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Cents More for Big Macs Could Mean Thousands More For Workers

hamburger

Daniel Gross passes along “The McPoverty Calculator,” which argues that a negligible price hike of hamburgers would enable fast food outlets to pay their workers much better.

This week has seen mass protests and job walk-outs across the fast-food industry, with employees from McDonald’s to Taco Bell demanding higher wages and better treatment. Some labor economists have said that a slight increase in the price of a burger could result in a big jump in wages—enough to raise the fortunes of thousands of $7.25-an-hour employees. (Even working 40 hours a week, 52 weeks a year, a minimum-wage worker only takes home $15,080 a year, well below the poverty line of $18,480 for a family of three.)

But if the fast-food giants agreed to do this, would consumers bite?

To find out, we consulted with economists Jeannette Wicks-Lim and Robert Pollin who have studied the relationship between wage increases in the fast-food industry and the cost of doing business. Using their formula, we created a Big Mac calculator that lets you see how your extra cents could translate into real-life wages.

The poll tells us that “The average price of a Big Mac is $4.56, and many fast-food workers make $7.25 an hour.” It then asks readers to select how many more cents they’d be willing to pay.  According to the calculator, paying an additional 5 cents for the burger would bring workers to $8.03 an hour, or $16,696.79 a year–still below the poverty line. Still, that’s a pretty massive pay hike for a measly nickel a burger. Paying an additional 10 cents brings workers to $9.56 an hour, or $19,885.60–just above the poverty line. My initial answer, 20 cents*, almost doubles their salary to $14.12 an hour, a whopping $29,263.75 a year. That’s actually a decent wage in most of the country.

Now, it’s not a slam dunk that people would really pay an additional 20 cents for the burger in practice, especially if competitors were holding the line on prices. But I suspect they would; for most of us, it’s simply a negligible amount. And, of course, there’s no guarantee that all of the increased revenue would go to the employees.

Still, the point of the exercise is to demonstrate that, contrary to what most people—myself included—would instinctively guess, McDonald’s wouldn’t have to radically alter their business model to pay decent wages. I would have guessed that doubling wages would have required selling $8 hamburgers, not selling $4.56 burgers for $4.76.

Following the leak to the Wicks-Lim and Pollin paper [PDF], which argues for raising the minimum wage to $10.50, here’s how they derive their formula:

Our estimate that business costs for fast food restaurants would rise an amount equal to 2.7 percent of sales revenue is extrapolated from the findings of five separate studies.

In Table A1 below we present these five studies, along with the size of the minimum wage hike analyzed, and the accompanying estimate of the business cost increase relative to sales revenue figure.

We use the numbers in Table A1 to produce a scatterplot (see Figure A1) with the size of the minimum wage increase on the x-axis, and the size of the business cost increase to sales on the y-axis. We find that the curve with the following equation best fits the data points (with an R2 of 0.73):

y = 0.0454 x 0.6363

We use this equation to extrapolate that the business cost increase relative to sales figure given a 44.8-percent minimum wage hike would be 2.7 percent (0.0454 x 0.448 0.6363 = 0.027). Therefore, a price increase sufficient to cover half of this rise in costs would amount to a 1.35% (2.7%/2). For a $4.00 Big Mac, a 1.35% increase equals about 5 cents.

Here’s the scatterplot:

wage-hikes-business-costs

I’d note that two of the five studies cited are by the authors, which could potentially contaminate the results. But their calculations seem reasonably consistent with the other three studies when controlled for the size of the increase in wage (all five studies proposed different hikes).

It’s not clear how this extrapolates to other facets of social inequality. Raising wages to above-poverty levels would obviously be a great start. Adding health care and other benefits, presumably, would require additional price hikes. Still, I suspect Americans could sustain our gluttonous lifestyle quite easily if Big Macs went up to $5.

 

____________

*In actuality, I’m not a fan of McDonald’s hamburgers and only eat them when I’m traveling, in a hurry, and given no other fast alternatives. For that matter, I’m a ketchup-only guy, so wouldn’t order a Big Mac, anyway. But I likely wouldn’t even notice a 20 cent price hike.

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About James Joyner
James Joyner is the publisher of Outside the Beltway, an associate professor of security studies at the Marine Corps Command and Staff College, and a nonresident senior fellow at the Atlantic Council. He's a former Army officer and Desert Storm vet. He has a PhD in political science from The University of Alabama. Views expressed here are his own. Follow James on Twitter.

Comments

  1. anjin-san says:

    Interesting story about how McDonalds employees are treated

    Get paid with fee laden debit cards

    Highly-rated. Helpful or Unhelpful: Thumb up 19 Thumb down 1

  2. Me Me Me says:

    I have no doubt that the fast food giants will see this as an opportunity to increase their profits while letting the employees have about 1% of the difference so that they mount a PR campaign saying aren’t we great.

    Like or Dislike: Thumb up 8 Thumb down 2

  3. Gromitt Gunn says:

    It seems like one of the basic foundations of a healthy society’s social contract should be that someone with a full-time job doesn’t also have to be on food stamps.

    Highly-rated. Helpful or Unhelpful: Thumb up 29 Thumb down 2

  4. rodney dill says:

    There’s been a lot of stuff on the news in Detroit about fast food workers striking for $15.00 an hours wages. That’s pretty close to your 20 cents a burger increase. As with you, I don’t eat fast food that often anymore, but at their prices I don’t comparison shop either so I wouldn’t notice the difference. If I do go a McDonalds on a long drive about the only thing I like is their southern style chicken sandwich.

    Like or Dislike: Thumb up 2 Thumb down 1

  5. James Joyner says:

    @Gromitt Gunn: Part of this is cultural. A lot of these jobs used to be held by teenagers working part time for spending money. They’ve long since been replaced by adults trying to support themselves but the pay model hasn’t changed accordingly.

    Highly-rated. Helpful or Unhelpful: Thumb up 20 Thumb down 0

  6. anjin-san says:

    @ Gromitt Gunn

    a healthy society’s social contract should be that someone with a full-time job doesn’t also have to be on food stamps.

    In our society, this is how corporations pass on HR & labor costs to the taxpayers.

    Like or Dislike: Thumb up 14 Thumb down 1

  7. C. Clavin says:

    Screw those workers…they aren’t paying taxes anyway…and they are just mooching on the labors of the actual Job Creators. If prices go up the franchise holders and Corporate should keep all the profit. I’m not paying more just so these takers can spend more on drugs and alcohol and satellite TV and Cadillacs. I’ll boycott.

    Highly-rated. Helpful or Unhelpful: Thumb up 21 Thumb down 3

  8. C. Clavin says:

    Sorry…I just wanted to see what it was like to be a Republican for a moment.

    Hot debate. What do you think? Thumb up 19 Thumb down 5

  9. JKB says:

    @Gromitt Gunn:

    Of course, that would imply some objective measure of poverty involving food, shelter and clothing but not a right to smart phones, cable, etc. Otherwise, we end up with what we have a rising poverty level based on a relationship to the average rather than needs.

    Our poor live like the wealthy of 100 years ago and often their food shortage is due to poor use of their available funds. Or these days, dependency upon the programs so they can divert their other monies to discretionary items.

    A healthy society would aid those in need to meet basic subsistence but leave the incentives for them to become self sufficient for a higher standard of living rather than our current system where those on the government dole live better than those who try to work and provide for themselves but aren’t wealthy.

    Poorly-rated. Helpful or Unhelpful: Thumb up 5 Thumb down 47

  10. JKB says:

    It is interesting that people who don’t eat at McDonald’s, at least often enough for price to matter, feel that higher prices won’t be an issue. Of course, many who eat at McDonald’s routinely would find the price increase inhibiting since they are already running on the edge. This would include many of the current McDonald’s employees, who might be trying to have a night out feeding the kids.

    I expect when the adults review this calculator they will find the same simplistic and deceptive thinking that was used in a Huffingpost article on the same topic, but has been pointed out to be very flawed thinking.

    We could also point out that if McDonald’s paid more, they could hire more skilled workers thus throwing those working at the current wage out of work all together. Not to mention, if you can make X number of dollars working for McDonald’s, workers up the skill ladder will also depend an increase to maintain relative remuneration for skill thus increasing the cost of McDonald’s non-labor inputs.

    I to rarely eat at McDonald’s or any chain fast food joint. As I’m following a low-carb diet, there are few restaurants at all I can patronize. And I would barely notice a 20 cent price increase. But I am not so self-centered to think that I am the typical McDonald’s customer nor so naive to presume that my experience would translate to the typical McDonald’s customer.

    Hot debate. What do you think? Thumb up 9 Thumb down 15

  11. C. Clavin says:

    Hahahaha…
    JKB practically falls over him/herself in the rush to prove my point.
    Hahahahaha….

    Like or Dislike: Thumb up 16 Thumb down 3

  12. Jenos Idanian #13 says:

    This story was thoroughly debunked and mocked yesterday. In brief, it’s based on some very wrong numbers and assumptions, and the author has absolutely no clue 1) how to read these financial reports and 2) how McDonald’s actually works.

    I don’t so much, either, but luckily Tom Maguire does — and gives the author a serious schooling.

    But if we require fast food joints to pay more, just watch them cute employees and find more ways of automating things.

    On the other hand, McDonald’s (well, McDonald’s franchisees) are already paying $15.00 an hour – in North Dakota. It’s little law called “Supply and Demand,” not “minimum wage.”

    Hot debate. What do you think? Thumb up 5 Thumb down 19

  13. Rodney Dill says:

    @JKB:

    many who eat at McDonald’s routinely would find the price increase inhibiting since they are already running on the edge. This would include many of the current McDonald’s employees, who might be trying to have a night out feeding the kids.

    That wouldn’t be true at all for the current McDonald’s employees who would suddenly have plenty of money to eat at McDonalds (after nearly doubling their income). Others in other occupations that didn’t get the bump could feel a bite though.

    Like or Dislike: Thumb up 11 Thumb down 2

  14. C. Clavin says:

    Shorter Jenos…

    I totally agree with this whacko….because he is saying what I want to hear…and let’s all move to North Dakota…because I know for a fact that the fracking boom will last forever!!! BENGHAZZiiiiiii!!!!!!!

    Like or Dislike: Thumb up 14 Thumb down 1

  15. steve s says:

    Our poor live like the wealthy of 100 years ago …

    Nonsense. Having a cell phone and a refrigerator is nice, sure, but living in a constant fear of homelessness? Any moment, your car could break down, your mcjob could downsize you, your newborn could have crippling health problems which bankrupt you? Your tooth breaks and you don’t have the $150 to even get it pulled? That luxurious (necessary to get a job) cell-phone does not transport you back to the lifestyle of Henry Cabot Lodge.

    15 years ago I was young and naive enough to say exactly what you’re saying. Then life, and experiences, intruded.

    Highly-rated. Helpful or Unhelpful: Thumb up 42 Thumb down 2

  16. Gromitt Gunn says:

    @JKB: You are completely divorced from reality. Someone making $8.50 / hr [$1.25 *above* minimum wage] working 40 hours per week has about $1,050 per month to live on. How many places in the US can an adult live on $1,050 per month? Never mind one with kids.

    Hot debate. What do you think? Thumb up 17 Thumb down 3

  17. Eric Florack says:

    why not raise their wages to $75/hr? wouldnt that help them even more?
    Look, gang, im sympathetic to the workers plight. But the very thing being advocated here… artificially high wages, usually imposed by government, is exactly why the economy is in John Crapper’s elegant device, and thereby why these workers cant find something better for a job.

    Poorly-rated. Helpful or Unhelpful: Thumb up 9 Thumb down 40

  18. JKB says:

    @Rodney Dill:

    There must be some confusion. That was my point. Those who routinely eat at McDonalds would find the price increase noticeable, perhaps to the point not eating there.

    Of course, the problem with minimum wage increases is that they push up the costs of everything long term and price low-skilled individuals out of the entry level job market. And there is a cap on how high wages can go at which point automation will become cost feasible.

    Automation has many features for the employer. Just by making the transition, the employer gets out of the minimum wage business, their average employee salary goes way up and they rid themselves of a host of government regulators as well as the costs of hiring and managing poor-work habit employees.

    There is already a machine in China that can make burgers faster and better. It also starts with forming the patty, slicing the tomato rather than pre-prepped items which adds to the promotional features.

    Like or Dislike: Thumb up 3 Thumb down 4

  19. steve s says:

    BTW, this is why I will never, ever buy a Papa John’s pizza. The $500 million dollar owner calculated that if he gave all his employees basic health insurance, he’d profit 3-5 cents less per pizza, so he fought against it hard.

    I’m not a communist, but if anybody’s morally cretinous enough to be put up against the wall….

    Highly-rated. Helpful or Unhelpful: Thumb up 38 Thumb down 3

  20. Rodney Dill says:

    @JKB: You said:

    This would include many of the current McDonald’s employees, who might be trying to have a night out feeding the kids

    …but it wouldn’t, unless you think they could get bumped from $7 something an hour to $15 an hour and be less able to to afford 20 cents more a burger. That would be math I’m not familiar with.

    Like or Dislike: Thumb up 14 Thumb down 1

  21. C. Clavin says:

    “…artificially high wages, usually imposed by government, is exactly why the economy is in John Crapper’s elegant device, and thereby why these workers cant find something better for a job…”

    There is absolutely no basis in fact for that statement. None. Zero. You must be proud of your ignorance.

    Like or Dislike: Thumb up 16 Thumb down 3

  22. rudderpedals says:

    Has anyone seen a comparison between American McDonald’s wages vs franchisee worker pay in Japan, Britain, France or Germany? I’d wager the pay & bennies are higher over there but it would be good to know the facts.

    Like or Dislike: Thumb up 2 Thumb down 0

  23. Rafer Janders says:

    @Jenos Idanian #13:

    But if we require fast food joints to pay more, just watch them cute [sic] employees and find more ways of automating things.

    Right, because they won’t do that anyway.

    Highly-rated. Helpful or Unhelpful: Thumb up 27 Thumb down 1

  24. Rafer Janders says:

    @rudderpedals:

    Has anyone seen a comparison between American McDonald’s wages vs franchisee worker pay in Japan, Britain, France or Germany? I’d wager the pay & bennies are higher over there but it would be good to know the facts.’

    You’d also have to account for the fact that workers in those countries can count on many public goods such as education, public transit, healthcare, and retirement from the state, while in the US workers have to pay or save for those out of their own pocket, thus further reducing their effective wage. Dollar for dollar the foreign workers generally come out ahead of ours.

    Like or Dislike: Thumb up 14 Thumb down 0

  25. Jenos Idanian #13 says:

    @Gromitt Gunn: You ever wonder just how many people actually work for an entire year for minimum wage? Not that many.

    And just who makes minimum wage? Mainly younger workers (25 or younger), who usually don’t have a family of four to be the sole support of. They often have roommates with whom they can share living expenses.

    And when wages are coerced up, employers respond by cutting expenses to make up for it. Got five people doing a job? Fire one, tell the other four they’ll have to make up the slack.

    And who will get fired? Most likely the least valued employee, the one least likely to find another job. The one that the “raise the minimum wage” crowd says they’re most concerned about.

    Margaret Thatcher once noted that the problem with socialism is that you eventually run out of other people’s money. Likewise, the liberal idea of generosity is to give away other people’s money.

    Poorly-rated. Helpful or Unhelpful: Thumb up 5 Thumb down 27

  26. ernieyeball says:

    All you whining do gooders winners of the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel who think that Burger Bums deserve higher wages should get together, start a hamburger chain and pay the help whatever you think is “fair” (whatever that means).
    I’m sure you will have customers lining up at the door ready to empty their pockets of cash and give it to you so you can give it to the help.
    What will you call it? How about “Out of Business Burger”.

    Like or Dislike: Thumb up 3 Thumb down 12

  27. Scott says:

    @rudderpedals: Minimum wage in Canada is 9.75 and Australia 16.88. Two countries roughly similar to the US.

    Source: http://en.wikipedia.org/wiki/List_of_minimum_wages_by_country

    Like or Dislike: Thumb up 5 Thumb down 0

  28. michael reynolds says:

    The numbers first quoted are simplistic, but true enough. Typically casual restaurants and fast food restaurants run labor costs in the area of 25% give or take. But of course that includes management employees who make substantially more and are not the subject of the debate. We’re talking about the minimum wage hamburger flippers. It’s quite possible contra Jenos’ source, that the front line employees account for something like 17% or close enough.

    In fact we don’t need to guess whether fast food wages can be raised while remaining profitable: In-N-Out starts their people at $10.50 plus benefits. In-N-Outs “Double Double” is a superior version of the Big Mac and sells for the same price (some variation by locations, etc).

    In-N-Outs are spotless, their employees are very motivated, their food is good, and they do it all with substantially higher wages. Which would make the original piece essentially correct and the Republican push-back a baloney sandwich.

    Highly-rated. Helpful or Unhelpful: Thumb up 34 Thumb down 1

  29. David M says:

    Why is screwing over employees a “conservative” position now? Corporations maximizing profit over everything else certainly should be considered shameful, not something to celebrate.

    Highly-rated. Helpful or Unhelpful: Thumb up 25 Thumb down 1

  30. Jenos Idanian #13 says:

    @ernieyeball: They will never actually start their own franchise and put their theories to the test. Because while they will never admit it, they know — as do we — that their theories will be destroyed by the free market. The only way they can make their theories work is if they have the power of the government behind them. They need the coercive power of the state to back them up and impose their theories on everyone for them to believe their ideas will work.

    They still won’t work, of course, but at least they’ll have the satisfaction of making a bunch of other people fail, too. And those who actually manage to survive? Obviously, they cheated or something, and don’t deserve their success, and so they must be punished.

    Poorly-rated. Helpful or Unhelpful: Thumb up 4 Thumb down 21

  31. Scott says:

    @Jenos Idanian #13: That is why a national minimum wage is necessary. So all are raised. The alternative is the continuing commodification of human beings and a race to the bottom mentality. Ultimately, the end result is degradation of people into serfs and slaves; the very thing the right is railing about.

    Like or Dislike: Thumb up 13 Thumb down 1

  32. Rafer Janders says:

    @Jenos Idanian #13:

    Mainly younger workers (25 or younger), who usually don’t have a family of four to be the sole support of.

    The median fast food worker is 28 years old, and the median female fast food worker is 32.

    Highly-rated. Helpful or Unhelpful: Thumb up 17 Thumb down 0

  33. Jenos Idanian #13 says:

    @Scott: That simply doesn’t hold true. As I noted above, McDonald’s is paying $15.00 an hour as a starting wage already — in North Dakota. And they aren’t doing it there because of a law passed by man, but by a higher law — that of supply and demand. If they want the workers, then they gotta pay that much for them.

    And again, the original article was completely flawed from word one. It looked at McDonald’s Corporate payroll expenses, while the majority of McDonald’s workers in restaurants are paid by the franchisees. Jacking up what Corporate pays will simply result in higher franchise fees — leaving even less money to pay the front-line workers.

    Like or Dislike: Thumb up 4 Thumb down 10

  34. Scott says:

    @Jenos Idanian #13: I think it is great that McDonald’s is paying $15.00/hr in North Dakota. I’m more concerned about the floor, not the ceiling of wages. I just don’t agree with the economic philosophy of treating human beings as being subject to supply and demand as if they were inanimate objects. I understand your point; I just don’t agree with it.

    Like or Dislike: Thumb up 9 Thumb down 1

  35. Stan says:

    This just in — Republicans in the House plan on cutting SNAP (food stamp) benefits by 5%. They also oppose an increase in the minimum wage, and their counterparts in state legislatures they control oppose relaxing requirements for Medicaid. All of this has a devastating effect on low income workers.

    I bring up these well known facts because I’m fascinated by the strong support for the Republican party among white voters of modest means. Not all of it is due to racism or social conservatism. So why do they vote Republican?

    Like or Dislike: Thumb up 12 Thumb down 0

  36. Jenos Idanian #13 says:

    @Rafer Janders: You’re conflating “fast food workers” with “minimum wage workers.” I sincerely doubt that the vast number of fast-food workers make minimum wage — when you factor in supervisors, leaders, managers, and workers who’ve shown ability and reliability.

    Like or Dislike: Thumb up 2 Thumb down 11

  37. rudderpedals says:

    @Rafer Janders: Absolutely.

    Like or Dislike: Thumb up 2 Thumb down 0

  38. Gromitt Gunn says:

    @ernieyeball: I don’t need to. In N’ Out, Costco, and Trader Joe’s (to name three large service employers) have already gone very far past proof-of-concept and straight into consistently delivering profits year-over-year, through macro-level booms and busts, while respecting front-line employees, treating them as human beings with agency and paying them accordingly.

    Highly-rated. Helpful or Unhelpful: Thumb up 24 Thumb down 0

  39. James Pearce says:

    @michael reynolds:

    In fact we don’t need to guess whether fast food wages can be raised while remaining profitable: In-N-Out starts their people at $10.50 plus benefits.

    Also look at Chipotle. Paying people well and making good food.

    Jenos (and others) seem to think the only way to make money in the restaurant business is to sell cheap food, pay your employees crap wages, and have thousands of locations. One glance at the actual marketplace exposes that as a lie.

    McDonald’s chooses to operate this way. If nothing else, this study illustrates that they could choose to operate a different way and suffer no ill consequences. Indeed, the result would be better for the employees than their current business practices.

    We’re often reminded that corporations are people, my friends. It’s nice to know that the people who say that crap so loudly are the ones who least believe it.

    Highly-rated. Helpful or Unhelpful: Thumb up 22 Thumb down 0

  40. PD Shaw says:

    @Jenos Idanian #13: Tom Maguire could have cut to the chase by simply pointing out that most low-level employees at a McDonald’s are employed by a franchise and thus the numbers are mostly bunk.

    I would add: McDonald’s franchise owners are free to pay whatever wage they want to pay their workers. McDonald’s franchise owners are free to charge whatever they want for a Big Mac. Why is there no example of a McDonald’s franchise owner increasing food prices to pay workers considerably more? Answer: McDonald’s customer base has high elasticity of demand.

    Like or Dislike: Thumb up 4 Thumb down 2

  41. Rafer Janders says:

    @Jenos Idanian #13:

    I sincerely doubt that the vast number of fast-food workers make minimum wage —

    Oh, well, as long as your doubt is sincere, and not backed up with any citations or data. That’s good enough for me.

    Highly-rated. Helpful or Unhelpful: Thumb up 21 Thumb down 0

  42. ernieyeball says:

    @michael reynolds: The In-N-Out joints that I have patronized on my West Coast drives have very limited menus compared to McDonalds, Burger King et al.
    Burger, Fries, beverage and not much else. Can’t remember if I got a decent cup of mud there or not.
    I believe this approach might reduce overhead and provide more profit for the owners. It is up to them to distribute this loot as they see fit.
    —–
    When I lived in The City 40 years ago or so a fried baloney sandwich on white bread with yellow mustard was good eatin’. Of course I had to budget for weed and cheap beer too.

    Like or Dislike: Thumb up 0 Thumb down 4

  43. C. Clavin says:

    “…As I noted above, McDonald’s is paying $15.00 an hour as a starting wage already — in North Dakota. And they aren’t doing it there because of a law passed by man, but by a higher law — that of supply and demand. If they want the workers, then they gotta pay that much for them…”

    C’mon…even you have to realize you are talking about a freak event…essentially a gold-rush in a sparsley populated area. Are you really suggesting we make policy based on this? Because that’s stupid even on the Jenos scale.

    Highly-rated. Helpful or Unhelpful: Thumb up 15 Thumb down 0

  44. C. Clavin says:

    “…When I lived in The City 40 years ago or so a fried baloney sandwich on white bread with yellow mustard was good eatin’. Of course I had to budget for weed and cheap beer too…”

    fried baloney is still good eatin’. the classics never go out of style.

    Like or Dislike: Thumb up 0 Thumb down 0

  45. David M says:

    @PD Shaw:

    There are corporate run McDonalds stores, so there’s no reason to think the franchise labor costs are significantly different.

    Like or Dislike: Thumb up 2 Thumb down 0

  46. Me Me Me says:

    The “law of supply and demand” doesn’t exist. There is a MODEL that explores the relationship between supply and demand.

    And you know what? Government successfully regulates within that model all the time with no adverse consequences.

    That is why your natural gas price doesn’t quintuple when there is another blizzard forecast for your state at the end of a harsh winter.

    Like or Dislike: Thumb up 11 Thumb down 1

  47. michael reynolds says:

    @David M:

    Yes, screwing over employees is a conservative position. It shows you just how successful the Fox-Limbaugh brainwashing has been that guys who are in many cases sitting about a dollar away from being those very burger flippers make the case for why their fellow working man should be bent over for the benefit of billionaire bosses.

    It’s the Pinkerton or slave-driver mentality. There’s always some dumb thug willing to toady the man in power and do his bidding.

    Like or Dislike: Thumb up 16 Thumb down 2

  48. anjin-san says:

    @ steve s

    Yea, Papa John’s. No money for employee health care, plenty of money for the CEO to hire sports stars to do commercials with him.

    What’s more important to a company? Workers being able to see a doctor, or the boss getting to drop Peyton Manning’s name so people will know what a big shot he is – in the case of Papa John’s, we know the answer.

    Like or Dislike: Thumb up 8 Thumb down 1

  49. michael reynolds says:

    @ernieyeball:

    For us it was Ramen, oatmeal and P&J with the occasional baloney.

    In-N-Out does run a more limited menu, but that goes to food costs, loss, efficiency etc… more than wages. Typically in restaurants the big three are food cost, labor and fixed expenses like rent, utilities, so on. The two things a store manager obsesses over are labor and food cost. The food cost is to a surprising degree a function of employee management. ie., when your employees hate you they rob you blind. Or when you burn through employees so you never have experienced staff they waste food either through error in preparation or simple mishandling. (Failing to refrigerate, etc…)

    My guess would be that In-N-Out by virtue of having employees that give a sh!t saves on food costs, while Macs and BK and the rest take bigger hits from theft and incompetence which they solve by paying their CEO even more millions, of course. Because it literally does not occur to them to treat the slaves better.

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  50. ernieyeball says:

    @Gromitt Gunn: In N’ Out, Costco, and Trader Joe’s.

    That’s nice.
    Unfortunately for me here in Sleepytown the closest Trader Joe’s and Costco are over 80 miles away. To get in and out with a burger I would have to drive to Allen TX, a mere 600 miles.
    I actually thought about making the trip to the Lone Star State to check out the new 85 mph tollway.
    Then I read about the Crazy Ants!
    http://www.usatoday.com/story/news/health/2013/06/30/crazy-ants-south/2446941/

    Like or Dislike: Thumb up 0 Thumb down 3

  51. michael reynolds says:

    @anjin-san:

    Ever notice how In-N-Out and Costco do very little advertising? Could it be that customers don’t need to be bullied by them because people know they’re pleasant, well-run businesses? Unlike Wal-Mart or Target or Mac or BK which have to hammer us incessantly at great expense?

    Highly-rated. Helpful or Unhelpful: Thumb up 17 Thumb down 0

  52. C. Clavin says:

    @ Michael Reynolds…
    Allow me to edit your two most recent comments…

    Yes, screwing over employees is a conservative position.

    Because it literally does not occur to them to treat the slaves better.

    Much pithier…no real loss of content.

    Like or Dislike: Thumb up 4 Thumb down 0

  53. PD Shaw says:

    @David M: “There are corporate run McDonalds stores, so there’s no reason to think the franchise labor costs are significantly different.”

    Of course there is, franchises set their own prices and pay their own wages. They are not directly managed by the Corporation, so there is no reason to know how they would compare.

    But that’s beside the point, the numbers are derived from McDonald’s 2012 annual report, which include not only salary and wages from corporate run stores, but also corporate management, technicians, accountants, lawyers, the CEO, etc.

    Like or Dislike: Thumb up 1 Thumb down 1

  54. Brett says:

    Most of the arguments I’ve heard against this (including JKB’s link) seem like arguments for pushing for a nation-wide $15 minimum wage instead of just a $15 wage at McDonald’s. If it’s just McDonald’s, then the price difference might push people to competitors and come at the expense of poor people eating there who don’t work there – but if everyone is earning the minimum wage of $15, that’s not a problem.

    Considering that Australia has plenty of McDonald’s and a minimum wage even higher than that, I suspect it won’t really be a problem in the end. There’s precedent there.

    That said, if McDonald’s doesn’t want to play ball in that court, then they ought to just come right out and say that line worker positions aren’t supposed to be something you live on – they’re just part-time jobs. Then cut the hours to 20 hours or below just to reinforce that.

    Like or Dislike: Thumb up 12 Thumb down 2

  55. ernieyeball says:

    @michael reynolds: I defer to your experience. My contact with the food service industry these days is as a customer.
    I did deliver pizzas once.
    Slavery? I worked in my dad’s doughnut shop when I was in Jr. HS. No cash pay. Just all the left over day old doughnuts I could eat and a roof over my head.

    Like or Dislike: Thumb up 0 Thumb down 3

  56. michael reynolds says:

    @PD Shaw:

    It’s not nearly that simple. Say you’re a Mac franchise owner with six stores in the Austin, TX area. There are, let’s say, four other franchisees within your district, each with multiple stores. You decide to jack up the pay at your store. What happens next? The other franchisees come down on you like the wrath of God because the first effect will be to strip out all of their best employees who can now work for you.

    Don’t overlook the effects of corporate culture and training.

    Like or Dislike: Thumb up 7 Thumb down 0

  57. David M says:

    @PD Shaw:

    That’s all very nice, but so what. There is no chance that McDonald’s couldn’t raise wages a lot with small price increases. Nothing you said changes that.

    Like or Dislike: Thumb up 2 Thumb down 0

  58. michael reynolds says:

    @ernieyeball:

    I worked Magic Pan, Sambo’s, Denny’s, Foster Farm and Carl’s Junior, in addition to various non-chain restaurants ranging from crap-on-a-steam table to black tie.

    Store managers at chains are under terrific pressure to hit assigned numbers. They do the easy things: screw employees over on hours and pay, skim from the till to depress income and use it to pay under the table, bring in inferior non-standard food, etc… I worked at one chain where skimming was actual taught by the district manager to favored franchisees so they could hit their numbers. Of course this corruption spread, theft was rampant, and the whole chain went belly-up.

    Like or Dislike: Thumb up 7 Thumb down 0

  59. PD Shaw says:

    @David M: Since McDonald’s doesn’t set wages or set prices for the products for franchises what “small price increases” are you talking about?

    Like or Dislike: Thumb up 0 Thumb down 2

  60. James Pearce says:

    @PD Shaw:

    Why is there no example of a McDonald’s franchise owner increasing food prices to pay workers considerably more? Answer: McDonald’s customer base has high elasticity of demand.

    If such an example is found, I guess that means you’re wrong??

    For what it’s worth, I don’t think I’d be caught dead appealing to the franchise owners. Some of them own and operate multiple stores, which insulates them a bit from actual market pressures.

    We heard from a lot of these guys during the Obamacare debates, when they complained they had 40 locations, but couldn’t afford health insurance for their employees. Yep, can afford to pay rent and utilities on 40 locations….but it’s poverty when it comes to compensating their workers? That’s not even remotely plausible.

    Like or Dislike: Thumb up 5 Thumb down 0

  61. Eric Florack says:

    @Jenos Idanian #13: I expect the npercentage of part time workers to be far higher now than in 08…. demonstrably part of Obamacare, etc.

    to the rest… might I remind you that this is almost verbatim the discussion about Detroit’s ability to cover union wages several decades back? the crumbling mess that is Detroit seems stark testimony to where the logical conclusion of the “it won’t cost much more” argument leads.

    Like or Dislike: Thumb up 1 Thumb down 12

  62. michael reynolds says:

    Spare me the “franchise” dodge. McDonalds can claim all day long they don’t dictate to franchisees, but it’s b.s. Of course they do. They start by setting the price for food which can only come through the approved McD’s supply chain. And obviously a franchisee who steps out of line in any significant way will be hammered back into place. Don’t be a sucker for corporate b.s.

    Like or Dislike: Thumb up 8 Thumb down 0

  63. David M says:

    @PD Shaw:

    English mfer, do you speak it?

    Like or Dislike: Thumb up 0 Thumb down 0

  64. charles austin says:

    1. I despair that so many otherwise intelligent adults still clamor for command economies.

    2. Milton Freidman and Adam Smith have previously addressed most of the recommendations covered in these studies, the article, the post and the comments before and much better than I can ever hope to.

    3. The authors of the studies cited and most of the commentariat here do not seem to understand how franchising works. At. All. Not that knowledge or experience is a prerequisite for holding forth on what some small business owner can and can’t afford or conflating a franchisor’s business model, costs and revenue streams with a franchisee’s business model, costs and revenue streams. And then there’s the whole point of why anyone goes into business in the first place. Hint, it’s not to satisfy someone else’s ephemeral idea of social justice. But I digress.

    4. So, as I understand it, a poll of self-selecting people from a largely middle class or better demographic reading a short summary of a (flawed) economic anlysis are deciding how much the price of a product they do not buy should be inflated for one lower income demographic (McDonald’s patrons) to benefit another lower income demographic (McDonald’s workers). Tough to come up with a better example of a systemic failure of do-gooder progressivism to connect real solutions to real problems than this rather regressive tax on some poorer people, who you seem to have little respect or concern for. I mean, they do eat at McDonalds. Ewwwww.

    5. FWIW, adding $0.20 to a Big Mac represents an inflation rate, or social justice tax, of 4.4% on those who eat them, but fortunately food is left off the CPI so, you know, no one will notice. But hey, you’ll feel better about yourself knowing you’ve struck a blow for social justice for some, so there’s that to balance it out. It’s not like it costs you anything to do good since you’re not going to be buying any Big Macs.

    6. “Still, I suspect Americans could sustain our gluttonous lifestyle quite easily if Big Macs went up to $5.” That’s quite the generalization to justify a gratuitous insult for many of your fellow citizens. Have you contracted Bloombergitis?

    Whoa, that’s two comments in a month. I’m on a roll.

    Like or Dislike: Thumb up 6 Thumb down 13

  65. Me Me Me says:

    @Eric Florack:

    I expect the npercentage of part time workers to be far higher now than in 08…. demonstrably part of Obamacare, etc.

    I guess you don’t know the meaning of the word “demonstrably”.

    Like or Dislike: Thumb up 6 Thumb down 0

  66. Tyrell says:

    Now: “Stay in school or you will wind up flipping burgers”
    Future: “Drop out and you can still get a good paying job – flipping burgers”

    Like or Dislike: Thumb up 0 Thumb down 4

  67. James Pearce says:

    @charles austin:

    And then there’s the whole point of why anyone goes into business in the first place. Hint, it’s not to satisfy someone else’s ephemeral idea of social justice.

    Yes, it’s to make money. But apparently just for the owners? The workers….who, you know, do the work……are just supposed to be happy with their crumbs.

    That’s how it goes?

    @Tyrell:

    Future: “Drop out and you can still get a good paying job – flipping burgers”

    Cute joke.

    Flipping burgers is a perfectly noble occupation. I’ll show you a dozen places in my neighborhood whose proprietors make a decent living doing just that.

    Flipping burgers for McDonald’s though…….yeah, that’s a one-way ticket to nowhere. Glad you noticed.

    (Of course, can’t blame McDonald’s for that, though…..gotta blame the hamburger industry in general.)

    Like or Dislike: Thumb up 10 Thumb down 0

  68. Rafer Janders says:

    @Eric Florack:

    I expect the npercentage of part time workers to be far higher now than in 08…. demonstrably part of Obamacare, etc.

    Astonishing, since Obamacare hasn’t actually taken effect yet.

    On the other hand, what has happened since 2008 that would cause the number of people forced into part-time jobs to increase….? Oh, what could it be? Help me out here, I’m drawing a blank….

    Like or Dislike: Thumb up 8 Thumb down 0

  69. Tyrell says:

    @James Pearce: Oh , no disrespect intended at all to people who work at McDonald’s or a high end restaurant. All honest work is honorable. I was stating a popular phrase that you hear all the time applied to kids in school. The McDonald’s up the road usually has lines out the door at their weekly application sessions, $7.50 an hour or not.

    Like or Dislike: Thumb up 2 Thumb down 0

  70. michael reynolds says:

    @Rafer Janders:

    Once again, a man who can time travel in one direction to alter his own birth certificate can obviously create a health care plan capable of causing effects prior to the cause of same. It’s simple to understand. You simply take a long steel probe, insert it into your tear duct and hammer into your head. Swirl it around a bit. You’ll find that Florack and Jenos make perfect sense.

    Like or Dislike: Thumb up 10 Thumb down 0

  71. PD Shaw says:

    @David M :

    “mfer”

    Oh, I see, you’re one of the trolls that OTB likes to cultivate.

    Like or Dislike: Thumb up 1 Thumb down 0

  72. PD Shaw says:

    @James Pearce:”If such an example is found, I guess that means you’re wrong??”

    Well, I guess to the extent that North Dakota counts, I would be. My point about the franchise owners is simply that McDonalds is one of the most successful franchise operations of all time, by many meansures, and it accomplishes this by giving the franchise-owners a lot of flexiblity in most aspects of its business. Most franchise arrangements are far more tightly controlled by the corporation. By not setting prices and wages they are able to receive franchise royalties from both a high cost/ tight-labor market area like North Dakota, and low cost, high unemployment areas.

    If it makes sense to a franchise owner to raise wages and Big Mac costs they can and will; but they are still selling the same product, which is a quick, inexpensive burger.

    Like or Dislike: Thumb up 0 Thumb down 0

  73. James Joyner says:

    @charles austin:

    I’m not putting forth the article as gospel but as a reasonable starting point for a conversation–which indeed it appears to have sparked. But you have to actually argue why the analysis is flawed rather than simply calling it that.

    Do I take it as a given that raising burger prices by 4.4% would allow wages to be doubled? Nope. I’m not in a position to do the analysis. But the very notion would have caused me to exclaim “Bullshit” before reading the study summary.

    That Americans are getting demonstrably fatter, partly as a result of our food choices, isn’t a gratuitous insult–hell, I’m almost 20 pounds over my college weight, and it ain’t from weight lifting—it’s a fact of life.

    Like or Dislike: Thumb up 8 Thumb down 0

  74. C. Clavin says:

    Ohhh…it’s a Florack-Jenos love fest.
    Imagine the two of them…both in their repsctive mom’s basement…each swooning over the intellect the other shows…each admiring how the other finds even crazier wing-nuts to link to.
    Jenos in total awe of how many times the word “ni@@er” shows up on Florack’s website. Florack marvelling at how Jenos was able to actually figure out what an anagram is.
    So adorable.

    Like or Dislike: Thumb up 4 Thumb down 1

  75. Gromitt Gunn says:

    Guys like charles austin, ernieyeball, JKB, bithead, etc. crack me up, in part being their understand of what makes a liberal is so ridiculously disjointed. Separate from the issues surrounding the fact that a liberal is whatever Rush defines it as today, regardless of what it meant yesterday, there’s the core conflation of economic vs political philosphies. One can be both a liberal and a capitalist at the exact same time, without one’s head exploding or any major degree of cognitive dissonance.

    And so acting like liberals are all raging socialists trying to undermine free markets at every step just makes you look ignorant and renders your arguments unserious at best. There are plenty of CPAs, MBAs, finance guys, marketing gurus, etc., who are also politically liberal, who understand rudimentary economics, break-even analysis, risk profiles, business combinations, how to read financial statements, etc., and still think that people should be regarded as individual agents deserving dignity, respect, and a fair opportunity at individual success or failure, and, yes, a safety net for those who can’t or don’t make it through no fault of their own.

    But by all means, *please* feel free to keep constructing and then tearing down those strawmen and shibboleths, boys. At least the time you waste on that delays you from doing any real damage to real people.

    Highly-rated. Helpful or Unhelpful: Thumb up 19 Thumb down 0

  76. James Pearce says:

    @PD Shaw:

    If it makes sense to a franchise owner to raise wages and Big Mac costs they can and will; but they are still selling the same product, which is a quick, inexpensive burger.

    You say that as if this is a physical law of nature.

    Me….I’m left wondering why McDonald’s is, as you say, “one of the most successful franchise operations of all time,” and yet, actually being employed by a McDonald’s leaves one with a poverty-level income.

    Like or Dislike: Thumb up 6 Thumb down 0

  77. C. Clavin says:

    All of us should keep in mind, during this entire discussion, that the only Private Sector job Paul Ryan has ever had is at a McDonalds.
    Also…he really, really, really likes fish.
    http://4.bp.blogspot.com/-TtVURst2714/UdJQGItpwDI/AAAAAAAARJQ/PNwBgE55iBQ/s600/Paul+Ryan+Likes+Fish.jpg

    Like or Dislike: Thumb up 1 Thumb down 0

  78. wr says:

    @JKB: “We could also point out that if McDonald’s paid more, they could hire more skilled workers thus throwing those working at the current wage out of work all together. ”

    Why would they hire “more skilled” workers? And more skilled at what? McDonalds’ employees are trained to work the McDonalds machines and systems. Is it going to help the corporation to go hire electrical engineers to make the Big Macs?

    Like or Dislike: Thumb up 4 Thumb down 0

  79. Latino_in_Boston says:

    This seems relevant:

    “in a free nation where slaves are not allow’d of, the surest wealth consists in a multitude of laborious poor.” – Bernard de Mandeville. 18th Century Philosopher.

    Like or Dislike: Thumb up 7 Thumb down 0

  80. wr says:

    @Jenos Idanian #13: “You ever wonder just how many people actually work for an entire year for minimum wage? Not that many.”

    And you’re basing this incredibly precise statistic on what, exactly? Your belief that it’s still 1967?

    Usually you can find some loser libertarian to make up phony “facts” for you, but here you can’t even be bothered.

    “And just who makes minimum wage? Mainly younger workers (25 or younger), who usually don’t have a family of four to be the sole support of. They often have roommates with whom they can share living expenses. ”

    Ooh, look, another blast from 1967. Of course it’s possible that Jenos isn’t actually depending on his own “assumptions” — he could be deliberately lying again.

    “And when wages are coerced up, employers respond by cutting expenses to make up for it. Got five people doing a job? Fire one, tell the other four they’ll have to make up the slack. ”

    And of course Jenos has failed to notice that over the last couple of decades, corporations have fired not only that one, but at least two others and told the others to make up the slack. Or perhaps he hasn’t bothered to see the huge gains in productivity over the last twenty or thirty years, or just how little of those gains have been shared with the workers.

    And now he’s going to finish off with the most hackneyed of all right-wing cliches, that moronic Thatcher quote which he and his dopey buddies think answers any questions about poverty and income. This may well be the laziest thing ever posted on the internet.

    Hey Jenos, your buddy Zimmerman was pulled over for speeding or something. Why don’t you write a couple of outraged paragraphs on how he’s being targeted by liberals and minorities? At least you pretend you care about him.

    Like or Dislike: Thumb up 7 Thumb down 1

  81. wr says:

    @Jenos Idanian #13: “Because while they will never admit it, they know — as do we — that their theories will be destroyed by the free market. ”

    Which is why Costco, which pays employees well and treats them better, is thriving while Walmart finds itself struggling.

    You really are a sad sack of ignorance, just wallowing in your hatred of everyone in the world and your joy at all misery.

    Like or Dislike: Thumb up 11 Thumb down 0

  82. wr says:

    @michael reynolds: “P&J with the occasional baloney”

    Not together on one sandwich. Please, no.

    Like or Dislike: Thumb up 2 Thumb down 0

  83. Ben Wolf says:

    @Charles Austin

    1. I despair that so many otherwise intelligent adults still clamor for command economies.

    All capitalist economies are command economies.

    2. Milton Freidman and Adam Smith have previously addressed most of the recommendations covered in these studies, the article, the post and the comments before and much better than I can ever hope to.

    Milton Friedman was a fool whose theories drove the planet into a global recession at the end of the 1970′s. As for Adam Smith, you clearly have not read him, otherwise you would be aware he specifically advocated government policy to improve the plight of working people.

    3. The authors of the studies cited and most of the commentariat here do not seem to understand how franchising works. At. All. Not that knowledge or experience is a prerequisite for holding forth on what some small business owner can and can’t afford or conflating a franchisor’s business model, costs and revenue streams with a franchisee’s business model, costs and revenue streams.

    You just repeated an 80 year old fallacy of composition. What happens at the individual level does not necessarily translate to the aggregate.

    And then there’s the whole point of why anyone goes into business in the first place. Hint, it’s not to satisfy someone else’s ephemeral idea of social justice. But I digress.

    They start a business because government requires them to work, or had you not noticed unemployment does not exist in a non-monetized economy?

    4. So, as I understand it, a poll of self-selecting people from a largely middle class or better demographic reading a short summary of a (flawed) economic anlysis are deciding how much the price of a product they do not buy should be inflated for one lower income demographic (McDonald’s patrons) to benefit another lower income demographic (McDonald’s workers). Tough to come up with a better example of a systemic failure of do-gooder progressivism to connect real solutions to real problems than this rather regressive tax on some poorer people, who you seem to have little respect or concern for. I mean, they do eat at McDonalds. Ewwwww.

    You do not understand the difference between rising nominal and rising real wages.

    5. FWIW, adding $0.20 to a Big Mac represents an inflation rate, or social justice tax, of 4.4% on those who eat them, but fortunately food is left off the CPI so, you know, no one will notice. But hey, you’ll feel better about yourself knowing you’ve struck a blow for social justice for some, so there’s that to balance it out. It’s not like it costs you anything to do good since you’re not going to be buying any Big Macs.

    You do not understand the definition of inflation which is a continuous rise in prices over a period of time, not a rise in the price of one good at one time. Given an 8-10% output gap at present a twenty cent increase would result in risingreal wages, meaning greater purchasing power.

    By the way, you do know where money comes from, right?

    “Still, I suspect Americans could sustain our gluttonous lifestyle quite easily if Big Macs went up to $5.” That’s quite the generalization to justify a gratuitous insult for many of your fellow citizens. Have you contracted Bloombergitis?

    The primary consumers of fast food are middle-class.

    Like or Dislike: Thumb up 9 Thumb down 2

  84. Scott says:

    @wr: FYI. Minimum in 1967 is equivalent to $9.78 today.

    Like or Dislike: Thumb up 3 Thumb down 0

  85. michael reynolds says:

    @PD Shaw:

    It is simply not true that McDonalds franchisees have a lot of freedom. They are required to be educated by McD. Their physical store is dictated by McD. Their suppliers are all dictated by McD and generally owned by McD. Their uniforms, advertising, work standards and of course menu are all dictated by McD.

    In addition, I am willing to bet you a cold beer that McD’s franchise agreement language gives them a great deal of leverage over further specifics. And as I pointed out earlier, the idea that a given franchise could raise pay and thus strip all the most experienced employees out of stores in the same area run by other franchisees, is ridiculous.

    You are swallowing McDonalds propaganda hook, line and sinker. There is no more tightly-controlled bunch of franchisees in the business, hence the 100% lockstep sameness location-to-location.

    Like or Dislike: Thumb up 7 Thumb down 0

  86. anjin-san says:

    @ wr

    Which is why Costco, which pays employees well and treats them better

    Starbucks, another company that pays more than they have to and provides better benefits than the market demands, has done pretty well.

    As always, Jenos sounds like a mid-level cubical guy making 31K a year in a third tier city who thinks he is a capitalist.

    Like or Dislike: Thumb up 8 Thumb down 0

  87. michael reynolds says:

    @PD Shaw:

    Further, you and others are sidestepping the crashingly obvious fact that McDonalds does quite well in countries that do not allow employees to be paid starvation wages. Quite clearly McD can adapt to any and all circumstances, despite all the b.s. about business models. They are profitable in Finland and China and all points in between. How, by being inflexibly tied to a starvation wage business model? No. By adapting.

    But they don’t have to adapt when the US has a population willing to sell out the needs of low-end workers. Stop making excuses, start demanding the same level of government protection afforded in other countries and guess what? McDonalds will adapt.

    Like or Dislike: Thumb up 11 Thumb down 0

  88. anjin-san says:

    Another note on McDonalds, some friends of my wife’s who owned a franchise for 30 years are ready to retire & just sold it. McDonalds basically f**ked them hard on the sale and their retirement will not be as comfortable as they hoped. Guess that was a thank you for 30 years of hard work.

    Like or Dislike: Thumb up 4 Thumb down 0

  89. michael reynolds says:

    @anjin-san:

    Well, that can’t possibly be because we keep hearing how completely, totally independent the franchises are. Aside from having menu, suppliers, training, standards, building, advertising etc.. dictated to them.

    Like or Dislike: Thumb up 4 Thumb down 0

  90. Grewgills says:

    The North Dakota example does give a real world example for wage increases and burger price increases. The price of a big mac went up by a dollar (~3.50 – ~4.50 or ~78%) and wages approximately doubled to $15 and added a $300 signing bonus.

    Like or Dislike: Thumb up 2 Thumb down 0

  91. anjin-san says:

    @ Florack

    I expect the npercentage of part time workers to be far higher now than in 08…. demonstrably part of Obamacare, etc

    Here in the real world, there was a spike in part time jobs under Bush that dwarfes the current one.

    http://liberalbias.com/images/content/part-time-employment-surge.jpg

    Like or Dislike: Thumb up 1 Thumb down 0

  92. James Pearce says:

    @wr: I try and skip over Jenos’s comments these days as they seem to be perpetually stuck on suck, but I had to laugh when I read this:

    And just who makes minimum wage? Mainly younger workers (25 or younger), who usually don’t have a family of four to be the sole support of. They often have roommates with whom they can share living expenses.

    He really did say that, didn’t he?

    Seriously, Jenos……you really think these guys work at McDonald’s for fun and not profit??

    Mr. Franchisee needs to open another store because 39 stores just isn’t enough, but Mr. Minimum Wage doesn’t need a raise because he has roommates.

    Like or Dislike: Thumb up 8 Thumb down 0

  93. Jack says:

    @Brett: Let’s just add a zero to everyone’s salary. In no time everyone will be a millionaire! Increasing the Federally mandated minimum wage is just as dumb. What the end result will be is increased prices for everyone on every product across the board. Effectively keeping the buying power the same regardless of income. But wait, because union contracts often stipulate a multiple of minimum wage, most union made products will be even more expensive causing an actual decrease in buying power.

    Also, anyone over 30, with the exception of a manager that is wearing a name tag (police, military, etc. not included), should probably rethink their vocation. These jobs are not their to provide a person enough money upon which to raise a family.

    Additionally, let’s look at the consequences of mandating that someone with no experience and no skills should be paid $15/hour when they only produce $10/hour for the company. That is a recipe for going out of business.

    Finally, when you add in mandated employer contributions (SSN/unemployment insurance, etc.) the actual minimum wage is around $9.25 but the employee doesn’t see the other $2.

    Like or Dislike: Thumb up 1 Thumb down 9

  94. anjin-san says:

    @ Jack

    For decades, I have been hearing the sky will fall every time the min wage goes up. At the very least, the restaurant business will be brought to ruin. I worked in restaurants, bars, and nightclubs for a long time. The industry, like the larger economy, never collapsed when workers at the bottom of the ladder got a few more ducats.

    Try again.

    Like or Dislike: Thumb up 4 Thumb down 0

  95. michael reynolds says:

    It’s fun how wages to people living on nothing are a real inflation problem while the wages of the CEOs have no effect whatsoever.

    Folks just love to lick a wingtip, don’t they?

    Highly-rated. Helpful or Unhelpful: Thumb up 17 Thumb down 0

  96. Jack says:

    @anjin-san: And every time minimum wage goes up, prices go up. It’s economics 101. You never fix a problem by increasing minimum wage all you do is placate the ignorant because they don’t realize the prices on everything else goes up too. Again, a minimum wage job is not there upon which to support a family.

    Like or Dislike: Thumb up 0 Thumb down 7

  97. anjin-san says:

    @ Jack

    And every time minimum wage goes up, prices go up.

    Sounds like a rather sweeping generalization. Got data?

    Like or Dislike: Thumb up 4 Thumb down 0

  98. Jack says:

    @michael reynolds: Funny how the average McDonald’s doesn’t have a CEO it has a franchise owner who is not making a bazillion dollars a year, but traditionally makes between ~200k net.

    Like or Dislike: Thumb up 1 Thumb down 5

  99. michael reynolds says:

    @Jack:

    Oh. What. B.S.

    Here’s a thought experiment: if paying people $7.25 is great, why not pay them even less? Why not pay them 75 cents an hour? Then we’ll have millions more people working full time and unable to feed and house themselves. We can call it the Bangladesh plan.

    EVERY successful, advanced economy on planet Earth has government regulations affecting pay and working conditions. All of them. 100% of them.

    And McDonalds sells burgers in all of those same countries and makes a profit. You are wrong.

    Like or Dislike: Thumb up 15 Thumb down 1

  100. anjin-san says:

    Ever notice how In-N-Out and Costco do very little advertising? Could it be that customers don’t need to be bullied by them because people know they’re pleasant, well-run businesses?

    I’m not much on fast food, but my kid likes In-N-Out burger. I enjoy going there because the staff always seems to have a smile and a good word for customers, and the overall energy is good – quite unlike the average fast food joint, where the atmospehere tends to be palpably opressive.

    Like or Dislike: Thumb up 4 Thumb down 1

  101. Ebenezer_Arvigenius says:

    Answer: McDonald’s customer base has high elasticity of demand.

    Frankly nobody who is willing to spend 4.60$ (more if menu’d) on a mediocre burger can be that price-sensitive. You get better food at that price point.

    But if this really bugs someone, a (somewhat larger) price increase could be added to menus only and left off the 99c options. If the costumer base really has high elasticity of demand that would be reasonable anyway.

    Like or Dislike: Thumb up 1 Thumb down 0

  102. Jack says:

    @anjin-san: Again, it’s economics 101.

    Additionally, evidence bears out basic economic intuition: a higher minimum wage costs some low-skilled workers their jobs while helping those who keep them. You need only look at the last time minimum wages went up between 2007 and 2010. At each data point when the minimum wage was increase from $5.15 to $5.85, again to $6.55 and then again to teh current $7.25 there was a corresponding decrease in workers, or more bluntly, a corresponding increase in unemployed.

    Like or Dislike: Thumb up 1 Thumb down 7

  103. Jack says:

    @michael reynolds: As long as supply and demand works, if there is a person willing to fill a job at 75 cents an hour, then that’s what they will be paid. North Dakota has shown, that if no one is willing to work for federal minimum wage, then you have to raise salaries. Right now there are millions of people willing to work for $7.25/hour, therefore companies will hire them at $7.25 an hour.

    Like or Dislike: Thumb up 0 Thumb down 3

  104. Ben Wolf says:

    @Jack: No, it is not economics 101. There is no empirical link between prices and the minimum wage because the minimum wage is at the bottom of the income structure. It cannot be inflationary as it is not sufficient to drive aggregate demand beyond productive capacity.

    Like or Dislike: Thumb up 10 Thumb down 0

  105. James Pearce says:

    @michael reynolds:

    Folks just love to lick a wingtip, don’t they?

    And if Jack is to believed, they love to bitch about unions in a discussion about McDonald’s.

    You know what else sucks besides unions and liberals? Dentists…..

    Like or Dislike: Thumb up 7 Thumb down 0

  106. Ben Wolf says:

    @Jack: No, there is not a law of supply and demand which sets prices such as the price for labor. Wages are the product of many variables including price fixing by industry which prefers fixprice over flexible prices as this reduces future uncertainty and regulates profits. I’d strongly suggest reading The New Industrial State.

    Like or Dislike: Thumb up 10 Thumb down 0

  107. michael reynolds says:

    @Jack:

    That’s 200 k per store. And doesn’t count stock options or the presumably rising value of the franchise itself. (And is probably baloney anyway.)

    So, let’s say you’re a franchisee with 5 stores, that makes it a million a year which would be 66 times what your burger flipper makes.

    Now, McD’s says you need 50 people to run a store. Of course those are mostly part-timers, so say the equivalent of 25 full-time per store. Times five stores, that’s 125 full-time employees working 40 hours a week.

    40 hours times 52 weeks gives us 2080 hours, times the 125 employee total equals 260,000 man hours per year. Give them each a $2 raise, that’s $520,000 a year, which would still leave our franchisee earning nearly half a million. Right?

    Could he live on that half million? Because I think his employees could live a lot better on $9.25 than on $7.25. And has this harmed the economy in any way? Why, no, it hasn’t. In fact, since 100% of the burger-flipper’s wage goes directly and immediately back into the economy, as opposed to going to Mercedes Benz, it might even be a plus. And fewer of them would be on food stamps and medicaid.

    Like or Dislike: Thumb up 11 Thumb down 1

  108. wr says:

    @Jack: “It’s economics 101″

    Why is it that the truly clueless like to state “it’s economics 101″ as if that proved every point?

    Here’s a hint — 101 is an intro class that exists only to teach the most basic concepts at their most basic levels. Economics is a hugely complex field, and there is much that simply cannot be taught in ten weeks to a bunch of freshman who are taking the class to satisfy a social science requirement.

    Maybe before you start claiming expertise in the field you should try signing up for economics 102…

    Like or Dislike: Thumb up 8 Thumb down 0

  109. wr says:

    @wr: And oh, it gets better. Economist Jack follows up:

    “Additionally, evidence bears out basic economic intuition:”

    So apparently when Jack mentions econ 101, he’s not talking about what one would learn in this basic intro class. It’s what he knows from his basic economic intution. Also known as “pulling it out of his ass 101.”

    Like or Dislike: Thumb up 8 Thumb down 0

  110. @michael reynolds:

    Last time you negotiated your book contract, do you set aside half of your royalties for all the clerks at B&N and the warehouse workers at Amazon? Because I’m sure you could live on a lot less and they could live alot better on the raise.

    Like or Dislike: Thumb up 1 Thumb down 4

  111. James Pearce says:

    @michael reynolds:

    Why, no, it hasn’t. In fact, since 100% of the burger-flipper’s wage goes directly and immediately back into the economy, as opposed to going to Mercedes Benz, it might even be a plus. And fewer of them would be on food stamps and medicaid.

    There you go again, Michael, acting as if these are people with actual lives.

    It say right there in the textbook that minimum wages increase unemployment. It was even on the quiz!

    Like or Dislike: Thumb up 5 Thumb down 0

  112. Scott says:

    Need to point out that the lower the wage, the higher my taxes will be. We are in the situation that taxpayers are essentially subsidizing the lower wages of workers because of the increased demand and necessity for food stamps, medical care, etc.

    Like or Dislike: Thumb up 10 Thumb down 0

  113. wr says:

    @Scott: Well, sure. Why should employers be required to pay the actual costs of running their businesses when they can get the government to supplement the absurdly low pay they offer their workers?

    Of course, the Republicans have the answer to that — cut off all aid to poor people. Not that they’re going to insist on higher pay scales. They’re just going to make sure that it’s only those who can’t afford bribes who suffer.

    Like or Dislike: Thumb up 5 Thumb down 0

  114. the Q says:

    To all you wingnut whack jobs out there crying about the minimum wage. I was alive when this was settled “science”. The fact that we have to hear from the idiots like JKB, Jenos etc boils my blood.

    When I first started working as a teenager in 1950, the federal min. wage was 75 cents. We didn’t have stupid bas$%^ards at the time (except of course for the few fringe rightwing morons) who belittled this concept as “destroyers” of capitalism. Min. wage hikes were popular, non partisan policy, with hikes coming under both Dem and Repub. admins.

    In fact the min. wage was raised 18 times between 1950 and 1981. And the average real wage for workers DOUBLED you freakin’’ wingnut morons during that time period.

    Since 1981, (a similar 30 year time frame) the min. wage has been raised 7 times. The result?
    Jenos, JKB, according to you, workers must have gained wonderful wage hikes due to unfettered capitalism, but any thinking person knows what happened. Working class on food stamps and idiots here reciting Adam Smith and Friedman.

    I am a baby of the New Deal, something which quite literally saved this country and to subject myself to the infantile babbling of stooges who write tripe like the above saying that the min. wage hurts workers etc. is completely belied by FACTS and reality.

    Look at GDP growth, wage increases for workers during the 1950-1981 period of US social capitalism vs. 1981 – 2013 supply side influenced “shit on the worker” philosophy and try and tell me that min. wage increases are bad for the economy.

    Go pluck yourselves you worthless baby boomer aholes.

    Sorry for the invective, but the story of the last 30 years has been wingnuts systematically destroying New Deal programs which served the middle class quite well .

    Ronald Reagan I hope is burning in hell.

    Highly-rated. Helpful or Unhelpful: Thumb up 17 Thumb down 1

  115. Ben Wolf says:

    @wr: Absolutely. That’s why macroeconomics is so important. Conventional wisdom and intuition and common sense do not necessarily apply to an economy in aggregate because there are emergent properties which change the game. If everyone understood that lone principle we’d be a lot better off as a nation.

    Like or Dislike: Thumb up 6 Thumb down 0

  116. James Pearce says:

    @Stormy Dragon:

    Last time you negotiated your book contract, do you set aside half of your royalties for all the clerks at B&N and the warehouse workers at Amazon?

    Really?

    I mean, I know he’s a writer and everything, but does he employ the clerks at B&N or the warehouse workers at Amazon? Maybe you should ask him if he pays his proofreader minimum wage……if he even uses a proofreader.

    Like or Dislike: Thumb up 10 Thumb down 0

  117. Jack says:

    @michael reynolds: The franchise owner puts his money on the line when opening a new store, not the employee. Many business owners forgo income in the first couple of years, but employees get paid. You keep wanting to make this about the employer verses the employee, but no employee goes without pay or takes any risk. That risk is on the owner. You say he clears 1 million, but he may be contemplating opening yet another franchise which would cost him 500k to start. This has nothing to do with haves and have nots. Start a business that requires hiring employees to do low skill work and them come back and talk, otherwise you are talking out your ass.

    Like or Dislike: Thumb up 0 Thumb down 4

  118. michael reynolds says:

    @James Pearce:

    Actually, the perfect example presents itself. I am now “packaging.” That means I come up with a concept, sell it and hire a writer to execute it. (Not under my name, not my book at all, under a pseudonym.)

    It’s all pretty standard stuff in the industry. In most cases the ghost gets no credit, makes a fixed fee with no royalties and does not participate in anything downstream, ie TV, movie, merch, etc…

    In my deal with my ghost I paid her 1) Upfront the highest industry rate I could find, (and more than she’s ever made off her own work), 2) Accelerated the pay-out so she gets it in 3 tranches even though I take it in in 4 tranches, 3) Split royalties 50/50, 4) Gave very meaningful downstream participation, and 5) Volunteered to not only allow her but to help her break into the market including using the pseudonym I will own contractually. The deal had my lawyer rolling his eyes because I was giving up so much.

    The result? She’s doing great work, is totally committed, and I think we have a decent shot at some of that “downstream.”

    So, short answer: yes, I practice what I preach.

    Like or Dislike: Thumb up 11 Thumb down 0

  119. michael reynolds says:

    @Jack:

    Right. And the man who risks his inheritance from his wealthy parents deserves to make 66 times more than the poor slob who only risks the health and welfare of his children.

    Got it.

    Like or Dislike: Thumb up 14 Thumb down 0

  120. Jack says:

    @the Q: And how many payrolls have you had to meet? None. That’s what I thought.

    Like or Dislike: Thumb up 1 Thumb down 9

  121. michael reynolds says:

    @Stormy Dragon:

    See answer above.

    BN employees don’t work for me. I negotiate with Rupert Murdoch. The people who do work for me get very fair treatment.

    Like or Dislike: Thumb up 6 Thumb down 0

  122. Jack says:

    @michael reynolds: Most of business owners did not/do not inherit money. They started from scratch.

    Like or Dislike: Thumb up 0 Thumb down 5

  123. michael reynolds says:

    @Jack:

    The buy-in according to McD is between 1 million and 1.8 million dollars. Started from scratch my ass.

    Highly-rated. Helpful or Unhelpful: Thumb up 15 Thumb down 0

  124. Jack says:

    @wr: There are very few “poor” people in America. American “poor” as classified by the Census Bureau have a standard of living that competes with Europe’s middle class. The following are facts about persons defined as “poor” by the Census Bureau, taken from various government reports:

    Forty-three percent of all poor households actually own their own homes. The average home owned by persons classified as poor by the Census Bureau is a three-bedroom house with one-and-a-half baths, a garage, and a porch or patio.
    Eighty percent of poor households have air conditioning. By contrast, in 1970, only 36 percent of the entire U.S. population enjoyed air conditioning.
    Only 6 percent of poor households are overcrowded. More than two-thirds have more than two rooms per person.
    The average poor American has more living space than the average individual living in Paris, London, Vienna, Athens, and other cities throughout Europe. (These comparisons are to the average citizens in foreign countries, not to those classified as poor.)
    Nearly three-quarters of poor households own a car; 31 percent own two or more cars.
    Ninety-seven percent of poor households have a color television; over half own two or more color televisions.
    Seventy-eight percent have a VCR or DVD player; 62 percent have cable or satellite TV reception.
    Eighty-nine percent own microwave ovens, more than half have a stereo, and more than a third have an automatic dishwasher.
    89 percent of the poor report their families have “enough” food to eat, while only 2 percent say they “often” do not have enough to eat.

    Overall, the typical American defined as poor by the government has a car, air conditioning, a refrigerator, a stove, a clothes washer and dryer, and a microwave. He has two color televisions, cable or satellite TV reception, a VCR or DVD player, and a stereo. He is able to obtain medical care. His home is in good repair and is not overcrowded. By his own report, his family is not hungry and he had sufficient funds in the past year to meet his family’s essential needs. While this individual’s life is not opulent, it is equally far from the popular images of dire poverty conveyed by the press, liberal activists, and politicians.

    Like or Dislike: Thumb up 2 Thumb down 15

  125. Jack says:

    @michael reynolds: Yes, they built up their wealth from scratch. It’s called saving, which based upon recent data, most Americans are unwilling NOT unable to do.

    Like or Dislike: Thumb up 0 Thumb down 7

  126. john425 says:

    “Fast Food” really isn’t fast in my part of the country. You have to order twice so that the ESL English speaking counter clerk can enter the order correctly on the register, then you have to tell them again; “Yes, I’ll eat it here, and No- it is not to go.

    Gimme Denny’s any day of the week.

    Like or Dislike: Thumb up 0 Thumb down 7

  127. michael reynolds says:

    @Jack:

    So, how many hours do you have to work at $7.25 to save a million? How about at 10.50 the In-N-Out wage?

    You know how you get a million dollars to invest? By being born wealthy. Or by being born with talent, which is the equivalent of inherited wealth. (That was my path.) Or yes, occasionally by starting a business – with capital you borrowed from your friends and family.

    How much you figure the $7.25 an hour guy can borrow from his $7.25 an hour friends and family?

    You’re just repeating capitalist articles of faith you’ve been indoctrinated with. They are not real.

    Like or Dislike: Thumb up 13 Thumb down 0

  128. john425 says:

    @the Q: “Q”s letter is missing it’s fellow I as in IQ

    Like or Dislike: Thumb up 1 Thumb down 2

  129. Jack says:

    @michael reynolds: According to McDonald’s at http://www.aboutmcdonalds.com/mcd/franchising/us_franchising/aquiring_a_franchise.html
    “Since the total cost varies from restaurant to restaurant, the minimum amount for a down payment will vary. Generally, we require a minimum of $750,000 of non-borrowed personal resources to consider you for a franchise.”

    I started out with nothing as an E1 in the military 28 years ago, so I started with nothing. With a few more years of savings I could afford a McD’s. And I would be putting my life savings on the line, not the employee.

    Like or Dislike: Thumb up 0 Thumb down 3

  130. Jack says:

    @michael reynolds: There was news article last week about a stripper that saved over $1M that she was going to invest in a NJ nightclub. It can happen.

    Like or Dislike: Thumb up 0 Thumb down 0

  131. michael reynolds says:

    @Jack:

    And meteors can fall out of the sky and kill people, but it’s not worth considering.

    We do not have much upward mobility in this country. We have increasing concentration of wealth in the top 1% and top 10% with the rest of the country owning essentially nothing. All it takes – until Obamacare comes in — is a single illness to break you. One illness and you can lose your job and be not just sick, but out on the streets sick.

    Why? So that the guy who risked his parent’s money can make 66 times what their employees make. All for the lucky few, nada for the working man.

    You have what amounts to a religious faith that flies in the face of the facts. The reality is that if you are born poor in America, you die poor, and your kids are poor. The reality is that you cannot support a couple let alone a family on a minimum wage which is lower in real terms than it was when I was making $1.60 an hour.

    Like or Dislike: Thumb up 13 Thumb down 0

  132. Latino_in_Boston says:

    @the Q:

    The Q, I salute you sir. Some passion and truth speaking right there.

    @michael reynolds:

    Same to you sir. A great f*king debate happening right here.

    Like or Dislike: Thumb up 6 Thumb down 0

  133. James Pearce says:

    @Jack:

    He has two color televisions, cable or satellite TV reception, a VCR or DVD player, and a stereo.

    Oh dear lord….not this nonsense again.

    You’ve given up arguing whether the poor deserve to enjoy the fruits of their labors and have descended into arguing that the poor are not, in fact, poor. There is no point engaging with such a closed mind.

    @michael reynolds:

    The result? She’s doing great work, is totally committed, and I think we have a decent shot at some of that “downstream.”

    You mean, choosing to compensate your employees, rather than pinching the fruits of their labor for your own enrichment, results in good work?

    WHAT?

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  134. beth says:

    @Jack: So one person in thousands is able to have an extraordinary life experience so we should base our economy on it?

    Like or Dislike: Thumb up 10 Thumb down 0

  135. Todd says:

    @Stan:

    I bring up these well known facts because I’m fascinated by the strong support for the Republican party among white voters of modest means. Not all of it is due to racism or social conservatism. So why do they vote Republican?

    One of my brothers is an assistant manager of a convenience store in Ohio. He barely ever has two nickels to rub together, and can’t afford health insurance. Yet he’s a staunch, Fox News watching Republican … primarily because he doesn’t think gay people should be able to get married and he’s convinced that Christians are “persecuted”.

    Oh yea, and he complains about taxes too … even though he get the EIC every year … but payroll taxes still come out, so he’s sure that in some way shape or form, he’s supporting all the “freeloaders”.

    Like or Dislike: Thumb up 11 Thumb down 0

  136. James Pearce says:

    @Jack:

    I started out with nothing….28 years ago, so I started with nothing. With a few more years of savings…..

    Over 30 years of savings and you can finally afford to open a McDonald’s franchise……

    Good thing you worked for Uncle Sam. If you worked for Mickey D’s, you’d have 60 years to go.

    Like or Dislike: Thumb up 10 Thumb down 0

  137. anjin-san says:

    @ Jack

    There was news article last week about a stripper that saved over $1M

    And Helen Keller inspired the world, handicap and all.

    Outliers. Most strippers wake up one morning with $400 in the bank and girls much younger than them taking their job.

    Most disabled people struggle their whole lives, and never have a movie made about them.

    I came into the world with a lot of advantages, and life is still pretty damn hard. I try not to let a day go by without doing something for someone who is less fortunate than I am. The contempt that the conservative movement, which allegedly honors Jesus, heaps upon the poor, never fails to amaze me. Did you cats actually hear anything Jesus said? Cause he said quite a bit about the poor, and y’all seem to be ignoring all of it.

    Highly-rated. Helpful or Unhelpful: Thumb up 16 Thumb down 0

  138. C. Clavin says:

    @ Wr…

    “…As always, Jenos sounds like a mid-level cubical guy making 31K a year in a third tier city who thinks he is a capitalist…”

    You are giving him/her way too much credit.
    My guess…survivors benefits…turned down for employment by Mickey-D’s…living in mommies basement…virgin…thinks Harry Potter is too esoteric.

    Like or Dislike: Thumb up 0 Thumb down 1

  139. Grewgills says:

    @Jack:
    I am guessing she pulled much better than minimum wage.
    I have had a few acquaintances that danced for a few years and they generally pulled in at least a few hundred a night and often a few grand in a week. If a dancer doesn’t fall into any of the traps (drugs, abuse) then she can save a fair bit.

    Like or Dislike: Thumb up 3 Thumb down 0

  140. C. Clavin says:

    @ Anjin-San…
    Yes…yes…yes.
    Well said, sir.

    Like or Dislike: Thumb up 0 Thumb down 0

  141. Andre Kenji says:

    @rudderpedals:

    Has anyone seen a comparison between American McDonald’s wages vs franchisee worker pay in Japan, Britain, France or Germany?

    McDonalds pays crap for it´s employees everywhere. That´s why I don´t patronize them, I don´t like to go to places where the employees can´t manage to SMILE to you.

    Like or Dislike: Thumb up 0 Thumb down 0

  142. Stan says:

    @Todd: Many of the people in my high school graduating class (1954!) have the same attitudes as your brother, and most of them don’t have the proverbial pot to piss in. It’s very mysterious.

    I see that another attempt is being made to expand Medicaid coverage in Ohio. I wonder what your brother thinks about this. If Medicaid expansion does go through, will he accept it? Keep us posted.

    Like or Dislike: Thumb up 3 Thumb down 0

  143. Todd says:

    @Stan:

    I will add that aside from social conservativism (which I really do think is the main driver of poor whites associating with the Republican party), the other reason is that one of the unique things about America is that most people, no matter how poor they are right now, honestly believe that they may be rich some day … and they don’t want the government taking it away once they get it.

    Like or Dislike: Thumb up 4 Thumb down 0

  144. anjin-san says:

    @ Todd

    True. You could hear Jack getting huffy about the hypothetical risk he would be taking in the form of a McDonalds franchise he will never buy, mixed in with resentment directed at the non-risk taking employees he will never hire.

    It’s a lot like “Joe the Plumber” getting worked up about the taxes he was going to have to pay on the pretend 250K he was making in his fantasy about being a business owner.

    At least Joe ended up living the conservative dream – making a living as a grifter.

    Like or Dislike: Thumb up 10 Thumb down 0

  145. michael reynolds says:

    @James Pearce:

    You mean, choosing to compensate your employees, rather than pinching the fruits of their labor for your own enrichment, results in good work?

    It was this crazy idea I had. Maybe. . . just maybe . . . if I didn’t screw her to the wall and take every advantage, she wouldn’t hate her work and would do a better job. Which might mean that . . . follow me here, because it gets pretty complicated . . . her motivated best effort might enrich me more in the end.

    Plus, I wouldn’t feel like an aszhole and have to join the Republican party.

    Like or Dislike: Thumb up 10 Thumb down 0

  146. Moosebreath says:

    @Todd:

    Another reason poor folks are against liberals is that they have done so little for them in the last few decades. They figure they may as well vote for the people who won’t help them who they agree with on social issues, as opposed to the people who haven’t helped them and who they don’t agree with on social issues.

    And that is why Republicans are pulling out every last stop against Obamacare. It’s the first thing the Democrats have done which will help the average person since around 1970, and when it goes forward and succeeds, it will show people that there is an advantage for their lives to voting for Democrats.

    Like or Dislike: Thumb up 11 Thumb down 0

  147. @michael reynolds:

    Ah, so really the franchisee just has to outsource the employees to a temp agency or something and now he bears no responsibility for how well their paide since “they don’t work for me” regardless of how much his business depends on their labor?

    Like or Dislike: Thumb up 0 Thumb down 6

  148. Todd says:

    @Moosebreath: Just to be clear, I’m not really a fan of Democrats much either … just at the moment (ok for the past 2 decades) they happen to be the grown-ups in the room. I honestly wish there was a Republican politician that I could see myself voting for. Maybe if I lived in Maine or Massachusetts, but fat chance here in Texas.

    Like or Dislike: Thumb up 10 Thumb down 0

  149. Hal 10000 says:

    This analysis begs the question: if McDonald’s could charge more for a burger, why don’t they? Because you can’t assume that raising prices by X means increased revenue of X. You, individually, may not buy fewer burgers because the price goes up by 30%, but the market as a whole will. Restaurants set their prices by the maximum they think the market will pay.

    There’s an additional factor that McDonald’s is not exactly where the rich go to eat. So you’d be raising prices on … mostly poor and middle class people. That doesn’t cross me as exactly useful.

    Like or Dislike: Thumb up 1 Thumb down 1

  150. Jenos Idanian #13 says:

    @James Joyner: I’m not putting forth the article as gospel but as a reasonable starting point for a conversation–which indeed it appears to have sparked. But you have to actually argue why the analysis is flawed rather than simply calling it that.

    So, you start off by citing a fundamentally and irreparably flawed article, and the conversation that follows hits the following points:

    1) The minimum wage should be “more.” Just how much more they won’t say, but it should be “more.”

    2) That the person who saves up their money and invests all that money and time and effort has a moral obligation to share the profits of his business with people who have taken none of the risks and put up only a tiny fraction of the equity he has, who are already paid the legally required compensation, and can walk away from the business with zero notification at any time they choose.

    3) That businesses are only entitled to a “reasonable” amount of profit, and should spread the excess in a way approved by those who did absolutely nothing to generate those profits. Oh, and those are the same people who determine what a “reasonable” profit is — and it’s always subject to change at their whim.

    4) That comments that consist of nothing but juvenile personal insults will get “helpful” upclicks.

    5) That the people most outraged at how business is conducted and have the most to say about how it should be changed have never once tried to personally apply their principles, but work to get others to live up to them — with the coercive power of the government to back them up.

    No wonder you’re so proud of what you’ve wrought here.

    Like or Dislike: Thumb up 1 Thumb down 10

  151. michael reynolds says:

    @Stormy Dragon:

    Dude, really, that’s dumb. Barnes and Noble employees are not in any sense working for me. Not directly, not indirectly, not even a three-way bank-shot.

    When I negotiate a deal it’s me vs. Newscorp or me vs. Holtzbrinck or me vs. Disney. If I do a bad deal it doesn’t help BN staff, it helps Rupert Murdoch. See, I’m essentially the employee in the situation. And, as detailed above, the people who do work for me are compensated well above the going market rates.

    Shouldn’t be that hard for you to grasp.

    Like or Dislike: Thumb up 10 Thumb down 0

  152. michael reynolds says:

    @Jenos Idanian #13:

    5) That the people most outraged at how business is conducted and have the most to say about how it should be changed have never once tried to personally apply their principles, but work to get others to live up to them — with the coercive power of the government to back them up.

    See:

    In my deal with my ghost I paid her 1) Upfront the highest industry rate I could find, (and more than she’s ever made off her own work), 2) Accelerated the pay-out so she gets it in 3 tranches even though I take it in in 4 tranches, 3) Split royalties 50/50, 4) Gave very meaningful downstream participation, and 5) Volunteered to not only allow her but to help her break into the market including using the pseudonym I will own contractually. The deal had my lawyer rolling his eyes because I was giving up so much.

    I left out the part where the government backed me up by. . . I forget. What was it again?

    Like or Dislike: Thumb up 12 Thumb down 0

  153. michael reynolds says:

    @Jenos Idanian #13: @Stormy Dragon:

    As a matter of fact, before Clavin comes along to pithily summarize me in fewer words, let me do it:

    Negotiating for myself, I’m like a union. Paying other people, I’m like a human being.

    Even shorter: I’m a Democrat.

    Highly-rated. Helpful or Unhelpful: Thumb up 16 Thumb down 1

  154. James Pearce says:

    @Hal 10000:

    This analysis begs the question: if McDonald’s could charge more for a burger, why don’t they?

    Because McDonald’s chose to sell low-quality, mostly pre-prepared food served factory-style by low-wage employees.

    Let’s stop pretending this is a chapter in Economics for Dummies. This is the real world here. McDonald’s could very easily charge more for a burger –lots of other companies do it daily– but they’d have to spend more than 10 seconds making it, use higher quality ingredients, and pay their workers more. They chose to use the cut rate method.

    It’s not a market dictate. It’s a choice.

    Like or Dislike: Thumb up 6 Thumb down 0

  155. anjin-san says:

    McDonald’s

    I remember how McDonald’s used to assure (over, and over, and over) everyone the only ingredients in their fries were potatoes, oil, and salt.

    Of course it turned out that was a bald faced lie. They put beef tallow in their fries. And they lied to everyone about it, including vegetarians.

    Before the mad cow scare, McDonalds used to buy beef from cows that were too sick to walk into the slaughterhouse. The would put the poor things on pallets and drag them in with fork lifts.

    Some classy outfit.

    Like or Dislike: Thumb up 1 Thumb down 0

  156. James Pearce says:

    @michael reynolds:

    “if I didn’t screw her to the wall and take every advantage, she wouldn’t hate her work and would do a better job. Which might mean that . . . follow me here, because it gets pretty complicated . . . her motivated best effort might enrich me more in the end.”

    Wait….I only thought that method worked with CEOs. It works for regular people too??

    Seriously though, wouldn’t it be awesome if McDonald’s employees were allowed to make a living as they work so hard to make their rich owners even richer? It would be, like, the whole point of having an economy.

    Like or Dislike: Thumb up 8 Thumb down 0

  157. James Pearce says:

    Jenos,

    2) That the person who saves up their money and invests all that money and time and effort has a moral obligation to share the profits of his business with people who have taken none of the risks and put up only a tiny fraction of the equity he has, who are already paid the legally required compensation, and can walk away from the business with zero notification at any time they choose.

    Took the time to read this, cuz….I dunno, feeling generous.

    And have to say, this is really sticking in my craw:

    has a moral obligation to share the profits of his business with people who have taken none of the risks

    I mean, I get that it fits in with the whole “makers vs. takers” thing, plays off the old “labor vs capital” stuff, but it all seems so…..outdated and flimsy.

    Does a businessman have a “moral obligation” to share the profits of his business with his employees? Yes. Absolutely yes. What kind of obligation is that if not a moral one?

    Fact is, the way things work is more synergistic than your nonsense political narratives. Without the boss, the employees would have no function. Without the employees, the boss wouldn’t get things done. It’s as Michael explained. Reward your workers and be rewarded with good work.

    Unless you’re the Yankees.

    Like or Dislike: Thumb up 11 Thumb down 0

  158. ernieyeball says:

    No Straw Man here. Someone is confused.

    In the interest of journalistic accuracy I have to note that while the headline mentions a Big Mac that sure looks like a Flame Broiled Burger King Whopper with Cheese to me.

    Like or Dislike: Thumb up 5 Thumb down 0

  159. ernieyeball says:

    Here’s an old lullaby to end the day with:

    I’m a friend to old Euell Gibbons
    And I only eat home grown spice
    I got a John Keats autographed Grecian urn
    Filled up with my brown rice
    Junk Food Junkie

    http://www.youtube.com/watch?v=6aY7dnvNsgE

    Disclaimer: View at your own risk. Some images may be offensive.

    Like or Dislike: Thumb up 1 Thumb down 0

  160. anjin-san says:

    My father ran a very successful business for a long time. He treated his people better than he had to. I asked him about it once. He said that a business owner had two choices:

    A. Treat your people well. Treat them with respect. Pay them as well as you can. Give them a stake in the success of the business. If you do that, you will probably have a happy shop, and your staff will give 110% when needed.

    B. Treat them as disposable equipment, and pay them as little as possible.

    He also told me that if money is the only reason you go to work, you might make a lot of money, but you will probably never be great.

    I got a lot of these little nuggets from my dad over the years, they have served me well. Worked for him, he made a lot of money and had a pretty good time doing it. His employees made less, but they did ok and had a nice place to work.

    Oh yea, he also said that the people who followed plan B tended to be assholes.

    Like or Dislike: Thumb up 10 Thumb down 0

  161. Hal 10000 says:

    @James Pearce:

    So there shouldn’t be market for cheap burgers? People should only buy their burgers at places willing to sell it for $10 or more? This IS a course in Economic for Dummies. McDonalds is responding to a market demand for cheap food and a supply of cheap labor. If you don’t like it, you don’t have to eat there.

    Like or Dislike: Thumb up 0 Thumb down 3

  162. Eric Florack says:

    @Me Me Me: Oh, I’m sure I do.
    the jobs numbers out today, speak to this rather well.
    http://www.foxnews.com/opinion/2013/08/01/mr-president-obamacare-is-creating-part-time-economy/

    Like or Dislike: Thumb up 0 Thumb down 6

  163. Eric Florack says:

    @charles austin: well spoken, sir.

    Like or Dislike: Thumb up 2 Thumb down 4

  164. Eric Florack says:

    @Hal 10000: Indeed, that nasty word “freedom” does keep popping up, doesn’t it?

    Like or Dislike: Thumb up 2 Thumb down 3

  165. Ben Wolf says:

    @Jenos Idanian #13: 1) The minimum wage should be “more.” Just how much more they won’t say, but it should be “more.”

    You set the wage based on CPI at $10 dollars in the lowest cost areas to live, and adjust upward in places more expensive.

    2) That the person who saves up their money and invests all that money and time and effort has a moral obligation to share the profits of his business with people who have taken none of the risks and put up only a tiny fraction of the equity he has, who are already paid the legally required compensation, and can walk away from the business with zero notification at any time they choose.

    Most businesses borrow from banks which leverage government money to extend the loan, and I hate to break this to you, but employees take risks and are investors too. Taking a job at a business requires reorganizing one’s life to fit its schedule, it requires a significant time and energy investment to learn and improve skills the business needs and working at said business imposes opportunity costs and path dependencies on employees. You have this bizarre idea that only financial investments matter, which is a mistake I see a lot of conservatives making.

    3) That businesses are only entitled to a “reasonable” amount of profit, and should spread the excess in a way approved by those who did absolutely nothing to generate those profits. Oh, and those are the same people who determine what a “reasonable” profit is — and it’s always subject to change at their whim.

    The people working at McDonald’s generate 100% of its profits, which are derived from their productivity. All profits are derived from the production of the labor force because they are the makers. McDonald’s extracts its profits at the expense of society by paying vastly less than the value of those peoples’ productivity and forces employees to go to government for the resources necessary to get by, like SNAP and Medicaid; the company is literally itself on government welfare, and if it can’t afford to get off then it isn’t really a viable business, is it? Low wages are the root cause of government dependency.

    4) That comments that consist of nothing but juvenile personal insults will get “helpful” upclicks.

    What goes around comea around, I suppose

    5) That the people most outraged at how business is conducted and have the most to say about how it should be changed have never once tried to personally apply their principles, but work to get others to live up to them — with the coercive power of the government to back them up.

    You’ve been given multiple examples of enlightened self-interest in this thread, where people who pay others to perform work understand how well that employee is doing affects how well everyone else is doing. This is why I reject conservatism, because it’s based on the principle that you get more out of people by treating them harshly and that some people are better than others. In your case you insist owners of capital are a superior sub-species to the producers of real wealth, the workers. You might want to consider than ownership is itself a product of state coercion. We have a massive government apparatus devoted to enforcing at the point of a gun the ownership of capital. Yet you have no problem with government choosing winners and losers here, deciding who gets the lion’s share of financial profits.

    Like or Dislike: Thumb up 12 Thumb down 0

  166. Jenos Idanian #13 says:

    Oh, more lessons from this thread:

    Most businesses would actually find it more profitable to engage in profit-sharing with their employees, but not all do. For reasons that are not explored.

    McDonald’s could easily raise the prices it charges, generating more income, but they don’t for reasons that are not explored.

    Amazing, how the people who run this multi-billion-dollar, multinational company lack the rudimentary common sense and financial acumen demonstrated above.

    Like or Dislike: Thumb up 1 Thumb down 8

  167. Jenos Idanian #13 says:

    @michael reynolds: You’re absolutely free to practice what you preach, and I’ll even laud you for doing so. I got no problems with that.

    Where I have the problem is the idea of putting the government behind your ideas of good practices. If they were so universally applicable, then why doesn’t Burger King or Wendy’s put them into practice and (if you’ll pardon the expression) eat McDonald’s lunch?

    These companies have chosen their business model. They have chosen to accept the consequences. And they are in compliance (generally, with the occasional exceptions that tend to get smacked down) with existing laws. If their practices don’t meet with your approval, feel free to not patronize them. If they aren’t, in your opinion, garnering all the profits they could by adopting your policies, then so be it.

    My objections aren’t to the ideas (even though I think that they’re stupid), it’s the idea that they should be put into law. As said repeatedly, if these ideas are so universally applicable, and guarantee to increase profits, then I can’t understand why its proponents just don’t bite the bullet and put them into practice, showing up those fatcats just how to make money hand over fist.

    Like or Dislike: Thumb up 1 Thumb down 7

  168. Stan says:

    @Jenos Idanian #13: If most employers divert a reasonable share of their gross profits to wages, including the wages of their most poorly paid employees, the economy does well provided money also goes into investment. But there’s every temptation for individual employers to act in their own self interest by paying their employees poorly, and many of them will. In that case the economy will perform poorly because of inadequate consumer demand. There’s a paradox here, like the prisoner’s dilemma paradox in game theory. That’s one of the reasons for supporting minimum wage laws.

    Like or Dislike: Thumb up 1 Thumb down 0

  169. Stan says:

    @Jenos Idanian #13: If every employer paid its employees as poorly as Walmart does the economy would collapse because of inadequate demand. Most employers are more generous, but that just gives the Walmarts of this world a chance to cheat. And when enough companies do, middle class consumers forego discretionary spending and the poor scramble to survive. That’s the economic argument for supporting an increase in the minimum wage and other measures that help the poor. Capitalism is too important to be left to the capitalists.

    Like or Dislike: Thumb up 6 Thumb down 0

  170. C. Clavin says:

    Florack…
    You do realize that what you linked to is an opinion piece and has no factual basis, right?
    And that the guy thet wrote that opinion piece is a Republican Congressman that has voted 30-something times to repeal Obamacare, right? Perhaps he has a biased interest in this?
    Why don’t you try getting out of your little epistimological bubble for a change. Try getting out of your mom’s double-wide and see what the world outside of Fax News is like.
    There is no factual basis for this Republican meme that you love to repeat endlessly.
    And simply repeating it endlessly may convince yourself…but it does not make it true.
    Bottom line…If you have to make things up to support your argument…then you don’t have much of an argument to begin with.

    Like or Dislike: Thumb up 6 Thumb down 0

  171. C. Clavin says:

    162,000 new jobs this month…with no change in the Public Sector.
    Imagine if Republicans got their heads out of their a$$es.
    UE would be at around 6% or under…and dropping. GDP growth close to 3%…maybe higher.
    Unfortunately this is the economy Republicans have decided they want.
    Enjoy.

    Like or Dislike: Thumb up 3 Thumb down 0

  172. Pharoah Narim says:

    @Jenos Idanian: I think you conveniently glossed over Ben Wolf’s point. If you have something against government enforcement of idea, then I also take it you are against the IDEAS of ownership and private property as they too are implemented through government coercion….at gunpoint if necessary. There is no ownership or private property in nature. You either physically possess an object or occupy a location— or you don’t. And even then, whatever is possessed or occupied may be removed through force or trickey by rivals. You wingers appeal to nature law quite a bit. How’s that sound for a Nat’l platform? So can the scrap about coercion… what you mean is: I support govt coercion to support MY “good” ideas.

    Like or Dislike: Thumb up 6 Thumb down 0

  173. James Pearce says:

    @Hal 10000:

    So there shouldn’t be market for cheap burgers?

    I do not think I said or implied that. If that’s what you got from my diatribe, then either you misread it unintentionally….or intentionally. So which is it, bad faith or confusion?

    There should be a market for cheap burgers. There is a market for cheap burgers. As the industry leader in cheap burgers, McDonalds sets the standard. And the standard is low.

    What I’m trying to explain is that McDonald’s could choose to set a higher standard. Hell, they’ve done it before. Criticized for their unhealthy menu, they added yogurt and salads. They took the cookies out of Happy Meals and added milk and apples. They changed their oil to reduce trans fats. Hell, they even purged their staffs of illegal workers not too long ago.

    But they can’t pay their employees better because when it comes to labor costs, they have no choices. The market forces them to pay minimum wage, to skimp on both health insurance and hours.

    That’s not Economics 101. That’s BS.

    Like or Dislike: Thumb up 5 Thumb down 0

  174. James Pearce says:

    Related….just found this from Josh Barro, who argues that employers have no moral obligation to share their profits with their employees, but comes to a very different conclusion about the implications than the “Let them eat food stamps” crowd:

    The lack of a moral obligation for employers to pay more actually strengthens the argument for policy interventions to enrich low-wage workers. If companies can’t be expected to act, the government must.

    His prescription:

    The government should also directly intervene to raise the incomes of people with low incomes. A minimum-wage increase is one way to do this, and within the range of observed minimum wages within the U.S. (under $10) it’s not likely to raise unemployment much.

    Doh!

    The federal government should continue to implement a universal health care entitlement and strengthen its retirement security offerings so that such benefits are not limited to those Americans whose employers happen to provide them.

    Double doh!

    And given the shift toward higher incomes at the top and higher returns to capital relative to labor, the federal government should rely more on taxes on high earners and more on taxes on capital to pay for these things.

    Ay yai yai!!!

    Like or Dislike: Thumb up 6 Thumb down 0

  175. ernieyeball says:

    @Gromitt Gunn: Obviously you have not read what I have stated about Brush Lintoff. Like when I have repeatedly called him a “Lying Gasbag”.

    Like or Dislike: Thumb up 0 Thumb down 0

  176. anjin-san says:

    @ Eric Florack

    Part time jobs under Bush

    Outsourcing your thinking to Fox is never a great idea.

    Part time jobs 2007-7013

    So what’s up with the huge spikes in part time jobs before Obama took office? More time travel?

    Like or Dislike: Thumb up 3 Thumb down 0

  177. anjin-san says:

    McDonald’s extracts its profits at the expense of society by paying vastly less than the value of those peoples’ productivity and forces employees to go to government for the resources necessary to get by, like SNAP and Medicaid; the company is literally itself on government welfare, and if it can’t afford to get off then it isn’t really a viable business, is it? Low wages are the root cause of government dependency.

    Yes, yes, and yes. As alway, conservatives only hate welfare when it goes to poor people. Welfare for the well to do and rich seems to be A OK.

    Like or Dislike: Thumb up 2 Thumb down 0

  178. ernieyeball says:

    Here’s another twist in the tale.
    When I visit the Golden Arches I always throw whatever change I receive in the bucket by the cash register dedicated to the Ronald McDonald House. If the price of the meal goes up there will be less to donate.
    Of course instead of being a slouch I will reach in my pocket for some coin to make up the difference. Don’t how many others will be able to do the same.

    http://en.wikipedia.org/wiki/File:Feed_the_clown.JPG

    Like or Dislike: Thumb up 0 Thumb down 1

  179. anjin-san says:

    @ ernieball

    So if the price of a burger goes up a nickel, charity will end?

    Like or Dislike: Thumb up 4 Thumb down 0

  180. JohnMcC says:
  181. James Pearce says:

    @anjin-san:

    So if the price of a burger goes up a nickel, charity will end?

    Yeah, a sign of losing the argument here. That was one of the dumbest things I’ve heard in this thread of really dumb things…..

    Like or Dislike: Thumb up 0 Thumb down 0

  182. ernieyeball says:

    @anjin-san: So if the price of a burger goes up a nickel, charity will end?

    Talk about a Straw Man! Me thinks my words have been twisted. Why such a fine fellow as you would want to do this is beyond me.

    Like or Dislike: Thumb up 0 Thumb down 0

  183. ernieyeball says:

    @James Pearce: Jesus! You deep thinkers just can’t accept the fact that I am one of Lucifer’s Apologists.

    Like or Dislike: Thumb up 0 Thumb down 0

  184. Moosebreath says:

    @ernieyeball:

    “Lucifer’s Apologists”

    Did you at least get a leather jacket with the name of your gang embossed on it?

    Like or Dislike: Thumb up 1 Thumb down 0

  185. Todd says:

    I don’t understand people who simultaneously oppose both (effective) government regulation of the labor market and (strong) unions. There’s got to be one or the other, or the balance of power is too skewed in favor of management.

    I personally would lean towards less regulation … including laws that make it harder to form and maintain unions. If most (or even all jobs) were unionized, there would almost be no need for regulations like minimum wage laws. Even in a relatively low skill job like fast food, one single worker has little value/power, and can be easily replaced if they don’t want to work for the meager wages. But the entire staff, as a whole, has great value to the business … as in, without them, there is no product, no revenue, no business.

    All that being said, I realize there’s very little chance of anything like this ever coming about (the less regulations, or greater union participation). We here in the good ole US of A love to complain about how things are, but we’re very reluctant to actually change anything.

    Like or Dislike: Thumb up 3 Thumb down 0

  186. wr says:

    @ernieyeball: Well, at least we know what a dying child is worth to a conservative. Big Mac goes up a nickel, no more donations. Truly a compassionate breed these righties.

    Like or Dislike: Thumb up 1 Thumb down 0

  187. James Pearce says:

    @ernieyeball:

    You deep thinkers just can’t accept the fact that I am one of Lucifer’s Apologists.

    Granted…..

    In my defense, even the Devil wouldn’t be so dumb.

    Like or Dislike: Thumb up 0 Thumb down 0

  188. Moosebreath says:

    @Todd:

    “There’s got to be one or the other, or the balance of power is too skewed in favor of management.”

    That’s a feature, not a bug.

    Like or Dislike: Thumb up 2 Thumb down 0

  189. Rafer Janders says:

    @Jenos Idanian #13:

    Most businesses would actually find it more profitable to engage in profit-sharing with their employees, but not all do. For reasons that are not explored.

    Many people in business are greedy, short-sighted jerks who’d rather steal a dishonest $1 now than show some foresight and make an honest $2 a year from now isn’t enough of an explanation?

    Like or Dislike: Thumb up 6 Thumb down 0

  190. rudderpedals says:

    @Todd: When money gets together it’s called capitalism and the syndicate’s fictional persona is strengthened by law and used to oppress. When labor tries to get together to be that countervailing influence needed to restrain the collective capitalists they cry foul, soshilizm, and the union gets busted up.

    Like or Dislike: Thumb up 1 Thumb down 0

  191. Eric Florack says:

    @Tyrell: well, look, in the Obama economy, its all that’s left. did you see the jobs report today?

    Like or Dislike: Thumb up 0 Thumb down 1

  192. Eric Florack says:

    @anjin-san: that was before min wage hikes..
    Meanwhile FTEs held steady till Obama.
    Or, didn’t you notice?

    Like or Dislike: Thumb up 0 Thumb down 1

  193. An Interested Party says:

    Oh yea, and he complains about taxes too … even though he get the EIC every year … but payroll taxes still come out, so he’s sure that in some way shape or form, he’s supporting all the “freeloaders”.

    Of course the GOP counts on people like this, who have propped up the Republicans for so very long…

    That comments that consist of nothing but juvenile personal insults will get “helpful” upclicks.

    Perhaps you are envious that many of your similar comments don’t get the same treatment…

    Like or Dislike: Thumb up 1 Thumb down 0

  194. michael reynolds says:

    Informers, scabs, Pinkertons, slave overseers, quislings, toadies and bootlicks — Idols to men like Jenos and Florack. Never so low down the totem pole that you can’t find someone even lower to sh!t on, never a master so abusive that they can’t nevertheless beg for scraps at his table.

    Like or Dislike: Thumb up 5 Thumb down 0

  195. Tyrell says:

    I do not know if anyone has considered this angle . Suppose McDonald’s does try this thing of doubling the salaries and it works out with sales unaffected. Word gets out that you can make $14 an hour down at McD’s. They would probably see a big increase in applications and see people with more education, skills,and various work experiences coming in. People would be jumping from other jobs. In other words they could be more selective in hiring. What effect would this have on the fast food industry as a whole?
    The local McDonald’s employees are either students or retired people, with few exceptions. This has been the way it is ever since I can remember, and I was around before fast food. At the store down here, the employees are courteous and do good work.
    I can tell that I and most others are not going to go much higher for a Big Mac. I will go to Five Guys or Steak & Shake. And do not mess with
    the dollar menu-that is wildly popular and accounts for 70% of their sales.

    Like or Dislike: Thumb up 0 Thumb down 0

  196. Ben Wolf says:

    @Tyrell: McDonald’s competitors will see a slide in worker productivity as their more productive employees jump ship to a firm offering them a better standard of living. McDonald’s itself will at the same time see an overall increase in worker productivity, both because they’ll have their pick of applicants and because people who aren’t destitute do better work. Other chains will resist for a time but will eventually be forced to follow suit. The biggest concern in my personal opinion is that an immediate doubling of wages could produce an undesireable shock to the service industry. It would probably be better to roll out the increase in phases over the course of a couple of years.

    Like or Dislike: Thumb up 4 Thumb down 0

  197. James Pearce says:

    @Tyrell:

    They would probably see a big increase in applications and see people with more education, skills,and various work experiences coming in. People would be jumping from other jobs. In other words they could be more selective in hiring. What effect would this have on the fast food industry as a whole?

    What is remotely wrong with any of that and why should be worried about its effect on the industry as a whole?

    I can tell that I and most others are not going to go much higher for a Big Mac. I will go to Five Guys or Steak & Shake.

    Sorry to say, but this needs some explanation.

    Are you saying you won’t pay more for a Big Mac because it’s a lower quality sandwich than what you’d get at Five Guys or Steak and Shake, and if you’re gonna pay more….might as well go to Five Guys or Steak and Shake? Is that what you mean?

    Like or Dislike: Thumb up 3 Thumb down 0

  198. Tyrell says:

    @James Pearce: Oh no, I did not mean there is anything wrong at all with hiring more qualified employees.
    To me, once a fast food meal goes over $5-7 I start thinking about different places with better food,
    not necessarily the more expensive places. I feel that I can get better food at 5 Guys or Steak and Shake.

    Like or Dislike: Thumb up 0 Thumb down 0

  199. Tyrell says:

    @anjin-san: Your comment about the beef tallow: I think that years ago they were frying their fries in beef tallow. To me the fries tasted better then, also the apple pies were better than those baked things.

    Like or Dislike: Thumb up 1 Thumb down 0

  200. Eric Florack says:

    @C. Clavin: so we are to ignore what he refers to, right/
    You have actually read the abysmal jobs report, right?
    No?

    Like or Dislike: Thumb up 0 Thumb down 1

  201. michael reynolds says:

    Great. Someone just has to bring up 5 Guys. And now I want a burger.

    Like or Dislike: Thumb up 1 Thumb down 0

  202. anjin-san says:

    @ Eric Florack

    Meanwhile FTEs held steady till Obama.

    Well, sure. Except for when we were losing 500K jobs a month under Bush. Or was it 600K? Did you forget about that?

    Some very interesting numbers

    Like or Dislike: Thumb up 0 Thumb down 0

  203. James Joyner says:

    @Tyrell: Granting that I’m not living on minimum wage, I can’t see a 20 cent price hike being a tipping point that would cause me to change restaurants, at least not if I had a genuine preference.

    Then again, McDonald’s is my least favorite of the big burger chains. In descending order, I prefer Five Guys, Whataburger, Wendy’s, Hardee’s/Carl’s Jr., Burger King, and McDonald’s. In-and-Out would be somewhere below Five Guys and above Burger King but I’ve only eaten there once and they don’t have them on this side of the country.

    The only reason I’d ever eat at a McDonald’s rather than a Five Guys is that it’s easier to find a McDonald’s and the wait times tend to be much shorter.

    Like or Dislike: Thumb up 0 Thumb down 0

  204. Mikey says:

    @michael reynolds: At least you can get Five Guys where you are. You brought up In-n-Out and they don’t have any here. Torment!

    Like or Dislike: Thumb up 0 Thumb down 0

  205. ernieyeball says:

    I’m still trying to find where I wrote that “all charity would end” when Burgers go up 5 cents…

    Like or Dislike: Thumb up 0 Thumb down 0

  206. Mikey says:

    @James Joyner: Elevation Burger has a few stores here in Northern Virginia. They are pretty good, but a bit pricey.

    Like or Dislike: Thumb up 0 Thumb down 0

  207. rudderpedals says:

    @ernieyeball: I think it was where you suggested if the burger cost more you’d stop tossing your change into the Ron’s kids change bucket.

    Like or Dislike: Thumb up 1 Thumb down 0

  208. anjin-san says:

    Seems like Fox has really been teeing off on fast food workers that want a raise. The today show, once again, humiliates Fox

    Like or Dislike: Thumb up 1 Thumb down 0

  209. ernieyeball says:

    @rudderpedals: Yeah except that’s not what I wrote.

    ernieyeball says:
    Friday, August 2, 2013 at 09:44
    Of course instead of being a slouch I will reach in my pocket for some coin to make up the difference. Don’t how many others will be able to do the same.

    Like or Dislike: Thumb up 1 Thumb down 0

  210. James Pearce says:

    @Tyrell:

    To me, once a fast food meal goes over $5-7 I start thinking about different places with better food

    I think this is pretty common. It’s also one of the reasons that McDonalds is stuck in this low-quality food/dead end job death spiral.

    If the menu at McDonalds was of sufficient quality, you wouldn’t need to seek out “better food.” It would be right there on the menu. That we’re willing to give Five Guys a couple extra bucks for an infinitely better burger just shows that McDonalds could also get a couple extra bucks per burger….if they were willing to provide it.

    My neighborhood Burger King just went through a renovation. They installed a cute little mural in the dining room of happy young people eating Whoppers off plates. The fries come in baskets. The drinks in glasses.

    Then you look down at your food, and it’s some lopsided monstrosity, a dried out patty smashed between two cracked buns, ketchup squirted only on the right side, pickles stacked on top of each other. The fries are over-cooked and salty, sitting limp in their little bag. The drink comes in a cheap cup and tastes vaguely of ammonia.

    And you look up at the mural and say, “Where is that Burger King and why did I come to this one?”

    Like or Dislike: Thumb up 1 Thumb down 0

  211. rudderpedals says:

    @ernieyeball: It probably was the sentence before the quote .

    Like or Dislike: Thumb up 0 Thumb down 0

  212. ernieyeball says:

    Here’s another twist in the tale.
    When I visit the Golden Arches I always throw whatever change I receive in the bucket by the cash register dedicated to the Ronald McDonald House. If the price of the meal goes up there will be less to donate.
    Of course instead of being a slouch I will reach in my pocket for some coin to make up the difference. Don’t how many others will be able to do the same.

    “If the price of the meal goes up there will be less to donate.” = “All charity ends when a burger goes up 5 cents” ???

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  213. ernieyeball says:

    Again, where did I say I would stop contributing?

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  214. James Pearce says:

    @ernieyeball:

    Again, where did I say I would stop contributing?

    You didn’t. You said you’d pony up more, while others might not.

    The problem is that you’re coming at this from this place of “If McDonalds raises prices, it will cut into Ronald McDonald House’s spare change donations.” That’s slightly ridiculous.

    You know what else reduces spare change donations? Debit cards.

    You know what else has more robust funding than spare change donations? The Ronald McDonald House.

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  215. ernieyeball says:

    “Don’t how many others will be able to do the same.” = “Others might not.” So you say.

    “You didn’t. You said you’d pony up more,..” At least you read what I wrote. Pedals apparently did not.

    You know what else has more robust funding than spare change donations? The Ronald McDonald House.

    Good for them!!!

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  216. ernieyeball says:

    Actually I have used my debit card at Mickey D’s and donated cash to the bucket on the same visit.
    It’s not that hard to do.

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  217. ernieyeball says:

    I’m off to get that Million $$$ Big Mac! Smell ya’ later.

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  218. James Pearce says:

    @ernieyeball: Also not hard to do…spend $.20 more on a Big Mac and still donate to Ronald McDonald House.

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  219. ernieyeball says:

    @James Pearce: spend $.20 more on a Big Mac and still donate to Ronald McDonald House.

    I’ve been buying Mc Donald’s since the burgers were 15 cents and fries were a dime. Whenever they started collecting for Ronald McDonald House I started dropping change in the bucket.
    It was something my parents taught me.
    So I guess I’ve been doing that all along.

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  220. ernieyeball says:

    @James Pearce: First I’m dumber than the Devil then I’m slightly ridiculous. You must be posting from the Waffle house!

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  221. rt0001 says:

    I worked at McDonalds when I was in high school. If I haven’t figured out a way to sell my labor for more than minimum wage by now then there’s more wrong with me than can be solved by trying to turn businesses into social welfare organizations. And by the way, for the many groups wallowing about this, I look forward to hearing about how they never, ever rely on unpaid interns.

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  222. Tony W says:

    @anjin-san:

    A. Treat your people well. Treat them with respect. Pay them as well as you can. Give them a stake in the success of the business. If you do that, you will probably have a happy shop, and your staff will give 110% when needed.

    B. Treat them as disposable equipment, and pay them as little as possible.

    He also told me that if money is the only reason you go to work, you might make a lot of money, but you will probably never be great.

    You got me thinking anjin-san, that perhaps there is a more nefarious agenda in the right-wing propaganda around disposable workers, in the form of “Do as I say, not as I do.” I am treated well and highly paid by my large corporate employer, but I now wonder if they purposefully engender maltreatment of workers as a competitive advantage?

    Perhaps the high-failure rate of new businesses is all part of the plan….in fact, I think I have invented a new conspiracy theory here!

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  223. JD says:

    There are only 26,000 people earning minimum wage in New England. This is blown to out of proportion that it stands proudly among the follies of the last five years.

    In our country, we are FREE to offer employment at any legal wage and the worker is FREE to turn down the offer.

    We have lost enough of our freedoms. Look at Walmart and the coke snorting groupies in Washington D.C.

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  224. wr says:

    @JD: “In our country, we are FREE to offer employment at any legal wage and the worker is FREE to turn down the offer.”

    And if the minimum wage was raised, this would still be entirely true. Or are you saying a seven dollar minimum wage is freedom and a ten dollar one is tyranny?

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  225. Matt says:

    I’d just like to point out that employees take risks too. I have had more then one paycheck bounce on me over the years due to shady business owners…

    Nothing quite like investing 80 hours in something for someone only to end up owing your bank +$144 because your paycheck bounced causing your bill payments to bounce. Bank of America is run by some serious assholes. The company does everything it can to make a check bounce and when you get multiple bounces they will charge you $49 for each overdraft. Since the business owner was bouncing checks my attempt in small claims court went nowhere.

    Needless to say that put me into a serious hole that I’m still trying to dig out of.

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  226. Matt says:

    @rt0001:

    If I haven’t figured out a way to sell my labor for more than minimum wage by now then there’s more wrong with me than can be solved by trying to turn businesses into social welfare organizations.

    EXACTLY that’s why corporate welfare is GOOOD and regular welfare is bad.

    So who do you think ends up paying for the food stamps and medicare those minimum wage workers collect? Oh yeah everyone but the person or company that should be paying them a livable wage..

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