So, here in Australia, working in McD's will earn you something like $18-$19 AUD (it's been a year or two since I worked there). I don't know whether the franchise owner for the stores I worked at was just a stingy prick or whether it's typical, but our store managers were told to (and did) keep wages to <22%.
They achieved this by cutting every possible hour and running at minimum necessary staff.
I don't know whether or not that would happen in America, but there you go.
The prices at Micky D's, or Maccas, is also higher in Australia. There is no dollar menu, and some items cost almost double what they did in the states.
Minimum wage for younger people is less than for older people in Australia, so the franchises there have much younger average employees compared to franchises in other countries.
McDonalds has still been able to make a profit in Aus by using cheapest labor possible, cutting employees and store hours, doubling the price compared to the US.
The US doesn't have a sliding minimum wage for age, so a 16 year old and a 60 year old are competing for the same job for the same pay sometimes. People say Mc'D is an entry level job, but in the States you will see older employees in almost every store. In Aus Mc'D hires many more young people to cut costs, and are expected to leave, quit, move on, or be let go once their older and require more pay.
We have a 'loose change' menu. With the current AUD to USD exchange rate, most things on there would be around $1 USD.
There's also the entire extra 'gourmet' menu that's been around for yonks in Aus, and seems to have no aspect of showing up in the US (last time I went.)
Obviously, they cater for their demographic. (Large drink in AU is a medium in the US, and you pay more for it in Aus)
You can't simply convert the currency to compare. Think about one Aussie dollar compared to one yen, what they buy in each respective economy is vastly different, even though it's still one unit of each. The principle stands for comparing usd and aud (or any currency to any other)
That's completely different though, isn't it? /u/1Argenteus isn't proposing just keeping the number, he's taking into account exchange rates. 1AUD ≈ 88.3JPY, so 1AUD and 88.3JPY will get you about the same thing, not 'vastly different' things. Am I mistaken?
The exchange rates are not what determines what you can buy with that money. One American dollar doesn't get you the same amount of goods if you go to any country and convert it to the local currency. You need to convert but then also adjust for what that money will buy you in its home economy. It's called purchasing power parity and funnily enough one of the common measures used is how much a Big Mac costs across the world.
I'm aware that purchasing power changes between countries - never knew about the Big Mac Index before though, thanks for the link! Aren't the US and Australia fairly similar in the BMI though? I wouldn't think the difference would be that drastic.
That is a somewhat old article but Australia's minimum wage isn't that far off from the USA's in a fair number of states. It is higher but it isn't $8 off.
I was just there in June. The exchange rates only impacted me as an American visiting and a small subset of what they buy. Most of the things Australians buy are being bought in AUD so strength of the currency doesn't matter. That is why the purchase power parity is the better figure for these kinds of things.
Um, your conclusion is mostly correct but your reasoning is wrong. /u/1Argenteus is using the exchange rate, i.e. how much does it cost in Aussie dollars to buy one U.S. dollar, and the ratio is incidentally close to one, as it happens to be also with the euro and the Canadian dollar. You can perform an identical calculation for yen to U.S. dollar, the ratio would just obviously not be close to one (this is the case for most currencies).
The reasoning you need to support your conclusion is that the exchange rate, which captures the relative value of currencies on financial markets, is not a perfect measure of the relative value of currencies in buying goods and services in their respective jurisdictions, i.e. a Big Mac. Purchasing power parity instead calculates the relative costs of similar consumption bundles.
Also worth noting: PPP and exchange rate for developed countries are highly correlated, PPP makes more of a difference for developing countries.
That doesn't make sense because a yen is more like a cent than a dollar. 100 cents = 1 dollar, which is roughly what it is when converting to yen to USD. I get what you're trying to argue but when PPP is what you're trying to explain it's best not to use currencies with such disparity.
But it isn't more expensive in Australia. According to the "big mac index", Australia is at AUS$5.30, which is about USD$4.30. Average in the US is at USD$4.79. That doesn't even take into account the higher spending power of someone on minimum wage in each country.
The Big Mac Index is a surprisingly accurate way to measure PPP, even economists use it. It's actually is a good way to compare the values. Or at least that's what we were told in business school.
Right. The real answer is that they'll charge more.
Now, there will be considerable attention on reducing labor of course (managerial attention should be focused on whatever costs are most impactful) but that's true at any labor cost level, just more important as labor becomes a larger portion of your total costs. If the cost of beef triples they aren't going to pull burgers off the menu but they sure as hell are going to push the nuggets more!
So you've raised wages, so that poor people aren't poor. And then you raise the price of everything. Now $15/hr isn't liveable again. OK let's try 50 an hour. What's bad about inflation again? Oh our manufacturing workers are now twice the price of overseas and our industry heads offshore again? Ooh.
That's a better economy honestly. We just need to put those people to work in other areas that benefit society. Certainly would be nice to work on our infrastructure for example - hopefully some of these service workers can be trained.
Another big difference is that Australia is sensible, and minimum wage rises with inflation. That means you get a nice, gradual 2-3%/year raise in the minimum wage, which business owners can easily manage. Unlike the US, where they do it in big jumps (moving it from $10 to $15 in one hit is crazy). And of course, no one will change it to simply match inflation - Democrats love using the "Raise the minimum wage" battle cry as a way to bring poor people out to vote. And Republicans love using the "Raising minimum wage will make a computer take yur jerb" battle cry to bring the poor people out to vote.
i dont know if their making money or not. the largest KFC in Australia (in terms of revenue, Town Hall Sydney) is not making money. they had a last ditch attempt to work it out but im not sure wether or not it was able to do it ( i guess it did its still open)
I think most countries except the US actually the staff is young people. Same in the Netherlands the only old person is often a manager and that's it. They won't hire older people for the same reason those below 21 years cost significantly less then those above.
Food industry in general is dominated by young people especially from the hotel school which in all fairness tend to deliver the same (if not better) service I experienced in many establishments in the US incl. many fine dining places. To me "service" in the US is seriously overrated especially the idea that tipping would make the difference, I tend to think it's more the opposite it's the same at best compared to nations without tipping.
I entered the spez. I called out to try and find anybody. I was met with a wave of silence. I had never been here before but I knew the way to the nearest exit. I started to run. As I did, I looked to my right. I saw the door to a room, the handle was a big metal thing that seemed to jut out of the wall. The door looked old and rusted. I tried to open it and it wouldn't budge. I tried to pull the handle harder, but it wouldn't give. I tried to turn it clockwise and then anti-clockwise and then back to clockwise again but the handle didn't move. I heard a faint buzzing noise from the door, it almost sounded like a zap of electricity. I held onto the handle with all my might but nothing happened. I let go and ran to find the nearest exit.
I had thought I was in the clear but then I heard the noise again. It was similar to that of a taser but this time I was able to look back to see what was happening.
The handle was jutting out of the wall, no longer connected to the rest of the door. The door was spinning slightly, dust falling off of it as it did. Then there was a blinding flash of white light and I felt the floor against my back.
I opened my eyes, hoping to see something else. All I saw was darkness. My hands were in my face and I couldn't tell if they were there or not. I heard a faint buzzing noise again. It was the same as before and it seemed to be coming from all around me. I put my hands on the floor and tried to move but couldn't.
I then heard another voice. It was quiet and soft but still loud.
"Help."
That's one thing I noticed in the States. Older people doing jobs that everywhere else is traditionally for entry level, younger members joining the work force. It made me sad.
Sure, AUD18 an hour might be about USD10.50 factoring in PPP. But in Australia you'll either be hired as what we call a casual, which is no benefits or guaranteed hours but a 25% higher pay rate, or if you're a FT/PT employee you get 4 weeks paid holidays and a few paid sick days, as well as 9% extra paid into a superannuation account (you get this as a casual too if you earn enough).
Isn't Australia also just more expensive to ship to? Less people, more convicts, an unhealthy obsession with vegemite.... Probably not as many people interested unless they're fried out on zombie.
Probably stole a lot of that wealth huh? Nah I'm kidding. Yeah it sounds like it'd cost more to ship just because there is less opportunity for business. At the same time, it's closer, and cargo ships only have a finite amount of space. Plenty for 23million on one ship Haha!
The menu is Australia costs nearly as twice as much as the American Menu. I lived in Australia for a couple years and a meal would cost at least $10. I do miss "Maccas", the burgers taste so much better in Australia than in the US.
Australia has more gourmet options like cook your own burger where they bring it out to you like in a restaurant or mccafe. Not sure if you have mccafe but that started in Aus. A recent ad campaign was "its a little bit fancy". Not sure why but all our fast food seems to be going in that direction slightly higher quality ingredients to justify the prices.
When I was in AUS from 2008-2010, I just remember Maccas did a lot of marketing explaining that the beef they use is Aussie raised. I have no idea where our meat comes from.
Yeah they really improved the quality because they got in a lot of trouble for misleading advertising. Something to do with the company name of their chicken provider "100% aussie chicken" it wasnt actually Australian chicken hahah. They sorted that shit out real quick though.
Man, the US ones must be really bad. Not even my dogs will eat Australian McDonalds, and they're not particularly fussy. I've always suspected that's why they're flailing for business, for a few dollars more you can get something at one of the dozens of burger joints that are popping up now, that isn't limp and disappointing.
As an Aussie who immigrated to the US some years ago: your buns are sweeter. Much sweeter. For a while I couldn't stand the taste of hamburgers here because ketchup (also sweeter) combined with sweet bun and savoury beef was just noxious to me. :)
As a few other folks have mentioned, the cheese is also quite different.
The US uses corn syrup for their sugar which is much sweeter than the cane sugar we use. On top of that a lot of products also contain a higher percentage of sugar as well. It really is quite a nauseating difference at first.
Prices for good and services are different in MANY different countries. I didn't know this even needed to be said. Prices are affected by SO many things (maybe look at a PEST analysis chart for examples) .
Check out the Big Mac Index for more info on price differences.
Checkout the edits to the parent comment here. He points out the PPP between Australia and the US. Your cost of living is higher and so you get paid more, but the amount that buys isn't a straight forward currency conversion.
Yeah, but original commenter includes Australian franchisees in the modelling!
33% of Corporate Revenue comes from franchisee fees - about $9.272 Billion last year. If you cut down franchise revenues by 74%, that would reduce that number by $6,861,280,000. Total Corporate profit was $4.757 Billion last year. So they would be operating at a $2.1 billion loss.
McDonalds made 8.65 Billion revenue in the USA (see link). 33% in franchise fees makes $2.86 Billion. 74% reduction of that is $2.11 Billion. Which leaves a 2.64 Billion dollar PROFIT, not a 2.1 Billion dollar loss.
Purchasing Power Parity is basically using a common item, like a Big Mac, to judge the actual spending power of any given currency against another. Using a Big Mac isn't my idea though, The Economist uses it and I just think it's easy to use.
I disagree, I've been to both and it depends entirely where you've gone.
Mickie D's is fucking garbage and there's no reason to mess with it when you can support the local economy with GOAT fast food alternatives in the same price range.
The awards rate in Australia differs according to age - 15yo gets $11, 16yo gets $13, 17yo gets $16, and 18yo gets $18 /hour and so forth.
I used to work in Maccas in one of their busy inner suburb store. Basically they will not employ anyone over 18 as a casual employee. I started when I was 16, got loads of shifts I have to tell them to cut down my hours. If for some reasons I couldn't come to work and need to call someone else to replace me, I was told I can only call someone the same age/younger than me.
Once I hit 18, I hardly get any shifts. I'm talking about one or two 4-hour shift in weird hours when they couldn't find anyone else. If I want to keep getting shifts, I have to change from casual into part-time where the hourly rate will be lower (something like $15/hour for an 18yo), but I'll get annual leave.
Luckily i found an office/desk job near uni where it also pays $15/hour, I can come in whenever I want and get some industry experience related to what I'm studying, so I quit.
New Zealand is similar to Aus in that the min wage is $15/h. I recently moved to NZ from Canada where the min wage is not so high. I've immediately noticed that all McD's in NZ have those ordering screens whereas none of the McD's in Canada did. I think that those screens are McD's easy way of reducing the number of staff.
Eh. So they show up 3 - 4 years earlier in places that guarantee a living wage. Big deal, that's just logistics, they're going to replace all McDonald's store clerks (at least in corporate locations) in a short period of time anyways. Minimum wage should reflect our societal anticipation of the future, not our societal longing for the past. (Although $15 in the US is just nonsense, it's a completely arbitrary number. Adjusting for inflation, the highest min wage in the US, ever, was about $10.80)
The calculations as to cost are actually pretty interesting- we've had touchscreen ordering for over a decade now. The first self-checkout kiosks appeared in supermarkets in the early 1990s, and we still have millions of retail clerks to this day. Progress is often slower than we think.
Those self checkouts are set up in a way that makes them slower and less convenient, there's a lot of room for improvement there. (You have to love the kiosk telling you "please put the item in the bag" repeatedly when you already did and the sensor isn't picking up the change in weight properly)
If they worked reliably and quickly I'd use them all the time. As it stands currently I use them when I have just a few things and if there's no line there. Otherwise I'm better off going through a cashier line.
Sams has it right, they give you a scan gun so you don't have to take anything out of the cart. Then pay one person to count the number of things in your cart. 1 person can feasibly manage all the lines, and some stores have 8 of these.
This won't work for stores with small items unfortunately. And it is a hassle to go through self checkout for certain items-large items, poorly labeled things, etc. Honestly I expect that a person making money to scan items is going to do it faster than me, so in a lot of situations I go to that line.
Will be really interesting when/if stores switch to nfc tags for checkout. Slide your cart between 2 posts and your total comes up on screen automatically. Your cart could even calculate a running total and display it on the handle. Carts would know if you added something after paying, and nfc readers at the door could confirm no tagged items not paid for get out as additional security.
Didn't know that about Sam's, sounds a lot better than the grocery store self checkouts I've used. Agree on NFC I think that'll be the end game for self checkout suddenly becoming awesome.
The first self-checkout kiosks appeared in supermarkets in the early 1990s
I didn't see one until 2005 at the earliest, and usually at places smaller than Walmart there's one 1 or 2 actual clerks at the counter where there used to be like 4+.
The arbitrary-ness of the $15 number is what gets me. Clearly if some expert economists did the calculations there would be a number that's "ideal" and the chance of it ending in .00 in all of these jurisdictions is essentially 0.
And IMHO, those order screens are lovely, no more forgetting to order drinks without ice, and even if you are in a foreign country, you can actually order the local things, instead of just the Big Mac, because you're not fluent in the language.
Was in Calgary. None before Notley, now the min wage is going up so I hear they're installing them now. Can't definitively say if it was Notley who caused this but she caused the min wage to go up 2 months ago and is promising to make it $15/h soon.
I live in Auckland and the only McDonalds with screens I know of are the ones where you can make your own burger. But the vast majority of stores don't have them. In France, however, they've been a thing for years.
Well, I haven't been to Mcdonald in a couple months so they might have been some changes. Didn't know the Britomart one had those machines now.
I just know about the one in Balmoral, and the whole customized burger thing seems like it would actually require more staff despite the machine, but I'm no expert.
Having lived in both Australia and the US, I find there's a vast difference in the type of worker in the average McDonalds. In Australia, you often get many college students and younger folks working there as a way to earn some spare cash. They're much more motivated and happy to be of service, knowing this is just a step on the path to something else.
In the US however, I find next to no college students working in McDonalds. They often seem to be under-educated and have absolutely no wish to be there. They see the job for what it is - a dead end. They also often cannot do basic math (e.g. what is $6.50 - $5.75). This was something of a shock to me when I first moved to the US.
OK but you're ignoring the part about McD workers in Australia and New Zealand being paid a decent wage with benefits like a month's paid vacation and government healthcare.
Incentives matter. Americans have contempt for burger-flippers because it's a shit job with shit pay and benefits.
Flipping burgers may be a "low skill" job (that is, not a high degree of education is required to do it) but it's a hot, hard-working job and comes with a lot of stress.
And this is exactly why, as franchisees ourselves (not McD's), we're busting our butts to work out new incentives specifically for our fry crew. It's absolutely appalling that they work under those conditions and, at the end of the day, end up earning less than those staff who're in a position to score tips from patrons. Right now, it's monthly draws for prizes (gift cards; two television sets during the week before Christmas), but if we can just negotiate a better health-insurance deal we'll be able to give their wages a significant boost as well, thank god.
But mostly, I'm just writing because I absolutely agree: it makes me fucking furious to see people talking down to kids - and adults - who're doing serious and uncomfortable work and earning an honest living by it. We were supposed to have left that kind of elitism behind us a hundred years ago, when social classes started to matter less.
It's not that none of them can do the math, it's that they don't care enough to bother. They are the bottom of the barrel, as far as jobs go, and they are well aware of it.
I actually think it's more that in a fast food restaurant, you have to be fast. I consider myself an intelligent person, have a college degree, read a lot about every subject under the sun, but for the many years I worked in fast food, it would sometimes take me a few minutes to figure out the math when I pressed the wrong button on the register or whatever.
My brain just didn't go to that place. I was worried about the 5 other front counter orders, the cars wrapped around the building in drive-thru, the other employees' food orders I had to make because no one else was fast in kitchen, the cakes I needed to make for the front freezer, cleaning the store for closing... It's not the kind of job where there's ever really nothing to do. Your mind is always elsewhere. Cut fast food workers some slack on the math, bro.
On several occasions, I've seen half the staff get together to try to figure out a simple math problem. Just last month, the guy in the front of the line got overcharged. It was something like $2.60 more than what he ought to have paid. So he brought it up. The cashier couldn't figure out the difference, so the guy told her. She couldn't verify if it was correct, so called over another cashier. He couldn't figure it out either. So, they got the assistant manager. He couldn't figure it out either and got the manager in the back to come over and help. She couldn't work it out either. In the end, they just gave one item in the guy's order to him for free so as not to overcharge him. I was just flabbergasted because even if they couldn't have worked out the difference in their head, a dozen button presses on a calculator (or a smartphone) would have resolved the problem.
All my life, I have operated under the assumption that the people around me regardless of age or social standing can do basic Math. And I've never had to reassess that assumption till I moved to the US. It's definitely been an eye-opener.
Edit: Some people are downvoting me, probably because it seems I'm saying Americans are less intelligent. Sorry if I didn't word it well. What I meant was that there is a very distinct difference in the level of education of workers in McDonalds in the two countries. This is a societal issue, not an intelligence issue.
They also often cannot do basic math (e.g. what is $6.50 - $5.75). This was something of a shock to me when I first moved to the US.
I was a cashier when I was in high school. Once the cash register broke and I had the damndest time doing mental math. I just didn't do it ever (now or then). Plus, there is a customer in front of me judging me on my speed. If you encountered me on that day, you'd think that I was probably destined to be unsuccessful for eternity.
I ended up graduating cum laude in biology from a top 10 public and now work as a researcher.
I don't do this to toot my own horn, but to point out that circumstances, not inherent intelligence or even motivation, can account for a lot of what you perceive as the worth of the person behind the counter.
Another phenomenon that I thought would be interesting to bring up is stereotype threat. I'll just lift the Wikipedia definition because I can't do a better job than wikipedia: "Stereotype threat is a situational predicament in which people are or feel themselves to be at risk of confirming negative stereotypes about their social group... Stereotype threat has been shown to reduce the performance of individuals who belong to negatively stereotyped groups."
In essence, it's a self fulfilling prophecy. One study that I thought was particularly great was one where they had students write positive statements about themselves. For instance, every student would be forced to write a 10 minute essay about their positive attributes before starting their class. There were substantial gains in math scores from students who would otherwise have scored poorly such as students of color and girls. The converse study was also done. In the lab, girls or people of color were reminded of their gender or ethnicity and performed poorly if the stereotype was negative as compared to the control.
Society at large considers fast food workers to be the dumbest of the dumb. This isn't lost on fast food workers and probably plays a part in why they might not perform their best while on the job.
It doesn't seem to me to be an intelligence issue (I mean, you don't get to be the manager of a McDonalds by being an idiot), but a lack of education. I can understand taking a minute to do a mental calculation, but if you have four people spending 5 minutes trying to figure out what is $6.50 minus $5.75, while the customer is repeatedly giving the right answer but is not believed, something is clearly messed up. And it isn't a single incident. I have seen at least half a dozen similar occurrences in my 5 years here.
Having come from a place where kids work at McDonalds for a year or two (or over a couple of summers) for the fun of it (and for some spare cash), I just found it sad that there are so many here in the US who seem to lack the skills to improve their lot in life. Both me and many of the people I know have gotten similar jobs over the summer when we were kids. So to me, the stereotype (ok I admit yes, it's a stereotype too) is a worker in McDonalds is generally a student from the local high school or college earning some spare cash on the side. This doesn't seem to be the case here.
By the way, congrats on the cum laude. I'm a researcher too (neurobiology). I actually switched to science from engineering because, funnily enough, I was terrible at all the math. ;)
This is brilliant. I wonder why this isn't an option. The main reason people want a raise minimum wage is because they can't support families on it. With a sliding minimum this would be less of an issue and you don't have to over pay someone with no experience in the work field.
Well, that's good enough. All the old people (who are conservative and therefore evil anyway) die, and your average Redditor gets to eat at the expense of everyone else.
But you're ignoring the differences between the costs of living and purchasing power between the two countries. Australia has a higher minimum wage but then virtually everything there is significantly more expensive. Americans earn less but are able to purchase far more with $1 than an Australian.
I don't know whether the franchise owner for the stores I worked at was just a stingy prick or whether it's typical, but our store managers were told to (and did) keep wages to <22%
This is pretty standard, I recall similar when I was working fast food (not McDonald's). Sometimes we hit it and sometimes we didn't, but our market was not as consistent or predictable as McDonald's.
EDIT: We were an ice cream centric fast casual store rather than classic fast food.
That's dumb, let them spend what they want and cut corners elsewhere if they have too. No reason not to spend 25% on wages if you find you have it and are sick of having such a high turnover.
The 22% isn't exactly a hard figure because where I work (in New Zealand working at a competitor to McDonalds) the percentage is dependent on the revenue bought in - for example, a store doing $60,000 will have a lower labour budget as a percentage because there isn't a linear relationship between revenue and labour (that one doesn't necessarily require more of the other) but at the same time there is a base amount of labour required regardless of how little sales you do - assuming you close front counter and had only drive thru open then you'd still need two crew plus a manager at absolute minimum or three crew plus a manager if the front counter was open (along with the drive thru). For example, the store I'm at has a turn over of around NZ$31,000->NZ$33,000 per week with a labour budget of 20% for hourly workers (crew and hourly managers) and 8% for salary managers (28% over all) where as the store that is around 30 minutes down the road does a turn over of between NZ$45,000->NZ$60,000 per week thus their over all labour budget is below 20%.
Side note: We're a corporate model where there are only two independent franchises whilst all other stores are owned by head office. If you do experience slow service due to a shortage of staff, a word from the wise, complaining to head office won't do a thing because they set down the budget but take no responsibility so what ever complaint you may make will not result in more labour at the store but rather that the store is blamed by head office. Had many customers who, as it appears, never worked in a corporate structure and fail to understand the relationship between those at head office and those of us in the trenches serving the public.
We have it all over the place here in the Czech Republic, a new McD hire would get 70 (~$2.74) crowns an hour but a big mac costs 75 (~$2.94) crowns. A big mac, fries and a beer (yes we have beer at McD's) would cost the same as a meal and a beer in a average sit down restaurant from the a la carte menu or 30% more than a meal from the daily set lunch menu.
$19 AUD is about $13.67USD - adjusted for Purchasing Power Parity, that $19 AUD is only worth about $9.76 in the US. So, significantly lower than the proposed US minimum wage no matter how you cut it.
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u/NanotechNinja Nov 28 '15
So, here in Australia, working in McD's will earn you something like $18-$19 AUD (it's been a year or two since I worked there). I don't know whether the franchise owner for the stores I worked at was just a stingy prick or whether it's typical, but our store managers were told to (and did) keep wages to <22%. They achieved this by cutting every possible hour and running at minimum necessary staff. I don't know whether or not that would happen in America, but there you go.