McDonald's Could Double Wages For Employees

[xUT]

McDonald's Could Double Wages For Employees

That possibility is that McDonald's could double its restaurant-worker wages and not increase its prices at all ... but instead just make a little less money. In other words, it could better balance the interests of all three of its stakeholders ; shareholders, customers, and employees; instead of shafting employees to deliver as much profit as possible to shareholders.

According to the Kansas City researcher who did the original wages-to-Big Mac study, McDonald's spends about 17% of U.S. revenue on employee salaries and benefits.
If that ratio holds true worldwide, McDonald's would have spent about $4.7 billion on salaries and benefits last year, on revenue of $27 billion. Meanwhile, the company made about $8.5 billion of operating (This is for the corporate parent, not the franchises.).

If McDonald's doubled the wages of its restaurant employees (not management, which is presumably very well-compensated), it might add, say, another $3 billion of annual expenses. This would knock its operating profit down to a still healthy $5.5 billion.

Importantly, however, $5.5 billion is still a lot of money. McDonald's would still be very profitable.
Big Macs would still cost the same as they do today (billions and billions would still be served!)
McDonald's managers would still take home their impressive salaries.
And McDonald's restaurant employees would, finally, rise above the poverty line. And their extra spending money would quickly be spent on other products and services, thus helping the whole
By paying these higher wages, McDonald's would also be able to hire the best restaurant workers in the whole economy, thus presumably improving the McDonald's experience for customers and reducing turnover and retraining costs.

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[background=rgb(255, 255, 255)]Like this will ever happen... [/background]​

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[Kev3188]

I'm as cynical as they come, but am still just idealistic enough to believe it may happen...

 

[Knotbuyinit]

McDonald's Could Double Wages For Employees

[background=rgb(255, 255, 255)]Read more: http://www.businessi...7#ixzz2aveT7ItD[/background]​

[background=rgb(255, 255, 255)]Like this will ever happen... [/background]​

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Arnobio Morelix is an undergraduate student at the University of Kansas School of Business Communications. Not a real bright one at that! McDonald's would need to raise their prices by 26% not 17%. At the same time we would be asking Joe Walmart to pay an extra buck on a 4 dollar purchase to pay Jane McDonald's.

http://justoneminute...oints-fail.html

 

[eolesen]

It's called a wage/price spiral, and the author obviously slept thru that day of Econ 101.

Wages go up, prices go up accordingly, and buying power reaches equilibrium, negating the wage increase.

The side effect of this often ignored by living wage proponents is that employers also cut back on employment and drive higher productivity...

Anyone who has run a business knows this all too well.

 

[NewHampshire Black Bears]

Capitalism has done a Great Job (so far)...choking the middle class into near oblivion,......so It's just a matter of time before the Mc D /Walmart workers in the good ol' USA....Revolt over Slave wages, and No bennies.
It will happen in NE/NY/NJ and CA. First (of course), but it WILL happen.
Hey, Everyone said WN would NEVER raise Fares, ...but alas..............

 

[700UW]

 

[Glenn Quagmire]

Instead of posting a bumper sticker like propaganda shot, why not post a scholarly study on the subject to prove your point?

 

[Black Magic]

Soo many peons out there that think doubling McD's or the minimum wage is the answer to everything...all that does is raise the cost of goods/services for the consumers. Get ready to pay $9 or more for a Big Mac meal if this happens. Go to Europe and see it for yourself if you don't believe me.

 

[Hello3B]

Doubling their wage is the same as taxing the employer $7 an hour for each employee.

 

[SparrowHawk]

The point is that no government should be setting wages for private enterprise. If the Federal Government desires to improve wages they can pay the military and civilian employees more at the entry level so they can actually NOT have to rely on Food Stamps. Look at the Federal government and their Wal-Mart wages and use of part-timers

 

[Glenn Quagmire]

The point is that no government should be setting wages for private enterprise. If the Federal Government desires to improve wages they can pay the military and civilian employees more at the entry level so they can actually NOT have to rely on Food Stamps. Look at the Federal government and their Wal-Mart wages and use of part-timers

Are you ready to foot the bill for higher wages for the military and civilian government employee wages so they do not have to rely on food stamps?

 

[SparrowHawk]

Are you ready to foot the bill for higher wages for the military and civilian government employee wages so they do not have to rely on food stamps?

NO! But only because we overspend on BS that is not needed like the Department of Education as an example. We spend more on our military then all of the other nations combined (Almost). Bill Clinton balanced the budget at 1.9 Trillion or roughly half what we spend now. There is no legitimate reason for us to be spending MORE than the 2.4 Trillion we're expected to bring in this year. It's long past time for government to live the way we do. From paycheck to paycheck. If ObamaCare is good for us it's good for every member of Congress and their staff. It's long past time for the feds to walk the walk.

 

[Ms Tree]

Soo many peons out there that think doubling McD's or the minimum wage is the answer to everything...all that does is raise the cost of goods/services for the consumers. Get ready to pay $9 or more for a Big Mac meal if this happens. Go to Europe and see it for yourself if you don't believe me.

Been to Europe quite a few times and I do not see $9 burgers. Meals were about the same price as here in the US. Where exactly did you find these burgers? Businesses would not be able to survive if no one was able to afford their food would they? So even if they do charge $9 for a burger people must have the money to buy it.

Seems your argument has some holes in it.

 

[Ms Tree]

The point is that no government should be setting wages for private enterprise. If the Federal Government desires to improve wages they can pay the military and civilian employees more at the entry level so they can actually NOT have to rely on Food Stamps. Look at the Federal government and their Wal-Mart wages and use of part-timers

I guess it's OK if you have a skill that is in high demand. I guess if you do not posses one of those skill sets, tough cookies. Personally I like the idea of all jobs being given a minimum salary. I am not keen on the idea of sanitation worker being paid only a few bucks an hour if that is what the market will bear.

 

[SparrowHawk]

I guess it's OK if you have a skill that is in high demand. I guess if you do not posses one of those skill sets, tough cookies. Personally I like the idea of all jobs being given a minimum salary. I am not keen on the idea of sanitation worker being paid only a few bucks an hour if that is what the market will bear.

So you admit you're a socialist? That's cool. Interestingly enough though is that no less then Milton Friedman and F.A. Hayek have written relatively extensively on the concept of a minimum income. Friedman was in many ways the de facto architect of the Earned Income Tax Credit enacted into law under Nixon. Hayek argued that in order for a society and it's economy to thrive a minimum income was required.