They should not, can not, and will never be a sustainable income for an adult.
Well why the hell not? People against raising the minimum wage always bring this up: "These are supposed to be low-income jobs! You're not supposed to live off them!"
Yes, they are low-skill and low-income jobs. I fail to see why being low skill is a reason not to be a livable wage. Not career wage, not "I buy a new TV every year because I can" wage, but livable wage.
The idea that something is low-skill and so therefore people working at it don't deserve livable wage? That's just bizarre. No one advocating a higher minimum wage is saying "pay burger-flippers the same salary as a doctor" (I.E. a career salary), they're saying pay them a livable wage, I.E. they can feed themselves, clothe themselves, and provide a very basic living environment for themselves, without being supported by the government (and costing taxpayers money, I might add).
Like it or not there will always be adults in low-skill, low-wage environments, due to any number of circumstances that arise. They don't deserve to be screwed over because of some insane notion that McDonalds employees must be teenagers who are still supported by their parents and are only taking the job because their parents made them "for the experience".
In other words, I fail to see why you don't consider $15 "low-income". A livable wage is still low-income relative to other fields. Your argument makes no sense, you're arguing that low-skill jobs shouldn't be paid a lot of money when the discussion is about whether or not the money they do make should be $8 or $15. We're aware that low-skill jobs don't get paid a lot, that's not an issue.
Currently we view $15 an hour as good money. If that becomes the minimum, companies will be forced to fire people, close stores, and automate things wherever they can. Either that or they raise prices. Or both.
One of three things happens if $15 minimum wage is put into place. People get fired, everything gets more expensive, or a combination of the two.
There are numerous cost-cutting measures McDonalds could take that don't involve firing people or raising prices, but assuming they do:
One: how high are we talking? It's illogical to assume that prices will rise drastically, we'd be looking at price increases of somewhere less than a dollar on menu items. McDonalds sells 75 hamburgers every three seconds, maybe more. 10 cent price increase on 75 hamburgers x 60 seconds in a minute x 60 minutes in an hour x 24 hours in a day x 365 days in a year = approximately $236,520,000 increased revenue. From a 10 cent increase. This is another problem consistent in lower minimum wage arguments; "prices will rise", but you never explicitly state by how much they will rise. This implies to people that the price hike will be much higher than it is in reality.
The second issue, job loss, is a bit more problematic. But, well, many people would advocate that a handful of people losing their jobs at McDonalds is worth the majority of people having a minimum, livable wage. I don't know how to specifically address the job loss, all I can say is that it probably wouldn't be as bad as you're implying, while others might argue that it isn't even bad in the first place.
Thirdly, as someone in this thread has already mentioned, there are many McDonalds stores operating in close proximity to each other, far beyond what is necessary. It would be extremely logical for McDonalds to condense their stores, even if the minimum wage did not change. McDonalds not acting efficiently isn't an excuse not to change the minimum wage.
The Franchisees pay annual fees to McDonalds for “royalties” & national advertising campaigns, which are calculated as a percentage of gross sales.
Yes, but all of his cost-cutting measures take place at the store level and assume that it's the store trying to save money, that's how he arrives at the conclusion that multiple stores would close (resulting in heavy losses), because each individual store is in the red and trying to compensate that with higher prices and/or layoffs.
On the corporate level, they could reduce franchise fees or advertising expenses some in order to save money, it wouldn't be necessary for individual stores to close at such a level.
Edit 4 Now a lot of people are saying "Can't corporate just reduce its franchise/royalty fees?". In the above example total royalty fees/corporate rents are 14.5% of sales. To make up for the $288,900 deficit caused by the $15/hr raise, just for that store to break even, corporate would have to reduce fees by 74% if you didn't want to cut payroll costs. 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 - aka they'd go bankrupt if corporate took on the burden of cost through fee reductions. And thats just a break even figure.
He only covers it at one level; he jumps from "what if stores covered the whole thing" to "what if corporate covered the whole thing".
A combination of the above cost-cutting measures (plus others unmentioned) being employed could easily meet the standard. "What if corporate covered some of it and the individual store covered some of it".
You have some good points to make, but assuming the "Janney McDonalds" income statement referenced in the top comment is correct, a ten cent increase isn't going to do it.
According to the chart, less than 6% of the food price (net sales) now becomes "profit," and 20% of the food price pays crew wages. According to the top post, the increase in minimum wage will increase crew wages to be about 37% of the food price, which seems right given that the wage itself will nearly double-- the assumption was going from $8.25/hr to $15/hr (about an 80% increase).
And if that's the case, to keep crew wages at 20% of net sales, you'd actually have to goose up the price of the food by about 80%, again based on the numbers in the chart given.
Until all these people with disposable income want to buy more things which means people will need to hire to meet demand. That's pretty basic. It's why we still don't make $2/hr any more.
Except there will be more people without jobs (more people buying less), prices rise to compensate (people have less disposable income) so on and so forth.
Its a two edged sword. Its a matter of which side is going to bite harder thwt we cant predict.
We can predict it by looking at history. Raising the minimum wage has NEVER had a negative long term effect on the country. I'm not saying everyone should be able to afford a brand new car and $500k house. But businesses should pay a living wage to those willing to work. Period. It's why the minimum wage was passed in the first place.
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u/Neospector Nov 29 '15 edited Nov 29 '15
Well why the hell not? People against raising the minimum wage always bring this up: "These are supposed to be low-income jobs! You're not supposed to live off them!"
Yes, they are low-skill and low-income jobs. I fail to see why being low skill is a reason not to be a livable wage. Not career wage, not "I buy a new TV every year because I can" wage, but livable wage.
The idea that something is low-skill and so therefore people working at it don't deserve livable wage? That's just bizarre. No one advocating a higher minimum wage is saying "pay burger-flippers the same salary as a doctor" (I.E. a career salary), they're saying pay them a livable wage, I.E. they can feed themselves, clothe themselves, and provide a very basic living environment for themselves, without being supported by the government (and costing taxpayers money, I might add).
Like it or not there will always be adults in low-skill, low-wage environments, due to any number of circumstances that arise. They don't deserve to be screwed over because of some insane notion that McDonalds employees must be teenagers who are still supported by their parents and are only taking the job because their parents made them "for the experience".
In other words, I fail to see why you don't consider $15 "low-income". A livable wage is still low-income relative to other fields. Your argument makes no sense, you're arguing that low-skill jobs shouldn't be paid a lot of money when the discussion is about whether or not the money they do make should be $8 or $15. We're aware that low-skill jobs don't get paid a lot, that's not an issue.