http://www.providencejournal.com/opi...a-taxpayer-for-that-happy-meal.ece



This article is written by a member of the newspapers editorial board. I point this out, because this newspaper is not know for advocating anything anti-business. I could not agree more with this article. These people are being screwed over, but of course as mentioned, not the CEO. Almost 14 mill for him, zip for the workers. As is mentioned, the pay is good enough to live on fast food, nothing else. We are subsidizing this, which does not surprise me. How come the Republican's, and the advocates of lower spending, smaller government, cannot see this? Maybe they do not want to see this. Everything runs on government subsidies, especially the fast food industry, also many others too numerous to mention.

Come on War, it's just the minimum wage argument wrapped up in a different package. Yes, these folks get paid minimum wage. Yes, a bunch of these folks have to dip into the public dole to 'get by'. But, where is that the employers' fault?

A business is not in business to employ people. It is in business to make money. Money to pay salaries with and money to pay taxes with. Money to expend on the community and on itself. Money to pay the shareholders.

It is not the responsibility of the business to pay a 'living' wage...it is the responsibility of the business to pay a wage commensurate with the contribution the employee makes to that business.

A business, absent government intervention, will pay an employee what that employee's labor is worth that business. When the government enters the market, via a minimum wage, the wage market is skewed, up and down.

My congressman's family owned a bunch of fast food restaurants down south. I remember when my congressman was running for his seat, he was asked about the minimum wage and he responded that he would like to have it raised. When asked why his family did not raise the wage of their employees, he replied that it would not be competitive for his family to raise wages, if others were not also 'forced' to raise wages.

Quoting WarRI1 (Thread starter): Everything runs on government subsidies, especially the fast food industry, also many others too numerous to mention.

I'd like to see every subsidy eliminated and the tax code returned to what it should be, and not used as a tool for social engineering.

But, you're right, every time we try to kill a subsidy; someone screams bloody murder and claims we will:
-hurt the poor
-hurt the minorities
-hurt women
-hurt farmers
-hurt oil
-hurt solar
-hurt pharma
-hurt (insert industry here)
-hurt (insert special interest group here)
-hurt employment

Quoting WarRI1 (Thread starter): hese people are being screwed over, but of course as mentioned, not the CEO. Almost 14 mill for him, zip for the workers

What did that CEO do to get to that point though? He didn't just go to the classified section paper of the newspaper and apply. He got to that position by what he has done. I know a guy who worked at McDonalds in college and eventually became the manager. You know what his job is now? He's the CFO of a 20 billion dollar aerospace firm. You don't get handed the CEO job, you work for it. Just as you work for any level.

Quoting WarRI1 (Thread starter): As is mentioned, the pay is good enough to live on fast food, nothing else. We are subsidizing this, which does not surprise me. How come the Republican's, and the advocates of lower spending, smaller government, cannot see this? Maybe they do not want to see this. Everything runs on government subsidies, especially the fast food industry, also many others too numerous to mention.

If everything runs on subsidies why is this an issue? Should only McDonalds be punished? Why not every other company that operates in the US.

Fast food jobs are not supposed to be careers. They are just that, jobs.
Pat

Quoting WarRI1 (Thread starter): These people are being screwed over, but of course as mentioned, not the CEO. Almost 14 mill for him, zip for the workers.

Fast food workers have been the butt of jokes for generations as the absolute lowest skill work available. A successful CEO of a multi-billion dollar corporation takes about the highest skill level you can find. Is Lebron James screwing over the minimum wage concession workers at an NBA game, or is he giving them a job opportunity by putting a demanded product on the court?

Quoting WarRI1 (Thread starter): As is mentioned, the pay is good enough to live on fast food, nothing else.

And what is wrong with that? Not every job should pay "a living wage" because not every job produces something with enough value to merit one.

Quoting WarRI1 (Thread starter): We are subsidizing this, which does not surprise me. How come the Republican's, and the advocates of lower spending, smaller government, cannot see this?

The solution is to just stop "subsidizing" the workers. Stop enforcing a minimum wage. Let the market shake things out.

It sounds like your solution is to pay the workers a middle class wage for low/no-skill labor. Here's the obvious consequence: the price of burgers will skyrocket or McDonalds will find a way to use less labor. If you have to pay high school drop-outs $20 an hour to flip burgers, suddenly a BurgerTron2000 is a great investment. Next thing you know, the restaurant employs no one and we all order our food at an automated kiosk.

Quoting DfwRevolution (Reply 4): And what is wrong with that? Not every job should pay "a living wage" because not every job produces something with enough value to merit one.

If the job require long term corporate subsidy to exist it should go away.

Quoting DfwRevolution (Reply 4): It sounds like your solution is to pay the workers a middle class wage for low/no-skill labor. Here's the obvious consequence: the price of burgers will skyrocket or McDonalds will find a way to use less labor.

So what if the price of burgers skyrocket? Let's stop the subsidy and move people to productive jobs instead of locking them into bad jobs just because it looks good in some statistics.

Quoting cmf (Reply 5): If the job require long term corporate subsidy

What subsidy is this you speak of?

Quoting RomeoBravo (Reply 6): What subsidy is this you speak of?

The one mentioned in the OP article

Quoting cmf (Reply 5): If the job require long term corporate subsidy to exist it should go away.

The job does not require a subsidy. Nobody is paying McDonald's et al. to employ these folks (unlike, say Amtrak). The person working the job takes a subsidy from the government because that person 'chooses' to remain in that job. By the way, some of those 'choices' were made long before that person got that job. And, yes...there are exceptions and those are the people we should be looking to help. Not the people that choose the easy way out.

Quoting cmf (Reply 5): So what if the price of burgers skyrocket?

Well, the most immediate affect will be that folks will stop eating at fast-food joints. Not really a bad thing except for all the folks that will lose their jobs. The next set of folks affected will be the vendors that supply everything from food to buildings to these fast-food companies. Yup, those folks are probably a little better paid and they will lose their jobs. Of course, this wave of socially conscious remuneration will move into the restaurant and retail industry and reduce that a shadow of itself.

We'll get to a point where only the rich will be able to eat out and shop for some of the finer things because they will be the only ones that can afford to do so.

Fine......when a Quarter-Pounder is US$12 because of mandatory worker benefits have risen to what the Left requires, how long until the Mickey Ds franchisees go out of business because nobody is willing to pay $12 for that crap, and their employees' jobs go away? No problem with it until the lefties are willing to foot that bill with their paychecks.

But then, I guess that will be the fault of the "Corporate Fat Cats" that the Left loves to target, but can never really identify.

Naturally, Babs Streisand, Alec Baldwin et. al. could send ALL of their earnings for the year to Washington, but I'm not holding my breath waiting for them and the rest of those Lefty Hollywood hypocrites to fulfill their useless blathering....

Quoting kric777 (Reply 8): Fine......when a Quarter-Pounder is US$12 because of mandatory worker benefits have risen to what the Left requires, how long until the Mickey Ds franchisees go out of business because nobody is willing to pay $12 for that crap, and their employees' jobs go away?

Have you been to a McDonald's in Europe by any chance?

Quoting Fr8mech (Reply 7): The job does not require a subsidy.

Great. Then McD will have no problem paying enough.

Quoting Fr8mech (Reply 7): The person working the job takes a subsidy from the government because that person 'chooses' to remain in that job.

No, it is McD who is the beneficiary of the subsidy as they are able to employ people at lower rates.

Quoting Fr8mech (Reply 7): By the way, some of those 'choices' were made long before that person got that job.

Where they?

Quoting Fr8mech (Reply 7): ell, the most immediate affect will be that folks will stop eating at fast-food joints.

Unlikely but if they are not able to exist without long term subsidies then so be it.

Quoting Fr8mech (Reply 7): Not really a bad thing except for all the folks that will lose their jobs.

People still need to eat. Those jobs will transfer to better companies.

Quoting Fr8mech (Reply 7): Yup, those folks are probably a little better paid and they will lose their jobs.

They are in their new jobs.

Quoting Fr8mech (Reply 7): Of course, this wave of socially conscious remuneration will move into the restaurant and retail industry and reduce that a shadow of itself.

Always the doom and gloom. Restaurants and retail is doing fine in countries where fast food restaurants, etc. don't receive preferential subsidies. B.t.w. do you remember the doom and gloom when they were about to ban smoking? Turned out pretty good for restaurants and bars. It will be the same here.

Quoting Fr8mech (Reply 7): We'll get to a point where only the rich will be able to eat out and shop for some of the finer things because they will be the only ones that can afford to do so.

No, we get to a point where more people are able to eat out because they make more than minimum salary. What you're talking about is happening because of the income disparity.

Quoting kric777 (Reply 8): Fine......when a Quarter-Pounder is US$12 because of mandatory worker benefits have risen to what the Left requires, how long until the Mickey Ds franchisees go out of business because nobody is willing to pay $12 for that crap, and their employees' jobs go away? No problem with it until the lefties are willing to foot that bill with their paychecks.

Well if I remember correctly, many on here say that is competition, capitalism at it's best. No customers, fold the business, someone else will fill the vacuum. Maybe the next guy will pay 15 bucks an hour, and stay in business. If Mickey D's goes, Burger King, Wendy's will love it and make enough to pay good wages. You can't cut it, be gone. I seriously do not think 15 bucks an hour will break them, do you really?    

Quoting cmf (Reply 10): Always the doom and gloom. Restaurants and retail is doing fine in countries where fast food restaurants, etc. don't receive preferential subsidies. B.t.w. do you remember the doom and gloom when they were about to ban smoking? Turned out pretty good for restaurants and bars. It will be the same here.

  

Quoting cmf (Reply 10): No, we get to a point where more people are able to eat out because they make more than minimum salary. What you're talking about is happening because of the income disparity.

  


Exactly, amazing how some can see it, and some cannot. Doom and gloom is the weapon of choice from the wealthy. Chicken Little said it best. The sky is falling, the sky is falling

The point of this article and others like them is that fast food and retail jobs have shifted from teen and college aged workers, living at home with parents under their medical, housing and food needs, to adults as the number of jobs has shrunk and more needing any job, their healthcare and basic welfare is being subsidized by government and taxpayers instead of their once middle class jobs did.

Quoting ltbewr (Reply 13): The point of this article and others like them is that fast food and retail jobs have shifted from teen and college aged workers, living at home with parents under their medical, housing and food needs, to adults as the number of jobs has shrunk and more needing any job, their healthcare and basic welfare is being subsidized by government and taxpayers instead of their once middle class jobs did.

I will put you on my list of those who get it from a human point of view. Well said, after thorough reading.   

If McDonald's had a minimum wage of $15, the cost of a Big Mac would go up by $0.68 at corporate locations (source: University Of Kansas) and $1.28 at franchise locations (source: Employment Policies Institute). Certainly not enough to kill McDonald's, but it might mean the end of the franchise model and the vast expansion of corporate locations, also known in capitalistic free markets as "creative destruction" (surely that can't be bad if this is part of the free market, right?).

Quoting Fr8mech (Reply 7): The person working the job takes a subsidy from the government because that person 'chooses' to remain in that job.

You seriously believe it is a freely-made choice???

Quoting Fr8mech (Reply 7): The job does not require a subsidy.

When more than half of full-time employees require government assistance to survive, when the employer has a hotline to instruct their employees how to get that assistance, there is no doubt the employer is getting an indirect government subsidy because there wouldn't be enough employees, ergo no business, without public assistance. Of course we absolutely cannot call it that because subsidies distort markets and are a form of protectionism.

Except when they benefit corporations...

This problem is much larger than most of you understand by the comments you write. First the CEO pay really has nothing to do with the real problem. A CEO of a very successful corporation should be and must be paid very well or he/she will just move on to a business that will pay this person what they are worth and that corporation won't be very successful anymore.

The problem is if you pay more you have to charge more therefore you get less business and price the lower class out of the market and that has a domino effect throughout the entire economy. If you believe in less government and a free market how can you be for forcing a business to pay their employees anything other than what the market demands? This is why I say that the problem is more complex than people seem to understand, there is no easy answer to this question. This is exactly why we elect representives who are charged with working with the "other side" to solve the big problems in our country, government, and economy. The idea is if both sides work together we end up with a solution to the problem that is somewhere in the middle and is something that both sides can work with but that idea doesn't work very well when a party is hijacked by far leaning representives who refuse to negotiate and work with the other side.

Welcome to American politics!!!

Quoting cmf (Reply 10): No, it is McD who is the beneficiary of the subsidy as they are able to employ people at lower rates.

They would be able to employ people at low wages even if there were no subsidies to the unproductive. Or look at it another way, if there were no McDonald's the unproductive would still get low wages.

The idea that McDonald's are getting subsidised makes no logical sense.

Quoting airportugal310 (Reply 16): Another liberal thread brought to you by known union & liberal cheerleaders

http://www.youtube.com/watch?v=23kFiqFiOlA

Quoting Fr8mech (Reply 1): A business, absent government intervention, will pay an employee what that employee's labor is worth that business. When the government enters the market, via a minimum wage, the wage market is skewed, up and down.

I think what you mean to say is that absent any guidelines for pay, a company will pay it's workers nothing if it can get away with it. Honestly, the whole concept of free market is farscical, because I'm not sure a perfect "free" market has ever existed. The value of currency, amount of taxes paid, conditions that must be satisfied in making the product or providing the service, all these things are government admnisitered, and influence the market. Let's stop pretending we'll ever see a free market and start working towards ending poverty in this country.

Quoting blueflyer (Reply 15): If McDonald's had a minimum wage of $15, the cost of a Big Mac would go up by $0.68 at corporate locations (source: University Of Kansas) and $1.28 at franchise locations (source: Employment Policies Institute).

Damn facts getting in the way of a good ol' fashioned conservative argument!

Quoting DfwRevolution (Reply 3): Is Lebron James screwing over the minimum wage concession workers at an NBA game, or is he giving them a job opportunity by putting a demanded product on the court?

Not a great analogy, because the services are not necessarily complimentary. No one is forced to eat and drink at a sporting event, and many choose not to due to the exhorbent prices that are charged. Talent only compels people to buy the ticket, not necessarily eat and drink. I'd say the concession prices are far more influential on the decision to purchase than anything the talent on the court/field will do.

Quoting blueflyer (Reply 15): the cost of a Big Mac would go up by $0.68 at corporate locations (source: University Of Kansas) and $1.28 at franchise locations

Just curious.. and there may be a good explanation .. but why would the price increase be almost double at a franchise location.

Oh and by the way, in this country where there are min wage laws.. a Quarter Pounder does NOT cost $12.00.

Quoting stealthz (Reply 19): Just curious.. and there may be a good explanation .. but why would the price increase be almost double at a franchise location.

The method they used was based on maintaining everything else equal and because the franchise cost structure is different this would be the result.

Problem is the entire calculation is full with problems. The biggest being that price is not a direct multiple of cost.

Quoting stealthz (Reply 19): Oh and by the way, in this country where there are min wage laws.. a Quarter Pounder does NOT cost $12.00.

Nor does it anywhere else  

I find it interesting that people are screaming about subsidies for the workers but only one line was devoted to the MASSIVE subsidies for agri-business. Corn, soybean, meat, chicken, potato.... they are living off the government dole at a much higher rate than the workers! Cut welfare for the rich and let's see what that does to the debt and deficit!

Quoting Fr8mech (Reply 1): But, where is that the employers' fault?

When you are pulling in $13+ Million a year there is a strong motivation to keep lower level employees below the poverty line.

Quoting Fr8mech (Reply 1): A business is not in business to employ people. It is in business to make money.

And a business operates in an economic environment that allows for profitable operations, even when they pay a living wage.

The problem is that we've established a level of corporate greed that makes it difficult to have a responsible minimum wage. Other countries can manage to both pay a living wage AND generate plump profits.

Quoting Fr8mech (Reply 1): It is not the responsibility of the business to pay a 'living' wage...it is the responsibility of the business to pay a wage commensurate with the contribution the employee makes to that business.

If a company wants to operate in a company's economic environment then they need to operate within the legal framework of that country. That is their responsibility. If those laws include a minimum wage above the poverty line then that is their responsibility. Just because Corporate America can pour money into politicians "campaign funds" to keep the minimum at a poverty level doesn't mean it is what we need in this country. It generates a serf community when you get right down to it.

Quoting Fr8mech (Reply 1): I'd like to see every subsidy eliminated and the tax code returned to what it should be, and not used as a tool for social engineering.

Not just "social engineering", the tax code has been effective (and properly) use to strengthen the economy. Start with some simple like accelerated depreciation.

"Social engineering" is simply a term that conservatives use as a crutch to complain about taxes. But you really don't hear complaints about cash handouts to companies, like the $40 Billion to the oil industry.

Quoting jetblueguy22 (Reply 2): What did that CEO do to get to that point though? He didn't just go to the classified section paper of the newspaper and apply. He got to that position by what he has done.

Actually he competed for the job and was chosen among a group of equally qualified individuals. Colin Powell made it very clear in his book - talking about his introduction course when he was promoted to General. There were a handful of new stars in the room and a senior general waked in the room and told them a home truth: if the plane bring them to DC had crashed and they were all killed the Army could replace them within the day without any loss of performance.

Quoting jetblueguy22 (Reply 2): Fast food jobs are not supposed to be careers.

But in the US today that is what it is for a lot of people - the serf community.

Quoting DfwRevolution (Reply 3): A successful CEO of a multi-billion dollar corporation takes about the highest skill level you can find.

Considering that they are far easier to replace than, say, a surgeon, I'd say you are a bit too much in love with the CEOs. A General or Admiral could easily have the same level of experience and knowledge, but is easily replaceable and General Powell was quickly told.

Quoting DfwRevolution (Reply 3): The solution is to just stop "subsidizing" the workers. Stop enforcing a minimum wage. Let the market shake things out.

It's the corporations getting the subsidy. It minimum wage was above the poverty line then a LOT of government spending wouldn't be needed. Shaking things out would cause more harm to the market and economy than even Bush & Cheney caused.

Quoting DfwRevolution (Reply 3): Here's the obvious consequence: the price of burgers will skyrocket or McDonalds will find a way to use less labor.

Not really. Companies that pay poverty level wages make a good chunk of money off of those serfs. The $13+ Million to McDonalds is evidence of that . Basically the percentage of sales those poverty wages represents can be pretty small, with in increase not impacting prices that much. Maybe 10¢ more for a Big Mac.

Another factor is competition. McDonalds over prices their products and competitors can come in and eat their lunch. So the CEO only gets $12+ million a year. I'll shed a tear over that.

And, of course, if that big, dead albatross of employer nanny care is taken out of the cost factor then company profits would be taken crd of, as would be the poor working at the bottom.

Quoting DfwRevolution (Reply 3): If you have to pay high school drop-outs $20 an hour to flip burgers, suddenly a BurgerTron2000 is a great investment

You think? Why spend money on the BurgerTron2000 if your sales are heading south?

Quoting DfwRevolution (Reply 3): Next thing you know, the restaurant employs no one and we all order our food at an automated kiosk.

Not a chance. Look around the restaurant areas in you town and try to find a parking space. There was a lot of business rowing and the revenues could easily cover responsible wages for all the staff that were running full speed. You tend to forget the very high volumes involved: people dropping $100+ for a meal for 4 could easily cover living wages - especially when drinks are involved.

Quoting cmf (Reply 4): If the job require long term corporate subsidy to exist it should go away.

No, a legal poverty wage should go away. Then you can start looking at lowering spending on services for the poor.

Quoting Fr8mech (Reply 7): The person working the job takes a subsidy from the government because that person 'chooses' to remain in that job.

The person chooses to work instead of laying around the house. What is available to them are poverty wages because the government allows it (read big time political contributions) and that person will hopefully keep working there until they can find a better job. Unfortunately employers prefer the serf level wages, especially since they can bully those employees so easily.

Maybe those adults trying to make what ever they can would be better off laying around their homes, or selling drugs to our kids.

Quoting Providence Journal (Thread starter): A full-bore stimulus (rather than the timid one we got) would have spurred a more robust recovery by lifting consumer demand. More jobs, including better-paying ones, would have been created.

Nonsense. A lift in consumer demand will create more jobs, but those jobs will continue to pay the going rate. Companies aren't just going to pay people more because the business is doing more volume.

Quoting WarRI1 (Thread starter): These people are being screwed over, but of course as mentioned, not the CEO. Almost 14 mill for him, zip for the workers.

Do you think the CEO was just handed that job right out of business school? Obviously he worked his way up to where he is by being the best and brightest in the field, and he should be compensated handsomely for it.

The current CEO of McDonalds Canada started his career as a teenaged fry cook making minimum wage in a McDonalds restaurant in upstate New York. He worked his way up under conditions not that different from what we see today. If that doesn't poke a hole in the whole "workers are stuck at the bottom" story then I don't know what does.

Quoting DfwRevolution (Reply 3): If you have to pay high school drop-outs $20 an hour to flip burgers, suddenly a BurgerTron2000 is a great investment. Next thing you know, the restaurant employs no one and we all order our food at an automated kiosk.

   Spot on. If the labour becomes substantially more expensive, you'll quickly see the company making more capital investments in technology and processes that make the labour redundant. The only reason it hasn't happened is because the lifetime value of labour is less costly and more sustainable than the technology to replace them.

Quoting cmf (Reply 6): Quoting RomeoBravo (Reply 6): What subsidy is this you speak of? The one mentioned in the OP article

Nowhere in the article does it mention that McDonalds receives a subsidy. McDonalds indirectly benefits from subsidies that exist upstream in the supply chain, but the corporation itself is not subsidized. Every company on the continent that uses corn or soy-based products will benefit from these subsidies.

Quoting blueflyer (Reply 15): You seriously believe it is a freely-made choice???

Yes. The employee is free to seek employment elsewhere. McDonalds isn't in the game of indentured servitude.

Quoting stealthz (Reply 19): Oh and by the way, in this country where there are min wage laws.. a Quarter Pounder does NOT cost $12.00.

But the price difference is relative to the wage difference, is it not?

Quoting cmf (Reply 4): So what if the price of burgers skyrocket?

Then people won't buy them.

Quoting Ken777 (Reply 23): Considering that they are far easier to replace than, say, a surgeon, I'd say you are a bit too much in love with the CEOs. A General or Admiral could easily have the same level of experience and knowledge, but is easily replaceable and General Powell was quickly told.

I respect the skills required of major CEOs because I've worked one-on-one with Fortune 500 CEOs. Their talents are in the league of professional athletes and other high-performing careers.

But to say they are more interchangeable than a surgeon? With the exception of a handful of word-class specialist, no way. If I need my appendix removed tomorrow, there are a line of surgeons that can be scheduled. There may only be a handful of people in the world who can integrate and lead a given organization of thousands of people.

Lastly, do not confuse fast with easy. Generals and CEOs are sometimes replaced quickly, but usually only when someone is being dismissed. Planned leadership transitions take months to years precisely because they are difficult.

Quoting Ken777 (Reply 23): You think? Why spend money on the BurgerTron2000 if your sales are heading south?

Because it will allow you to reduce your costs of sales and change the value proposition of your product. For example, eliminating labor costs could allow lower prices, higher quality, more profit, or some combination thereof.

Quoting Ken777 (Reply 23): No, a legal poverty wage should go away. Then you can start looking at lowering spending on services for the poor.

You are effectively arguing for a "minimum price law" of every product that requires labor. You can't make things more or less valuable, but you can make them higher price. If something costs more for the same value, people will buy less of it.

Quoting Ken777 (Reply 23): Not a chance. Look around the restaurant areas in you town and try to find a parking space. There was a lot of business rowing and the revenues could easily cover responsible wages for all the staff that were running full speed. You tend to forget the very high volumes involved: people dropping $100+ for a meal for 4 could easily cover living wages - especially when drinks are involved.

You say "not a chance," but it has already happened.

President Obama seemed to think he was making some profound observation, but it has happened throughout our economy. High volume customer service is becoming automated self-service more and more. At airports, check-in counters are a skeleton crew with automated kiosks. ATMs have displaced thousands of tellers and more and more people bank entirely online.

Yes, people will still crowd to restaurants and spend money. There just won't be many employees at those restaurants if you insist on pricing labor more than its worth.

Quoting Revelation (Reply 21): The problem is simple to solve. Simply come up with a formula based on the ratio of the pay of the entry level workers (contract as well as direct) to the CEO based on traditional/world norms and make it illegal for a CEO to earn more than that ratio upon pain of jail time.

Actually, the solution is even easier: what a business pays its employees isn't your business.

Quoting blueflyer (Reply 15): You seriously believe it is a freely-made choice???

Ask yourself what led up to this person being "forced" to work for minimum wage. What decisions did that person make that put him in a position where the only thing he can do is "flip burgers"? We all make choices in life...even if we start from crap...the choices are there. Some are just harder to make than others.

Quoting Ken777 (Reply 23): If a company wants to operate in a company's economic environment then they need to operate within the legal framework of that country.

And, the fast-food industry is doing just that.

Quoting Ken777 (Reply 23): If those laws include a minimum wage above the poverty line then that is their responsibility.

Again, is anyone not paying the minimum wage?

It is the responsibility of an organization to operate within the laws. It is not the responsibility of that organization to provide its employees anything more than what they contribute to the organization.

Look at it this way...an entire Burger King staff can walk out today and they can be replaced in less than a week and the store would barely miss a beat and you wouldn't notice a bit difference.

Now, look at an airline...if every mechanic walked out, it would take the airline months to replace the people and years to replace the experience.

That is why Burger King 'burger flippers' make minimum wage and aircraft mechanics make a whole bunch more.

It is not

Quoting cmf (Reply 10): No, we get to a point where more people are able to eat out because they make more than minimum salary.

You assume that the price of the food and service will remain the same. It will necessarily go up if the organization is to meet it financial obligations and profit goals.

I know a local restaurateur. He runs a high end restaurant. He pays well in excess of the minimum wage and his employees are able to keep their tips. I can't afford to eat there more than once or twice a year.

Quoting WestJet747 (Reply 24): But the price difference is relative to the wage difference, is it not?

Doesn't appear so, "the Economist" publishes it's "big Mac index" a measure of how many Big Macs one can buy around the world for US$50, in 2012 that $50 would buy 11 in the USA and 10 in Australia, doesn't seem so different considering the differeing wage regimes.
incidentally that $50 would get you 30 burgers in India and 7 in Norway!!

Quoting ual747den (Reply 16): First the CEO pay really has nothing to do with the real problem. A CEO of a very successful corporation should be and must be paid very well or he/she will just move on to a business that will pay this person what they are worth and that corporation won't be very successful anymore.

Got that. For those who opine that really accomplished CEOs are finger-switch replaceable like a linebacker or a high ranking military officer probably doesn't understand. Only one case in point: the entire Ford family couldn't get FoMoCo out of its doldrums, so they hired an accomplished man, Allen Mullalwy (sp?) from Boeing to run FoMoCo. It's working, and I'm sure he didn't come cheap. Money well spent, I'd say. I know that my Ford stock has zoomed a bit from the $3.60/share I bought it for, anyway. Thank you, Mr. knowledgeable CEO, and I think your new products are pretty damn good too (altho I am a GM guy).

Quoting Revelation (Reply 21): The problem is simple to solve. Simply come up with a formula based on the ratio of the pay of the entry level workers (contract as well as direct) to the CEO based on traditional/world norms and make it illegal for a CEO to earn more than that ratio upon pain of jail time

Naaaah...way too complex (would get yet ANOTHER freshly-minted government agency involved in the marketplace). And furthermore, if the CEO makes 10 mil a year and the sweeper makes 10 dollars an hour, the sweeper can leave to get a 10.50 dollar/hour job at another company just like the CEO can leave for a 10.5 mil/year job at another company. Who's going to decide? You or some scamming congressman?

I am not in favor of minimum wage laws. I understand there is a problem that many of you have pointed out in this thread, however, But, I am still am a "marketplace" guy. One should be compensated for one's performance, and in many cases, this is clearly not the case. I also firmly believe that without government interference, all markets would eventually tend to be better which would not only NOT screw the "little" guy but help him/her.

Will all things be better tomorrow or next year? Of course not. But with common sense, which is uncommon nowadays, things could make substantial leaps to the positive strata. As far as government subsidies go, the most positive step would be to eliminate the "legal" government subsidies that the folks in Washington, DC vote in for themselves whilst all the rest of us are asleep. best regards...jack

http://go.bloomberg.com/multimedia/ceo-pay-ratio/



It was said earlier that the CEO should be paid handsomely for his work. There is a difference between handsomely and obscene. We have entered the era of obscene. Nobody will argue about an Executive being paid fairly. The difference is when wages are being depressed by these same people, and they use those figures to boast earnings along with layoffs, and then they arrange a hefty wage increase/bonus, that is obscene. Anyone who defends or denies this happens is being a little naïve, or obtuse.

[Edited 2013-10-26 19:20:21]

Quoting WestJet747 (Reply 24): Nowhere in the article does it mention that McDonalds receives a subsidy. McDonalds indirectly benefits from subsidies that exist upstream in the supply chain, but the corporation itself is not subsidized. Every company on the continent that uses corn or soy-based products will benefit from these subsidies.

"That’s because Big Macs, Whoppers and their ilk are heavily subsidized fare.
Low wages may help to keep fast food cheap. But because of them, most fast-food workers rely on public assistance just to get by."
Straight from the article. The money isn't handed directly to McD but they are the beneficiary.

Quoting DfwRevolution (Reply 27): Then people won't buy them.

So what?

Quoting Fr8mech (Reply 30): Ask yourself what led up to this person being "forced" to work for minimum wage. What decisions did that person make that put him in a position where the only thing he can do is "flip burgers"? We all make choices in life...even if we start from crap...the choices are there. Some are just harder to make than others.

Those jobs do not go away because everyone has a Ph.D.

Quoting Fr8mech (Reply 30): That is why Burger King 'burger flippers' make minimum wage and aircraft mechanics make a whole bunch more.

Of course a well trained mechanic makes more, that isn't an issue. The issue is that the difference between low paid and well paid is unreasonably big.

Quoting Fr8mech (Reply 30): You assume that the price of the food and service will remain the same. It will necessarily go up if the organization is to meet it financial obligations and profit goals

No I don't.

Quoting Fr8mech (Reply 30): I know a local restaurateur. He runs a high end restaurant. He pays well in excess of the minimum wage and his employees are able to keep their tips. I can't afford to eat there more than once or twice a year.

Being from a restaurateur family I can guarantee you it isn't the waiters salary that makes the difference between you being able to afford it once or twice per year versus once or twice per month or week.

Quoting stealthz (Reply 33): Doesn't appear so, "the Economist" publishes it's "big Mac index" a measure of how many Big Macs one can buy around the world for US$50, in 2012 that $50 would buy 11 in the USA and 10 in Australia, doesn't seem so different considering the differeing wage regimes. incidentally that $50 would get you 30 burgers in India and 7 in Norway!!

  

Pretty amazing people are so adamant it can't work yet there are examples of it working all around the world.

Quoting cmf (Reply 40): Pretty amazing people are so adamant it can't work yet there are examples of it working all around the world.

It does amaze, the outright denial when in the face of evidence around the world, it does not make that much difference as regards minimum wages affecting prices. It seems strange that on this forum, where statistics are used and used, when it does not fit their agenda, they choose to completely disregard the evidence. Why does this not surprise me?

There are also other forms of subsidies many big retailers and fast food outlets their owners get.
There are property and corporate tax breaks given by some communities and states to get them to put up a store there for a few desperately needed jobs or to get some badly needed tax revenue to replace long gone factories that used to pay good wages. This leads to companies putting town vs. town for these subsidies to put their store in them and bigger tax breaks done.
Towns who lose downtown businesses, owned by locals who's income and profits stayed in the area.
Walmart and McD's rarely sponsor local youth sports teams and activities like locally owned one do.
Towns and states having to spend maybe millions in roads, traffic lights, additional police, fire and EMT's for these businesses due to the additional traffic.
Those corporate jets, despite some good business reasons for them is loaded with all kind of tax deals on the purchase, operation and tax subsides to the airports they operate to/from, Federal ATC ops costs to taxpayers and so on.
Numerous other tax benefits from depreciation to general 'operational' costs on a much grander scale.

Quoting cmf (Reply 40): Pretty amazing people are so adamant it can't work yet there are examples of it working all around the world.

Quoting WarRI1 (Reply 41): It does amaze, the outright denial when in the face of evidence around the world, it does not make that much difference as regards minimum wages affecting prices. It seems strange that on this forum, where statistics are used and used, when it does not fit their agenda, they choose to completely disregard the evidence. Why does this not surprise me?

It's also amazing to see the complete lack of economic knowledge being displayed in this thread. I'm still at the undergraduate level in my economics studies, but even principles courses are enough to see the socialist fallacies emerge. The Big Mac comparisons are no surprise to me. In fact, I just went through that example in a class when looking at exchange rates. It's good to look at the numbers, but we all have to acknowledge that the Big Mac is only one tiny piece of the entire economic puzzle. It's just one morsel that makes up a quality of life comparison between nations. All it can tell us is that on a relative basis Big Macs are about the same price in different economies.

The bottom line is that McDonald's labor force is not subsidized. Not even a hint. What we have today is the result of a mostly free market and people's free choice. If that market was more free, the models say they'd be better off, not the other way around.

Quoting MSPNWA (Reply 44): but even principles courses are enough to see the socialist fallacies emerge

None of the -isms work.

Quoting MSPNWA (Reply 44): The bottom line is that McDonald's labor force is not subsidized. Not even a hint.

When someone must provide extra money to your workforce for them to be able to work at your place, then they are subsidised. Failing to acknowledge that is wearing tinted glasses.

Quoting Fr8mech (Reply 30): Now, look at an airline...if every mechanic walked out, it would take the airline months to replace the people and years to replace the experience.

A few things about that example.

Firstly, you can be replaced, and quickly if need be. Contract MX is showing up all over the place in spots previously believed to be untouchable. How many airlines did their own HMVs 20 years ago vs now? Line MX is almost never in house anymore at stations smaller than a focus city. And it's a pretty safe bet that they're not paying what 5X is.

For now, things look ok(ish) if you're still on that side, but a generation down the line and it could easily not be the case. There really isn't a point, for example, to do D & C checks in house when we can send it overseas for a third the cost (strictly speaking about labor; other costs are a bit more fixed, and some, like transport, actually increase).

But as it pertains to this discussion, just because you have a skilled trade (though the Dep of Labor disagrees, unfortunately), doesn't mean you can't be downsized away the same as some when some Burger Joint buys the latest JobKiller5000 or whatever they're calling those kiosks now...

And what's of concern is that none of that has anything to do with your skill or job performance.

Quoting Fr8mech (Reply 30): You assume that the price of the food and service will remain the same. It will necessarily go up if the organization is to meet it financial obligations and profit goals.

I for one am not assuming that it would remain the same. But I do know that tall tales of $12 Big Macs happening over this are just that. By way of reference, when I managed a restaurant during my school days, labor ran anywhere between 11 & 16%. 11 being awesome, and 16 being atrocious. That's actually not much of a cost spread to begin with, but let's say for the sake of discussion that a new law doubles the cost of your labor. So now you're looking at between 22 & 32% of revenue going to labor. I do think that the establishment will pass as much of that onto the customer as they can, so let's say they're able to do all of that.

A Big Mac meal is what, $7? I have to guess since it's been a minute since my last McD's visit. That meal is now between $8.54 & $9.24. Personally, I think it would end up closer to the former as again, the higher figure is based on the kind of numbers that would get mgmt in a lot of hot water with ownership or corporate. But we can average, since this a.net and call it $8.89. So from $7, we get to $8.89. While these back of napkin figures do not include sales tax, they also assume that either there is no competition, or that the competition is behaving in exactly the same fashion and not trying any effort to undercut. And again, it's also based on a doubling of labor costs, not limited to staff that weren't min wagers to begin with.

So you're right. That is an increase. Is it so awful that it's not worth doing? I can't for the life of me see how. You could make the argument that their labor isn't worth it and that it shouldn't be raised for that reason alone. But honestly, that's a dangerous row to hoe. As I said above, even you're not safe from that type of thinking.


I said this in another thread, and I think it's worth repeating here. Why is it that when a fuel spike, caused by rampant speculation and currency hedging, resulting in very real cost increases across the board (since pretty much nothing we have isn't transported at some point) is perfectly ok, because capitalism... but when labor cost increases that would not likely increase the final cost of a given product beyond 12 - 15% or so the forebearer or apocolypse?

The cost of doing business is the cost of doing business; it doesn't matter if some of that's labor or some of it is for making speculators filthy rich. Just sayin...

Quoting darksnowynight (Reply 47): So you're right. That is an increase. Is it so awful that it's not worth doing? I can't for the life of me see how.

Here's what will happen if that where to be the case. As alluded to already in this thread. McDonald's will reduce the amount of staff at their restaurant - getting rid of the weakest performers first. They'll probably replace most of the till people with a machine that your order from and staff will simply make your burgers for you and exchange it for a receipt. Where possible they'll try to automate most of the burger making processes (i'm not an expert so i can't tell you how much scope there is here). In general you'll probably face longer queues at Maccas, because they will have calculated that customers will value lower priced burgers slightly more than queuing time, on top of that there will be less customers anyway because they're slightly more expensive so they're now having to compete with higher quality restaurants.

So yeah some people will get a payrise, and others will be laid off and will never be able to find a job or gain any skills - which is utterly utterly cruel.

The key thing though, is that none of this would happen overnight. At first advocates would probably claim victory as the fast food chains take the hike on the chin in the short term. The issues would creep in subtly and be hard to identify.

Quoting darksnowynight (Reply 47): Why is it that when a fuel spike, caused by rampant speculation and currency hedging, resulting in very real cost increases across the board (since pretty much nothing we have isn't transported at some point) is perfectly ok, because capitalism... but when labor cost increases that would not likely increase the final cost of a given product beyond 12 - 15% or so the forebearer or apocolypse?

Hedging serves a purpose. It mediates the supply of something over time and helps to efficiently distribute resources. Artificial wage caps cause inefficient use of resources.

[Edited 2013-10-27 09:00:17]

Quoting WarRI1 (Thread starter): This article is written by a member of the newspapers editorial board. I point this out, because this newspaper is not know for advocating anything anti-business.

I see it as being more anti-Income Support Programs. I've been making the same argument on this board for years. Companies who hire at or near minimum wage, and who do not restrict such hires to students and such just looking for a supplementary income to buy gas and go on dates, but hire people who must earn a living, are effectively getting massive subsidies from the government. THIS is the real corporate welfare scandal.

When someone is hired to work, it is a mutual agreement. I agree to perform work for you in return for an amount of money that must serve my needs. If the money is not enough, I have to go look elsewhere. If your offered salary is not enough for me (or anyone else) to serve their needs, you need to increase the offered wage. Would you take a job that only pays $1 per hour? Certainly not. How about $5? $10? $15? Where is your cut-off point?

Forget any food stamps or any income assistance for the moment. They don't exist. You live alone, and your rock-bottom subsistence needs is around $2000 per month. Any full-time job that doesn't pay you $13/hour (net, after all deductions) just won't cut it, and you have to keep looking until you find it.

If McDonalds offers you $8 per hour gross (roughly half of your needs), and income assistance programs chip in to make up the difference, that will factor into your decision on whether or not to take the job. Now, with the wage + food stamps, you have met your threshold, and you take the job.

If those income assistance programs did not exist at all, McDonalds, Walmart etc would be FORCED to increase their offered wage, regardless of any minimum wage law, simply in order to get enough people to fill the jobs. Yes, your burger or goods from Walmart might get a little more expensive, but the price would then reflect the real market value - and what's wrong with that? The fact of the matter is that every time you buy a Big Mac, the government is subsidizing a buck or two of the price.

The unintended side-effect of these income assistance programs, which I grant were probably passed for the most noble reasons (although the cynic in me says that this was in fact the intended outcome), has been to artificially pad the demand side of the equation, allowing companies to offer wages much lower than their true market value. And the minimum wage law legitimizes such low wages even further.

Quoting Fr8mech (Reply 1): Come on War, it's just the minimum wage argument wrapped up in a different package. Yes, these folks get paid minimum wage. Yes, a bunch of these folks have to dip into the public dole to 'get by'. But, where is that the employers' fault?

Except if a two-stage minimum wage law is introduced. Let's say, minimum wage of $15 per hour (indexed for inflation - that would be today's minimum) for any job over 20 hours per week and where the employee is not a full-time student, and a second-tier minimum wage of $7.50, but only for full-time students under 21 working less than 30 hours per week. The fact is that there IS a market for very cheap labor that students can meet - they are simply looking for enough money to buy gas and condoms.

Let's assume that the employment effects are minimal (particularly if the law was phased in gradually). I bet that a lot of liberals here would support such a change in the minimum wage law. It would get millions of people off of food stamps and other programs, helping the budget, debt, and not the least, their own self-esteem.

But I'll bet you that the Democratic Congressional Caucus would not support it, unless they include a massive increase in the poverty threshold that ensures that even at the new minimum wage level, current recipients would continue to get a substantial portion of their income from assistance programs. Those programs are a source of power - they are the political nicotine base - once hooked, they will keep voting for the people that give them freebies. The Democratic Party (I'm not talking about most liberals in general, who I do believe truly want to help those at the bottom of the economic ladder - I'm talking about the Democrats in power) is highly dependent on having millions of voters believing that Democrats give them goodies, and the GOP wants to take those goodies away.

These days, taxpayers pay for a lot of things. Over 100 million people are on means-tested government benefit programs.

McDonald's isn't unique in that regard. They may actually reduce government benefits by actually getting people to work instead of the alternative, which is welfare and may involve getting pregnant.

McDonald's could save taxpayers 100s of billions compared to the alternative. We don't know.

Quoting RomeoBravo (Reply 48): Here's what will happen if that where to be the case.

No, that's what you say will happen. Which is funny, because everywhere where wages have been raised to livable (I guess) standards, that has not happened, interestingly enough.

Even here in California, where living wage laws are more common than not, there are no shortages of McDs. In fact, many of them advertise later closings and earlier openings. Are these things that require more staff, or less?

Quoting RomeoBravo (Reply 48): and others will be laid off and will never be able to find a job or gain any skills - which is utterly utterly cruel.

One time I lost a job to redundancy, about 16 years ago, and it was before I had any measurable skills. And that totally happened. Oh wait, nevermind...

Quoting RomeoBravo (Reply 48): Hedging serves a purpose. It mediates the supply of something over time and helps to efficiently distribute resources.

Which is not the goal of any economy anywhere. And if it were, I'd say it's doing a pretty piss poor job. Efficient distribution of resources would mean no billionaires and indigents.

Quoting RomeoBravo (Reply 48): Artificial wage caps cause inefficient use of resources.

So do a lot of things. Like speculation. And since I'm not particularly interested in living in a place where poverty grows faster than an economy (for obvious and selfish reasons, let's be clear), it's better to spend more on labor and less on subsiding plutocrats. Really doesn't net me anything to have a society full of people who can't pay bills.

Quoting Dreadnought (Reply 49): Forget any food stamps or any income assistance for the moment. They don't exist. You live alone, and your rock-bottom subsistence needs is around $2000 per month. Any full-time job that doesn't pay you $13/hour (net, after all deductions) just won't cut it, and you have to keep looking until you find it.

That's ridiculous. If you can't survive, buy a bus ticket to a place with prospects. See a loan shark and go into debt. Consider leaving the USA. Consider living in your friend's basement. Splitting an apartment, god forbid. Living on rice and beans. $2000 a month (in most of the USA) allows you to maintain your own home, car and retail groceries of your choice.

Those things are an achievement, not a right.

Quoting Flighty (Reply 52): That's ridiculous. If you can't survive, buy a bus ticket to a place with prospects. See a loan shark and go into debt. Consider leaving the USA. Consider living in your friend's basement. Splitting an apartment, god forbid. Living on rice and beans. $2000 a month (in most of the USA) allows you to maintain your own home, car and retail groceries of your choice.

I was just giving an example - the minimum income you are willing to live on is up to you to decide, whether you live in someone's basement or want to maintain your mansion in Malibu. You set the number - but it must be all-inclusive.

I used $2000 because, at least around here, that's about the cheapest you can live with halfway-decent apartment, food, utilities etc.

[Edited 2013-10-27 09:38:24]

Quoting darksnowynight (Reply 51): No, that's what you say will happen. Which is funny, because everywhere where wages have been raised to livable (I guess) standards, that has not happened, interestingly enough.

Ok, so can you explain to my why youth unemployment is at historical highs in the UK, even though overall unemployment, though high, is not at historic levels? On top of that, why is it that every time i go to a supermarket these days i have to scan my own items on an automatic till myself. Finally, why is it that people who are out of work on a long term basis are working for free for work experience and then when that period is up, they don't get a job. Why can't they just work for a price that is less than the minimum wage but more than nothing?

Quoting darksnowynight (Reply 51): Which is not the goal of any economy anywhere.

Efficient distribution of resources is not the goal of an economy? Maybe it's not the goal of a bad economy, but it is the goal of a good economy.

Quoting darksnowynight (Reply 51): So do a lot of things. Like speculation.

Again, speculation causes efficient use of resources. Why do people speculate on things like oil? Because they anticipate the price being higher in the future than it is now. The price being higher in the future means that there will be a greater unmet demand in the future, so holding some oil back now will result in oil arriving on the market when there is the greatest demand for it.

It's similar in a way to how airlines sell seats. They don't sell the whole plane out straight away, they'll keep the price high on those last seats so the people who desperately need to travel at the last minute and are prepared to pay a lot for it are satisfied.

Quoting RomeoBravo (Reply 48): Hedging serves a purpose. It mediates the supply of something over time and helps to efficiently distribute resources.

Actually, it gives more money to the top. Look at what happened in 2008 with oil and housing.

Quoting Flighty (Reply 50): They may actually reduce government benefits by actually getting people to work instead of the alternative, which is welfare and may involve getting pregnant. McDonald's could save taxpayers 100s of billions compared to the alternative. We don't know.

The right does not want any of that to work. They want workers to stay on low wage jobs and complain people are on low wage jobs. If people were actually getting ahead or, at the very least breaking even, they would not have a reason to hate workers.

Take welfare away and those workers will still be working the same job at the same wage.

Quoting WarRI1 (Thread starter): As is mentioned, the pay is good enough to live on fast food, nothing else.

Since when is fast food cheap?

You know what's cheap food? Buying fresh meats, fruits, vegetables and grains from super markets and cooking it yourself.

Quoting PPVRA (Reply 56): Take welfare away and those workers will still be working the same job at the same wage

Thank you. I was just coming back to make that point.

The right keeps complaining about things being "given" to the workers. Like "free" health care and "free" food and "free" shelter. What the right forgets is people have to pay for insurance, even if it is state/federal health care exchanges under ACA. People have to be employed and receive a pay check to get "free" food from food stamps. People have to work and pay rent to get "free" shelter through HUD.

Not only that, the whole solution the right has is: stop giving to workers. They say the have a great idea for replacing low cost health care with something, but they never say what that is. They say the workers will get food and shelter, so no need to worry about that.

When we went to Mexico two years ago, the number of women and children (under 10 years old) begging on the streets was heart wrenching. All I could think is "this is how the right wants workers in United States to live." Spend a week around the cathedral in Mazatlan and you will get it.

Quoting Dreadnought (Reply 49): If those income assistance programs did not exist at all, McDonalds, Walmart etc would be FORCED to increase their offered wage, regardless of any minimum wage law, simply in order to get enough people to fill the jobs.

That's a backwards way of looking at it. People don't know what their minimum income needs are, regardless of whether or not government assistance is available. People agree to work for a certain salary, and they do their best to live within the means of that salary. That is why the minimum wage is necessary - companies won't voluntarily raise their wages, because they could easily collude to keep them low. The minimum wage needs to be above the poverty line to reduce poverty, period.

[Edited 2013-10-27 12:46:06]

Quoting Dreadnought (Reply 49): If those income assistance programs did not exist at all, McDonalds, Walmart etc would be FORCED to increase their offered wage, regardless of any minimum wage law, simply in order to get enough people to fill the jobs.

Actually, the opposite is true. With all the jobs either simply vanishing or going overseas, workers now have to take low wage jobs. There are thousands fighting to fill a few positions at low wages. This does not force or compel companies to raise wages. On the contrary, they simply keep wages low with the attitude of "you need this more than we need you."