking into consideration all the facts.
What facts? You're making up an example to fit your needs....you're not talking about an actual business.
Quote:
Originally Posted by oldtrader
Lets look at the true figures. An average McDonald's only does 2.7 million not the 4 to 5 million you claim.
An average McDonalds doesn't have 15 people on a shift, the labor size you're citing would only be seen in a fast food restaurant with a much higher than average volume.
Quote:
Originally Posted by oldtrader
And note that $153,900 is Gross operating income. It does not include things like new equipment, remodeling, etc. that an owner has to budget for. McDonald's is constantly changing to keep up with the market, and putting in the new coffee bars for the designer coffee, costs $70,000 for the equipment to be paid by the franchise owner. Frozen drink machines, another $13,000.
These aren't "costs", they are investments. Adding a new coffee bar, frozen drink machine, etc will increase your revenue, as such it should pay for itself overtime. Operating income is close to a restaurants actual profit, other expenses are largely voluntary and done to increase the revenue and/or value of the business.
But as I said before, if a business has to rely on government subsidies for its employees (because their low pay) to be viable then its a business that shouldn't exist. In terms of franchises, they pay a lot in franchise fees and a modest reduction in these fees can go a long way to paying its employees a higher rate. You have to look at the overall picture in the case of franchises, not just the owners position.
Without the "cheap money" the economy would be even more depressed than it is now and the fed doesn't control government policy so its not able to control where the "cheap money" is utilized.
We're talking interest rates here, not spending. Anyway, I'm not making some ethical or political point, just that inflation is the reason local governments are forced to raise the minimum wage, and that it's not a Marxist money grab as some might suggest. Minimum wage hikes cause inflation too, but in this case, it's a reaction to low interest rates and the weak US dollar, and one that took too long in my opinion. Food in particular has gotten much, much more expensive in recent years and people have been hurting. A wage hike with no direct economic impetus could certainly be seen as redistribution of wealth, of course, but the minimum wage tends to be the one who shows up late to the inflation party rather than being the one to send out invitations.
These aren't "costs", they are investments. Adding a new coffee bar, frozen drink machine, etc will increase your revenue, as such it should pay for itself overtime. Operating income is close to a restaurants actual profit, other expenses are largely voluntary and done to increase the revenue and/or value of the business.
Those expenses you say are investments, have to come from somewhere, and they come from the operating income. Actually, those expenses you call voluntary are required to be made by the franchiser to keep their restaurants uniform. The operating income, is not close to the actual profits, and that is what the owners are complaining about. Their profits are shrinking due to franchiser requirements to own the business.
Quote:
But as I said before, if a business has to rely on government subsidies for its employees (because their low pay) to be viable then its a business that shouldn't exist. In terms of franchises, they pay a lot in franchise fees and a modest reduction in these fees can go a long way to paying its employees a higher rate. You have to look at the overall picture in the case of franchises, not just the owners position.
The franchise fees have been raised, and are not being reduced. You are not looking at the owners position which is the reason there are jobs in that restaurant. If the owners cannot make a profit, the restaurants are going to close down and a lot of jobs will be lost.
Quote:
I am struggling to envision a better future for mankind than one without a single fast-food franchise restaurant on the face of the earth. Or any kind of franchise business.
You cry for the franchise owners, OT, as if other people are less worthy of concern.
Take away the franchise businesses in this country, and you would do away with close to half the jobs in this country. Example: Soft drinks would go out of business, as most of them are bottled by franchised bottling businesses. Stores like ACE Hardware, would all close. Nearly all independent grocery stores would close. Moving companies would go out of business. More than half of all decent hotels/motels would close. Auto dealerships would be closed. Gas stations would be closed. Franchised business, make up a large percentage of all retail and hospitality fields.
If all franchised businesses went out of business, there would be about a 40% unemployment factor in this country, as without the outlets, factories would have to close, etc. Want to put this country into a depression (much worse than a recession) just do away with franchised businesses. And without centralized buying, etc., as enjoyed by the franchised system prices for everything would go through the roof.
I know a little how things work. I have been around the business world since 1950 when I bought my first business (a gas station at 18 years old signed for by my father) which was a franchised gas station.
As the Korea war came along, I sold out and I joined the navy with my draft notice in the post office box. When I got out I entered into the business world, and have never looked back. I have worked in retail, the corporate world, and since 1972 till I retired I was a commercial real estate broker. I also taught retail business classes at a college at one time, but found I could not make a good enough living for my family teaching, and quit after 1 year, even though I was offered tenure if I stayed.
Take away the franchise businesses in this country, and you would do away with close to half the jobs in this country. ...
If all franchised businesses went out of business, there would be about a 40% unemployment factor in this country, as without the outlets, factories would have to close, etc. Want to put this country into a depression (much worse than a recession) just do away with franchised businesses. And without centralized buying, etc., as enjoyed by the franchised system prices for everything would go through the roof.
Oh? Really? ... Because demand for food and other products would cease?
And prices would go through the roof? Because the market doesn't balance demand, prices, and wages?
Quote:
Originally Posted by oldtrader
I know a little how things work. ...
Yes, I can see that you know a little -- and not a lot.
OT, you are one of the very few on this forum who is older than me ... but I am also retired, and have college degrees, undergrad and grad, in arts and sciences both. And I was self-employed for over 35 years in a variety of my own start-up from scratch businesses. Guess what? I even also sold real estate, including investment properties, very successfully for some years ... horrible business.
Franchise businesses and corporate structures are among the worst crimes against our society. They strip the common man of opportunity to be independent ... they strip away all focus on quality ... they fictionalize concern for customer welfare.
Why should people be more concerned with the few at the top than the workers whose labor enriches those parasites? Demand for food and other products existed for tens of thousands of years before franchising and corporate assembly-line culture came into being.
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.
