Dems Minimum wage war is a fool's gold

[Sisyphus]

@2012:

Gross sales = $2.7 million. Crew payroll, $540,000 (20%). Store level operating income = $153,900 (5.7%) Increase Crew payroll 40% = +$216,000.

McDonalds Franchisee Income Statement Survey Detail | BlueMauMau, Franchise news for franchisees

Do the math...

Do the economics: what's the demand side effect? Pre FMW increase over 24 months (41%) pre-store average revenue was $2.3 M. 0.4 M = $400 K, and McDonald's franchise info site claims average franchisee pretax of 10%, currently.

 

[Sisyphus]

Ditto. Apparently you don't know the numbers of the types of jobs that were created during the Bush recovery. Hint: it was "news" for awhile that it was primarily low paying jobs. Just like we have during these early stages of the anemic "Obama recovery".

True, but then, I know more that you. Median income was flat and then rose:

Year / Median Ind Income
2007 29,075
2006 29,396
2005 28,843
2004 28,407
2003 28,464
2002 28,497

Also, percentage of workers earning the minimum fell ... from about 2.5% of the workforce in 2002, to 2.1% of the workforce in 2006.

Those actual stats would seem to contradict your thesis.

 

[ocean515]

Do the economics: what's the demand side effect? Pre FMW increase over 24 months (41%) pre-store average revenue was $2.3 M. 0.4 M = $400 K, and McDonald's franchise info site claims average franchisee pretax of 10%, currently.

10%? I'm sure you have a link to that.

In your thesis, how long would it be before the demand side effect would make up for the operating loss that would result from a 40% labor cost increase?

 

[Sisyphus]

My point is that it's normal at this stage for low end jobs to be the ones being added. As the economy gets stronger and there's more demand for labor, better jobs will become available. It's simple supply and demand.

Meanwhile, what we are experiencing (what you do not see) is the effects of Globalism, in which high income nations (us) have large service sectors, lower manufacturing sectors and real low agricultural sectors. Middle income countries have a similar but more balanced mix of the three. Low income countries are the polar opposite: huge agro, mid-size manufacturing and low, low service sector, due to so little PCE (workers cannot afford services).

So while retail is strong and growing, it's not the first to rebound. It trails higher wage earners coming back into the stores and restaurants.

 

[Papa bull]

True, but then, I know more that you. Median income was flat and then rose:

Year / Median Ind Income
2007 29,075
2006 29,396
2005 28,843
2004 28,407
2003 28,464
2002 28,497

Also, percentage of workers earning the minimum fell ... from about 2.5% of the workforce in 2002, to 2.1% of the workforce in 2006.

Those actual stats would seem to contradict your thesis.

Also, percentage of workers earning the minimum fell ... from about 2.5% of the workforce in 2002, to 2.1% of the workforce in 2006.

Seriously... think about that again and tell me how you figure that contradicts the claim that the early stages of recovery are marked by new jobs being largely minimum wage. In 2002 there were more minimum wage jobs than in 2006. Think real hard about why that might be if in 2002, the new jobs were mostly minimum wage and in 2006, they weren't so heavily weighted to minimum wage. Think really, really hard and see if you can figure out this puzzle.

 

[Dapper Andy]

My point is that it's normal at this stage for low end jobs to be the ones being added. As the economy gets stronger and there's more demand for labor, better jobs will become available. It's simple supply and demand.

How could that possibly make sense to you?

Low wage jobs follow higher wage jobs.

 

[Sisyphus]

1. 10%? I'm sure you have a link to that.

2. In your thesis, how long would it be before the demand side effect would make up for the operating loss that would result from a 40% labor cost increase?

1. Info from Franchise Info site:

What are McDonalds franchise owner profits? The franchise profit-earnings question is something most franchise companies normally don't answer, because usually they don’t paint the prettiest picture.


McDonalds, on the other hand, gives detailed financial information in its 373-page Franchise Disclosure Document (FDD) because it has a good story to share.

According to the McDonalds FDD Item 19, the average sales volume of traditional restaurants in the U.S. open at least one year was $2.4 million in 2010. The highest sales volume for a U.S. McDonalds in 2010 was $9.8 million (the "star" performer). The lowest performing restaurant clocked in at $387,000.

That’s a slight rise from their 2009 FDD, which reported that in 2008 the average sales volume per McDonalds Franchise was $2.3 million per year, per the 2009 FDD. The highest performer that year was 9.5 million while the lowest had sales of $491,000.
Average profit margin per Franchise runs about 10% of sales.

Item 19 of the 2010 McDonalds FDD goes on to list proforma financial results for restaurants that hit three different sales levels - $2 million, $2.2 million and $2.4 million, showing cost of sales, gross profit and operating profit at each level. Operating profits were in the mid to high six figures at each sales level.

2. Will redo in a few minutes, when I clear another call ... my apologies for being poor at multi-tasking.

 

[Sisyphus]

Also, percentage of workers earning the minimum fell ... from about 2.5% of the workforce in 2002, to 2.1% of the workforce in 2006.

Seriously... think about that again and tell me how you figure that contradicts the claim that the early stages of recovery are marked by new jobs being largely minimum wage. In 2002 there were more minimum wage jobs than in 2006. Think real hard about why that might be if in 2002, the new jobs were mostly minimum wage and in 2006, they weren't so heavily weighted to minimum wage. Think really, really hard and see if you can figure out this puzzle.

Because % of jobs at FMW would increase and not decrease. You're exactly wrong, and also are ignoring economic principals within consumer economies, which ours is.

 

[ocean515]

1. Info from Franchise Info site:

What are McDonalds franchise owner profits? The franchise profit-earnings question is something most franchise companies normally don't answer, because usually they don’t paint the prettiest picture.


McDonalds, on the other hand, gives detailed financial information in its 373-page Franchise Disclosure Document (FDD) because it has a good story to share.

According to the McDonalds FDD Item 19, the average sales volume of traditional restaurants in the U.S. open at least one year was $2.4 million in 2010. The highest sales volume for a U.S. McDonalds in 2010 was $9.8 million (the "star" performer). The lowest performing restaurant clocked in at $387,000.

That’s a slight rise from their 2009 FDD, which reported that in 2008 the average sales volume per McDonalds Franchise was $2.3 million per year, per the 2009 FDD. The highest performer that year was 9.5 million while the lowest had sales of $491,000.
Average profit margin per Franchise runs about 10% of sales.

Item 19 of the 2010 McDonalds FDD goes on to list proforma financial results for restaurants that hit three different sales levels - $2 million, $2.2 million and $2.4 million, showing cost of sales, gross profit and operating profit at each level. Operating profits were in the mid to high six figures at each sales level.

2. Will redo in a few minutes, when I clear another call ... my apologies for being poor at multi-tasking.

You know, a link to the franchisewisdom or franchisefoundations would have been just as easy.

So your theory is same store sales will increase 10% with an increase in FMW? How long would that take, was the question.

I'd love to see how you can support a theory that same store sales will increase 10% with an increase in FMW. I'd suggest a 10% same store sales increase would be unprecedented in McDonald's modern history.

 

[Dapper Andy]

I disagree. Restaurant jobs did used to be real jobs with viable pay for people to live on (albiet at the low end of the scale). The problem is that cost of living increased (a mixture of inflation and increased expectations) and low-end wages haven't increased in line with that. These jobs became jobs for college kids because the wages became relatively low, not the other way around.

I think there is a fundamental problem with how we value people these days. Basic manual labour used to have some element of basic respect but now anyone in this kind of low-end job is treated like scum. I suspect the fact there are a lot of immigrants taking them is relevant to (though the cause and effect could be going both directions there).

We can continue to think in this manner but we will have to accept that this will mean millions more people who are effectively unemployed. Even if everyone was capable of obtaining some form of skill or qualification, there aren't anything like enough skilled jobs to go around. The unskilled jobs still need to be done and unless we provide a living wage to do them, nothing is going to improve.

Laborers aren't treated like scum.

Their labor just isn't worth that much anymore and they kind of need to accept that.

 

[Sisyphus]

You know, a link to the franchisewisdom or franchisefoundations would have been just as easy.

So your theory is same store sales will increase 10% with an increase in FMW? How long would that take, was the question.

I'd love to see how you can support a theory that same store sales will increase 10% with an increase in FMW. I'd suggest a 10% same store sales increase would be unprecedented in McDonald's modern history.

Look at your own data source ...

● Number of customers served per day = 1,584 (vs. 1,052 daily in 2003-4)

● Average meal check = $4.75 (vs. $4.45 in 2003-04)

Some growth has occurred since the $5.15 MW days, both in customers and average sales per order. Plus, you can drive through most cities and see many examples that the 41% increase under Bush 43 (a major accomplishment, for which I give him credit) was not a deal buster. Sales are up, MCD-NYSE is $90 / share, from ~$40 / share pre-FMW increase. So the gloom and doom scenario the Right claims that higher wage minimums creates seems to have not materialized in McDonald's case, nor the other poster-child for MW-effected enterprise: Walmart.

And neither has the Big Mac become artificially inflated in cost, and in fact, has risen in cost more slowly since the increase of 41% in the FMW:

So if the postulate is that wage minimum increases do all the nasty stuff ya'll think it will, where's an example of it, in the marketplace?

 

[ocean515]

Look at your own data source ...

● Number of customers served per day = 1,584 (vs. 1,052 daily in 2003-4)

● Average meal check = $4.75 (vs. $4.45 in 2003-04)

Some growth has occurred since the $5.15 MW days, both in customers and average sales per order. Plus, you can drive through most cities and see many examples that the 41% increase under Bush 43 (a major accomplishment, for which I give him credit) was not a deal buster. Sales are up, MCD-NYSE is $90 / share, from ~$40 / share pre-FMW increase. So the gloom and doom scenario the Right claims that higher wage minimums creates seems to have not materialized in McDonald's case, nor the other poster-child for MW-effected enterprise: Walmart.

And neither has the Big Mac become artificially inflated in cost, and in fact, has risen in cost more slowly since the increase of 41% in the FMW:

So if the postulate is that wage minimum increases do all the nasty stuff ya'll think it will, where's an example of it, in the marketplace?

I think you may want to sharpen your thesis on some background in the food industry, if you're going to put so much weight on McDonalds to support your argument.

A 10% same store sales increase would be astronomical in the FF business. McDonald's reports their same store sales have been flat, and warn they expect continued weak results for the rest of the year.

http://www.nytimes.com/2013/07/23/business/mcdonalds-posts-tepid-results-and-expects-more-of-the-same.html?_r=0

 

[Papa bull]

Because % of jobs at FMW would increase and not decrease. You're exactly wrong, and also are ignoring economic principals within consumer economies, which ours is.

The "recovery" from the 2001 recession begain in 2002 and the percentage of FMW jobs decreased from 2002 through 2006. That should tell you that the "new jobs" trended toward higher paying. And that means more new FMW jobs in 2002 than in 2006. Hence all the wailing from the democrats about Bush's economic recovery turning good jobs in to minimum wage jobs... at least for awhile. By 2006, they shut up about that and got back on their Iraq talking points... just like your statistics indicate they would have.

 

[Diving Mullah]

I'm not a republican ...and in no way advocating that people should be continue to be depressed. Here is my point, again ...many of those Mc Donalds workers have qualification beyond high school....their ambition was never to work at McDonald. But as fate would have it the economic condition leave them little choice... and it appears they now want McDonalds to do for them ...what their intended ambition and goals were.

The democratic politicians have latched onto this idea ...and it seems we're missing the point here!!

The country cannot morph into a place where McDonalds go from a place people worked to get pocket change ....to being a career choice on which you should be able to raise a family.

Whats galling is while the dems in congress is rallying for these McDonald career .....they are busy infusing millions more into the country with this new immigration bill!!

Tied to the immigration bill ....is an infusion of engineers and technical workers under the HB-1 visas ....because American engineers pounding the pavement looking for a job today (especially those over 50) don't have enough to deal with!!
That plan will depress everybody's wages when corporations can quickly fill positions with cheap, educated.... foreign labor.

And yes congress rally for minimum wage increase ...while injection millions of unskilled laborers into the country under your amnesty bill...I'm sure you'll get Walmart to comply then...sheesh!! :doh


Where the hell have the boldness and creativity of America gone???

I will say it again ...the McDonalds jobs were never meant for you to work at and raise your kids, get health care, pay rent in NEW YORK...and pay your bills.
This is why I say it's a fool's gold!!

Actually the problem is far more acute than what you think...

The question of minimum wages should really be a conversation about living wage or at least wages in this country. The wages both for professionals and hourly workers have gone down done significantly adjusted for inflation since 1980($1500, to $2000 annually), while at the same time the profits for the corporations including fast chains and subsequently the salaries of the CEO of those companies have increased geometrically. But that is not the conversation we want to have because it would open the kind of cans of worms that may reflect badly on the corporate America.

So instead we are having conversation about this fictional workers who want 100,000 a year for flipping burgers. Undeserving unskilled Americans who are lazy and afraid of hard work. Yet we conveniently forget most of these lazy bums work 2 or more full time jobs.

Essentially one group of people fighting ideologically with another group over the scapegoat group. It is true what they say about divide and conquer, or the eloquent words of President Lincoln..which is always good to remember..

"A house divided against itself cannot stand." I believe this government cannot endure, permanently half slave and half free. I do not expect the Union to be dissolved—I do not expect the house to fall—but I do expect it will cease to be divided. It will become all one thing, or all the other. Either the opponents of slavery, will arrest the further spread of it, and place it where the public mind shall rest in the belief that it is in course of ultimate extinction; or its advocates will push it forward, till it shall become alike lawful in all the states, old as well as new—North as well as South. Have we no tendency to the latter condition? Let any one who doubts, carefully contemplate that now almost complete legal combination— piece of machinery so to speak—compounded of the Nebraska doctrine, and the Dred Scott decision.

This issue may not be as black and white as slavery, although back then the slavery was also quite bit gray in the minds of many, and carried similar conversation and overtone of lazy and inferior color folks(and lets not forget the white indentured workers as well). The real question is how can we justify the 500X salary increase of the "few" at the same time equal and steep decline in the salary of the many who work for the few and yet the "few" are the victims and at the "many" are the villains!!

I did always find it interesting that Republicans and Conservatives claim to love the the flag and "America", but utterly and wholeheartedly despise Americans and people in general. Which actually does say more about them.

Diving Mullah

 

[Dapper Andy]

Look at your own data source ...

● Number of customers served per day = 1,584 (vs. 1,052 daily in 2003-4)

● Average meal check = $4.75 (vs. $4.45 in 2003-04)

Some growth has occurred since the $5.15 MW days, both in customers and average sales per order. Plus, you can drive through most cities and see many examples that the 41% increase under Bush 43 (a major accomplishment, for which I give him credit) was not a deal buster. Sales are up, MCD-NYSE is $90 / share, from ~$40 / share pre-FMW increase. So the gloom and doom scenario the Right claims that higher wage minimums creates seems to have not materialized in McDonald's case, nor the other poster-child for MW-effected enterprise: Walmart.

And neither has the Big Mac become artificially inflated in cost, and in fact, has risen in cost more slowly since the increase of 41% in the FMW:

So if the postulate is that wage minimum increases do all the nasty stuff ya'll think it will, where's an example of it, in the marketplace?

The economy doesn't exist in a vacuum though.

That more Big Macs were sold doesn't mean the increase in FMW didn't hurt their sales.

I don't know how much insight can be gained by looking at industry giants like McDonalds or Walmart though. Both have the clout to squeeze suppliers and offset an increase in minimum wage. Of course it might be interesting to look at their hiring practices. Low wage employers certainly aren't viewing Obamacare as a boon to their businesses and have reduced hours, etc.

 

[Sisyphus]

The "recovery" from the 2001 recession begain in 2002 and the percentage of FMW jobs decreased from 2002 through 2006. That should tell you that the "new jobs" trended toward higher paying. And that means more new FMW jobs in 2002 than in 2006. Hence all the wailing from the democrats about Bush's economic recovery turning good jobs in to minimum wage jobs... at least for awhile. By 2006, they shut up about that and got back on their Iraq talking points... just like your statistics indicate they would have.

I was challenging a contention that recoveries begin by first growing low-paying jobs. So indeed we agree that was a false contention by the person who made it and I was responding to.

However, median income remained flat, until circa 2006, when the FMW increases began kicking in. So new job creation was likely a mix of low, middle and upper-middle, not necessarily skewing to higher paying, per se, as a rule, which of course would raise the median.

Meanwhile, Bush was not the dummy people thought. He's an intelligent guy, but very Texan, which some misinterpret as dumb. Not true. It's a more subtle cleverness and less overt intellectualism. And he did many things right, and two very wrong: too keen to be a wartime president, knowing he could get a rubberstamp Congress being a wartime president; was wrong about tax policy. Lesser failing, since no president has been immune, are too keen on income growth from Capital and not Labor, albeit, way better than Clinton or Obama having raised the FMW. The failing perhaps any could have had, of course, was over reacting to 9/11 and creating a huge new, and unneeded government agency: HLS, which is a boondoggle we'll be paying for for generations.

 

[Fenton]

Meanwhile, what we are experiencing (what
you do not see) is the effects of
Globalism, in which high income
nations (us) have large service sectors, lower manufacturing sectors and real low agricultural sectors. Middle income countries have a similar but more balanced mix of the three. Low income countries are the polar opposite: huge agro, mid-size manufacturing and low, low service sector, due to so little PCE (workers cannot afford services).

So while retail is strong and growing, it's not the first to rebound. It trails higher wage earners coming back into the stores and restaurants.

LOL !!!

Acute Globalization huh ?

No what we're " experiencing " is the effects os mandated arbitrary cost pushed onto businesses and individuals.

What we're experiencing is a lack of confidence in the private sector and a trend towards cautious pessimism as milkions of low information voters have now plotted our future.

You libs and your mitigation.

See that Robot in my avatar ? He's the other excuse liberals give when trying to justify their Presidents failure.

His name is Percy and he represents the excuse of mass acute automation has apparently produced a legion of robots who instead of exterminating us via Gloabal Nuclear anihillation or driving us under ground as they grow us, insert false memories into our heads and use us a AA Batteries, have instead decided ti just take our jobs.

Globalization.....HAHAHA !!!

 

[Sisyphus]

The economy doesn't exist in a vacuum though.

That more Big Macs were sold doesn't mean the increase in FMW didn't hurt their sales.

I don't know how much insight can be gained by looking at industry giants like McDonalds or Walmart though. Both have the clout to squeeze suppliers and offset an increase in minimum wage. Of course it might be interesting to look at their hiring practices. Low wage employers certainly aren't viewing Obamacare as a boon to their businesses and have reduced hours, etc.

The point was that Big Macs did not skyrocket in price to end users, despite the 41% increase in the FMW -- and in fact, lowered the cost increase trajectory!!

And if the growing success of McDonald's, Walmart, Home Depot, etc had their sales hurt in some way because of the FMW, in a mysterious unknown way, that you cannot, apparently, even speculate what it might be, how can you say it exists?

 

[Sisyphus]

LOL !!!

Acute Globalization huh ?
No what we're " experiencing " is the effects os mandated arbitrary cost pushed onto businesses and individuals.

What we're experiencing is a lack of confidence in the private sector and a trend towards cautious pessimism as milkions of low information voters have now plotted our future.

You libs and your mitigation.

See that Robot in my avatar ? He's the other excuse liberals give when trying to justify their Presidents failure.

Mass acute automation has apparently produced a legion of robots who instead of exterminating us via Gloabal Nuclear anihillation or driving us under ground as they grow us, insert false memories into our heads and use us a AA Batteries, have instead decided ti just take our jobs.

Globalization.....HAHAHA !!!

No. A global economic trend. In fact, Globalism is about 18% of our economy. Not really a big deal. And we'd be poorer without it.

 

[trfjr]

High school and college students spend their day at school. Who runs the McDonald's for lunch?
"Never intended for." Look, if someone works 74 hours a week, they should be able to ****ing feed themselves. Don't give me this spending cash for privileged college kids bull****. (and yes, if you can work only part-time for minimum wage and go to college, you are privileged. I mean, who exactly is paying that tuition?)

Don't want to pay the extra quarter for a burger in order to pay the fast food worker more? Tough ****, because you're just going to pay for medicaid, welfare, and/or food stamps instead. Why should the taxpayers fund McDonald's and Walmart's ****ty pay? People like you always put "living wage" in scare quotes. You know what the alternative to a living wage is?

Not living.

if you flip burgers for a living the problem lies with the one flipping burgers. If that is all your education and talents qualifies you to do then that is your problem

 

[Heebie Jeebie]

Look, if someone works 74 hours a week, they should be able to ****ing feed themselves

Does it have to be productive work or could work 74 hours a week of 'make work' keeping the sidewalk in front of a store was free of trash and expect to be able to feed yourself?.

 

[Sisyphus]

if you flip burgers for a living the problem lies with the one flipping burgers. If that is all your education and talents qualifies you to do then that is your problem

Still beats sitting around on the internet all day, and flipping flags to make an avatar.

 

[Fenton]

No. A global economic trend. In fact, Globalism is about 18% of our economy. Not really a big deal. And we'd be poorer without it.

It's nothing new and it's damn sure not the reason why our economy is flat, even after Obama's new 7 Trillion dollar tab and Bernake's endless QE.

When you elect a empty suite that has an issue with the our Country on a fundamemtal level and who follows the left wing party line of more Government and Higher taxes then don't be surprised when the private sector or more importantly the engine of the economy idles down and waits for aindication of a more substantial economic policy.

If you go after the investors and the producers under some manufactred false narrative of forced equity, don't be surprised when they take their ball and go home leaving Obama only one choice when it comes to the growing class of impoverished Americans.

Massive borrowing and Fed action that makes his borrowing stay cheap.....for now.

 

[trfjr]

Still beats sitting around on the internet all day, and flipping flags to make an avatar.

you know nothing about me. My talents and education allowed me to retire at 50 and yes i started in the job market flipping burgers at 16 in high school paid for my own education and went on from there. maybe you should have done the same instead of sitting on you lazy leftist ass whining about how unfair it is that you have to work hard and educate your self and rather have the government hand it to you instead of earning it your self

 

[Sisyphus]

you know nothing about me. My talents and education allowed me to retire at 50 and yes i started in the job market flipping burgers at 16 in high school paid for my own education and went on from there. maybe you should have done the same instead of sitting on you lazy leftist ass whining about how unfair it is that you have to work hard and educate your self and rather have the government hand it to you instead of earning it your self

I know one thing: you label yourself as a Libertarian, and they're often nincompoops. So that's something.