Then change the business model or fail.
One could easily imagine a business that only works if they pay employees 50 cents a day. Such a business has no place in a society that respects human dignity.
If your business depends on purchasing a third of someone’s waking hours but cannot afford to pay them enough to live securely and comfortably in exchange, then your “business model” depends on poverty to continue.
A McDonalds company help line used to advise their employees on how to apply for foodstamps. McDonalds is one of the largest employers of people who receive Medicaid and food stamps in the US. They’ve been using the social safety net as a form of government subsidies by the back door for years.
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Walmart is especially egregious because the SNAP benefits that subsidize their employees’ wages are often being used at Walmart. After all, if you need groceries why not pick them up at the store you work at?
So not only do they not pay their workers enough by letting taxpayers subsidize wages, some of that taxpayer subsidy goes right into their pockets.
Oh, I just realized what needs to be done. You know how many states come after the families of people who died on Medicaid to get the money back, seizing inheritance and assets? How about instead of that, they start charging businesses for employees being on government assistance? Just straight fine them for every employee who has to be on food stamps, cash assistance, or Medicaid. Idk, 10k/employee/year sounds about right. Then paying them all +9k/year becomes the cheaper option.
Kind of like using tips to fill in for low wages, but with taking advantage of government help.
This is exactly the thing.
If a business cannot afford to pay its employees a living wage, that business is insolvent. What we have currently are a bunch of insolvent businesses that think they aren’t insolvent because they’ve been allowed to pay poverty wages.
Lol they are moments away from not needing any staff at all
Yeah right … it is of course way easier and cheaper to build a hightech food factory in almost every town that is able to create at least a dozen of different dishes than paying the employees 20$ per hour. The technicians that repair those robots will of course also work for less than 20$. /s
I remember when you said the same thing about touch screen order points, and menus on flat screen TVS at the drive thru .
Quit talking BS
That’s what they said a decade ago with all the articles about the automated hamburger machine: https://www.businessinsider.com/burger-robot-could-revolutionize-fast-food-industry-2012-11
If they couldn’t even incorporate this technology just for burgers into their restaurants after a decade, what makes you think they can cover the entire menu plus serving these items to customers in just “moments away”?
Ive been hearing that for at least ten years.
Registered nurses in India make like $100/month
And they can buy a decent restaurant meal for around $3. I’m not sure what you think your point is here.
I don‘t know what the going rate for registered nurses in the US is - but you probably will at least get 20$…
I want to say the going rate is around $40/hour for registered nurses but I’m sure it varies depending on city/state in the US.
That’s about the median, correct
It’s super variable. Travel nurses in OB at my hospital were making $225 an hour. This was in rural CA where the average nurse made low $100k a year though. Some in red states are still in the $50k range though.
This is 100% bullshit and they 100% know it. They pay employees in Denmark over 20$/hr and the food is actually cheaper there than it is here. If it was unsustainable, then they wouldn’t be doing business in Denmark. The difference between there and here, Denmark is essentially 100% regulated by industry-wide labor unions. Starbucks employees shouldn’t be trying to unionize, the entire fast-food industry should be unionizing together.
https://www.snopes.com/fact-check/mcdonalds-workers-denmark/
Interesting, I don’t think I’d heard of an industry union like that. It’s a great idea
Yes you have, the Screen Actors Guild is an industry-wide actor’s union. The Writers Guild of America is an industry-wide guild for writers. The Teamsters as well. Actually most “Blue Collar” unions are industry unions. Plumbers, carpenters, electricians, etc. all have industry-wide unions. It is a recent phenomenon relegated to service and sales industries that are forcing unions to be only at single stores instead of industry or even company wide.
Your McDonald’s franchises are unsustainable? Oh well.
Most McDonald’s stores are privately owned franchises. If corporate is crafting their franchise agreements such that private store owners are not able to pay a living wage to employees, then corporate is to blame.
But private owners are the ones who ultimately set wages. Franchisees need to bear some responsibility here, too. They’re the ones who are in a position to pressure corporate for franchise agreements which give them a better opportunity to offer living wages, and they’re not.
I’ll stick to the multibillion dollar megacorp but you do you.
possibly, just possibly, if CEOs weren’t pathologically greedy then you’d be able to pay your workers what they are worth and wouldn’t have this ‘it’s too expensive’ worry to keep you from doing the right thing
McDonald’s strong sales recovery and a healthy stock price performance earned its chief executive
Chris Kempczinski received a pay package of just over $20 million in 2021, according to new SEC documents filed on Monday.
That was nearly double the $10.8 million he was paid during the pandemic-plagued 2020. It was also the largest pay package received by a McDonald’s CEO since 2017, when Kempczinski’s predecessor Steve Easterbrook received $21.8 million.
I have a bigger issue with the billions they spend every year in stock buybacks. Last year, it was $4B. That’s an additional 20k per employee.
That sounds nice and all, but if he gave up his 20m/yr and gave it to employees… everyone would get an extra $100 per year.
There are some parts I agree with this, because if we did calculate the profits and gave all the profits generated for 2022, we would end up only being able to give the average worker a raise to $16.20 an hour divided over 1.35 million employees.
But that is part of the problem. McDonalds has become too heavy for American workers to save it. It is over franchised.
McDonald competes using the “Walmart strategy” Where they under price the competition until no one can compete and are forced to close.
But times have changed.
This business model doesn’t work when workers have options for good paying jobs.
$15 * 1,350,000 = $20,250,000 per hour for all employees per hour.
McDonald made in profits 14 billion in 2023
Assuming McDonalds took that 14 billion and gave it all to the employees.
(14,000,000,000 / 365)/24 = 1.6 million per hour divided over 1,350,000 million employees give or take.
Add that to the original
$20,250,000 + 1,600,000 = 21,850,000 / 1,350,000 = $16.18 per hour.
Note: this does not include stock buybacks as those are not ready for 2023, but I imagine around 2 billion extra we could dig out of those expenses. Also I do not know the overall executive pay. I can tell you the CEO’s pay, and even the average, but I have no Idea what that total number is.
In all, I have tried to keep the math consistent, Please criticize the math, as I still feel like I have done something wrong.
I didn’t want this conclusion. But if it is true. The Food industry is going to need to raise it’s prices and stop overpaying it’s CEOs. Or small Family owned businesses that don’t have those constraints will outpace them in the next few years.
Edit: If you want more context and made it this far, check out _healththetank’s post below, it adds a little bit more understanding on what I got wrong.
14,000,000,000 / 365)/24 = 1.6 million per hour divided over 1,350,000 million employees give or take.
You’re paying employees 24hrs a day, 365 days a year. They should be paid, assuming standard full time (which most of them are not), 40hrs per week, 52 weeks per year or 2,080 hours.
14,000,000,000/2080 = 6,730,769 per hour over 1.35 million staff = a raise of $5 per hour, putting the new hourly rate at $20/hr. Not way higher, but worth noting.
Additionally, as I mentioned above, the assumption of 40hrs per week for all staff is highly unlikely to be accurate. I looked, but wasn’t able to find any hard data, just anecdotal stuff. Most staff I know in fast food places work ~30hrs per week, if they’re ‘full time’, so the number is likely higher than I’ve shown.
Therefor it is entirely possible, even without touching the CEO pay, to pay $20 per hour to all staff.
Thank you so much!
There is also the assumption that everyone would be paid $20 when in fact they would probably fall in a range of $16 - $18 with the extremely rare $19-$20
I knew the math wasn’t adding up somewhere, otherwise the new UPS contracts would bust the company.
I agree with your points, I was speaking in reference to the 20m/yr CEO salary. Over 200k employees, that only comes out to $100 per person. As you’ve demonstrated, it takes a lot more than just paying CEOs less.
How did $4bn become $20mn in your head?
When I read it off of the person’s post I replied to. Can you show me where you saw 4bn in EpicMuch’s comment? Or did you just feel like lashing out over something you barely read? How did you think your comment would be useful?
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That does not change the fact that nobody deserves to be paid what CEOs are being paid. That’s the point.
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It’s not just CEO pay. CEO pay is certainly a symptom of the upward transfer of wealth, and it’s quite harmful in its own ways, but simply dividing the pay of a CEO among N employees isn’t going to change much at most companies.
As far as charging more per product goes, that becomes a question of what the per unit labor costs are. An old (2015) report from Perdue estimated that doubling the minimum wage of $7.25 and offering health insurance would raise prices at a place like McDonald’s about 4.5% and tripling it would raise prices 22%. These are generally fairly complex formulas and incorporate factors like federal offsets for health insurance.
The Big Mac is the universal product for a lot of these things. The ingredients for a big mac cost less than $1. The estimate I saw from McD was $0.77. That’s the raw material cost. The other costs are things like rent, electricity, advertising, labor, and so on. What we would need is an accurate estimate of the labor component of the big mac price and multiply it by 1.33 or whatever the labor increase is and see what the new total cost is. If labor is 10% of the cost, then on a $10 big mac the labor is $1. Increasing the paid wage from $15 to $20 would raise the price of a big mac to $10.33.
But even that is overestimating the impact, because the actual big mac sandwich is one of the lower profit margin items. Fries and sodas have massive profit margins, so the total impact of a wage increase per order would be even lower because the cost would be spread over high margin items as well.
Current supply chain problems (and price gouging) has shifted cost of goods even further away from labor as a component.
So overall, without them actually opening the books on their cost of goods, I’m going to guess that the drama they’re enacting over their business model is BS, just like it was whe the minimum wage was raised to $15 in CA.
Translation: “We have decided that when given the choice between paying our workers a living wage and paying our executives lavishly, we pick the latter and think you are too dumb to notice”
That might be true, but people have to stop working there as employee demand dictates pay rates. Everyone saw this during the pandemic. Short supply of workers lead to an immediate raise in pay.
You also have to remember McDonald’s is a franchise business and the owner might not be taking in millions, as McDonald’s has been known to mistreat franchisees from lower income neighborhoods.
https://news.yahoo.com/mcdonalds-defeats-black-franchisees-1-134243905.html
https://www.eatthis.com/news-subway-mcdonalds-and-more-are-expected-to-be-investigated-by-the-ftc/
I mean I understand, but honestly I think if they can’t survive in the area they should just close shop. If it was too much of a bother corporate would subsidize but, this would also allow for more local alternatives to potentially appear. We don’t have a mcdonalds for a solid 40 mins from where I live, or any corporate/franchise chain, and the ma/pa food places are a nice change compared to going into more populated towns
I mean I understand, but honestly I think if they can’t survive in the area they should just close shop.
Understood, but the point I’m trying to make is that these franchisees are small businesses. They can’t access the billion dollar capital that McDonald’s corporate has.
You have to treat franchisees as small businesses, because besides the name, they pretty much are.
Close your disgusting business then. Please start abroad
Then die.
Well then don’t run the Business
They always say that like it’s anyone’s problem but their own. Figure out how to make your business model adapt to changing circumstances or die out, either way this is a problem for McDonald’s to worry about internally, not for society to worry about on their behalf.
Bad business model, innit.
But its sustainable in other countries.
… while continuing to have a 45° profit angle year after year
The food is poison to a community anyway.
Maybe they should pay their CEO 10x less
McDonald’s sent its own letter to its restaurant system on Monday, which was viewed by CNBC. Responding to the bill, the company said it and other franchisee groups “worked tirelessly over the past year to fight these policies and protect Owner/Operators’ ability to make decisions for their businesses locally and protect their restaurants and their crew.
…
Our very-well-paid lobbyists are frantically schmoozing to
bribedonate to whoever will take our money to vote to protect our crew from these egregious wage increases.mcdonalds is basically a real estate investment company that sells hamburgers… it’s that business that stands to take a hit if their franchisees start failing because they, too, are greedy af.
a fair wage and fair menu prices work elsewhere. but not in the good o’ u.s. of a.
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