Posted on 09/06/2014 10:39:23 AM PDT by upchuck
Union activists want to raise the minimum wage in the fast-food industry to $15 an hour. However, fast-food restaurants operate on very small profit margins; they could only afford such wages by raising pricessignificantly. Higher prices would, in turn, drive customers away, forcing even larger price increases to cover costs. Ultimately, the average fast-food restaurant would have to raise prices by nearly two-fifths. This would cause sales to drop by more than one-third, and profits to fall by more than three-quarters. Absent the widespread adoption of labor-saving technology, the union-led Fight for 15 would make fast food much more expensive for Americans. Fight for 15
The Service Employees International Union (SEIU) has launched an expensive PR campaign calling for wages of at least $15 an hour in the fast-food industry. This Fight for 15 is part of a larger SEIU pressure campaign to unionize fast-food restaurants. Hundreds of union activists have staged walkouts and protests across the country demanding the higher pay rate. These protests have attracted considerable media attention. However, if the SEIU achieved its stated goal, it would hurt the budgets of millions of moderate-income Americans. No, Fast-Food Joints Cannot Absorb Cost Increases
Artificially inflating wages would substantially increase fast-food restaurants total costslabor makes up a considerable portion of their budget. ...snip... Labor costs (26 percent) and food and material costs (31 percent) make up the majority of the typical restaurant budget.
The Bureau of Labor Statistics reports the average cook in a fast-food restaurant earned $9.04 an hour in 2013. The SEIUs push for $15 an hour would consequently raise fast-food wages by at least 66 percent. Paying $15 an hour would raise fast-food restaurants total costs by approximately 15 percent.
(Excerpt) Read more at heritage.org ...
The higher labor costs would initially force fast-food restaurants to raise their prices by 15 percent, which would drive down sales by 14 percent. This would force restaurants to raise prices again, pushing sales down further.
In equilibrium the average fast-food restaurant would have to raise prices 38 percent.[10] Prices would rise roughly twice as much as the initial increase in labor costs.[11] Total sales and hours worked would both fall by 36 percent.
Fast-food restaurant owners would also have to accept a 77 percent reduction in profits in order to stay in businessleaving them with an average profit of just $6,100 a year per store. Otherwise they would have to raise prices to an extent that would drive away their customer base.
Have intelligent hard working friends who still don’t get it and are for the increase. They tell me that where they work, the lowest starting pay is nowhere near minimum wage so an increase wont raise their prices much. One even starts at double minimum wage. They can’t tell me why the company can eat those increases and still make a profit. A $15 minimum wage would take their people from doing good to that number. They can’t answer how much their starting pay would be with the $15 floor added.
So raise the prices.
If that hurts the wallets of consumers, maybe they’ll finally wake up to how the 1% has drained all the money out of the system.
The dollar menu is one of the smartest things fast food operators have ever done.
I like the dollar menu at MCD. Everything else, IMHO, is too expensive for what you get.
“...nuclear grade stupidity...”
Heh-Heh.
BUMP for later. I’m supposedly ‘working’ right now.
(Soon to be replaced by a robot, LOL!)
The thinking-and the whole idea- is to erase all profit. Businesses are supposed to eat all expenses,pay more and profit not at all. Prices MUST stay low and wages must go UP and costs must not be passed on but paid for out of the evil profits. We’re talking-for the most part- about people who have no concrete concept of money. ‘Money’ is a government card or a credit card, it’s a number given to you from ‘wherever’. So how hard it is to make the numbers bigger, add a zero? They only see what the numbers can get them, not that the money has to come from somewhere/someone.
It won’t be the first time a labor movement destroyed an industry. For big labor, it’s still a win, as it’s all about power and not workers.
Minimum Wage Hike Nanny State PING!
“it won’t be the first time...”
Maybe these folks should talk to the Twinkie workers and see how that worked out for them.
EXACTLY. Not to mention union wages are tied to the minimum wage so if the minimum wage rises so do union wages. Like you said, EVERYTHING, not just burgers, will go up.
Here’s another thing to consider. I know people working at semi-killed to skilled jobs that aren’t making $15/hr. so how does this play out? People working at the skilled/semi-skilled jobs are going to continue at that & then have to pay more for a burger? I see a mess coming down the road.
Women and Children hardest hit.
Fast food is probably the last occupation in America where a hard working employee can start at the bottom as an entry level worker and rapidly work their way up to shift manger or better, to corporate level if they are good enough.
As an example, my daughter had a high school friend who was an honors student but came from a tough, poor family situation and could not afford to go to college despite earning a state tuition waiver.
She had been working at a McDonalds in her senior year of high school to earn money for school and had worked her way up shift manager just after graduation and site manager a year later. Another year later she was managing several restaurants for the same owner. A year or so down the road, they are helping by paying for to go to college and she is looking at a promising career with McDonalds corporate .
She now has the enviable position of the most highly promoted member of her high school class so far.
I know several other people who stated at the bottom and worked their way up to very nice management positions at Mc Donald's and McDonalds even seems to value their up through the ranks employees very highly.
In my opinion, McDonalds is one of the last bastions of the American dream. Jack in Box has similar success stories as well.
%%
SEIU, say me, say it for always,
That’s the way it should be.
SEIU, say me, say it together-
Naturally...
But that would hurt the poor who depend on fast food to survive! We must force politicians to enact a cap on prices at McDonald's! (Bye-bye McD's.)
These unionistas don’t seem to realize that fast-food isn’t something anyone MUST have.
Actually, that's not quite correct. A $15 per hour raise = 38% increase in the retail sale price of your favorite fast food.
To control costs and keep business, you can count on the franchisee to: 1) layoff staff; 2) cut hours back (more part time employees); 3) loss of perks such as free food, free parking, etc.; 4) invest heavily into automated preparation, sales, and service to eliminate employees. The people being paid $15 per hour will maintain the equipment that serves up the product.
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