7 ms·

You don't see a problem when a very profitable franchise tells its employees to ask the government for support because it doesn't want to pay them enough to liv

by simfoo 13y ago

You don't see a problem when a very profitable franchise tells its employees to ask the government for support because it doesn't want to pay them enough to live off? This is disgusting.

stevoski 13y ago
Is McDonald's really very profitable? I ask innocently, I don't live in America, I never eat in McDonald's, and I think you are probably right, but I'm seeking data to back up the assertion. If McDonald's arbitrarily raised wages, could they do that without increasing the costs of their products? Would that then make them less competitive against the horde of other fast food shops, and therefore reduce their sales dramatically in what may (or may not, I really don't know) be a hyper-competitive industry. These are the types of considerations I'm sure are important.
- dchest 13y ago
  From Wikipedia article: Revenue US$27.56 billion (2012) Operating income US$8.60 billion (2012) Net income US$5.46 billion (2012) Total assets US$35.39 billion (2012) Total equity US$15.29 billion (2012) Employees 1,800,000 (2013)
  - stevoski 13y ago
    I think that works out to $3000/employee. If these employees work on average 2000 hours/year (could be wildly different to that, depends on how many of these employees are full-time, and the amount of hours in a full-time work year in various countries), and McDonalds was to pay each employee $1/hour more, the profits would drop by two-thirds, to $1000/employee. Without raising price, some franchises could eat[1] that extra cost; some would probably have to close shop. [1] Boom. Zing.
    - maxerickson 13y ago
      Most of the locations are franchises. It is pretty common for a franchisee to earn enough money to open another McDonald's. The corporate profits probably don't tell the whole story.
- malyk 13y ago
  McDonald's is just an example. Presumably when we are talking about one company paying a living wage we are talking about all of the companies in their industry doing the same. Then again, starbucks pays well, has health insurance, etc., has high prices, and is killing most of their competition...so maybe not. Also, the rise in prices doesn't have to be that large to cover the increase in pay. "From that humble start as a small restaurant, we're proud to have become one of the world's leading food service retailer in 118 countries, with more than 34,000 restaurants serving nearly 69 million people every day."[1] So an average store would serve ~2000 people a day. (69,000,000 / 34,000 = 2029.4) I don't know exactly what the workforce looks like, but it's probably something like 4 cashiers, 2 cooks, 2 helpers, and a manager. If we assume we don't need to pay the manager more then that's 8 employees per store that we want to have a higher pay. The big mac value meal is $5.69. Let's say the average customer buys that. [2] 2000 customers per day * $5.69 = $11,380 in revenue in a day. I'd bet it's more, but that's a start. If we have 8 employees working for 16 hours a day (different employees at different times, of course), and we want to raise their wages $3 per hour, how much more do we need to charge? Well, if we want to keep our profit margin the same then we'd need to earn an extra (8 employees * 16 hours * 3 dollars) $384 a day. So, we'll need to charge each customer $0.20 more per order. ($384 / 2000 customers per day).[3] So, really. Is changing the price of the big mac meal to $5.89 really going to change McDonald's market position? Is it going to make eating at mcdonald's that much more expensive that people will stop going? Is there any real impact on anybody but their employees? I'm sure there's an error in those calculations somewhere, but the general idea is that it doesn't take much of a price increase to cover the pay for employees.[4] This is what drives me crazy about these companies. Walmart moves so much merchandise that if they raised the prices on all of their prices by a nickel they could probably afford to pay everyone a living wage. [1] - http://www.mcdonalds.com/us/en/our_story.html http://www.mcdonalds.com/us/en/our_story.html [2] - in the USA, of course. [3] - there may be some other costs to paying employees more for the business, but I can't think of any off-hand. Also, the amount of tax collected per transaction would be higher as well, so not only does society benefit from having less people on public benefits, but it takes in more money overall that it can use for other things (in places where fast food is taxed, of course (is that everywhere?)). [4] - Another problem with this simple calc is that not all stores are average and many don't do anywhere near 2000 customers a day in business. They probably employ less people, but it's something to keep in mind.
cperciva 13y ago
Is it disgusting that in Canada, very profitable companies tell their employees to go to a (publicly funded) doctor when they get sick? If not, what's the difference between a publicly funded healthcare system and a publicly funded food stamp system?
- room271 13y ago
  Healthcare strikes unevenly and can cost for more than most people could ever earn - so an insurance scheme of some kind seems sensible. In practice the state can often provide this more efficiently than the private sector. Food on the other hand, costs a non-variable amount and is relatively inexpensive. The two examples you give are not at all similar.
- Jare 13y ago
  If you are employed you are paying for healthcare
  - deleted 13y ago
    [deleted]
- joshAg 13y ago
  The difference is that the Canadian health system is designed for Canadians to use for long periods of time, whereas the american programs are only intended to be stopgap measures when a family is temporarily unable to provide the things provided by the program for themselves. Anyone in canada is able to take advantage of the publicly funded doctor. The system is purposely setup to cover every canadian. Only low income Americans are eligible to take advantage of SNAP and Medicaid. The system was originally designed to help people for relatively short periods of time when they are between work that pays them enough to not need the assistance. In fact, part of the reason many people dislike these programs are due to the mythical "welfare queen" that stays on programs like these for years and chooses not to get a better job because that would mean no longer getting the free (to her) assistance. If every American was eligible to be on food stamps for their entire life, then there wouldn't be a difference. But that's not how food stamps are designed nor how they work.

by simfoo 13y ago

You don't see a problem when a very profitable franchise tells its employees to ask the government for support because it doesn't want to pay them enough to live off? This is disgusting.

stevoski 13y ago

Is McDonald's really very profitable? I ask innocently, I don't live in America, I never eat in McDonald's, and I think you are probably right, but I'm seeking data to back up the assertion. If McDonald's arbitrarily raised wages, could they do that without increasing the costs of their products? Would that then make them less competitive against the horde of other fast food shops, and therefore reduce their sales dramatically in what may (or may not, I really don't know) be a hyper-competitive industry. These are the types of considerations I'm sure are important.

dchest 13y ago
From Wikipedia article: Revenue US$27.56 billion (2012) Operating income US$8.60 billion (2012) Net income US$5.46 billion (2012) Total assets US$35.39 billion (2012) Total equity US$15.29 billion (2012) Employees 1,800,000 (2013)
- stevoski 13y ago
  I think that works out to $3000/employee. If these employees work on average 2000 hours/year (could be wildly different to that, depends on how many of these employees are full-time, and the amount of hours in a full-time work year in various countries), and McDonalds was to pay each employee $1/hour more, the profits would drop by two-thirds, to $1000/employee. Without raising price, some franchises could eat[1] that extra cost; some would probably have to close shop. [1] Boom. Zing.
  - maxerickson 13y ago
    Most of the locations are franchises. It is pretty common for a franchisee to earn enough money to open another McDonald's. The corporate profits probably don't tell the whole story.
malyk 13y ago
McDonald's is just an example. Presumably when we are talking about one company paying a living wage we are talking about all of the companies in their industry doing the same. Then again, starbucks pays well, has health insurance, etc., has high prices, and is killing most of their competition...so maybe not. Also, the rise in prices doesn't have to be that large to cover the increase in pay. "From that humble start as a small restaurant, we're proud to have become one of the world's leading food service retailer in 118 countries, with more than 34,000 restaurants serving nearly 69 million people every day."[1] So an average store would serve ~2000 people a day. (69,000,000 / 34,000 = 2029.4) I don't know exactly what the workforce looks like, but it's probably something like 4 cashiers, 2 cooks, 2 helpers, and a manager. If we assume we don't need to pay the manager more then that's 8 employees per store that we want to have a higher pay. The big mac value meal is $5.69. Let's say the average customer buys that. [2] 2000 customers per day * $5.69 = $11,380 in revenue in a day. I'd bet it's more, but that's a start. If we have 8 employees working for 16 hours a day (different employees at different times, of course), and we want to raise their wages $3 per hour, how much more do we need to charge? Well, if we want to keep our profit margin the same then we'd need to earn an extra (8 employees * 16 hours * 3 dollars) $384 a day. So, we'll need to charge each customer $0.20 more per order. ($384 / 2000 customers per day).[3] So, really. Is changing the price of the big mac meal to $5.89 really going to change McDonald's market position? Is it going to make eating at mcdonald's that much more expensive that people will stop going? Is there any real impact on anybody but their employees? I'm sure there's an error in those calculations somewhere, but the general idea is that it doesn't take much of a price increase to cover the pay for employees.[4] This is what drives me crazy about these companies. Walmart moves so much merchandise that if they raised the prices on all of their prices by a nickel they could probably afford to pay everyone a living wage. [1] - http://www.mcdonalds.com/us/en/our_story.html http://www.mcdonalds.com/us/en/our_story.html [2] - in the USA, of course. [3] - there may be some other costs to paying employees more for the business, but I can't think of any off-hand. Also, the amount of tax collected per transaction would be higher as well, so not only does society benefit from having less people on public benefits, but it takes in more money overall that it can use for other things (in places where fast food is taxed, of course (is that everywhere?)). [4] - Another problem with this simple calc is that not all stores are average and many don't do anywhere near 2000 customers a day in business. They probably employ less people, but it's something to keep in mind.

cperciva 13y ago

Is it disgusting that in Canada, very profitable companies tell their employees to go to a (publicly funded) doctor when they get sick? If not, what's the difference between a publicly funded healthcare system and a publicly funded food stamp system?

room271 13y ago
Healthcare strikes unevenly and can cost for more than most people could ever earn - so an insurance scheme of some kind seems sensible. In practice the state can often provide this more efficiently than the private sector. Food on the other hand, costs a non-variable amount and is relatively inexpensive. The two examples you give are not at all similar.
Jare 13y ago
If you are employed you are paying for healthcare
- deleted 13y ago
  [deleted]
joshAg 13y ago
The difference is that the Canadian health system is designed for Canadians to use for long periods of time, whereas the american programs are only intended to be stopgap measures when a family is temporarily unable to provide the things provided by the program for themselves. Anyone in canada is able to take advantage of the publicly funded doctor. The system is purposely setup to cover every canadian. Only low income Americans are eligible to take advantage of SNAP and Medicaid. The system was originally designed to help people for relatively short periods of time when they are between work that pays them enough to not need the assistance. In fact, part of the reason many people dislike these programs are due to the mythical "welfare queen" that stays on programs like these for years and chooses not to get a better job because that would mean no longer getting the free (to her) assistance. If every American was eligible to be on food stamps for their entire life, then there wouldn't be a difference. But that's not how food stamps are designed nor how they work.