It was always about the scale. No one would have made any comments to complain if congress had just raised minimum wage another .70. It was Obama that brought up such a large increase and did so in order to make an issue of it - as he wanted (as usual) to divide people into categories of haves and have nots. That's the momentum that allowed Seattle to do something so stupid as to raise minimum wage to $15 (that and the idiot socialist politician there). I'm happy, actually. The absolute failure of what will happen in Seattle will prove to everyone that it's a bad idea to just arbitrarily raise it without thought.
I'd like to see the $15/hr minimum wage in Seattle. Then, watch all the fast food restaurants close because the price of their food pushes them out of the market. Then, perhaps, a light would go on (doubt it, though)... and the OdumboCrats would go, "Oh, THAT'S how it works".
What Will a Minimum Wage Increase Cost You at McDonald's? By Travis Hoium | More Articles June 8, 2014 | Comments (185) "Whenever the debate about the minimum wage comes up it's inevitable that a comment about the impact on McDonald's (NYSE: MCD ) dollar menu comes up. In New York, McDonald's workers began protesting in 2012, demanding a $15 per hour wage, to which one commenter quipped, would lead to a $10 hamburger. "It's true that increasing wages on companies like McDonald's would likely lead to higher prices, but labor is less than a quarter of the cost of what you pay for at the fast food giant. To explain just what a higher minimum wage would mean for your beloved dollar menu let's dive into the numbers. "What makes up a hamburger? "Based on McDonald's company owned store data, we can approximate the costs that go into producing food at stores around the world. From there, we can approximate just what a $10 or even $15 minimum wage might mean for the cost you could pay for a Big Mac in the future. "McDonald's company -owned stores brought in $18.9 billion in revenue last year and spent $4.8 billion on employee payroll and benefits. We can ballpark the total increase in cost of a burger if we assume that all labor related costs will rise uniformly with the minimum wage, which probably overestimates the impact but without more detailed data it's a good approximation. "Based on those assumptions, I've built a table that shows how costs may increase if the minimum wage goes up. To do this I've used company-owned store data and assumed that McDonald's company-owned store profit remains flat. "You can see that prices would go up but a $10 minimum wage would cost consumers about a dime more per dollar spent and a $15 minimum wage, or more than doubling pay, would cost about $0.27 more per dollar. What's interesting is that labor is only the second largest cost component and food costs should be watched more closely than the minimum wage debate. "Labor isn't the problem "While labor gets the headlines at McDonald's, if you want a cheaper hamburger you should be putting a focus on the global food market, not the 16-year old behind the counter. Since the minimum wage was last increased, the consumer price index for beef is up 38% and vegetable and soft drink costs are up as well. <img src="http://media.ycharts.com/charts/4f2dfa715a1cea8e9d863b97fa3ae27d.png"> "Food costs account for 33.7% of everything you buy at McDonald's versus 25.6% for labor. So, you should be mad about the cost of beef that caused the $1 double cheesburger to become a $1 McDouble (which has one less slice of cheese) in recent years. "Food is a bigger component of McDonald's costs than labor but a higher minimum wage would cost you. "Prices are already going up "Whether the minimum wage is going up or not, McDonald's is getting more expensive. $2.99 value meals that were once commonplace are now almost nonexistent and the "dollar menu" has become the "dollar menu & more" with items like the $2 Bacon McDouble. "Small changes like taking a piece of cheese off an item or adding bacon and increasing the price are subtle ways to increase prices and McDonald's does it well. If labor costs go up to $10 or even $15 per hour you would see more subtle changes similar to this along with small price increases on regular items. "The bottom line is that a $10 minimum wage won't lead to a $5 cheeseburger at McDonald's. The increase in price would be 10% at most and more than likely any price increase would be hidden to most consumers like they have been since the minimum wage was last increased in 2009. "A little food for thought the next time McDonald's comes up in the minimum wage debate. (Travis Hoium manages an account that owns shares of McDonald's. The Motley Fool recommends McDonald's.)
Letter to the Editor in our paper today: Minimum wage The current minimum wage discussion, especially as it pertains to the fast-food industry, is very interesting. In 1960 the minimum wage was $1 per hour. McDonald's at that time paid employees the minimum wage and offered no employee benefits. Today, McDonald's pays an average hourly wage of $7.90 per hour, excluding benefits and factoring the cost-of-living index, the $1 per hour wage would equal approximately $8 per hour in current wages. Based on this data, McDonald's has been paying its employees at approximately 99 percent of the current cost-of-living index relative to 1960. These wage facts clearly show that the average hourly wage at McDonald's has been consistent with national wage per hour rates relative to the cost-of-living index, and again this excludes benefits that are now supported or subsidized by McDonald's. For example, in 2014, and in marked contrast to 1960, McDonald's offers a very extensive benefit system for its employees (e.g., conditional medical insurance, prescription drug coverage, vision and dental benefits, 401(k) benefits, term life insurance, etc). These employee benefits should most clearly be considered part of the McDonald's employee package, in addition to the hourly wage rate. Given these very concrete facts, it is amazing that some folks think the minimum wage for McDonald's employees should be raised to $15 per hour - a 53 percent increase. Wow! (Note: I do not work for McDonald's, and I am not affiliated with McDonald's in any way whatsoever.)
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Overall wage expenses will stay the same for fats food companies. They will automate the food production in each store and fire all the cooks. Its the small independent business that wont be able to compete, thus concentrating the marketplace into bigger corporations. A $15 minimum wage will kill the American dream.
There is some of that inflation you couldnt seem to find before, funny how you are now throwing out an article that says the real problem with costs at mcdonalds is inflation, lol.
This is a pure example of regressive taxation. Any liberal Democrat should cry foul to this type of taxation. To pay employees more then they agreed to work for, you are going to make the customers, mostly hard working poor and SNAP users at Walmart and McDonalds pay ONLY 10% more. If you are a Liberal progressive wouldn't you want the wealthy to pay for this, like a luxury tax? Why stick this cost on the poor
I'd love to pay my people zero and have them accept it. But what would I get tomorrow? They'd come to work cold, wet, tired, hungry, and unable to work.