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I’m trying to be illustrative through glibness here, but… If consumers can’t afford the prices required to pay a restaurant’s labor living wages, then perhaps
by twoodfin 11mo ago
I’m trying to be illustrative through glibness here, but…
If consumers can’t afford the prices required to pay a restaurant’s labor living wages, then perhaps they’re not viable customers of that restaurant.
Minimum wages above the market-set rate are a form of price control. The distorting effects of price controls—in this case, contributing to shortages of low-margin restaurant meals—are economically inevitable.
- SunshineTheCat 11mo agoIt is quite the juggling act: you have employees demanding to be paid more, the cost of goods/inflation steadily rising, while customers wanting everything to be cheaper. Something has to give somewhere, the challenging part would be to know where.
- reppap 11mo agoDon't forget company leaderships and stock owners taking more and more profit out of companies than ever.
- SunshineTheCat 11mo agoTake 100% of their salaries and profits and it would make a negligible, likely unnoticeable difference in this issue.
- zepolen 11mo agoAmazon made $311B in 2024, they employ 1.5 million people. That's $200k an employee, on top of what their regular salary is. McDonalds made $15B and employ 150k people, that's $100k per employee. So no, not negligible in the slightest.
- SunshineTheCat 11mo agoAre you under the impression the only expense a company has is payroll?
- zepolen 11mo agoProfit is after costs+investments removed, not just payroll.
- zaphar 11mo agoWhere did you get the $311B number? Because I get a net profit of $59.25B which is only 40k per employee. This assumes that the company doesn't need to keep any profit for future usage which may or may not be case depending on how big their war chest is. Not to say that 40k couldn't be life changing for many of the Amazon employee but the 311B number seems to be pulled out of thin air.
- zepolen 11mo agoYou're correct, it's wrong. I googled it, guessing AI just hallucinated that.
- jay_kyburz 11mo agoAccording to AI, they paid 5.3 billion in dividends and a have about 2 million in employees.
- the_gastropod 11mo agoI'm not sure if there's a more sophisticated way of doing this. But just looking at revenue vs net income for 2024 suggests McDonald's operates at about a ~33% margin.
- deleted 11mo ago[deleted]
- reppap 11mo agoI'm not suggesting everyone would be a millionaire with a more egalitarian distribution of wealth. But, to suggest America's skyrocketing inequality has nothing to do with the poor being unable to afford a burger is a bold claim to make. Because if the wealthy are not extracting their fortunes from American companies, what then?
- AngryData 11mo agoI find that hard to believe when their margins are double what they were a decade ago.
- venturecruelty 11mo agoSounds like a great start!
- stronglikedan 11mo agoThat's been said forever, but only ever said.
- SSchick 11mo agoHow about executive compensation?
- stronglikedan 11mo agoThat would make everything maybe 1 cent cheaper, so it's not really significant.
- SunshineTheCat 11mo agoYea whenever the idea of a company's profit is under a microscope, people often reflex to exec "greed" but it's typically because it's easier to blame a fictional disney villain, than it is to dig into the root of the problem.
- venturecruelty 11mo agoIf you can explain why anyone needs $8.469 billion of profit (2023), I'll gladly hear you out about greed. But something tells me I'm not going to get a great answer. :)
- Nextgrid 11mo agoIt would however have second-order effects; having less wealthy people would drive down rents/etc. If the wealthy just keep getting wealthier you'll end up in a situation where the wealthy just trade between each other out because of higher margins and the working class has nowhere to buy things.
- twoodfin 11mo agoMarkets are the best mechanism ever invented to resolve that challenge to maximum aggregate benefit.
- acdha 11mo agoThere’s an entire academic field studying ways in which it’s not that simple. Housing, employment, and transportation are somewhat famously areas where markets need help due to information and power disparities.
- standardUser 11mo agoTrue, but to prevent those restaurants from hiring children, feeding us poison, and dodging all taxes the market must be regulated. And we're back to the same discussion we've been having for 150 years - how do we best regulate markets.
- venturecruelty 11mo agoCan't wait for the glorious day when Big Macs are $100 because the Market has willed it. Verily, I say unto thee, for mine eyes have beheld the Market's glory, thou art blessed to pay $100 for a Big Mac, and thou ought to bend thy knee and worship at the feet of the Market, for it is all-knowing, and all-powerful, and perfect. Selah.
- sylos 11mo agoMaybe the mcdonald's stockholders can have a few less yachts
- ToucanLoucan 11mo agoI think the bigger issue is the 500 mil/quarter stock buybacks and the several million compensation packages for the executives than the burger flipper wanting enough money to make it worthwhile to leave their house.
- geraldwhen 11mo agoMcDonald’s is a franchise. Franchise owners bear the burden of employee and goods costs.
- anticorporate 11mo agoFranchise owner also bear the burden of franchise fees, which pay for these exorbitant executive compensation packages.
- ToucanLoucan 11mo agoAnd they've been complaining for decades at this point that corporate is failing them. Not enough new products, bad business and advertising strategies, store renos, the list goes on. The burger flipper making a lot more money is doing a lot more for their franchisee's than the executives are as of late.
- boringg 11mo agoThe exec comp is a rounding error compared to the other costs of the business.
- JPKab 11mo agoThe numbers are interesting when you run them. https://chatgpt.com/share/6920afb3-5f84-8008-827d-907e5f0a0a0c https://chatgpt.com/share/6920afb3-5f84-8008-827d-907e5f0a0a...
- xeonmc 11mo agoCan you afford McDonald’s food if you work at McDonald’s?
- dangus 11mo agoYou usually get a free meal per shift if you have any sort of half decent owner at basically any fast food restaurant.
- rixed 11mo agoSo, that's a "no" since that meal costs less that it would if bough over the counter?
- dangus 11mo agoI’m just going to sidestep this and point out the stupidity of this comparison. Does it magically prove I’m making a bad salary if I can’t afford my employer’s product? Is a five star general making a bad salary because he can’t afford a nuclear submarine?
- venturecruelty 11mo ago>Does it magically prove I’m making a bad salary if I can’t afford my employer’s product? Yes, if the entire premise of your employer is "here's the cheapest hot food imaginable". >Is a five star general making a bad salary because he can’t afford a nuclear submarine? No, because the entire premise of the military is not "here's the cheapest nuclear submarine imaginable". What a ridiculous strawman you set up, although you swung pretty earnestly at it, Mr. Quixote. A better example would be Walmart, whose entire premise is "we sell the cheapest goods imaginable". Despite this, a lot of Walmart (and McaDonald's employees, actually) are on government assistance. If you have a justification for why there should ever be a society where someone working at a job that boasts "we have the cheapest shit" still can't afford their job's cheap shit, then please, be my guest.
- 11mo ago
- dangus 11mo agoI don’t think this is very related to what’s actually going on here. It used to be that fast food was always cheap. But now, fast food is a broad market that’s aimed at a wide variety of demographics. McDonald’s just so happens to be closer to the “premium” side of the market. They have a strong brand and don’t have to be the cheapest fast food restaurant on the block. People don’t buy McDonald’s because it’s cheap. There are plenty of fast food restaurant chains that still mainly serve lower income demographics. Rally’s/Checkers, Church’s Chicken, Popeyes, Sonic, and maybe you could even count Arby’s, or Taco Bell depending on what you’re ordering. Some of the bigger brands like McDonald’s do have some deals to be found but you’ll need to be on their apps hunting for them.
- chairmansteve 11mo agoYou are correct. But how do we address the wealth inequality in America?
- intalentive 11mo agoI like Michael Hudson's answer: repress financial rent-seeking. Inequality is driven by rents that siphon wealth from the productive economy. Therefore: nationalize natural monopolies and destroy monopolies of privilege.
- rixed 11mo agoIs McDonald still a labor intensive shop? Last time I visited one I had the impression that it had become vastly more automatised: you order on a machine, and most customers just grab a bag from their car before they drive away.
- swatcoder 11mo agoWage is not a determining factor for McDonald's pricing and has nothing to do with that. They successfully converted from a neighborhood fast food shop into a new chain of automats with almost no staff once touchscreens got cheap enough and the necessary software could be suitably amortized. They ditched the employees, minimized community features like playplaces and tables, dropped the low margin dollar menu that many poorer people relied on, and focused on getting higher-margin products with better photography to busy professionals with brand attachment. Trying to turn this into the tired debate about minimum wage just distracts from a discussion about what's actually happening to this brand.
- deleted 11mo ago[deleted]
- twoodfin 11mo agoOK so what’s the problem then? Surely if McDonald’s made their own decision to move up-market, competitors have swooped in to serve the customers they’re leaving behind?
- pseudalopex 11mo ago> Minimum wages above the market-set rate are a form of price control. The distorting effects of price controls—in this case, contributing to shortages of low-margin restaurant meals—are economically inevitable. The article cited analysis which said California's $20 minimum wage increased fast food prices 2% approximately.
- venturecruelty 11mo agoYeah, if you make below a certain amount of money every year, you're a net drain on society and we should politely march you into a wood chipper.