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The numbers are not so bleak as you think. > Wikipedia [sic] has 36,000 franchises worldwide McDonalds only has 14,339 franchises in the US [1] -- where the p

The numbers are not so bleak as you think. > Wikipedia [sic] has 36,000 franchises worldwide McDonalds only has 14,339 franchises in the US [1] -- where the pay raise debate is happening. > Assume we're paying about 100 person hours/day for a franchise, assume 360 days [sic] in a year, and you get... about 1.3 billion paid hours. According to the parent comment, McDonald's made $1B in profit during the 3rd quarter alone. Correcting for both the number of franchises & the quarter vs the whole year of labor yields an estimated $7.64 in profit per hypothetical hourly employee (HHE). And keep in mind that it's down from $1.5B profit previously, which corresponds to an estimated $11.46 per HHE. > That's a [sic] 3.4% of their revenue! McDonald's has $7.95B of earnings on $27.44B in revenue [1]; about 29%. Even if their profit is only $4B annually ($1B in Q3 x 4 qtrs.), that's still 14.6%. > Capitalism is very efficient... People are not. And that's the point. People making minimum wage don't always have the flexibility to take risks that would allow them to advance. "A bird in the hand" and all that often means that a stable minimum wage job is more valuable than a risky opportunity to make more. [1] http://www.statista.com/topics/1444/mcdonalds/ http://www.statista.com/topics/1444/mcdonalds/

jerf 12y ago
"McDonalds only has 14,339 franchises in the US [1] -- where the pay raise debate is happening." As I mentioned in another reply, the point was more to recalibrate understandings of the money size involved than to specifically speak to this discussion. I'm not sure how you "corrected" for the number of franchises, then... if you did it by accounting all worldwide profit as for US franchises that is not a "correction". And regardless of the correction remember not to party too hard with "profit" amounts right now when McDonalds may very well go negative in the near future; the point I'm trying to make survives that, but it would make hash of yours. Profit is not guaranteed! Somewhere online I saw a list of the profit margins of all the Fortune 100. Single-digit percentages were the norm. I was unable to google it up for this. "> Capitalism is very efficient... People are not. People making minimum wage don't always have the flexibility to take risks that would allow them to advance. " That's a complete nonsequitor. And moreover it's a frankly stupid accusation of me you're trying to implicitly make. Give me the button to push to make everyone in the world effectively as rich as billionaires and somehow it all works out with no negative effects, and I'd push it in a heartbeat. I'd love to manifest Iain Bank's Culture. It sounds great. But in the real world, we have to work with what resources we have, and we don't actually have anywhere near as many as people think. The rich may be rich, but divide their riches up somehow perfectly efficiently amongst everybody, and we all get a lot less than our generally-innumerate intuitions are telling us we would.
- cgearhart 12y ago
  > ...you did it by accounting all worldwide profit as for US franchises that is not a "correction". [sic] The corporation is not debating raising wages worldwide, only in the US. Their total corporate revenue (including international revenue) can be included in the calculation of whether it is "affordable". But only the workers in the US should be included in the calculation. > Profit is not guaranteed! The focal point of the discussion is that the current distribution of earnings marginalizes the hourly workforce. It does not have to be this way. The napkin math supports the idea that changing the proportions in the distribution could be reasonably accomplished. Furthermore, the napkin math ignores price increases, which would likely be part of any more sophisticated projections. > That's a complete nonsequitor. And moreover it's a frankly stupid accusation of me you're trying to implicitly make. People are not "efficient" in the economic sense. They do not make perfect decisions for themselves, even given perfect information. They will compete with each other irrationally, and even against their own best interests. The efficiency of capitalism exploits those traits. We ought to use reasonable policies and regulations to address that. > The rich may be rich, but divide their riches up somehow perfectly efficiently amongst everybody, and we all get a lot less than our generally-innumerate intuitions are telling us we would. I'm not arguing for carving up the wealth of the rich and redistributing it. But hourly workers should share in the gains wrought by their labor. As it stands, the top 1% takes an amazingly disproportionate share. [1] [1] http://www.politifact.com/punditfact/statements/2014/jan/22/joe-scarborough/scarborough-top-1-took-95-gains-under-obama/ http://www.politifact.com/punditfact/statements/2014/jan/22/...

jerf 12y ago

"McDonalds only has 14,339 franchises in the US [1] -- where the pay raise debate is happening." As I mentioned in another reply, the point was more to recalibrate understandings of the money size involved than to specifically speak to this discussion. I'm not sure how you "corrected" for the number of franchises, then... if you did it by accounting all worldwide profit as for US franchises that is not a "correction". And regardless of the correction remember not to party too hard with "profit" amounts right now when McDonalds may very well go negative in the near future; the point I'm trying to make survives that, but it would make hash of yours. Profit is not guaranteed! Somewhere online I saw a list of the profit margins of all the Fortune 100. Single-digit percentages were the norm. I was unable to google it up for this. "> Capitalism is very efficient... People are not. People making minimum wage don't always have the flexibility to take risks that would allow them to advance. " That's a complete nonsequitor. And moreover it's a frankly stupid accusation of me you're trying to implicitly make. Give me the button to push to make everyone in the world effectively as rich as billionaires and somehow it all works out with no negative effects, and I'd push it in a heartbeat. I'd love to manifest Iain Bank's Culture. It sounds great. But in the real world, we have to work with what resources we have, and we don't actually have anywhere near as many as people think. The rich may be rich, but divide their riches up somehow perfectly efficiently amongst everybody, and we all get a lot less than our generally-innumerate intuitions are telling us we would.

cgearhart 12y ago
> ...you did it by accounting all worldwide profit as for US franchises that is not a "correction". [sic] The corporation is not debating raising wages worldwide, only in the US. Their total corporate revenue (including international revenue) can be included in the calculation of whether it is "affordable". But only the workers in the US should be included in the calculation. > Profit is not guaranteed! The focal point of the discussion is that the current distribution of earnings marginalizes the hourly workforce. It does not have to be this way. The napkin math supports the idea that changing the proportions in the distribution could be reasonably accomplished. Furthermore, the napkin math ignores price increases, which would likely be part of any more sophisticated projections. > That's a complete nonsequitor. And moreover it's a frankly stupid accusation of me you're trying to implicitly make. People are not "efficient" in the economic sense. They do not make perfect decisions for themselves, even given perfect information. They will compete with each other irrationally, and even against their own best interests. The efficiency of capitalism exploits those traits. We ought to use reasonable policies and regulations to address that. > The rich may be rich, but divide their riches up somehow perfectly efficiently amongst everybody, and we all get a lot less than our generally-innumerate intuitions are telling us we would. I'm not arguing for carving up the wealth of the rich and redistributing it. But hourly workers should share in the gains wrought by their labor. As it stands, the top 1% takes an amazingly disproportionate share. [1] [1] http://www.politifact.com/punditfact/statements/2014/jan/22/joe-scarborough/scarborough-top-1-took-95-gains-under-obama/ http://www.politifact.com/punditfact/statements/2014/jan/22/...