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hm, interesting calculation. however, isn't McDonalds a franchise? where did these numbers come from? also, i am not that crazy to think that this would not ca

by bakhy 12y ago

hm, interesting calculation. however, isn't McDonalds a franchise? where did these numbers come from? also, i am not that crazy to think that this would not cause ANY cutbacks. the money does indeed have to come from somewhere. it's just that there would be nowhere near a proportionate response in firings compared to the increase in the life quality of the people affected, and also in the consumption driven by their new incomes. ultimately, this is like a collective bargain on a wider scale, supported by the democratic process in Seattle. it is correcting for the unfavorable effect of market forces on the pay of uneducated workers. due to their abundance, the downward pressure on the pay of this category of workers can only be stopped by minimum wage or social security. EDIT - i've been googling around, and found a much lower number of employees, 440k employees (source: http://www.macroaxis.com/invest/market/MCD--McDonalds-Corp http://www.macroaxis.com/invest/market/MCD--McDonalds-Corp - don't know how reliable..) which, following your calculation through, gives ~ $6 net income per employee hour. also, another point is flat out ignored - prices can be increased, shifting part of this burden to the end consumer, which in the end only seems just. any business that is already giving a fair wage to it's workers is being driven out of business by competition exploiting lack of minimum wage rules and abundance of low skilled labor. EDIT 2 - Also, the crucial problem with executive pay is not so much that people think that from their pay some huge increases in workers' pay could be given, it's in the purely subjective feeling of injustice, when on one side managers are showered with millions (and I presume McDonalds has more than just 1), while workers are given advice on how to get food stamps. this quite understandably pisses people off. EDIT 3 - Sorry for all the edits :D Another thing worth noting is that it seems very unlikely that ALL McDonalds employees are working on a minimum wage. This would also reduce the effect of minimum wage hike on their profits.

glenra 12y ago
I initially got the numbers from the right-side box here: https://en.wikipedia.org/wiki/McDonald's https://en.wikipedia.org/wiki/McDonald's The larger number I used includes as "employees" people who work for non-company-owned franchises and licensees; I believe your smaller number is only counting workers at the company-owned outlets (not franchises or licensees), so your number should be about 19% of mine, give or take (source for that 19% number is the last line on this page: http://www.aboutmcdonalds.com/mcd/investors/company_profile.html http://www.aboutmcdonalds.com/mcd/investors/company_profile.... ) (Incidentally McDonald's suggests it has 761,000 "employees" here - I suspect that's a US-only number: http://www.mcdonalds.com/us/en/careers.html http://www.mcdonalds.com/us/en/careers.html ) > another point is flat out ignored - prices can be increased Actually they can't. I assume prices currently are set at levels that roughly maximize the firm's profits. If McDonalds could earn significantly more money by charging more they would have already raised the price to do that. They serve a price-sensitive customer base; raising prices would indeed earn more per meal served but would sell fewer meals for overall less profit. (If you think McDonald's could make billions more by raising prices, you have to explain why they've been voluntarily charging less than they could all these years. Are they just being magnanimous, charging less out of the goodness of their hearts? :-) ) If you really want to nitpick, though: if McDonalds spent their entire worldwide profit margin raising salaries just in the US they could do a bit better than my calculation, but that would involve "exploiting" their foreign licensees and helping the relatively-rich US employees entirely at the expense of relatively-poor foreign ones. Whereas if anything, it would be more ethically just to only raise wages abroad and not do so here.)
- bakhy 12y ago
  you cannot, in one calculation, use the number of employees in all non-McD owned restaurants plus the number of employees in McD, and the profit of only McD itself. i hope i don't need to explain why that is wrong. as for the number of 761,000, you seem to be right to put "employees" in quotes, even the site you link to does not call them employees. the site i linked to provides both figures. "I assume prices currently are set at levels that roughly maximize the firm's profits." -- again, you simply assume. and you forget to consider an important factor in determining where the point of maximum profits is - the costs of production. which have now, with the hiking of minimum wage, changed. so, even if they were in this theoretically perfect point of maximum profit (which is an ideal, and thus incredible to be achieved to say the least), they would automatically be out of it after the min wage is introduced, and would be forced to change prices to return to it. but this is all idealized talk, for such a point to exist we must assume a perfectly linearly elastic market. i would like to see proof of that.

by bakhy 12y ago

glenra 12y ago

I initially got the numbers from the right-side box here: https://en.wikipedia.org/wiki/McDonald's https://en.wikipedia.org/wiki/McDonald's The larger number I used includes as "employees" people who work for non-company-owned franchises and licensees; I believe your smaller number is only counting workers at the company-owned outlets (not franchises or licensees), so your number should be about 19% of mine, give or take (source for that 19% number is the last line on this page: http://www.aboutmcdonalds.com/mcd/investors/company_profile.html http://www.aboutmcdonalds.com/mcd/investors/company_profile.... ) (Incidentally McDonald's suggests it has 761,000 "employees" here - I suspect that's a US-only number: http://www.mcdonalds.com/us/en/careers.html http://www.mcdonalds.com/us/en/careers.html ) > another point is flat out ignored - prices can be increased Actually they can't. I assume prices currently are set at levels that roughly maximize the firm's profits. If McDonalds could earn significantly more money by charging more they would have already raised the price to do that. They serve a price-sensitive customer base; raising prices would indeed earn more per meal served but would sell fewer meals for overall less profit. (If you think McDonald's could make billions more by raising prices, you have to explain why they've been voluntarily charging less than they could all these years. Are they just being magnanimous, charging less out of the goodness of their hearts? :-) ) If you really want to nitpick, though: if McDonalds spent their entire worldwide profit margin raising salaries just in the US they could do a bit better than my calculation, but that would involve "exploiting" their foreign licensees and helping the relatively-rich US employees entirely at the expense of relatively-poor foreign ones. Whereas if anything, it would be more ethically just to only raise wages abroad and not do so here.)

bakhy 12y ago
you cannot, in one calculation, use the number of employees in all non-McD owned restaurants plus the number of employees in McD, and the profit of only McD itself. i hope i don't need to explain why that is wrong. as for the number of 761,000, you seem to be right to put "employees" in quotes, even the site you link to does not call them employees. the site i linked to provides both figures. "I assume prices currently are set at levels that roughly maximize the firm's profits." -- again, you simply assume. and you forget to consider an important factor in determining where the point of maximum profits is - the costs of production. which have now, with the hiking of minimum wage, changed. so, even if they were in this theoretically perfect point of maximum profit (which is an ideal, and thus incredible to be achieved to say the least), they would automatically be out of it after the min wage is introduced, and would be forced to change prices to return to it. but this is all idealized talk, for such a point to exist we must assume a perfectly linearly elastic market. i would like to see proof of that.