Yet another fast food worker strike

[Matt1970]

Lol! Now we are talking! Was that so hard? Now should I do what you did and immediately dismiss half of the studies based on who did them? I also won't bother pointing out that I also said and even linked to studies that said raises in minimum wage also resulted in employment loss off the lowest skilled workers. I also never said anything about employment growth happening when the mw is raised, so we will ignore that straw man.

What we are talking about is inflation being risen because of an increase in the mw since proponents have stated that the minimum wage needs to be raised to live off of and a higher inflation level that would negate any gains would be pointless.

So now that you have attempted to support your claim, I shall now read the links you posted more thoroughly and rebut them or concede to the claims made.

So?

 

[Sonikku]

http://www.cato.org/blog/raise-minimum-wage-kill-jobs

They've got a pretty set of charts for the CFO responses, but the number are thus:
Would you reduce hiring if the minimum wage increases?
Retail industry - yes 57%
Service industry - yes 44%
Manufacturing industry - yes 40%.

If yes, would $10 an hour reduce your hiring?
Retail industry - yes 82%
Service industry - yes 93%
Manufacturing industry - yes 81%.

Just imagine how many jobs we would now have if we stopped raising the minimum wage decades ago.

 

[werepossum]

Just imagine how many jobs we would now have if we stopped raising the minimum wage decades ago.

Honestly I'm not sure we'd have that many more. Our safety nets tend to be pretty sweet and easily obtained, at least for women. If the true market wage for unskilled labor is (for argument's sake) $4/hour, how many people are going to work for that? In big cities it would pretty much be pointless as there are no $200/month trailers or $250 apartments for rent. I'm guessing that very few people are so honest as to keep working even if they can't earn enough to keep their spines away from their belly buttons; at that point, honesty, though admirable in the abstract, is self-destructive. No employer is going to work $4/hour labor thirty hours a week and trigger full time benefits such as health care, so the worker would have to find two or three such jobs to even keep his nose above water. I think practically speaking the only way society functions without a reasonable minimum wage is by providing housing, transportation, and health care that is free or damned near. It's not acceptable that a first world nation in the twenty-first century have people starving, so one way or another we're all going to pay for the unskilled.

This is only going to get worse - probably much worse. At the same time automation and outsourcing/offshoring are reducing the amount of unskilled and even skilled labor we need, we're importing millions of unskilled illegals. At some point, maybe even within a decade or two, our entire model is going to fail.

 

[boomerang]

Obama could raise the minimum wage today across the nation with the stroke of a pen. He's told us countless times about his powers to circumvent Congress and the Constitution. Why hasn't he done so? Because it's too valuable an issue to not drag out at every election. It's ammo. Why, we're the only party that feels your pain! We're the only party that wants to see you blah, blah, blah, blah, blah. Lip service, nothing more.

How Democrats Use the Minimum Wage Issue To Exploit The Poor

 

[ivwshane]

http://www.heritage.org/research/reports/2014/09/higher-fast-food-wages-higher-fast-food-prices


I can't link charts, but here're the numbers. Note that these are based on an average fast food restaurant's 2013 tax returns:
Item_____________________Amount____Percentage of sales
Wages & payroll taxes_______$217,484___26%
Purchases (food, paper, etc.)__$254,589___31%
Depreciation________________$29,565____4%
Marketing__________________$24,638____3%
Rent and utilities____________$73,913____9%
Other expenses_____________$193,965__24%
Before-tax profit_____________$27,101____3%

We're talking here about increasing wages for the average employee by 66%. Assuming the managers are good little drones as ivwshane envisions and are fine with suddenly earning only a couple bucks an hour more than the workers with no responsibilities, that raises their costs by 15%. Note that this 15% is ONLY the direct cost for the restaurant and assumes that purchases, depreciation, marketing, utilities, and other costs have zero impact, which obviously is highly unrealistic. Even so, there clearly is not 15% to be had here.

People who are are convinced that their employer is raking in money hand over fist need to note how many businesses go under. At $15/hour, the vast majority of small businesses are gone forever. They simply do not have the money to ride out such an increase. (And of course, assuming this thing got indexed to inflation there would be no riding it out.) Ditto for the less affluent chains or those caught cash-poor in mid-expansion, since their excess stores would be near worthless. We'd have a handful of giant mega-corps (no doubt incorporated in Canada or Europe if not Bermuda for tax advantages) controlling all prepared food. Does that sound like a recipe for affordable food?

Heritage also compiled studies on price sensitivity for fast food restaurants. Depending on things like methodology, economic environment, and restaurants studied, these studies show price inelasticity of between -0.743 and -1.884, with an average of -0.946. In other words, raise prices by 1%, lose business of 0.946%. There are a LOT of these studies because fast food is an extremely price sensitive, low margin business. And these aren't studies tied to minimum wage increases, but increases due to any cause, because with a before-tax 3% profit margin, being able to successfully project the effect of a price increase is very big business and can literally make or break an employer.

So now we raise wages 15% and fast food restaurants lose over 14% in sales. (As everyone in the business knows, lower end restaurants are extremely price sensitive.) But the restaurant's fixed costs don't go down. So now prices must be increased further to cover this shortfall. Bottom line, Heritage's study found that prices would have to increase by an estimated 38% to remain viable, assuming businesses had to accept a 77% decrease in profits, a 36% decrease in sales, and a 36% decrease in hours worked. Now, a typical fast food restaurant might cost between $300,000 for a very cheap hole in the wall mom-and-pop store to $2+ million for something comparable to a full service Krystal - NOT including land. (I know; we've done a LOT of restaurants.) Restaurants are already a very low margin business - how many people do you think would be willing to put up even $300,000 for an expected profit of around $6,200? Fuck-all, that's how many. That's a return of around 2% assuming the very cheapest restaurant and average sales and costs - not typically a goal that gets realized.

It's no surprise that this is being pushed by the SEIU, an organization dedicated to the destruction of the nation as we know it.

There are several flaws with this study, first it talks about market pressures at the franchisee level while ignoring potential market pressures that would occur between the franchisee and the franchiser. While profit margins may only be around 4% for franchisees it's much higher for the franchiser, mcdonalds for example has a profit margin of 19+%. If franchisees start closing up shop it will force franchisees to adjust.

Second, the study assumes that a wage increase of $15 would be instantaneous, despite the fact that most minimum wage increases are typically phased in.

Lastly, the article completely ignores the increased business it would gain when it's primary demographic has more disposable income.

 

[BoberFett]

I'm pretty tired of this debate. I say raise it to whatever you want. I look forward to low skilled workers being put out on their asses, replaced by one competent worker who can do the work of two $7.25/hr workers.

Or replaced by a small shell script.

 

[ivwshane]

http://www.commonwealthfoundation.org/issues/detail/the-harmful-effects-of-a-minimum-wage-increase


Again, this is the projected effect of a $10.10 minimum wage, a 39% increase, not the 107% increase of a $15 minimum wage.

This article is a red herring. There are no reasons why we can't raise the minimum wage while doing the other things suggested. Unless you support subsidization of the minimum wage worker by the tax payer.

The CBO projections it uses fly in the face of historic minimum wage increases and there are numerous studies that show an increase in mw affects employment in no meaningful way.

http://www.cepr.net/documents/publications/min-wage-2013-02.pdf



Side note: this would be the 2nd right wing source you have linked to.

 

[unclefred]

I'm pretty tired of this debate. I say raise it to whatever you want. I look forward to low skilled workers being put out on their asses, replaced by one competent worker who can do the work of two $7.25/hr workers.

Or replaced by a small shell script.

Uber true.

 

[ivwshane]

http://www.cato.org/publications/commentary/minimum-wage-hike-means-more-sub-minimum-workers

Your third partisan source, this one so far being the worst. Zero references and all but a minimal acknowledgment of the impact of the recession.

 

[ivwshane]

http://www.cato.org/blog/raise-minimum-wage-kill-jobs

They've got a pretty set of charts for the CFO responses, but the number are thus:
Would you reduce hiring if the minimum wage increases?
Retail industry - yes 57%
Service industry - yes 44%
Manufacturing industry - yes 40%.

If yes, would $10 an hour reduce your hiring?
Retail industry - yes 82%
Service industry - yes 93%
Manufacturing industry - yes 81%.

Seriously? The very first line should have given you pause, "based on data from EU countries".

And are we going to start taking surveys as fact now? You shouldn't need surveys to back up your points, historical data should agree with you and so far at worst it doesn't agree with you and at best the impacts are minimal and vague.

 

[ivwshane]

Uber true.

I know you are new but just so you know, it's not mandatory to reply to every thread let alone read every thread.

If you are tired of reading a subject you are free to ignore this and any other thread you are too lazy to participate in.

 

[werepossum]

There are several flaws with this study, first it talks about market pressures at the franchisee level while ignoring potential market pressures that would occur between the franchisee and the franchiser. While profit margins may only be around 4% for franchisees it's much higher for the franchiser, mcdonalds for example has a profit margin of 19+%. If franchisees start closing up shop it will force franchisees to adjust.

Second, the study assumes that a wage increase of $15 would be instantaneous, despite the fact that most minimum wage increases are typically phased in.

Lastly, the article completely ignores the increased business it would gain when it's primary demographic has more disposable income.

I get it, dude. You believe there is a free lunch, one simply has to tear it from the hands of the evil rich. Good luck with that. But if you truly believe it's all about demand and putting more wealth in the hands of those who will spend it rather than those who earned it, why not argue for setting the minimum wage at $30? Hell, why not $300? I'll promise to consume my ass off if you can make me rich with no effort on my part.

As far as changing the minimum wage to $15 gradually, gradually offsets some of the pain but not the consequences. The franchise owners earn a tiny bit from the employees; the franchise itself earns a small amount from the franchise owners. Looking at the relative costs I showed should let you know there's no magic pot of cash to grab, but it becomes a matter of faith, and as such there's nothing I can post to change your beliefs.

 

[ivwshane]

Obama could raise the minimum wage today across the nation with the stroke of a pen. He's told us countless times about his powers to circumvent Congress and the Constitution. Why hasn't he done so? Because it's too valuable an issue to not drag out at every election. It's ammo. Why, we're the only party that feels your pain! We're the only party that wants to see you blah, blah, blah, blah, blah. Lip service, nothing more.

How Democrats Use the Minimum Wage Issue To Exploit The Poor

You mean like how he raised the minimum wage for federal employees and it's contractors earlier this year?

http://www.cbsnews.com/news/obama-raises-minimum-wage-for-federal-contractors/


I know you are a fucking idiot who gets his info from any right wing site but I'd expect that at the very least you would fact check your talking point before posting it.

I know, I know! You don't care what other people think, you just post for your own amusement and you know you are superior to everyone else.

We get it, stupidity is a badge and you wear it proudly!

 

[unclefred]

I know you are new but just so you know, it's not mandatory to reply to every thread let alone read every thread.

If you are tired of reading a subject you are free to ignore this and any other thread you are too lazy to participate in.

So sorry I don't support your partisan views. It's just that they are uninteresting and backward.

 

[ivwshane]

I get it, dude. You believe there is a free lunch, one simply has to tear it from the hands of the evil rich. Good luck with that. But if you truly believe it's all about demand and putting more wealth in the hands of those who will spend it rather than those who earned it, why not argue for setting the minimum wage at $30? Hell, why not $300? I'll promise to consume my ass off if you can make me rich with no effort on my part.

As far as changing the minimum wage to $15 gradually, gradually offsets some of the pain but not the consequences. The franchise owners earn a tiny bit from the employees; the franchise itself earns a small amount from the franchise owners. Looking at the relative costs I showed should let you know there's no magic pot of cash to grab, but it becomes a matter of faith, and as such there's nothing I can post to change your beliefs.

Another straw man, unsurprisingly. I never said it was a free lunch, I just argued it wasnt as devastating as you claimed it to be.

With regards to franchisees earning a small profit from the franchisees, bullshit!

 

[ivwshane]

So sorry I don't support your partisan views. It's just that they are uninteresting and backward.

Lol! Slow down partner! Don't go off on me with all your facts and supporting evidence! I can barely process your opinion you decided to add by your second post in this thread!

Go back to your right wing bubble, where you are looked at as a genius among idiots!

 

[werepossum]

One final point - McDonald's is a favorite target because it is the king of the restaurant industry. Some 2013 profit levels for the 10 largest publicly held dining chains:
http://finance.yahoo.com/blogs/the-...s-aren-t-rich-protesters-think-192549497.html

McDonald’s. 2012 profit: $5.5 billion; profit margin: 19.8%.

Yum Brands (YUM) (Taco Bell, KFC, Pizza Hut): $1.6 billion; 11.7%

Starbucks (SBUX): $1.4 billion; 10.4%

Burger King (BKE): $118 million; 6%

Wendy’s (WEN): $7.1 million; 0.3%

Dunkin’ Brands (DNKN) (Dunkin’ Donuts, Baskin Robbins): $108 million; 16.5%

DineEquity (DIN) (Applebee’s, IHOP): $128 million; 15%

Sonic (SONC): $36 millon; 6.6%

Darden (DRI) (Olive Garden, Red Lobster): $412 million; 4.8%

Brinker International (EAT) (Chili’s, Maggiano’s): $163 million; 5.7%.

Half of those companies have a profit margin below the average for the S&P 500. Other chains, such as Ruby Tuesday (RT) and Boston Market, lost money in their latest full year of operations. And if you haven’t driven past a Bennigan’s or TCBY lately, that’s because the restaurant business is notoriously difficult, with chains and individual stores failing all the time.

McDonald’s has perhaps 140,000 U.S. employees, which is a small fraction of the 4 million Americans who work at fast-food restaurants. So while McDonald’s might be able to afford a bit more for workers, many industry employees work at chains that could use a little more income themselves. Maybe they should all angle for a job at McDonald’s.

This actually falls right in line with Barack Hussein Obama's pledge to fundamentally transform America, for with a $15 minimum wage, most restaurant chains are simply gone, along with any money invested in those chains. Ironically, McDonald's, the chain progs most love to hate, will probably survive and eventually make even more money. Cash-rich, McDonald's would be the best positioned restaurant chain by far to build the new highly automated restaurants a $15 minimum wage demands. Eventually, I have little doubt that McDonald's profit margin would be even higher, as it would face much less competition. All the mom and pop fast food places would be wiped out, and probably all chain fast food except for the more profitable of the Yum brands which are also well capitalized. Maybe Burger King; they aren't nearly as well capitalized, but their management seems pretty quick on their feet lately.

The sit-down, hand cooked, human wait staff restaurant would become a thing solely for rich people though. For the rest of us, it'll be automats and cafeterias. http://www.npr.org/blogs/alltechcon...od-restaurants-that-require-few-human-workers

 

[werepossum]

http://dailycaller.com/2014/05/14/panera-bread-will-replace-cashiers-with-robots-by-2016/

Panera Bread CEO Ron Shaich supports raising the minimum wage — and he has every reason to.

Panera’s 1,800 nationwide locations are at the forefront of modernizing the way customers experience fast food restaurants. As soon as 2016, the bread and pasta joint will have replaced all of their cashiers with kiosks.

Shaich, who donated $35,800 to the Obama Victory Fund, told USA Today that the move is part of an effort to “never have a customer wait,” but there is growing evidence that as pressure to raise wages builds, employers will turn to wage-free robots to avoid dramatic payroll hikes.

Fast food establishments in European countries with high minimum wages have already begun to replace some of their workforce with automated employers.

All of McDonald’s locations in France, for example, have installed kiosks to substitute and supplement human employees. The kiosks have allowed McDonald’s to avoid some of the high payroll costs of dealing with France’s minimum wage, which currently sits at $12.22 an hour in U.S. dollars. The European country is also suffering from an unemployment rate of over 10 percent.

Although the technology has not been widely adopted, equipment exists to replace almost all of the fast food workforce.

Momentum Machine’s meat-flipping robot, which can turn out 360 juicy burgers in an hour, could “allow a restaurant to spend approximately twice as much on high quality ingredients,” based on the labor costs, the company estimates.

Some companies abroad have already fully replaced human workers with robotic substitutes.

A well-recognized sushi-chain in Japan currently has robots making food while customers order on a touch screen. In lieu of human servers, a conveyer belt delivers their food and a computer tracks customer purchases and automates their bill payment at the end.

Despite the threat of the growing number of cheap and efficient technological opportunities available to restaurant chains, fast food workers, labor unions, and members of the political left have ramped up efforts to pressure lawmakers to raise the minimum wage in recently.

Over the past year, hundreds of protests to hike wages have been staged outside of fast food restaurants across the country, organized by the labor-back groups Fightfor15 and Fast Food Forward, among others.

On Thursday, labor groups plan to expand their campaign to raise the minimum wage to an international level, with protests demanding a $15 hourly wage scheduled to take place on six continents.

SNIP

Leftwing CEO simultaneously arguing for increasing the minimum wage and replacing his near-minimum wage workers with automation. Hmmm.

 

[ivwshane]

One final point - McDonald's is a favorite target because it is the king of the restaurant industry. Some 2013 profit levels for the 10 largest publicly held dining chains:
http://finance.yahoo.com/blogs/the-...s-aren-t-rich-protesters-think-192549497.html



This actually falls right in line with Barack Hussein Obama's pledge to fundamentally transform America, for with a $15 minimum wage, most restaurant chains are simply gone, along with any money invested in those chains. Ironically, McDonald's, the chain progs most love to hate, will probably survive and eventually make even more money. Cash-rich, McDonald's would be the best positioned restaurant chain by far to build the new highly automated restaurants a $15 minimum wage demands. Eventually, I have little doubt that McDonald's profit margin would be even higher, as it would face much less competition. All the mom and pop fast food places would be wiped out, and probably all chain fast food except for the more profitable of the Yum brands which are also well capitalized. Maybe Burger King; they aren't nearly as well capitalized, but their management seems pretty quick on their feet lately.

The sit-down, hand cooked, human wait staff restaurant would become a thing solely for rich people though. For the rest of us, it'll be automats and cafeterias. http://www.npr.org/blogs/alltechcon...od-restaurants-that-require-few-human-workers

So you counter cherry picked data with cherry picked data? Then it's probably best you don't support your claim on a small subset of the US economy.

 

[ivwshane]

http://dailycaller.com/2014/05/14/panera-bread-will-replace-cashiers-with-robots-by-2016/


Leftwing CEO simultaneously arguing for increasing the minimum wage and replacing his near-minimum wage workers with automation. Hmmm.

As I've already told you, I'm not interested in opinion, I'm interested in facts. You scrambling to find anything or anyone to support your view is laughable.


I too await the day when we are served by robots! People have been predicting it since the fifties!


Btw! I heard honda has a robot that can walk up and down stairs now! Look out minimum wage workers!

 

[nehalem256]

You mean like how he raised the minimum wage for federal employees and it's contractors earlier this year?

http://www.cbsnews.com/news/obama-raises-minimum-wage-for-federal-contractors/


I know you are a fucking idiot who gets his info from any right wing site but I'd expect that at the very least you would fact check your talking point before posting it.

I know, I know! You don't care what other people think, you just post for your own amusement and you know you are superior to everyone else.

We get it, stupidity is a badge and you wear it proudly!

One will note that he only raised it to $10.10/hr.

Why didn't he raise it to a living* wage of $15/hr? Does Obama hate workers?

*note as we previously discussed $15/hr is too low. It should actually be $25/hr. Obama must really federal hate workers to pay them so little^_^

 

[ivwshane]

One will note that he only raised it to $10.10/hr.

Why didn't he raise it to a living* wage of $15/hr? Does Obama hate workers?

*note as we previously discussed $15/hr is too low. It should actually be $25/hr. Obama must really federal hate workers to pay them so little^_^

You are confused because you are an idiot. Yes Obama hates federal workers because he's is the only one who has raised their minimum wage /s

So who is it that you support that's trying to raise the minimum wage to $15? You don't support raising the minimum wage to $15? Why do you hate your fellow Americans?

Go back to fucking toasters, the only thing you seem to be good at.

 

[werepossum]

So you counter cherry picked data with cherry picked data? Then it's probably best you don't support your claim on a small subset of the US economy.

How on Earth are the ten largest publicly held dining chains' profit margins "cherry picked data"?

You're arguing in favor of changing the wages of over a third of all workers by government fiat. That's hardly a small subset of the US economy either; it would affect almost every facet of our economy, since these workers are not segregated in one area but are spread throughout our economy. No one would be immune to the increased costs, and low wage industries would be devastated.

 

[Cozarkian]

Assuming the goal is to help families trying to survive on minimum wage, a much better idea is to increase the earned income credit. Minimum wage increases would also benefit teenagers and families with two wage earners. Increasing the EIC instead would provide less incentive to reduce hours or raise prices.

 

[werepossum]

Assuming the goal is to help families trying to survive on minimum wage, a much better idea is to increase the earned income credit. Minimum wage increases would also benefit teenagers and families with two wage earners. Increasing the EIC instead would provide less incentive to reduce hours or raise prices.

That's a good point, although increased welfare also has its down side. Perhaps the best would be a mix: Increase the Earned Income Credit, raise the minimum wage to $9 or so and index it to inflation to restore its earning power to historic averages, then allow and encourage states and cities to set higher minimum wages where appropriate. We'd still get some inflation and some higher unemployment, but the left is arguing that inflation would be good right now and as the economy is picking up is historically the least painful time to raise minimum wage. It would help offset the deflationary effect (on wages especially) of all the new illegals and increased outsourcing/off-shoring.