4 ms·

Every time I visit, say, Macdonalds, I try to figure out how much it would cost to pay everyone in the logistic chain decently. E.g. let's suppose we agree to g

Every time I visit, say, Macdonalds, I try to figure out how much it would cost to pay everyone in the logistic chain decently. E.g. let's suppose we agree to give 5% extra to Macdonalds at the register to distribute to its employees in some equitable fashion. So my $12 order (two happy meals and a burger, say) costs me an extra $0.60. <10 people are processing something like 200 orders per hour (I suspect it's more like 5 people and 400 orders, I'm guesstimating), so that's $12 for each of them. But let's assume there are another ten people in the logistic chain. So that's $6/h for each of them. Now imagine the flow-on effect to the rest of the economy if people in those horrible jobs had some kind of living wage. I suspect not only would these workers be $6/h better off, I'd probably be better off too.

bigtunacan 12y ago
I really don't think the people in these jobs understand the whole picture. I already typically won't establish a McDonald's already because prices have gotten so high. It's cheaper to cook at home. If wages double and prices raise less people are going to eat there and hence less people who are employed. These people should be focused on how they can increase their long term earning potential instead of helping to further squeeze out the middle class.
- deleted 12y ago
  [deleted]
- misterbishop 12y ago
  Huh? If you can't afford to eat at McDonalds, maybe you should be protesting for a higher wage.
  - kefka 12y ago
    Mcdonalds is expensive for the quantity and quality you get. I can make the similar much healthier, tastier, and cheaper than they can.
    - Tloewald 12y ago
      Good grief, I didn't plan to defend Macdonald's, but this sounds delusional to me. If you're trying to get food cheaply, unless your labor is pretty much free and you're incredibly efficient I very much doubt this is true. Assuming I were to prepare a home cooked meal from scratch, the chances I would get away with less than 1h of labor (including driving to markets, shopping, and preparation) alone justifies eating out (at a restaurant, forget Macdonalds). Certainly eating home-cooked food is healthier. And it's probably more delicious. And cooking can be enjoyable, but not as a daily grind. But don't make the cost argument unless your time is free.
      - kefka 12y ago
        Don't make the argument "unless your time is free" unless you have 0-turn around time->money converter. Which, your argument is that "Time isn't free, so neener neener", which falls flat in its face. I'm not in the upper, or middle economic class. And making our own food is how we save a great deal of money, and also eating much healthier. We probably could eat on $50/wk for both my wife and I. But it would be junk food and bad calories and malnutrition. Last night, we had shrimp, tilapia, roasted veggies, and a capezzi salad. That would have been ~$40 each out on the town. It cost us $10 for both of us combined. And it was a half hour work for one of us. We can't even work a half hour on no minutes notice.
        Tloewald 12y ago
        Yes but your "free" time is valuable in a different way. I cheerfully cook for myself and my family on occasion, but having to do it all the time (for a family which has different conflicting dietary issues) is not much fun. (We don't eat out much for reasons of health as much as anything.) I just wouldn't make the cost argument -- it doesn't hold water.
      - bigtunacan 12y ago
        Ok, I'll follow on just slightly here related to the cost argument. First let's take time out of the picture because there are too many factors to measure it properly... How close is a McDonalds, do you enjoy cooking, blah... blah... Instead let's compare on cost only... When I originally posted I did not mention the dollar value menu, that is what was immediately posted as a response by someone else. But since it is the lowest common denominator and the representation of McDonalds has cheap food... Let's try to approximate how much it costs in money only to make a "dollar burger". The dollar burger has only 1.5 ounces of meat. Today when I checked my local grocer 80% lean ground was $2.48 a pound. So that should make about 12 dollar burgers. ~21 cents per burger for hamburger Hamburger buns were 68 cents for an eight pack; that's 8.5 cents per burger. It was $2.50 for an 8 pack of presliced cheese These were much thicker higher quality cheese, and unsliced cheese can be bought far cheaper... But we splurged so that's another 32 cents per burger. 88 cents for a head of lettuce which will easily make 20+ dollar burgers so that's 4.4 cents per burger So we add this up and we are now at a burger that costs 57.4 cents to make. We still need to add a sprinkle of onion crumbs as well as a squirt of mustard and ketchup; I think we can safely assume that is going to cost less than the remaining 42.6 cents. So yes; in fact I can make an equivalent burger for less than it costs at McDonalds. If I was going to get a sandwich at McDonalds more likely I would end up with something that doesn't totally suck, like the Big Mac, which averages $4.79 in the US. For $4.79 I can make one hell of a burger.
  - bigtunacan 12y ago
    My point was not that I can't afford to eat at McDonalds, but rather that it is a convenience purchase and eating at home is more cost conscious. If prices raise, which they will if wages go up, then more people will choose not to eat there and this will result in less jobs for the very people protesting the wages.
    - Tloewald 12y ago
      Preparing food at home is not actually cheaper than Macdonalds -- I defy you to create a double cheeseburger for $1. (The beef alone would cost over $1 at Walmart -- roughly $6/lb. Macdonald's gets its beef a lot cheaper.) The food at home is possibly healthier, but healthy food is even more expensive. That said, I doubt people will baulk at paying $1.05 (after all they are paying sales tax on it in many cases).
      - bigtunacan 12y ago
        Indeed, the dollar menu is incredibly cheap, but I cringe to even call that food. I'm probably better off eaten the cheapest off brand hot dogs than those slime burgers. That said, they are looking for a $15/hour rate. Since federal minimum wage is $7.25 an hour we are talking a potential wage cost doubling. I doubt that will only result in a 5% cost increase and that it will be much more. Also, I'm not saying that all sales will stop, but that they will decrease. That is the substitute goods effect. McDonalds food is an inferior good. As it's prices raise more people will move away from them to substitute goods.
        Tloewald 12y ago
        It's easy and fun to dismiss Macdonalds, but their "slime" burgers are made from beef (no pink slime even). I doubt that cheap hotdogs are made from better ingredients. "I doubt that will only result in a 5% cost increase and that it will be much more." Well -- make your case. A Bloomberg reporter guesstimates that doubling salary costs at fast food franchises would increase prices by 25%. http://www.bloomberg.com/bw/articles/2013-08-02/this-is-what-would-happen-if-fast-food-workers-got-raises http://www.bloomberg.com/bw/articles/2013-08-02/this-is-what... But that's pretty much a worst case scenario (assumes that everyone working there is minimum wage -- in fact from the figures I see, no-one at Macdonalds earns the Federal minimum wage). I suspect if you did the analyses what you'd see is something like this: 1) Increasing the minimum wage would have flow-on effects to other salaries causing wage increases across the board. 2) There would be price rises generated by increased labor costs, and also by more money being in the economy (this would improve GDP, but that's not a useful measure). 3) It would have a significant stimulus effect (low income people tend to spend more than save, so giving them more money has a high multiplier effect -- it's really the best kind of stimulus). This would reduce unemployment. 4) A lot of people who have multiple jobs to survive would be able to give up some of them, which would reduce unemployment. 5) Some companies would make do with fewer employees, which would increase unemployment. 6) My guess is 3 + 4 would overwhelm 5. Combined with 2, this would raise interest rates. Seems like a pretty desirable outcome all round.
- deleted 12y ago
  [deleted]
- Tloewald 12y ago
  > These people should be focused on how they can increase their long term earning potential instead of helping to further squeeze out the middle class. "These people" -- what, people with awful jobs? "further squeeze out the middle class" -- how is this squeezing out the middle class? Low end salaries in the US are a tragedy of the commons. Because people can cobble together subsistence services when collecting a "salary" (e.g. by going to the ER for medical care or collecting food stamps to eat) companies are able to get people to work for them for artificially low prices. Effectively, taxpayers are subsidizing Walmart and Macdonalds for paying people too little. This is not the same as, for example, providing decent welfare or unemployment benefits that go away when you have a job. That drives up salaries because it makes having a shitty job seem worse than just collecting welfare. Instead we have income-based support that cuts in even for people who are working. The middle class are being squeezed by medical costs which are in large part driven by the US healthcare situation. If our health costs were under control, the "middle class" would have enjoyed healthy salary increases over the last decade.
  - bigtunacan 12y ago
    '"These people" -- what, people with awful jobs?' People with completed unskilled jobs that could be performed by a twelve year old if labor laws allowed. An unfortunately high number of unskilled, unmotivated people take jobs at places like McDonalds with no ambition to do anything better. Raising the minimum wage ONLY raises the minimum wage in terms of earning, so yes it squeezes the middle class as their earning comes closer to the minimum wage. Raising the minimum wage results in inflation and raising costs; this directly impacts the middle class. Quite frankly many of these are also providing services that just aren't necessary; they are purely convenience. People only have so much money to spend, so raising prices results in fewer sales as some people will switch to substitute goods. In the example I'm working with here, buying groceries and cooking at home is a cheaper substitute good for McDonalds; as the cost of McDonalds raises more people will substitute this with cooking at home. This is just the basics of supply and demand. So yes, "these people", anyone with a low paying unskilled job should be doing anything in their power to develop needed and in demand jobs so they can raise their earning potential. Aside from the few that move up to managerial roles at a place like McDonalds there is no earning potential. These are the types of places where you get hired with no prior job experience or skills. They are not now, nor have they been in my lifetime, sustainable careers.

bigtunacan 12y ago

I really don't think the people in these jobs understand the whole picture. I already typically won't establish a McDonald's already because prices have gotten so high. It's cheaper to cook at home. If wages double and prices raise less people are going to eat there and hence less people who are employed. These people should be focused on how they can increase their long term earning potential instead of helping to further squeeze out the middle class.

deleted 12y ago
[deleted]
misterbishop 12y ago
Huh? If you can't afford to eat at McDonalds, maybe you should be protesting for a higher wage.
- kefka 12y ago
  Mcdonalds is expensive for the quantity and quality you get. I can make the similar much healthier, tastier, and cheaper than they can.
  - Tloewald 12y ago
    Good grief, I didn't plan to defend Macdonald's, but this sounds delusional to me. If you're trying to get food cheaply, unless your labor is pretty much free and you're incredibly efficient I very much doubt this is true. Assuming I were to prepare a home cooked meal from scratch, the chances I would get away with less than 1h of labor (including driving to markets, shopping, and preparation) alone justifies eating out (at a restaurant, forget Macdonalds). Certainly eating home-cooked food is healthier. And it's probably more delicious. And cooking can be enjoyable, but not as a daily grind. But don't make the cost argument unless your time is free.
    - kefka 12y ago
      Don't make the argument "unless your time is free" unless you have 0-turn around time->money converter. Which, your argument is that "Time isn't free, so neener neener", which falls flat in its face. I'm not in the upper, or middle economic class. And making our own food is how we save a great deal of money, and also eating much healthier. We probably could eat on $50/wk for both my wife and I. But it would be junk food and bad calories and malnutrition. Last night, we had shrimp, tilapia, roasted veggies, and a capezzi salad. That would have been ~$40 each out on the town. It cost us $10 for both of us combined. And it was a half hour work for one of us. We can't even work a half hour on no minutes notice.
      - Tloewald 12y ago
        Yes but your "free" time is valuable in a different way. I cheerfully cook for myself and my family on occasion, but having to do it all the time (for a family which has different conflicting dietary issues) is not much fun. (We don't eat out much for reasons of health as much as anything.) I just wouldn't make the cost argument -- it doesn't hold water.
    - bigtunacan 12y ago
      Ok, I'll follow on just slightly here related to the cost argument. First let's take time out of the picture because there are too many factors to measure it properly... How close is a McDonalds, do you enjoy cooking, blah... blah... Instead let's compare on cost only... When I originally posted I did not mention the dollar value menu, that is what was immediately posted as a response by someone else. But since it is the lowest common denominator and the representation of McDonalds has cheap food... Let's try to approximate how much it costs in money only to make a "dollar burger". The dollar burger has only 1.5 ounces of meat. Today when I checked my local grocer 80% lean ground was $2.48 a pound. So that should make about 12 dollar burgers. ~21 cents per burger for hamburger Hamburger buns were 68 cents for an eight pack; that's 8.5 cents per burger. It was $2.50 for an 8 pack of presliced cheese These were much thicker higher quality cheese, and unsliced cheese can be bought far cheaper... But we splurged so that's another 32 cents per burger. 88 cents for a head of lettuce which will easily make 20+ dollar burgers so that's 4.4 cents per burger So we add this up and we are now at a burger that costs 57.4 cents to make. We still need to add a sprinkle of onion crumbs as well as a squirt of mustard and ketchup; I think we can safely assume that is going to cost less than the remaining 42.6 cents. So yes; in fact I can make an equivalent burger for less than it costs at McDonalds. If I was going to get a sandwich at McDonalds more likely I would end up with something that doesn't totally suck, like the Big Mac, which averages $4.79 in the US. For $4.79 I can make one hell of a burger.
- bigtunacan 12y ago
  My point was not that I can't afford to eat at McDonalds, but rather that it is a convenience purchase and eating at home is more cost conscious. If prices raise, which they will if wages go up, then more people will choose not to eat there and this will result in less jobs for the very people protesting the wages.
  - Tloewald 12y ago
    Preparing food at home is not actually cheaper than Macdonalds -- I defy you to create a double cheeseburger for $1. (The beef alone would cost over $1 at Walmart -- roughly $6/lb. Macdonald's gets its beef a lot cheaper.) The food at home is possibly healthier, but healthy food is even more expensive. That said, I doubt people will baulk at paying $1.05 (after all they are paying sales tax on it in many cases).
    - bigtunacan 12y ago
      Indeed, the dollar menu is incredibly cheap, but I cringe to even call that food. I'm probably better off eaten the cheapest off brand hot dogs than those slime burgers. That said, they are looking for a $15/hour rate. Since federal minimum wage is $7.25 an hour we are talking a potential wage cost doubling. I doubt that will only result in a 5% cost increase and that it will be much more. Also, I'm not saying that all sales will stop, but that they will decrease. That is the substitute goods effect. McDonalds food is an inferior good. As it's prices raise more people will move away from them to substitute goods.
      - Tloewald 12y ago
        It's easy and fun to dismiss Macdonalds, but their "slime" burgers are made from beef (no pink slime even). I doubt that cheap hotdogs are made from better ingredients. "I doubt that will only result in a 5% cost increase and that it will be much more." Well -- make your case. A Bloomberg reporter guesstimates that doubling salary costs at fast food franchises would increase prices by 25%. http://www.bloomberg.com/bw/articles/2013-08-02/this-is-what-would-happen-if-fast-food-workers-got-raises http://www.bloomberg.com/bw/articles/2013-08-02/this-is-what... But that's pretty much a worst case scenario (assumes that everyone working there is minimum wage -- in fact from the figures I see, no-one at Macdonalds earns the Federal minimum wage). I suspect if you did the analyses what you'd see is something like this: 1) Increasing the minimum wage would have flow-on effects to other salaries causing wage increases across the board. 2) There would be price rises generated by increased labor costs, and also by more money being in the economy (this would improve GDP, but that's not a useful measure). 3) It would have a significant stimulus effect (low income people tend to spend more than save, so giving them more money has a high multiplier effect -- it's really the best kind of stimulus). This would reduce unemployment. 4) A lot of people who have multiple jobs to survive would be able to give up some of them, which would reduce unemployment. 5) Some companies would make do with fewer employees, which would increase unemployment. 6) My guess is 3 + 4 would overwhelm 5. Combined with 2, this would raise interest rates. Seems like a pretty desirable outcome all round.
deleted 12y ago
[deleted]
Tloewald 12y ago
> These people should be focused on how they can increase their long term earning potential instead of helping to further squeeze out the middle class. "These people" -- what, people with awful jobs? "further squeeze out the middle class" -- how is this squeezing out the middle class? Low end salaries in the US are a tragedy of the commons. Because people can cobble together subsistence services when collecting a "salary" (e.g. by going to the ER for medical care or collecting food stamps to eat) companies are able to get people to work for them for artificially low prices. Effectively, taxpayers are subsidizing Walmart and Macdonalds for paying people too little. This is not the same as, for example, providing decent welfare or unemployment benefits that go away when you have a job. That drives up salaries because it makes having a shitty job seem worse than just collecting welfare. Instead we have income-based support that cuts in even for people who are working. The middle class are being squeezed by medical costs which are in large part driven by the US healthcare situation. If our health costs were under control, the "middle class" would have enjoyed healthy salary increases over the last decade.
- bigtunacan 12y ago
  '"These people" -- what, people with awful jobs?' People with completed unskilled jobs that could be performed by a twelve year old if labor laws allowed. An unfortunately high number of unskilled, unmotivated people take jobs at places like McDonalds with no ambition to do anything better. Raising the minimum wage ONLY raises the minimum wage in terms of earning, so yes it squeezes the middle class as their earning comes closer to the minimum wage. Raising the minimum wage results in inflation and raising costs; this directly impacts the middle class. Quite frankly many of these are also providing services that just aren't necessary; they are purely convenience. People only have so much money to spend, so raising prices results in fewer sales as some people will switch to substitute goods. In the example I'm working with here, buying groceries and cooking at home is a cheaper substitute good for McDonalds; as the cost of McDonalds raises more people will substitute this with cooking at home. This is just the basics of supply and demand. So yes, "these people", anyone with a low paying unskilled job should be doing anything in their power to develop needed and in demand jobs so they can raise their earning potential. Aside from the few that move up to managerial roles at a place like McDonalds there is no earning potential. These are the types of places where you get hired with no prior job experience or skills. They are not now, nor have they been in my lifetime, sustainable careers.