3 ms·

I have an idea: let's try and see - although I know it's against any current business teaching. Seems easier to assume the employees are whiners, especially fro

by soco 2y ago

I have an idea: let's try and see - although I know it's against any current business teaching. Seems easier to assume the employees are whiners, especially from a position where the hourly rate is at least an order of magnitude higher. But I digress: of course the first question will be, who's trying first this novel approach? My favorite example is the comparison with Denmark, where the hourly wage of the mac worker is more than double yet the big mac price is pretty much the same. Who would have guessed...

NoMoreNicksLeft 2y ago
> I have an idea: let's try and see While I encourage and am delighted by your attitude that you want to see experimental results, there are some insurmountable issues: 1. I don't have any friends who want to run their multi-million-dollar-or-billion-dollar grocery businesses into the ground. 2. People of leftist bent, when seeing results they don't like tend to blame it on non-leftists and double down. 3. This is such bad budgeting that there's no need to jump off the cliff just to prove we'll splat. You're doubling payroll in an industry where profit margins are razor thin. > My favorite example is the comparison with Denmark, where the hourly wage of the mac worker is more than double yet the big mac price is pretty much the same Do the Danish customers trash the place like they do in every McDonald's I've ever been to in any large city in the US? Do they deal with hobos coming in with their own cups and just filling those up without purchasing anything? Or any of a thousand other issues (I guess you'd call them "social") that make operating a franchise so much more difficult and expensive in the US? Do they have to hire twice as many employees just to get 80% of the labor (oh wait, that one's rhetorical, we already know the answer). Has a Danish McDonald's employee ever had to hose down the restroom because someone projectile-diarrheaed every surface within that room, includin 8ft up the walls and so forth? We can't have that, unless you can get everyone in the United States to behave like Danes. But then they'd also eat better (and be taxed like Danes), like Danes, and so sales would fall. And where Denmark has fewer than 100 stores, the US has 14,000... how many of those will close? Of the ones that remain open, how many would they lay off? Are the stores in Denmark franchises, or corporate and just there as loss leaders or something like that? So some are paid more, the rest just become unemployed. Forgive me if I think that the Danish model doesn't work here.
ToValueFunfetti 2y ago
>My favorite example is the comparison with Denmark, where the hourly wage of the mac worker is more than double yet the big mac price is pretty much the same. Who would have guessed... Not me! Can someone explain this to me? I worked in a restaurant for 5 years. It's a notoriously tight-margin industry, the poster child for late stage capitalism. We aimed for labor costs of ~30%. If we doubled wages, holding margins constant, we'd have to charge 30% more. Another ~40% goes to ingredients- I don't know what their labor percentage is, but conservatively assuming 20%, that's an additional 8% if they doubled wages too. If we let margins go to zero (they do have to be non-zero to incentivize opening a restaurant at all, but can be arbitrarily small), we're still a minimum of 28% more expensive. But even if we ignore all of that, the US notably subsidizes beef to a large degree. If we had salary parity with Denmark, I'd still expect the US Big Macs to be cheaper. And that's all before factoring in Denmark's higher taxes. So what gives? Does McDonald's have wider margins or a lower labor percentage than the rest of the industry? Does Denmark also subsidize beef?

by soco 2y ago

NoMoreNicksLeft 2y ago

> I have an idea: let's try and see While I encourage and am delighted by your attitude that you want to see experimental results, there are some insurmountable issues: 1. I don't have any friends who want to run their multi-million-dollar-or-billion-dollar grocery businesses into the ground. 2. People of leftist bent, when seeing results they don't like tend to blame it on non-leftists and double down. 3. This is such bad budgeting that there's no need to jump off the cliff just to prove we'll splat. You're doubling payroll in an industry where profit margins are razor thin. > My favorite example is the comparison with Denmark, where the hourly wage of the mac worker is more than double yet the big mac price is pretty much the same Do the Danish customers trash the place like they do in every McDonald's I've ever been to in any large city in the US? Do they deal with hobos coming in with their own cups and just filling those up without purchasing anything? Or any of a thousand other issues (I guess you'd call them "social") that make operating a franchise so much more difficult and expensive in the US? Do they have to hire twice as many employees just to get 80% of the labor (oh wait, that one's rhetorical, we already know the answer). Has a Danish McDonald's employee ever had to hose down the restroom because someone projectile-diarrheaed every surface within that room, includin 8ft up the walls and so forth? We can't have that, unless you can get everyone in the United States to behave like Danes. But then they'd also eat better (and be taxed like Danes), like Danes, and so sales would fall. And where Denmark has fewer than 100 stores, the US has 14,000... how many of those will close? Of the ones that remain open, how many would they lay off? Are the stores in Denmark franchises, or corporate and just there as loss leaders or something like that? So some are paid more, the rest just become unemployed. Forgive me if I think that the Danish model doesn't work here.

ToValueFunfetti 2y ago

>My favorite example is the comparison with Denmark, where the hourly wage of the mac worker is more than double yet the big mac price is pretty much the same. Who would have guessed... Not me! Can someone explain this to me? I worked in a restaurant for 5 years. It's a notoriously tight-margin industry, the poster child for late stage capitalism. We aimed for labor costs of ~30%. If we doubled wages, holding margins constant, we'd have to charge 30% more. Another ~40% goes to ingredients- I don't know what their labor percentage is, but conservatively assuming 20%, that's an additional 8% if they doubled wages too. If we let margins go to zero (they do have to be non-zero to incentivize opening a restaurant at all, but can be arbitrarily small), we're still a minimum of 28% more expensive. But even if we ignore all of that, the US notably subsidizes beef to a large degree. If we had salary parity with Denmark, I'd still expect the US Big Macs to be cheaper. And that's all before factoring in Denmark's higher taxes. So what gives? Does McDonald's have wider margins or a lower labor percentage than the rest of the industry? Does Denmark also subsidize beef?