Fast Food Workers Stage Strike, Demand Higher Minimal Wage.

[Divair]

Oh boy, I can't wait to pay fifteen bucks for a Big Mac.

Why would you pay $15 for a Big Mac?

<waits>

Seriously, even if you were to ascribe to the "Prices-Must-Go-Up-By-a-Factor-of-<X>-If-Wages-Go-Up-By-a-Factor-of-<X>" theory — which has no basis in economic reality — your "$15 Bag Mac" assumes that Big Macs currently cost $7.25.

Which they most assuredly do not.

Big Mac prices vary according to local demand (who'd have imagined such a thing!); the average price in the U.S. appears to be around $4.20. Thus, according to the "Prices-Must-Go-Up-By-a-Factor-of-<X>-If-Wages-Go-Up-By-a-Factor-of-<X>" theory, an increase of 106.9% in the minimum wage would "necessarily" drive the price of goods produced with that minimum wage by 106.9% — which would push the average price of the Big Mac Stateside up to $8.69, not $15.

The thing is, prices don't work that way.

McDonald's average labor cost in 17%. Without looking at the specifics of what's required to "build" a Big Mac, another way of looking at the effects of a minimum wage increase would be to calculate the labor cost of a Big Mac, based on the average National price and the average labor cost:

$4.20 × 17% = 71.4¢

So let's assume that, in response to an increase in the minimum wage of 106.9% (from $7.25 to $15), McDonalds raises everybody's pay by 106.7%. This goes for the lowest-paid worker at the counter or behind the grill, who gets a raise from $7.25 to $15, just as it goes for CEO Donald Thompson (which is only fair, right?), who gets a raise from $8.75 million a year in salary and bonuses to $18.1 million a year in salaries and bonuses.

<recalculates>

OK, so now McDonald's labor cost is just over 35%. Does this mean that prices need to increase by 106.9% so that labor cost can go back down to 17%? No, because none of the other costs of doing business (including the cost of capital — IOW, McDonald's dividend expectations or the interest that it has to pay on its corporate debt) have gone up. McDonald's can recoup its losses (assuming infinite elasticity of demand for its products [which is a fancy way of saying that its customers don't care how much they pay for their "Mickie D" fix]) by raising its prices by just over 18% — IOW, by just the overall increase in its labor costs.

$4.20 × 18% = 76¢

So the price of a Big Mac only has to go up from $4.20 to $4.96, on a National basis.

Mind you, this is a facile analysis. Some of McDonald's other costs will go up if the minimum wage goes up, because some of the ingredients it uses in its products are also manufactured by minimum wage workers; OTC, McDonald's customers are not, in fact, infinitely willing to pay any price for its food, so consumer resistance will keep prices from going up as far as is needed to completely cover any cost increases (which means that McDonald's profits will not rise as fast as they have been), and that will slow the company's growth.

However you cut it, though, we won't see $15 Big Macs. Or even $8.69 Big Macs, for that matter.

i do. And I don't want to pay fifteen bucks for a Big Mac either.

So now you don't have to worry about that happening, do you?

And, of course, you'll be ignored once ripping apart the argument.

[Alien Space Bats]

And, of course, you'll be ignored once ripping apart the argument.

Of course!

Because "$15 BIG MAC!!! DERP!!!!" is so much better of an argument.

---

ADDENDUM: Anybody notice how I smuggled a $9.35 million annual raise in there for the CEO?

I'll bet nobody on the other side calls that "inflationary"...

'Cause $4,525/hr is mere chump change.

[Divair]

And, of course, you'll be ignored once ripping apart the argument.

Of course!

Because "$15 BIG MAC!!! DERP!!!!" is so much better of an argument.

I can imagine it in an advert. "Only on NSG."

[Chestaan]

$7.35? That's fucking ridiculous. If a business can't afford to pay workers a decent wage then they have no right to be in business.

[Tyriece]

$7.35? That's fucking ridiculous. If a business can't afford to pay workers a decent wage then they have no right to be in business.

Best post i read all day.

[Lunatic Goofballs]

I would demand a no higher than 10 to 1 disparity. That is, that the lowest paid worker in that business makes no less than one tenth what the highest paid worker in that same business earns. That seems like something worth fighting for.

[Galloism]

I would demand a no higher than 10 to 1 disparity. That is, that the lowest paid worker in that business makes no less than one tenth what the highest paid worker in that same business earns. That seems like something worth fighting for.

Shit, I'd like a setup like that (dunno if that's the ratio I'd use, but that's the principle) for large businesses.

And apply the rules of constructive ownership. No cheating.

[Genivaria]

I would demand a no higher than 10 to 1 disparity. That is, that the lowest paid worker in that business makes no less than one tenth what the highest paid worker in that same business earns. That seems like something worth fighting for.

This^. Do this.

[Chestaan]

I would demand a no higher than 10 to 1 disparity. That is, that the lowest paid worker in that business makes no less than one tenth what the highest paid worker in that same business earns. That seems like something worth fighting for.

Are we just talking workers here or also the owners?

[Lunatic Goofballs]

I would demand a no higher than 10 to 1 disparity. That is, that the lowest paid worker in that business makes no less than one tenth what the highest paid worker in that same business earns. That seems like something worth fighting for.

Are we just talking workers here or also the owners?

Define 'owners'? If you're talking about stockholders, they don't get a salary anyway. If you're talking about upper management, then yes. Of course.

[Ceannairceach]

And, of course, you'll be ignored once ripping apart the argument.

Of course!

Because "$15 BIG MAC!!! DERP!!!!" is so much better of an argument.

---

ADDENDUM: Anybody notice how I smuggled a $9.35 million annual raise in there for the CEO?

I'll bet nobody on the other side calls that "inflationary"...

'Cause $4,525/hr is mere chump change.

You know, another thing, even if Big Mac's rose to such a high price, you could always just purchase an equivalent product elsewhere. I imagine that Burger King would love to sell a hamburger for ten dollars if McDonalds was going for fifteen.

[Blazedtown]

$15/hour? That's fucking ridiculous for flipping burgers. I don't even make that and I'm a licensed plumber.

[Chestaan]

Are we just talking workers here or also the owners?

Define 'owners'? If you're talking about stockholders, they don't get a salary anyway. If you're talking about upper management, then yes. Of course.

Stockholders don't get a salary but they do get a dividend. Dividends could be lowered and the money distributed to the low paid workers. Not likely in the slightest, but it would be nice.

[Ceannairceach]

$15/hour? That's fucking ridiculous for flipping burgers. I don't even make that and I'm a licensed plumber.

Perhaps you should ask for more, then.

[Lunatic Goofballs]

$15/hour? That's fucking ridiculous for flipping burgers. I don't even make that and I'm a licensed plumber.

Maybe you should protest too.

[Blazedtown]

$15/hour? That's fucking ridiculous for flipping burgers. I don't even make that and I'm a licensed plumber.

Perhaps you should ask for more, then.

Its where I'm at more anything. South Dakota is right to work and has no state income tax.

If they get $15/hr for flipping burgers I should be making atleast $35/hr. I do more work in a day than they do in a month. You know what'll happen if I ask for $35/hr? I won't have a job and won't get a new one. I think they should be paid better but $15 an hour is bullshit.

[Ceannairceach]

$15/hour? That's fucking ridiculous for flipping burgers. I don't even make that and I'm a licensed plumber.

Maybe you should protest too.

Even if you get paid enough, protest anyway.

Preferably by throwing cheese. The slogan would be "Would you like cheese on that exploitation!?"

[Divair]

Perhaps you should ask for more, then.

Its where I'm at more anything. South Dakota is right to work and has no state income tax.

If they get $15/hr for flipping burgers I should be making atleast $35/hr. I do more work in a day than they do in a month. You know what'll happen if I ask for $35/hr? I won't have a job and won't get a new one. I think they should be paid better but $15 an hour is bullshit.

That's. The. Point.

[Ceannairceach]

Perhaps you should ask for more, then.

Its where I'm at more anything. South Dakota is right to work and has no state income tax.

If they get $15/hr for flipping burgers I should be making atleast $35/hr. I do more work in a day than they do in a month. You know what'll happen if I ask for $35/hr? I won't have a job and won't get a new one. I think they should be paid better but $15 an hour is bullshit.

So campaign for your rights. It's all you can really do. Or move.

[Lunatic Goofballs]

Maybe you should protest too.

Even if you get paid enough, protest anyway.

Preferably by throwing cheese. The slogan would be "Would you like cheese on that exploitation!?"

CHeese throwing you say?

[Benuty]

Even if you get paid enough, protest anyway.

Preferably by throwing cheese. The slogan would be "Would you like cheese on that exploitation!?"

CHeese throwing you say?

Only if that cheese is seperate from the meat otherwise it isn't kosher.

[Blazedtown]

Its where I'm at more anything. South Dakota is right to work and has no state income tax.

If they get $15/hr for flipping burgers I should be making atleast $35/hr. I do more work in a day than they do in a month. You know what'll happen if I ask for $35/hr? I won't have a job and won't get a new one. I think they should be paid better but $15 an hour is bullshit.

So campaign for your rights. It's all you can really do. Or move.

I already have my rights. They don't deserve a god damn raise that high or even close. Working fast food is not suppose to be a carer. It should be something for high school and college kids. Not people trying to support a family.

[Lunatic Goofballs]

So campaign for your rights. It's all you can really do. Or move.

I already have my rights. They don't deserve a god damn raise that high or even close. Working fast food is not suppose to be a carer. It should be something for high school and college kids. Not people trying to support a family.

When there aren't enough jobs to go around, they kind of have to support a family.

[Timsvill]

15$ and hour? That's how much I pay for a big mac! 15$!!! they should be begging for 10$! If they get their way, fast food will cost 70$! Like gas prices!

[Blasveck]

So campaign for your rights. It's all you can really do. Or move.

I already have my rights. They don't deserve a god damn raise that high or even close. Working fast food is not suppose to be a carer. It should be something for high school and college kids. Not people trying to support a family.

But it should be enough for you to pay for the most basic of living expenses. And it's not.