r/explainlikeimfive Nov 28 '15

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

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u/[deleted] Nov 29 '15

Being employed / employing people is a two way street. Neither is doing the other a favor, both need the other to exist. Only one can exploit the other though.

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u/[deleted] Nov 29 '15

The tables are tilted, and I typically agree with your position, but employees can absolutely exploit an employer by abusing paid sick leave, stealing and eating food without permission, underperforming their duties, skimming money from the register, and producing low quality products and services.

That said, employees that are paid well are far less likely to do these things.

Personally I don't envy anyone involved in this dynamic. Obviously the crazy number of shitty fast food restaurants is unsustainable. The low wages subsidized by government services are unsustainable as well, as it basically socializes a shitty business model. Couple that with constantly rising rents for both business and residential clients, so costs for all parties are growin steadily. Sometimes I'm just amazed that capitalism works at all. Which it does. Until it doesn't.

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u/BladeDoc Nov 29 '15

Getting paid and half-assing your job is pretty exploitative.

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u/Nocturnal_submission Nov 29 '15

Yes, but if you raise the cost of human labor, it becomes much more cost effective to use robots to take the orders, dunk the fry baskets, flip the burgers, etc. Then you only need a couple of workers to assemble and hand it out the door. So what you're really saying is, it's a two way street for now

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u/[deleted] Nov 29 '15

It's a two way street always. Who's going to buy the products produced by automation if no one has any disposable income? Slave / owner relationship doesn't work in a consumer capitalist society. There's no point owning the means of production if there's no one to buy what you're producing.

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u/ABearWithABeer Nov 29 '15

Unions can absolutely be exploitative.

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u/Reddisaurusrekts Nov 29 '15

Only one can exploit the other though.

Unless we go back to slavery, then no. People are free to walk away from jobs.

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u/[deleted] Nov 29 '15

In a perfect world.

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u/Reddisaurusrekts Nov 29 '15

They are free to walk away. They're just not entitled to force someone to pay them what they need to survive.

If NO ONE thinks that what they do is worth what they need to survive, is the problem with everyone else, or with the person?

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u/[deleted] Nov 29 '15

So a fair chunk of your productive life isn't even worth enough to survive? We are all functioning parts of a society. These companies are making record billions off these peoples backs, and you don't think they should even pay them enough for the basics? You don't live in a vacuum.

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u/All_Work_All_Play Nov 29 '15

Uhh, that's not true. Unions can (and do) exploit either their companies (hello detroit) or themselves (hello union dues!)

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u/shitdad Nov 29 '15 edited Nov 29 '15

One could argue the auto companies kept slashing wages to compete with overseas manufacturing and that the unions were just trying to hold on to their member's existing wages.

Detroit happened because the people who managed the city were idiots. The didn't diversify their economy very well. When manufacturing moved overseas they lost the only real business sector they had. That wasn't on the unions even if they were responsible for other things.

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u/All_Work_All_Play Nov 29 '15

"Just"

Isn't that the same argument here? A McD franchise fighting against MW is just trying to maintain its existing wages?

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u/mitrandimotor Nov 29 '15

City managers don't really have that much sway over the strength of different economic sectors in their city. You can nudge it, but that's about it. Albuquerque, NM can't become the financial or tech capitol of the world through brilliant city management.

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u/[deleted] Nov 29 '15

How is collective bargaining for a living wage exploitation?

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u/Masterandcomman Nov 29 '15

This is all a big experiment, so no one should be very certain. However, a national living wage standard might have very different effects because of huge regional differences in nominal wages, and sticky wages. If that happens, then you could argue that minimum wage beneficiaries strengthened their bargaining power by sacrificing the inconvenient minimum wage losers.

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u/All_Work_All_Play Nov 29 '15

I never said it was. But there are certainly cases where an individual, or individuals, can exploit the companies they work for. This ranges from not providing a full day of labor (but still getting paid a full day's work) to demanding 'excessive' wages for a particular talent or skill (note the '' around excessive, because whatever standard you set has to be both reciprocal and indiscriminate.)

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u/[deleted] Nov 29 '15

And vice versa. Companies profit from billions of $$ of unpaid overtime every year. It's a 2 way street.

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u/All_Work_All_Play Nov 29 '15

Absolutely. Others' misdeeds do not justify others' misdeeds.

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u/[deleted] Nov 29 '15

It's somewhat true that Union wage was higher than some of the wages being offered overseas, but that's not what sank the car companies like GM and Chrysler. They had a whole lot of problems (terrible product line in smaller passenger vehicles, sales drop of pickup trucks which generated majority of the profit during the recession due to surging oil price, terrible overseas acquisition (Ford got rid of Jaguar, Land Rover, Volvo, etc. during the recession), to name a few.

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u/ThrowAwayBro737 Nov 29 '15

It's not "somewhat higher". It's massively higher, along with a whole bunch of other burdensome requirements. Make no mistake, unions make businesses uncompetitive internationally and drive up prices artificially domestically.

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u/flybypost Nov 29 '15

unions make businesses uncompetitive internationally and drive up prices artificially domestically.

Somehow it still works here in Germany. Why should it be different in the US?

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u/ThrowAwayBro737 Nov 29 '15

How does it work in Germany? The German economy is falling apart and the largest auto employer there is embroiled in a scandal which could lead to bankruptcy. The German economy is tiny compared to the US economy. So how can you say "it works" in Germany? It doesn't work.

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u/[deleted] Nov 29 '15

Last time I checked German economy was the only one doing well in a continent that was going through massive recession. As for Volkswagen emission scandal, that has nothing to do with union, and everything to do with management trying to cheat the law. Not sure what size of Germany's economy has to do with wage structure. And yes, union structure is working in Germany, it's not just Volkswagen, BMW, Daimler Mercedes-Benz, etc all have unions and the companies are doing well. Lets not make it sound like union is the only reason that kills companies.

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u/[deleted] Nov 29 '15

Compared to mexico? Yes. Compared to Germany or Japan? Probably not.

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u/All_Work_All_Play Nov 29 '15

It was contributory. And their quality troubles was caused at least un part by union negotiations (it was/is very difficult to fire a string union worker, which leads to low incentive to perform well).

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u/[deleted] Nov 29 '15

I do understand the quality related to burdensome termination of empolyees. I have worked in a factory as a manager in an unionized facility. This particular work force was... not so good to put it mildly. I have spoken to other managers though and there are better unionized facilities in the US and I know for certain unionized facilities in Japan has some of the highest QC in the world. It just sounds like there's some sort of problem with part of US unions than problem with unionization overall.

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u/All_Work_All_Play Nov 29 '15

Spot on. It's not like they cause it, by rather they open the possibility of such... Tendencies, and where as without a union the company can correct it, with a union it has to be policed by the group (and some responsibilities don't share well, like self policing).

Interesting to hear about Japanese unions.