House Dem: Fast-Food Wage Doubling Would Create ‘Millions of Jobs’

[BehindBlueI's]

Ah, the fun of hysteria and misinformation. Its funny watching the numbers people are pulling out of their butts.

Field work has been largely automated. That's why your store bought tomatoes taste like water instead of tomatoes. They were bred so that they could withstand machine harvesting, ripen off of the vine, and live long enough to be transported from California to anywhere in the US. Labor costs for farms remained steady though. Why? Because instead of a multitude of low paid workers, they end up with a hand full of high paid workers. Anyone can pick a tomato, not everyone can operate heavy equipment, maintain and repair heavy equipment, etc. Would Burgertron 9000 come into being? Maybe. At least then you'd have some industrial maintenance workers earning a decent rate, and you'd still have to hire cashiers, managers, and people to run the machines.

As we've previously discussed, a Big Mac won't cost $8. Doubling of wages would create about a 12% price increase if McDonalds were to still maintain their $5.5 billion dollars in profit. Why? Easy, Labor is only about 25-30% of the cost of running a restaurant. That includes management and salaried workers who woudn't be affected, as well as fixed costs like worker's comp payments that also wouldn't be changed.

I don't think they'll get their $15/hr. I'm glad they are trying, though. Its funny to see how much anger and ire people trying to make a living wage conjure up here, especially compared to the total apathy when the top 1% screw you out of way more money (and give you nothing for it) by manipulating commodities or using virtual monopolies to fix prices.

 

[MisterChester]

I don't get how raising wages creates jobs. Are employers lining up saying "I have too much money! Somebody take it, please!"

A possible outcome is that with raising wages, workers have more expendable income. The more they spend, that produces demand, and companies must supply that increased demand by hiring more workers to satisfy the given demand.

Think of the current ammo situation. Outside stimuli are causing a large increase in demand of ammunition. As a result, ammo makers have to produce more to keep up with the demand by extending work hours, expanding facilities, buying more goods to make the ammo, and hire more workers to make the ammo. It's all about demand.

 

[Whosyer]

Ah, the fun of hysteria and misinformation. Its funny watching the numbers people are pulling out of their butts.

Field work has been largely automated. That's why your store bought tomatoes taste like water instead of tomatoes. They were bred so that they could withstand machine harvesting, ripen off of the vine, and live long enough to be transported from California to anywhere in the US. Labor costs for farms remained steady though. Why? Because instead of a multitude of low paid workers, they end up with a hand full of high paid workers. Anyone can pick a tomato, not everyone can operate heavy equipment, maintain and repair heavy equipment, etc. Would Burgertron 9000 come into being? Maybe. At least then you'd have some industrial maintenance workers earning a decent rate, and you'd still have to hire cashiers, managers, and people to run the machines.

As we've previously discussed, a Big Mac won't cost $8. Doubling of wages would create about a 12% price increase if McDonalds were to still maintain their $5.5 billion dollars in profit. Why? Easy, Labor is only about 25-30% of the cost of running a restaurant. That includes management and salaried workers who woudn't be affected, as well as fixed costs like worker's comp payments that also wouldn't be changed.

I don't think they'll get their $15/hr. I'm glad they are trying, though. Its funny to see how much anger and ire people trying to make a living wage conjure up here, especially compared to the total apathy when the top 1% screw you out of way more money (and give you nothing for it) by manipulating commodities or using virtual monopolies to fix prices.

But, what if they cut corners on fixed costs, to make up the difference from the wage increase? Wouldn't the quality of their food suffer?

 

[CathyInBlue]

You know what's also happening with increased demand? Companies that don't want to produce more just hike up prices to siphon off more profit from the same market with the same supply with increased demand. Capitalism works that way too. Double everyone's salaries overnight, and by noon the next day, the prices of everything will double as well. Equilibrium works.

 

[Bunnykid68]

You know what's also happening with increased demand? Companies that don't want to produce more just hike up prices to siphon off more profit from the same market with the same supply with increased demand. Capitalism works that way too. Double everyone's salaries overnight, and by noon the next day, the prices of everything will double as well. Equilibrium works.

It happens faster than that though. Every time there has been a minimum wage increase, product prices went up before the the wages did , at least in the convenience stores and grocery stores for the last 20 years

 

[BehindBlueI's]

But, what if they cut corners on fixed costs, to make up the difference from the wage increase? Wouldn't the quality of their food suffer?

Fixed costs are things like property taxes and building maintenance, things that don't change regardless of how much or how little you sell. Ingredients are a variable cost, you must spend more on it as you increase your sales. That said, perhaps. You could see slightly smaller portions or cheaper ingredients, although with as big as McDonalds is they can push some of that cost down the supply chain. Like Wal-mart, they have so much market clout they can force suppliers to take a smaller cut of the pie.

Chances are your dollar menu items would stay the same. They are like the loss leaders Wal-mart uses to drive traffic. The dollar menu is a psychological ploy to get people in the door and buying things with higher profit margins. Your "premium" menu items would go up a bit more or reduce portion size. McDonald's has a wide enough variety of products now that they can play with profitability on any particular item to maximize profit on their overall line. Lose a bit on this sandwich, but make more on this coffee drink, etc. You can be sure they've got a bevy of very smart folks with economics and marketing degrees who plan that out for them.

 

[cobber]

But, what if they cut corners on fixed costs, to make up the difference from the wage increase? Wouldn't the quality of their food suffer?

They will do this, AND raise the price. And they will cut jobs as well. Lose-lose-lose.

Like Wal-mart, they have so much market clout they can force suppliers to take a smaller cut of the pie.

That loss they force on their suppliers doesn't just vanish into thin air. It resurfaces somewhere else. And guess who will end up paying for it?

 

[ZombieApocolypse]

As Rand Paul said about the Dems raising taxes, "Let em." Go ahead and let them double fast food wages, then watch them collapse from within when it fails miserably

 

[BehindBlueI's]

Doubling wages doesn't double product costs. This would assume that labor is 100% of the cost. Particularly doubling the wages of the lowest wages earners isn't going to cause prices on consumer goods to skyrocket, but it would help the economic recovery. I'm not saying raising minimum wage is the way to do that, there is no simple answer (if there was, it would have already been done), but do we really want to make the argument that workers should remain poor so that prices stay stable?

One of the huge arguments for turning a blind eye to illegal immigrants is that "our food prices will skyrocket" without them because they work so cheaply. Labor costs for farming varies, but 15% is a pretty good average for most types. Fruit tree farms require more labor costs because of the amount of care and the lack of machine harvesting. Massive grain fields require a bit less. Let's take garlic farms. The workers get a piece rate which is less than $2 per 5 gallon bucket of picked and cut garlic heads. Garlic ends up at about $1/oz for processed or $3/lb for fresh at the retail level. You could triple the wages of field workers and not have any noticeable affect on retail prices, because a tiny fraction of the end cost is field worker wages.

Similarly what Americans buy the most is processed foods, which rely heavily on grains, which are machine harvested and have very low percentages of labor per total cost. On average, the entire cost of the farming, including profit, is about 14% of the total cost of retail food. The remainder is in the infrastructure that transports it, wholesalers, jobbers, and retailers.

Doubling the wages of the lowest earners would definitely help the economy. They tend to spend what they earn, and spend a lot of it locally. Doubling the pay of the top 10% might help with investment capital, but those folks are already spending what they want to spend on consumer goods.

Paying a living wage to legal unskilled and semi-skilled workers would be a huge boon to our economy.

(Statistics from "The American Way of Eating")

 

[BehindBlueI's]

That loss they force on their suppliers doesn't just vanish into thin air. It resurfaces somewhere else. And guess who will end up paying for it?

Who pays for it when Wal-mart does it? Who pays for it when a publicly traded company decides to push costs down the line in order to show growth to shareholders instead of for wages?

 

[netsecurity]

Ah, the fun of hysteria and misinformation. Its funny watching the numbers people are pulling out of their butts.

Field work has been largely automated. That's why your store bought tomatoes taste like water instead of tomatoes. They were bred so that they could withstand machine harvesting, ripen off of the vine, and live long enough to be transported from California to anywhere in the US. Labor costs for farms remained steady though. Why? Because instead of a multitude of low paid workers, they end up with a hand full of high paid workers. Anyone can pick a tomato, not everyone can operate heavy equipment, maintain and repair heavy equipment, etc. Would Burgertron 9000 come into being? Maybe. At least then you'd have some industrial maintenance workers earning a decent rate, and you'd still have to hire cashiers, managers, and people to run the machines.

As we've previously discussed, a Big Mac won't cost $8. Doubling of wages would create about a 12% price increase if McDonalds were to still maintain their $5.5 billion dollars in profit. Why? Easy, Labor is only about 25-30% of the cost of running a restaurant. That includes management and salaried workers who woudn't be affected, as well as fixed costs like worker's comp payments that also wouldn't be changed.

I don't think they'll get their $15/hr. I'm glad they are trying, though. Its funny to see how much anger and ire people trying to make a living wage conjure up here, especially compared to the total apathy when the top 1% screw you out of way more money (and give you nothing for it) by manipulating commodities or using virtual monopolies to fix prices.

What will happen if minimum wage even goes up more than 10% is that many businesses will close, and many new businesses won't open (especially with increased taxes, and Obamacare too). The price of all goods will rise (inflation), and OUR PAY WILL STAY THE SAME. You are a fool if you think this is a way of sticking it to the "1%". The 1% will be able to surf through the inflation without a problem--it is the middle class that will quickly be demoted to lower-middle class, or worse. THIS is redistribution of wealth. But if you really want to see who is hurt worst, it would be the youth, who would never be able to get a job until they were 30, and the poor, who would never get a job, because they couldn'tafford school. DISASTER. Unemployment would hit 30%. Millions would actually starve to death, and I'm not talking anout rich people who can't get someone to make a sandwich for them...

And guess what? That evil 1% includes the people who run this country, like George Soros, John Kerry, Bloomberg, and practically all the Jews in Hollywood. Do you think these socialists will give up their wealth? No, because they have friends in high places. Only conservative rich guys will get screwed in the long run if we stay on this path. It has already been happening: Remember the last tax increase in businesses earning 250K+, which Hollywood got exempted from, and how labor unions are being exempted from Obamacare rules? Socialism breeds corruption. Oh yea, and the conservative rich guys are usually the ones who actually created, and run the businesses that actually produce real jobs, so we should definitely force them out you think? I'm talking about people who gambled their entire wealth on their business, and it paid off, and they deserve to pay themselves whatever they want, because if they couldn't then they WOULDN'T. (See Atlas Shrugged Part 1 on Netflix, because we're there now).

 

[Bunnykid68]

Paying a living wage to legal unskilled and semi-skilled workers would be a huge boon to our economy.

(Statistics from "The American Way of Eating")

What is this mythical living wage number? 10, 15, 20, 25 dollars an hour?

Businesses are in business to make money, force them to up their cost and they will simply pass that cost on to the consumer as they have always done.

 

[Whosyer]

You folks do realize that I , a) asked if the quality of McDonalds food may suffer? , and b) I never use purple.

 

[Bunnykid68]

You folks do realize that I , a) asked if the quality of McDonalds food may suffer? , and b) I never use purple.

Can it really get any worse? They use to have great fries but now they are hit and miss, more miss I think

 

[Jack Burton]

I tried getting into the IBEW training course. You have to pass an interview just to be approved by the union to get their vaunted training you can learn in a book. They're not taking people they don't think are gonna be good little union drones.

IBEW has always been a "who do you know" union to get into. My dad helped dozens of neighborhood kids get into the trade but if he didn't know you... too bad. This type of system has its good and bad points... it certainly was rough on outsiders and minorities.

 

[Whosyer]

I think DQ has the best fries going.

 

[CavMedic]

Glad I joined the Army, served my Country for 4 years, went to war and earned/learned a great skill set so that some highschool dropout can work at Burger King for 15.00 hr while I struggle to find a job in my field that pays more than $10 hr.

Whatever...give it to them. Then when we see them still getting food stamps and housing aid we can send them jail...oh wait, most have them already been there and don't care about that.

 

[LANShark42]

There is a reason "high-paying" jobs pay what they do. It's either because they are dangerous and have trouble getting people to do them, or because they require a skill that not everyone has. People working in fast food DO have a choice. They can either live in the poverty that their current job provides, or they can try to better themselves by doing something to improve their skills. If the government is going to get involved at all, they should be providing training and skill-building education.

 

[cobber]

Who pays for it when Wal-mart does it? Who pays for it when a publicly traded company decides to push costs down the line in order to show growth to shareholders instead of for wages?

Somebody pays it. If Micky D or Wally Mart don't hit you up, someone else will. And they may not have the same economies of scale to 'absorb' pay increases, whether primary or secondary.

What is this mythical living wage number? 10, 15, 20, 25 dollars an hour?

Businesses are in business to make money, force them to up their cost and they will simply pass that cost on to the consumer as they have always done.

Wages poo! Have a nationally-guaranteed salary, say $100,000 Continental a year.

 

[cobber]

whoops, double post... already got my 50 darnit