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McDonald's, or 17%
Jul. 31st, 2013 10:04 amSo, the Vast Left-Wing Conspiracy (tm) called, and apparently today I'm supposed to talk about McDonalds in particular and fast food worker wages in general.
As you may have heard, workers at various restaurants are staging one-day strikes, demanding that the new minimum wage from their employers be set at $15/hour, double the current minimum wage. The Usual Sources are howling that, if the fast-food industry gives in, the apocalypse will immediately follow.
But would it? A business student did an analysis of McDonald's, and found out that, keeping profit at the same levels, upping the wage to $15 results in a 17% increase in the cost of food at McDonald's. I have not done the math, but this sounds about right - wages are only a portion of food costs, and raising a fry cook's wage won't increase the electric bill.
Now, raising wages is not without impact. Some McDonald's customers are in fact price-sensitive enough for that increase to matter. Although, having said that, there's no particular reason profits have to stay the same, or that other costs couldn't be reduced to partially compensate for the wage change.
I don't have a dog in this fight, so I mention these facts merely to put them on the record.
As you may have heard, workers at various restaurants are staging one-day strikes, demanding that the new minimum wage from their employers be set at $15/hour, double the current minimum wage. The Usual Sources are howling that, if the fast-food industry gives in, the apocalypse will immediately follow.
But would it? A business student did an analysis of McDonald's, and found out that, keeping profit at the same levels, upping the wage to $15 results in a 17% increase in the cost of food at McDonald's. I have not done the math, but this sounds about right - wages are only a portion of food costs, and raising a fry cook's wage won't increase the electric bill.
Now, raising wages is not without impact. Some McDonald's customers are in fact price-sensitive enough for that increase to matter. Although, having said that, there's no particular reason profits have to stay the same, or that other costs couldn't be reduced to partially compensate for the wage change.
I don't have a dog in this fight, so I mention these facts merely to put them on the record.
