Remember that $70K salary experiment? Here's what happened over a year later

[Blur4stuff]

mcdonalds could easily raise wages without having to charge $30 for a burger

[Theinquisition]

mcdonalds could easily raise wages without having to charge $30 for a burger

If I remember correctly, most McDonalds are franchises with profit margins in the single digits. So yeah, a massive hike in wages would equal a massive hike in prices.

[Blur4stuff]

If I remember correctly, most McDonalds are franchises with profit margins in the single digits. So yeah, a massive hike in wages would equal a massive hike in prices.

sure if it was $70k/year. i don't think it has to be near current minimum wage versus 70k, though. there are number in between.

[Alski]

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can you give us some more information on this?

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If I remember correctly, most McDonalds are franchises with profit margins in the single digits. So yeah, a massive hike in wages would equal a massive hike in prices.

It wouldn't be nearly as much as you think considering wages make up a small % of the total expenditure.

[Grim Retailer]

If I remember correctly, most McDonalds are franchises with profit margins in the single digits. So yeah, a massive hike in wages would equal a massive hike in prices.

A Big Mac in Oslo costs about twice what it does in the US. And the wage is 20-odd $ an hour.

Anyways, happier workers being productive should not be new and shocking.

[Kapadons]

can you give us some more information on this?

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It wouldn't be nearly as much as you think considering wages make up a small % of the total expenditure.

Wages for a restaurant are the second biggest expenditure behind food and paper goods. Last I saw , McDonald's was an 18%-20% labor cost not including salaried managers. Including salaried managers it would vary from 23-25% depending on location. With profit margins in the 7-10% range, increasing ANY wage is meaningful. Doubling the wage for nearly all your employees is a game breaker. The option would be to increase prices. Not, it wouldn't be the $20 some mentioned earlier, but it would certainly be a sizable increase.

And tony is right. Most McDonald's are individual franchises which means they are a small business. Those restaurants aren't making billions in profit. The coroporation does by working royalty and land deals.

McDonalds is similar to Walmart in that they don't make a huge profit margin per item sold, just that they do an epic shit ton of business.

[PosPosPos]

Wages for a restaurant are the second biggest expenditure behind food and paper goods. Last I saw , McDonald's was an 18%-20% labor cost not including salaried managers. Including salaried managers it would vary from 23-25% depending on location. With profit margins in the 7-10% range, increasing ANY wage is meaningful. Doubling the wage for nearly all your employees is a game breaker. The option would be to increase prices. Not, it wouldn't be the $20 some mentioned earlier, but it would certainly be a sizable increase.

And tony is right. Most McDonald's are individual franchises which means they are a small business. Those restaurants aren't making billions in profit. The coroporation does by working royalty and land deals.

McDonalds is similar to Walmart in that they don't make a huge profit margin per item sold, just that they do an epic shit ton of business.

Probably not *double*, but something like +~20% across the board could make the difference.

It's roughly 24% of their expenses, just for reference.

[Moozart]

I just read the article. Pretty much the owner "gets by", in renting out his home and I think he was living with other people. His workers seem happy and he got a bump from all the good publicity.

Now his company is more profitable and he may again take his million dollar salary. Which he said he always intended if his company did well. Again, for all those that think us liberals rail against capitalism. I am fine with him making his money and paying his employees a very good salary.

The bad. All those people are now having kids. I am one who thinks the world is overpopulated now.

Edit: Also there was stuff about his wife and fight with his brother. Embezzlement charges that were cleared. Basically small stuff to show he is not an angel.

If you are making 70k a year and only "getting by" something is seriously wrong and you should rethink your whole situation

[Milchshake]

At the McDonald's in downtown Seattle, a Double Cheeseburger costs $1.69. The new minimum wage in Seattle is really killing prices...

[Pendulous]

It's great, but it's a very rare occurrence for a CEO to be like this. Letting them decide their employees wages is usually a terrible idea.

[Kapadons]

At the McDonald's in downtown Seattle, a Double Cheeseburger costs $1.69. The new minimum wage in Seattle is really killing prices...

It costs $1 in San Antonio so....seems the wage does have some effect.

[Milchshake]

It costs $1 in San Antonio so....seems the wage does have some effect.

Or that fuel, transportation, RENT, Beef are also cheaper in San Antonio?

[Captain N]

It costs $1 in San Antonio so....seems the wage does have some effect.

But not to the effect that so many raising wages = doom people seem to believe. To be honest the minimum wage here in Chicago was recently raised from $10 to $10.50 and the price of our double cheeseburger has dropped from $1.69 to $1.50.

[Themius]

I just read the article. Pretty much the owner "gets by", in renting out his home and I think he was living with other people. His workers seem happy and he got a bump from all the good publicity.

Now his company is more profitable and he may again take his million dollar salary. Which he said he always intended if his company did well. Again, for all those that think us liberals rail against capitalism. I am fine with him making his money and paying his employees a very good salary.

The bad. All those people are now having kids. I am one who thinks the world is overpopulated now.

Edit: Also there was stuff about his wife and fight with his brother. Embezzlement charges that were cleared. Basically small stuff to show he is not an angel.

1) the world is not over populated
2) we have pretty low birth rates.

Like... are you against Japan increasing their population becuase you feel the earth is overpopulated even though Japan will face serious issues due to their low low birthrates?

[Annoying]

Yeah, my bad. I was due for a work meeting and was literally standing above my computer and hit "post"

I've read a lot of stuff that has stated that decreasing birthrates are partially due to wage stagnation.

I'll get it. Seems to be a productive post.

[Logwyn]

But not to the effect that so many raising wages = doom people seem to believe. To be honest the minimum wage here in Chicago was recently raised from $10 to $10.50 and the price of our double cheeseburger has dropped from $1.69 to $1.50.

You need to see how much the cost of nuggets are. The most popular item.

[Endus]

That's implied, yes. Happier employees are more productive, generally.

Also stuff like Google's employee review, which found that one of the single biggest swings in performance was when employees felt emotionally secure in their position, meaning they didn't feel like anyone was looking over their shoulders, they were being trusted to get their work done, people were open and accepting rather than critical and cynical, etc.

Removing wage pressures would help with that.

So you want your BigMac and fries to be 30-40$?
Interesting.

Wages are a pretty small component of fast food pricing. For numbers, check out this study; https://www.purdue.edu/newsroom/rele...3-percent.html

Nearly doubling wages at a McDonalds was projected to raise prices by a whopping 4.3%. And when you take that relative gain into account, it doesn't matter WHAT the eventual number price might be, the practical reality is that people can afford more burgers per paycheck, so spending goes up.

If I remember correctly, most McDonalds are franchises with profit margins in the single digits. So yeah, a massive hike in wages would equal a massive hike in prices.

See above.

Yes, their margins are relatively narrow once you take franchising into account, but wages aren't a major component of their costs.

If everyone suddenly starts making twice as much, that's a 100% increase. If that means prices go up by 5%, it means those workers, if they could afford to eat McDonalds 20 times a year, can now afford to eat there 38 times a year. They can afford nearly twice as many burgers, despite the price increase.

It's that effective spending potential that really matters, not the actual number. That's why normal inflation isn't a big deal, if wages are being indexed to inflation in general; that stuff costs 2% more doesn't affect you if you're making 2% more money in the same job.

[Bryntrollian]

If another company raised everyone's salary to $70K they wouldn't see the boost in revenue due to all that free publicity. Being #2 is rarely newsworthy.

I think the big deal was the CEO himself lowered his multi-million dollar salary to just 70k, which would still be a big deal.

[Gorgodeus]

If I remember correctly, most McDonalds are franchises with profit margins in the single digits. So yeah, a massive hike in wages would equal a massive hike in prices.

It has already been proven that for every $1.00/hr in wage increase, a business only has to charge $0.10 to offset the increased labor cost. Studies were done in areas that have raised the minimum wage.

[Kapadons]

Or that fuel, transportation, RENT, Beef are also cheaper in San Antonio?

That's why I said some. obviously a 60% increase isn't due solely to increased wages.