3 ms·
technically, if labor is 25% of costs and the cost of that labor is increasing by 66%, prices would only need to rise 16.5% to maintain current rates of profita
by wavefunction 11y ago
technically, if labor is 25% of costs and the cost of that labor is increasing by 66%, prices would only need to rise 16.5% to maintain current rates of profitability (.25 * .66)
- greedo 11y agoBut raising the min to $15 is a 107% bump, so prices would have to rise by +/- 27%, before you factor on the increase in Social Security costs. The employer contrib to SS is 6.2%, and Medicare is 1.45%. So a $15 min wage actually costs the employer an additional $8.60/hour. An even easier and more insightful way is to carve up a Big Mac. In the US, the average price for a Big Mac is $4.79. Overhead: 30% or $1.44 Food Cost: 25% or $1.20 Labor: 25% or $1.20 Franchise Royalties: 13% or $.62 Profit: 7% or $.34 Now a Big Mac isn't as profitable as fries or soda, but those percentages are across the entire menu. Not a lot of profit for a burger... I think a lot of devs here are not seeing the overall economics of the fastfood world, and perhaps feeling a bit of guilt due to the difference in their salaries versus the fastfood workers...