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Exactly , even a low paying job is better than no job. They will also be able to attract people with more education , skills and experience .
Service does matter.. And not everyone does the same job
An example is IN N OUT burger which is in CA and other states .
They pay above minimum wage but they demand a higher level of quality from their employees . They don't hire everyone . Average employee seems to be a clean cut younger person . I wouldn't be surprised if a lot of the employees are in college currently or have plans to go to college soon .
No one from Wendy's contributed to that article, that was written by Tom Worstall a Brit who works for the Adam Smith Foundation, a libertarian think tank. Worstall doesn't think there should be a minimum wage at all. And again, he is in no way associated with Wendy's.
In that article, he claims that in order to remain profitable, Wendy's could only afford to pay $1.62 an hour in higher wages. He arrived at that by multiplying 37,000 (employees) X $1.62 X 2000(hours worked). That is not how you calculate the cost of a wage increase. Wages are about 25% of the cost of goods sold, but about 7% of those labor costs are fixed and don't increase with a wage hike.
Every day on CD I read about how the poor are responsible for their own mess, that their condition is a result of lack of ambition or character. I'm amazed when the same people who make those claims exhibit so much sympathy for failing businesses that they suggest taxpayers subsidize them by not raising the minimum wage. Here's an excellent article about how much low wages are costing us: http://www.nelp.org/content/uploads/...ood-Report.pdf
It's laughable that when justifying something like reaganomics, the right wingers will say stuff like the "size of the overall pie isn't fixed," or "rising tides will lift all boats" yet when it comes to raising the min wage... suddenly there's NO room. Really? So what if the fast food guy is now making more than the EMT? A perfectly rational response would be for the EMT to go to the Hospital Admins who are getting paid $100+/hr and ask for a raise!
That's the kind of action that is sorely needed in this country! Too many people are languishing under sub-living wages and relying on govt handouts. Of course, as soon as they take those handouts they're accused of being less than human by the (probably christian) conservative right. Those poor folks are d@mned if they do and d@mned if they don't.
So, franchises are forced to raise salaries and the stores has to cut staff. Yet, these franchises can't cut the cost of their franchise fees so offset the costs? I think the problem is the ones that have the powers to be are unwilling to sacrifice their profits, even just a little.
It's no wonder some franchises that pay their employees well have much better consumer satisfaction.
So, franchises are forced to raise salaries and the stores has to cut staff. Yet, these franchises can't cut the cost of their franchise fees so offset the costs? I think the problem is the ones that have the powers to be are unwilling to sacrifice their profits, even just a little.
It's no wonder some franchises that pay their employees well have much better consumer satisfaction.
This is actually a very good point. Most of these franchises have to spend X% of their annual income in franchise or royalty fees. In many of these cases, it's a safe bet that reducing that % marginally could offset some portion of the increase in labor costs. Without delving into actual #s, I'd wonder if paying employees more would enable more employees to be able to shop more. It certainly would spur an economic multiplier effect that would increase currency in circulation.
With our current system, more and more of our country's income is being tied up in the hands of a smaller percentage of people. That isn't good for anyone in the long term.
This is a 70% increase in pay for folks who, for the most part, decided not to go to school or pick up a trade, or work their ways up into management roles...
Meanwhile, middle class wages are practically stagnant.
I received a whooping 5% COL raise this year -- still more than most.
It's a sad world when the lazy can go protest and whine against the government and the government gives in.
In many places, fast food workers are now making more than crane operators and medical technicians.
Massive wage increases in fast food can only be offset by 3 things:
1) Gaining efficiencies somewhere in your processes
2) Firing some workers
3) Increasing prices.
Eventually prices end up increasing in most cases. This will drive down demand and sales if they increase enough. Nobody wants to pay 5 dollars for a burger that cost 4 dollars a month ago.
Supply and demand will sort this out but some people will likely lose their job. Huge wage increases are not free. There is a price.
.
Who came up with $15 ? Is it just because it sounds better than $16 $17 $18 etc?
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 is actually a very good point. Most of these franchises have to spend X% of their annual income in franchise or royalty fees. In many of these cases, it's a safe bet that reducing that % marginally could offset some portion of the increase in labor costs. Without delving into actual #s, I'd wonder if paying employees more would enable more employees to be able to shop more. It certainly would spur an economic multiplier effect that would increase currency in circulation.
With our current system, more and more of our country's income is being tied up in the hands of a smaller percentage of people. That isn't good for anyone in the long term.
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?
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?
That is not their only choice. I for one would rather the CEOs pay to offset their employees low wages than the taxpayer (currently many low wage workers both fast food and retail qualify for government assistance for food, health care, rent and utilities). How is that right?
According to a new report, YUM! (owner of KFC, Taco Bell and Pizza Hut) compensated its CEO $22 million in 2013.
Chipotle's CEO took home $13.8 million in total compensation. And McDonald's CEO compensation totaled $7.7 million. (Compensation includes salary, bonus and the value of exercised options.) Overall, the average compensation of fast-food CEOs has quadrupled since 2000.
The report, by the public policy group Demos, concludes the fast-food industry has the most extreme pay disparity of all the sectors in the U.S. economy, with a CEO-to-worker pay ratio now exceeding 1,000 to 1.
By comparison, the ratio in the retail sector is about 304 to 1, meaning the CEOs in this sector make about 304 times the income of the average worker. And construction company CEOs make about 93 times that of the average worker.
And economists have documented the burden on taxpayers, who foot the bill for the federally-funded assistance programs that many fast-food workers rely on. A report released last fall found that 52 percent of fast-food workers are enrolled in, or have their families enrolled in, public assistance programs, such as SNAP (food stamps).
"Taxpayers are subsidizing the CEO pay plan," Nell Minow of GMI Ratings said during the conference call releasing the new report. "And that's simply intolerable."
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