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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 Walma

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.

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.