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You're talking about margin and fast food is definitely a low margin business (barring soda). If salaries increase, the business will literally have to raise t
by malvosenior 8y ago
You're talking about margin and fast food is definitely a low margin business (barring soda).
If salaries increase, the business will literally have to raise the price of goods sold or go out of business. That's different than raising the price to achieve a higher margin (and opening your self up to competition from people who can operate with a lower margin).
- ryandrake 8y agoIf a rational business owner could raise prices and make more revenue, they would, regardless of what their costs are. Why would they wait for their costs (salaries) to increase?
- cheald 8y agoBecause your competition's costs are increasing by the same amount at the same time, and their ability to compete on price is hindered by the increase in costs to the same degree yours is.
- sgift 8y agoMargins of fast food industry businesses are somewhere between 6 and 9% in the median. So ... I call bullshit on "have to raise"
- jimbofisher1 8y agoCorporate profits are at all time highs while wages have stagnated since the 70s, you sir are full of it.
- briandear 8y agoActually the idea that compensation has stagnated since the 1970s is misleading. See this study from Stephen Rose at the Urban Institute for a detailed look at this assertion that “wages have stagnated”: https://www.urban.org/sites/default/files/publication/65351/2000331-Beyond-the-Wage-Stagnation-Story.pdf https://www.urban.org/sites/default/files/publication/65351/...
- jimbofisher1 8y agoTheir entire analysis hinges on counting benefits as wages. Sorry but my health insurance doesn't pay my rent or put food on the table. Also given that health costs in the US are wildly inflated this analysis seems lacking as health insurance accounts for a very large chunk of employer benefits and are almost entirely eaten up by inflated costs.