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I guess a Big Mac will soon cost $15, if you can get anybody to make one.
I've probably posted 5 or 6 reliable sources about the small amount of a price increase even doubling the minimum wage would cause, please read through those; or if you have some source with evidence that a nasty big mac will cost $15 please share it.
No, it's not a good point. If franchises reduce franchise fees it cuts into their profit. These franchises have a business model that specifies a profit margin. If they reduce fees they screw with that value. That means their shareholders (most of these are public companies) lose value on their investment. So what do they do? They sell their shares. That reduces the value of the company and the wealth of everyone invested in it. If you have a 401K that might even include you.
Further, increasing pay from 7-8 dollars an hour to 15 dollars an hour is basically doubling your payroll cost. A reduction in franchise fees isn't very likely to cover all of that cost.
Lastly, these labor cost increases almost always get priced into products. So even if Billy is now making more per hour he will likely be working fewer hours and will be shopping for products that have and will increase in price. So what has he really gained?
If the minimum wage increase is nationwide, it would affect all similar businesses the same, they would raise their prices some amount to cover the increased labor cost and they would still be competitive with one another. The average profit on a franchise is 3.4% and it would still be 3.4% if they raised prices.
Labor is only about 25% of the cost of goods sold, part of that is fixed (around 7%) and does not go up with wage increases. No one that I have heard of is doubling wages overnight the increases are being phased in, generally over 3-6 years.
If you read through my earlier posts you find that I have already posted this information, with links to reliable sources in case you doubt what I am saying.
Unions. Many unions have their pay indexed to the minimum wage in their contracts. If the min wage increases so does pay for union members. That's why you see unions in front of businesses demanding an increase in the minimum wage. When their pay increases so does cash flow in union dues (as a percentage of pay). These union dues are then used to bribe politicians into supporting an increase in the minimum wage. All nice and tidy, isn't it?
This whole thing is really just a union scam.
Not a scam, you just described why we need unions. It's real hard for a machinist, or a cook, or an accountant to negotiate with a corporation for a pay raise. If we still had labor unions like we did in the 50's and 60's we probably wouldn't have this much wage stagnation.
I've probably posted 5 or 6 reliable sources about the small amount of a price increase even doubling the minimum wage would cause, please read through those; or if you have some source with evidence that a nasty big mac will cost $15 please share it.
Let the prices raise. Demand goes down, business loses an insane amount of money. That or some of those insane corporate profits can come down to where they're supposed to go!
The top guys don't want to lose money, so they either let their business flop or share a piece of the pie.
Originally Posted by snowtired14[url=http://www.heritage.org/research/reports/2014/09/higher-fast-food-wages-higher-fast-food-prices
How Higher Minimum Wage for Fast-Food Workers Can Affect Prices[/url]
I won't even comment on the source (Heritage) but I do try to get slightly less biased sources, otherwise I would just use Huffington Post and WikiPedia, but that's ok. Most of their numbers have been refuted in other sources that I posted, but I will only focus on one data point, the claim that the 'average' fast food restaurant only brings in $27,000 in profit. Why in the world would you continue to own a business if all you could make was $27,000 a year? I could make that selling crap on ebay (and I have). I found several articles stating that the average profit was around $88,000. - I can post links or you can google it.
The internet is full of evidence to support whatever point of view you wish to take, which one is right is the question.
Heritage, AEI and National Review are right wing organizations, none them even think that we should have a minimum wage so their conclusion about a minimum wage increase being would mean the world as we know it is pretty predictable. The CBS report uses much of the same data that I provided in earlier posts, but for some reason they decided to rely on data from the libertarian think tank the Manhattan Institute.
When I look for information, I try to find sources that don't have a strong political bias either way. It would be easier for me to rely upon Wikipedia, DailyKos & Huffington Post but I intentionally avoid those. My advice is do your own due diligence and try to get your information from as many politically neutral sources as you can
Heritage, AEI and National Review are right wing organizations, none them even think that we should have a minimum wage so their conclusion about a minimum wage increase being would mean the world as we know it is pretty predictable. The CBS report uses much of the same data that I provided in earlier posts, but for some reason they decided to rely on data from the libertarian think tank the Manhattan Institute.
When I look for information, I try to find sources that don't have a strong political bias either way. It would be easier for me to rely upon Wikipedia, DailyKos & Huffington Post but I intentionally avoid those. My advice is do your own due diligence and try to get your information from as many politically neutral sources as you can
Once again we disagree 2sleepy, The Heritage Institute, American Enterprise Institute, and The National Review are considered respectable conservative think tanks, not right wing organizations. Regardless, why would a particular viewpoint invalidate their opinion and argument for their theory, it may be as valid as any of your socialist leaning articles. I happen to believe the predictions of the conservative viewpoint are more likely to happen. Just because the articles you've embraced don't necessarily pronounce their political affiliation doesn't make them more valid, until the experiment is over it's all theory. The problem is, once we commit to the experiment, the outcome could result in good results, or bad.
Once again we disagree 2sleepy, The Heritage Institute, American Enterprise Institute, and The National Review are considered respectable conservative think tanks, not right wing organizations. Regardless, why would a particular viewpoint invalidate their opinion and argument for their theory, it may be as valid as any of your socialist leaning articles. I happen to believe the predictions of the conservative viewpoint are more likely to happen. Just because the articles you've embraced don't necessarily pronounce their political affiliation doesn't make them more valid, until the experiment is over it's all theory. The problem is, once we commit to the experiment, the outcome could result in good results, or bad.
Their viewpoint is universally that we shouldn't have a minimum wage. Do you really expect them to provide data supporting an increase in something that they don't agree should exist in the first place?
Posting information for those sources would be like posting stuff from the SEIU or AFL-CIO and claiming that it was unbiased in spite of the source. I could go through each of those sources that you posted and provide other, less biased economic studies that contradict it, but I'm not in the least bit interested in investing that much effort. It's been my experience that if a person chooses sources from a highly partisan source, they tend to believe in that and it's useless to attempt to argue with them. By the way much of the policy of the 'conservative' think tanks is echoed by ALEC, they even have a whole pile of model bills to hand out to legislators to repeal minimum wage laws and prohibit pay increases. , heck your congressional reps don't even have to write their own bills when they have ALEC around to help out.
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