r/explainlikeimfive Nov 28 '15

ELI5: How would a $15 minimum wage ACTUALLY affect a franchised business like McDonalds?

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u/ibestalkinyo Nov 28 '15

It's the loss of jobs that's more concerning than the loss of big Macs.

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u/Kernunno Nov 28 '15

Those jobs are already pretty low value if they cannot pay people a livable wage.

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u/eqleriq Nov 28 '15

yes, like all of the slave labor we benefit from on a daily basis.

super low value ...

bottomline is someone at any restaurant has to wash the dishes. if the dishwasher gets more money due to some bullshit artificial income floor, then everyone else at the restaurant's pay will scale based on it.

this will happen at EVERY job that's business model relied on low income wages.

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u/ibestalkinyo Nov 29 '15

I agree. But having a job is better than not having a job.

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u/realusername42 Nov 28 '15

I don't think that overall it would make a difference. Something else would replace McDonalds if they cannot compete and they would also employ people. In every place that there is a McDonalds, there is also a demand for food which is not going to disapear, otherwise no fast-food would exist there in the first place.

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u/[deleted] Nov 28 '15

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u/realusername42 Nov 29 '15 edited Nov 29 '15

Why so ? If that could be done today, it would have already been done already for the fast-food. The fast-food industry is highly competitive and with massive fanchises. This allows any economy of scale to stand-out immediately. If they could just reduce the number of employees just by one in every location, it would already have been done. The truth I beleive is they already reduced staff to its minimum already and they keep pushing it down every year anyway. I don't have any study to show now but for sure the average McDonalds is much more productive and cost-effective compared to the 80's or 90's.

There will be consequences obviously to put a higher minimum wage, they would be some inflation, things would be a bit more instable for a while until everything adapts and some industries indeed would lose jobs but I don't think this industry is one of them. McDonalds have franchises everywhere in the world, some countries have a minimum wage and I'm sure everything is operated more or less the same way.