America's #1 Online Cigar Auction
first, best, biggest!

Last post 9 years ago by DrMaddVibe. 122 replies replies.
3 Pages<123
Is there a reasonable solution to the minimum wage/welfare issue?
Jump to Bottom | Previous Topic | Next Topic
victor809 Offline
#101 Posted: Tue, Jun 10 2014, 3:59 PM EST
Joined: 10-14-2011
Posts: 23,866
Brewha wrote:
I think the Catholics got rid of the white collars . . . .


I thought they were keeping them... something about black showing **** too easily.
gryphonms Offline
#102 Posted: Wed, Jun 11 2014, 11:25 AM EST
Joined: 04-14-2013
Posts: 1,983
I am not so sure there would be as large of a cost increase due to raising minimum wage. Let's look at a McDonald's employee as an example. Say on average an employee produces 15 sales an hour and the average sale is $15.00. If their wage was increased $7.50 an hour the employers cost would be about $9.35 per hour. This would equate to about $.64 per meal. This would be a price increase of about 4%. In this case I do not think increasing a $15.00 meal by $.64 would have any effect on business. Also a 4% increase is not significant. I would prefer this over subsidizing businesses that I do not patronize.
HockeyDad Offline
#103 Posted: Wed, Jun 11 2014, 11:44 AM EST
Joined: 09-20-2000
Posts: 46,164
gryphonms wrote:
I am not so sure there would be as large of a cost increase due to raising minimum wage. Let's look at a McDonald's employee as an example. Say on average an employee produces 15 sales an hour and the average sale is $15.00. If their wage was increased $7.50 an hour the employers cost would be about $9.35 per hour. This would equate to about $.64 per meal. This would be a price increase of about 4%. In this case I do not think increasing a $15.00 meal by $.64 would have any effect on business. Also a 4% increase is not significant. I would prefer this over subsidizing businesses that I do not patronize.


The guy cooking fries and the guy cooking burgers produces no sales. The whole scenario is bogus. What you need to determine is the breakdown of the business costs.

Real estate, utilities, raw materials, advertising, labor, etc.

Once you know what percentage of your overall cost is labor, then you need to figure out what portion of that is minimum wage labor. That component cost will double. Then you can run the new cost model and make price adjustments.

Now to test the 4% McDonalds price increase theory.......If McDonalds' cost fir minimum wage labor was 4% of their overall cost and that element doubled due to a minimum wage increase, they may elect to pass on a 4% price increase. Minimum wage labor being 4% of McDonalds' costs sounds a bit low.

In the grand scheme of things, the upper class do not shop at McDonalds so the lower class and middle class will absorb the cost increase.
victor809 Offline
#104 Posted: Wed, Jun 11 2014, 11:48 AM EST
Joined: 10-14-2011
Posts: 23,866
gryphonms wrote:
I am not so sure there would be as large of a cost increase due to raising minimum wage. Let's look at a McDonald's employee as an example. Say on average an employee produces 15 sales an hour and the average sale is $15.00. If their wage was increased $7.50 an hour the employers cost would be about $9.35 per hour. This would equate to about $.64 per meal. This would be a price increase of about 4%. In this case I do not think increasing a $15.00 meal by $.64 would have any effect on business. Also a 4% increase is not significant. I would prefer this over subsidizing businesses that I do not patronize.


Your math is sound, and came up with a similar number to a Forbes article I found.

However, the Forbes article then went on to say that due to franchising.. etc etc etc the price increase will not happen that way.

My completely uneducated guess would be that the high volume McD's would try to find a way to eliminate the increased labor costs by cutting down on staffing (in other words, your hypothetical employee above has to put out 30 sales an hour). But the low-volume McD's won't be able to absorb that increased cost. The franchises on the margin will go out of business (not a real crisis... it's a mcDs)
victor809 Offline
#105 Posted: Wed, Jun 11 2014, 11:52 AM EST
Joined: 10-14-2011
Posts: 23,866
HockeyDad wrote:
The guy cooking fries and the guy cooking burgers produces no sales. The whole scenario is bogus. What you need to determine is the breakdown of the business costs.



Not completely bogus. If you have 4 minimum wage slobs behind the counter (one taking orders, one doing fries, one making burgers and one assembling orders) and you sell 60 meals an hour, your productivity is 15/man-hour. A labor increase will have a direct imact on those unit costs. It works fine for back-of-the-napkin work.
teedubbya Offline
#106 Posted: Wed, Jun 11 2014, 11:55 AM EST
Joined: 08-14-2003
Posts: 95,637
It would provide a good chance to pass on other costs (like rising beef costs) and blame it on the government mandated minimum wage. Folks would buy it hook line and sinker. Win-Win
HockeyDad Offline
#107 Posted: Wed, Jun 11 2014, 11:56 AM EST
Joined: 09-20-2000
Posts: 46,164
Under that scenario, an order per minute steady for 8 hours is not realistic.
gryphonms Offline
#108 Posted: Wed, Jun 11 2014, 11:57 AM EST
Joined: 04-14-2013
Posts: 1,983
HD, I am accounting for all non management employees. Yes the people at the register produce the sale, but you can come up with an average based on a total number of non management employees. My premise is not bogus.
victor809 Offline
#109 Posted: Wed, Jun 11 2014, 12:26 PM EST
Joined: 10-14-2011
Posts: 23,866
HockeyDad wrote:
Under that scenario, an order per minute steady for 8 hours is not realistic.


I dunno.
You could have two people at registers for a faster rate. Or just lower the rate a little. The estimated numbers may be off, but he's going the right direction. Maybe it'd turn out to be 0.8 instead of 0.63$... either way the price increase probably isn't going to be allowed by the home office anyway. The individual franchises will have to decide how to absorb the cost.

On a completely unrelated note, it may be a good time to look at investing in companies making these:
http://global.networldalliance.com/downloads/white_papers/EMN8_MG_UPDATE_01_09.pdf
teedubbya Offline
#110 Posted: Wed, Jun 11 2014, 12:33 PM EST
Joined: 08-14-2003
Posts: 95,637
victor809 wrote:
I dunno.
You could have two people at registers for a faster rate. Or just lower the rate a little. The estimated numbers may be off, but he's going the right direction. Maybe it'd turn out to be 0.8 instead of 0.63$... either way the price increase probably isn't going to be allowed by the home office anyway. The individual franchises will have to decide how to absorb the cost.

On a completely unrelated note, it may be a good time to look at investing in companies making these:
http://global.networldalliance.com/downloads/white_papers/EMN8_MG_UPDATE_01_09.pdf



Could be obsolete immediately. Smart phones. Although they are pretty common at box offices.
DrMaddVibe Offline
#111 Posted: Wed, Jun 11 2014, 12:45 PM EST
Joined: 10-21-2000
Posts: 55,513
victor809 wrote:
I dunno.
You could have two people at registers for a faster rate. Or just lower the rate a little. The estimated numbers may be off, but he's going the right direction. Maybe it'd turn out to be 0.8 instead of 0.63$... either way the price increase probably isn't going to be allowed by the home office anyway. The individual franchises will have to decide how to absorb the cost.

On a completely unrelated note, it may be a good time to look at investing in companies making these:
http://global.networldalliance.com/downloads/white_papers/EMN8_MG_UPDATE_01_09.pdf



OR...


http://www.cigarbid.com/...s-Earning-a-Living-Wage


OH NOES!!!Frying pan Frying pan Frying pan
gryphonms Offline
#112 Posted: Wed, Jun 11 2014, 12:48 PM EST
Joined: 04-14-2013
Posts: 1,983
So for Joe's hamburgers the incremental cost to maintain gross profit margin would be small. But for a McDonalds the only way to maintain gross profit margin is to increase productivity. Then my prmise is inaccurate in many cases. I doubt productivity could be raised to the point of mitigating lost revenue due to increased wages.
tailgater Offline
#113 Posted: Wed, Jun 11 2014, 2:45 PM EST
Joined: 06-01-2000
Posts: 26,185
Forget McDonalds.

You're a business owner and 30% of your payroll is minimum wage employees.

This cost doubles with no corresponding increase in productivity.

Do you keep your price the same?
DrafterX Offline
#114 Posted: Wed, Jun 11 2014, 2:48 PM EST
Joined: 10-18-2005
Posts: 98,563
not and stay in business... Not talking
tailgater Offline
#115 Posted: Wed, Jun 11 2014, 2:56 PM EST
Joined: 06-01-2000
Posts: 26,185
I think most can survive without closing their doors.
But increasing costs will impact profits.
Which affects investment into the business.
And lessens the take home pay for the owners.

So the guy who sacrificed and built the business that employs dozens of people has to take a hit.
While the person with no marketable skills gets to double their income.
teedubbya Offline
#116 Posted: Wed, Jun 11 2014, 2:57 PM EST
Joined: 08-14-2003
Posts: 95,637
well then there really is only one solution

landmines
victor809 Offline
#117 Posted: Wed, Jun 11 2014, 3:11 PM EST
Joined: 10-14-2011
Posts: 23,866
... Sadly, due to increased cost of labor, landmine prices have risen too high to make them a viable solution any longer.

HockeyDad Offline
#118 Posted: Wed, Jun 11 2014, 3:16 PM EST
Joined: 09-20-2000
Posts: 46,164
If raising the minimum wage to $15 only increases the cost of a McDonald's meal by .64 cents, why aren't we discussing raising the minimum wage to $22. That would only be like $1.28 per meal.

Every business will be affected differently based on the percentage of their overall cost that is minimum wage labor.

Every business will be affected based on their ability to raise prices to offset the cost increase.

Sometimes you just have to pass it before you can know what's in it. I'm in favor of a $15 minimum wage because the fallout from unintended and intended consequences will definitely create investing events.
tailgater Offline
#119 Posted: Wed, Jun 11 2014, 3:42 PM EST
Joined: 06-01-2000
Posts: 26,185
victor809 wrote:
... Sadly, due to increased cost of labor, landmine prices have risen too high to make them a viable solution any longer.



Retail is for suckas!
Brewha Offline
#120 Posted: Wed, Jun 11 2014, 5:19 PM EST
Joined: 01-25-2010
Posts: 12,201
victor809 wrote:
... Sadly, due to increased cost of labor, landmine prices have risen too high to make them a viable solution any longer.


So we should reduce foot soldier pay to minimum wage, sos we can afford them again?
victor809 Offline
#121 Posted: Wed, Jun 11 2014, 5:22 PM EST
Joined: 10-14-2011
Posts: 23,866
Brewha wrote:
So we should reduce foot soldier pay to minimum wage, sos we can afford them again?



Nah, we're just paying former McDonalds employees to lay on the ground holding hand grenades. When someone steps on them, they pull the pin.
DrMaddVibe Offline
#122 Posted: Wed, Jun 11 2014, 8:40 PM EST
Joined: 10-21-2000
Posts: 55,513
victor809 wrote:
Nah, we're just paying former McDonalds employees to lay on the ground holding hand grenades. When someone steps on them, they pull the pin.



WHOA!!!


Did they Super Size that order?
Users browsing this topic
Guest
3 Pages<123
Back to Top