Let Me Explain

From Facebook: (And no, I did not respond this way on Facebook.)


Actually, your Facebook post is based upon a faulty premise.  No one actually thinks the world would end if the minimum wage were $15 an hour.  The price of a meal might rise, and some restaurants would cut back hours and install automation…

Poor people would become poorer, since they would have less work,  and people of moderate means might eat out less. Some products produced in America would become more expensive, but there’s always Chinese made stuff.  Oh, the employees would be hurt.  Those folks who used to earn the lower minimum wage.

People do object to the government mandating the wages of anybody, as the government has no business doing this.

Also, I think the boards of directors of major corporations set the pay for the CEO’s. There’s a limited supply of people with the skills to run a major corporation.  I can’t do it.  Can you?

If the boards pay too much to the CEO, the stockholders would object, and the situation would be fixed. Not being a stockholder, I don’t really care what they pay the CEO, as long as I can get a quality product at a reasonable price. Oh, and if they pay the ground-level workers too much, the price will go up.  That I’ll notice.  


For more information, see this article.

Let’s do the math: A typical franchisee sells about $2.6 million worth of burgers, fries, shakes and Happy Meals each year, leaving them with $156,000 in profit. If that franchisee has 15 part-time employees on staff earning minimum wage, a $15 hourly pay requirement eats up three-quarters of their profitability. (In reality, the costs will be much higher, as the company will have to fund raises further up the pay scale.) For some locations, a $15 minimum wage wipes out their entire profit.

Recouping those costs isn’t as simple as raising prices. If it were easy to add big price increases to a meal, it would have already been done without a wage hike to trigger it. In the real world, our industry customers are notoriously sensitive to price increases. (If you’re a McDonald’s regular, there’s a reason you gravitate towards an extra-value meal or the dollar menu.) Instead, franchisees can absorb the cost with a change that customers don’t mind: The substitution of a self-service computer kiosk for a a full-service employee.


This entry was posted in Somebody is Wrong on the Internet, Uncategorized and tagged . Bookmark the permalink.

7 Responses to Let Me Explain

  1. onwyrdsdream says:

    “I never took economics” is the short version of that sign.

    Keeping it brief, Neither management nor shareholders set how much employees are valued. Both are set by the people ultimately buying their services. If a CEO is valued highly, that’s because a good CEO is rare, and the decisions they make can affect the existence of something valued in the billions. A guy that works the grill at McDonalds? There are millions who could replace him with a minimum of training and no prior ability. A good CEO who is paid millions a year will reduce the price of your burger, or increase it’s quality. An exceptional CEO should offset the cost of having him with the increase in earnings he brings. Asking the question as to why the guy who controls a billion dollar business is paid more than someone who controls the assembly of a few dollars worth of ingredients provided by someone else each hour is already insane. The supply of people who can do the job is different, and the responsibility is insanely different.

    Liked by 1 person

  2. Techno Jinxx says:

    something many of the “fight for 15” seems completely unaware of is how raising min wage has a domino effect on industries.
    if you make widgets, you get the supplies you need to make them from someone else at a cost to you, IF they have to pay their employees more, they shift the cost to you in the form of higher prices (if they can if not then they go out of business, shrinking the pool of supply availability), and whoever that compay buys their supplies from has the same issue all the way back down the chain to the raw material beginning of the supply chain…
    so raising the min wage sounds great…until you realize (as most of those idiots DONT) that doing so will raise the end cost of EVERYTHING multiple times before it even gets to where you buy it..of course that is IF they business in the chain dont just close their doors.


  3. The same folks who say “the rich get richer, the poor get poorer” figure that will ALL change if only the min. wage goes up. Suddenly, Mr. Rockefeller and Mr. Ford will make less, and nobody will pass on the price of labor to the customer.


  4. Paul Krendler says:


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