Fast Food Workers Protesting.

brianlux

I know I've said this in every minimum wage thread I've come across but if you really have an interest in this subject read Barbara Ehrenreich's Nickel and Dimed. Then take a few years off and try to repeat her experiment.

jeffbr

We know about mega-corps raking in big profits and paying their workers shit wages. But how will this affect a typical small business? Should there be small business exemptions? We can talk about the macro economics of this, but that doesn't help a small business on a constrained budget.

So let's do a little hypothetical (making this up with round numbers just to make math easy):

Small donut shop brings in $25k/month in revenue. Has expenses of $5k for rent, $10k for labor, $5k for cost of goods, $5k for taxes, insurance, overhead.

New minimum wage law gets passed. New employees are bumped from $10/hr to $15/hr, and longer-term employees already making >$10/hr are bumped commensurate with the increase of new employees. Labor costs now are $15k/month, revenue is still $25k/mo. What are the options?
1) raise the price of goods to increase revenue
2) decrease the number of hours / worker to reduce labor costs
3) reduce the number of headcount to reduce labor costs

If #1 happens, then we all pay more for donuts, including the minimum wage worker, whose new windfall suddenly doesn't have the buying power it used to. If #2 happens, then the worker makes more / hour, but with fewer hours the paycheck looks the same (but they'll have more time for a 2nd job, I guess). If #3 happens, then the worker would probably rather still be making $10/hour rather than $0/hour while searching for a new job with all of the other displaced workers.

Again, we can talk all day about the evils of Wallmart and McDonalds, but I'm just trying to understand how small businesses with pretty fixed budgets and no real flexibility on pricing absorb a large increase on the expense side of the ledger without it ultimately affecting both the worker and consumer.

callen

unsung said:

mickeyrat said:

unsung said:

cp3iverson said:

Honest question. If someone makes $9 an hour cooking fries at Wendys and more skilled office work is paying $13 an hour what happens if minimum wage gets bumped to 15? I think everyone that was making more than the fast food people but making less than 15 still wants to make more than the guy cooking fries.

Just like the college educated teacher making 20 an hour somewhere doesnt want to barely make more than the 16 year old fry cook that they teach Algebra to. Or the office worker who got bumped to 17 an hour. And so on and so on. And if everyone gets raises down the line what gets solved?

Beats me. This is why i usually go through life ignoring politics. LOL

What about a Private in the Army that would make less than a burger flipper?

with a uniform allowance, on base housing paid for, medical care paid for, chow at the mess hall paid for. And still their pay lags behind everyones. Was true when I served in 88-90 as it is now.

So please tell me your point in this?

It's odd how everything needs to be spelled out for people to understand.

I feel it would be a travesty that a burger flipper would make more than a soldier.

Does that clear it up?

But that wouldn't be the case that's why.

And saying why not give them 40 or more is being silly. Not sure if 15 is right number but ant increase would be good for our society.

callen

jeffbr said:

We know about mega-corps raking in big profits and paying their workers shit wages. But how will this affect a typical small business? Should there be small business exemptions? We can talk about the macro economics of this, but that doesn't help a small business on a constrained budget.

So let's do a little hypothetical (making this up with round numbers just to make math easy):

Small donut shop brings in $25k/month in revenue. Has expenses of $5k for rent, $10k for labor, $5k for cost of goods, $5k for taxes, insurance, overhead.

New minimum wage law gets passed. New employees are bumped from $10/hr to $15/hr, and longer-term employees already making >$10/hr are bumped commensurate with the increase of new employees. Labor costs now are $15k/month, revenue is still $25k/mo. What are the options?
1) raise the price of goods to increase revenue
2) decrease the number of hours / worker to reduce labor costs
3) reduce the number of headcount to reduce labor costs

If #1 happens, then we all pay more for donuts, including the minimum wage worker, whose new windfall suddenly doesn't have the buying power it used to. If #2 happens, then the worker makes more / hour, but with fewer hours the paycheck looks the same (but they'll have more time for a 2nd job, I guess). If #3 happens, then the worker would probably rather still be making $10/hour rather than $0/hour while searching for a new job with all of the other displaced workers.

Again, we can talk all day about the evils of Wallmart and McDonalds, but I'm just trying to understand how small businesses with pretty fixed budgets and no real flexibility on pricing absorb a large increase on the expense side of the ledger without it ultimately affecting both the worker and consumer.

Yes small business may get hurt due to lower volume and it's increased burden. Good point and my one reservation.

mickeyrat

unsung said:

mickeyrat said:

unsung said:

cp3iverson said:

Honest question. If someone makes $9 an hour cooking fries at Wendys and more skilled office work is paying $13 an hour what happens if minimum wage gets bumped to 15? I think everyone that was making more than the fast food people but making less than 15 still wants to make more than the guy cooking fries.

Just like the college educated teacher making 20 an hour somewhere doesnt want to barely make more than the 16 year old fry cook that they teach Algebra to. Or the office worker who got bumped to 17 an hour. And so on and so on. And if everyone gets raises down the line what gets solved?

Beats me. This is why i usually go through life ignoring politics. LOL

What about a Private in the Army that would make less than a burger flipper?

with a uniform allowance, on base housing paid for, medical care paid for, chow at the mess hall paid for. And still their pay lags behind everyones. Was true when I served in 88-90 as it is now.

So please tell me your point in this?

It's odd how everything needs to be spelled out for people to understand.

I feel it would be a travesty that a burger flipper would make more than a soldier.

Does that clear it up?

so taking into account the items listed that a min, wage worker does not get doesnt change ANY of your equation? Forgot to add GI Bill. Small individual contribution with a decent enough payout after service not to mention the ability to take classes while IN service at no or low cost.

So your premise about the "pay" of our soldiers, sailors , airmen and marines is false.

brianlux

Come on- anybody gonna take the Ehrenreich challenge?

hedonist

jeffbr said:

We know about mega-corps raking in big profits and paying their workers shit wages. But how will this affect a typical small business? Should there be small business exemptions? We can talk about the macro economics of this, but that doesn't help a small business on a constrained budget.

So let's do a little hypothetical (making this up with round numbers just to make math easy):

Small donut shop brings in $25k/month in revenue. Has expenses of $5k for rent, $10k for labor, $5k for cost of goods, $5k for taxes, insurance, overhead.

New minimum wage law gets passed. New employees are bumped from $10/hr to $15/hr, and longer-term employees already making >$10/hr are bumped commensurate with the increase of new employees. Labor costs now are $15k/month, revenue is still $25k/mo. What are the options?
1) raise the price of goods to increase revenue
2) decrease the number of hours / worker to reduce labor costs
3) reduce the number of headcount to reduce labor costs

If #1 happens, then we all pay more for donuts, including the minimum wage worker, whose new windfall suddenly doesn't have the buying power it used to. If #2 happens, then the worker makes more / hour, but with fewer hours the paycheck looks the same (but they'll have more time for a 2nd job, I guess). If #3 happens, then the worker would probably rather still be making $10/hour rather than $0/hour while searching for a new job with all of the other displaced workers.

Again, we can talk all day about the evils of Wallmart and McDonalds, but I'm just trying to understand how small businesses with pretty fixed budgets and no real flexibility on pricing absorb a large increase on the expense side of the ledger without it ultimately affecting both the worker and consumer.

See, I appreciate this type of post, this type of thinking. There has to be a logical (business-side) consideration of the implications - not devoid of emotion but rational. If X happens, what will Y be? It's not hard-hearted or even hard-headed.

I see it as being practical and certainly not worthy of being demonized or assumptions made that some (many, most?) are looking down at others. Far from the truth, I think at least within this forum.

rgambs

jeffbr said:

We know about mega-corps raking in big profits and paying their workers shit wages. But how will this affect a typical small business? Should there be small business exemptions? We can talk about the macro economics of this, but that doesn't help a small business on a constrained budget.

So let's do a little hypothetical (making this up with round numbers just to make math easy):

Small donut shop brings in $25k/month in revenue. Has expenses of $5k for rent, $10k for labor, $5k for cost of goods, $5k for taxes, insurance, overhead.

New minimum wage law gets passed. New employees are bumped from $10/hr to $15/hr, and longer-term employees already making >$10/hr are bumped commensurate with the increase of new employees. Labor costs now are $15k/month, revenue is still $25k/mo. What are the options?
1) raise the price of goods to increase revenue
2) decrease the number of hours / worker to reduce labor costs
3) reduce the number of headcount to reduce labor costs

If #1 happens, then we all pay more for donuts, including the minimum wage worker, whose new windfall suddenly doesn't have the buying power it used to. If #2 happens, then the worker makes more / hour, but with fewer hours the paycheck looks the same (but they'll have more time for a 2nd job, I guess). If #3 happens, then the worker would probably rather still be making $10/hour rather than $0/hour while searching for a new job with all of the other displaced workers.

Again, we can talk all day about the evils of Wallmart and McDonalds, but I'm just trying to understand how small businesses with pretty fixed budgets and no real flexibility on pricing absorb a large increase on the expense side of the ledger without it ultimately affecting both the worker and consumer.

It's hard not to get frustrated with this. No specific accusations, but it seems like alot of people don't look past the TV for their information. I already pointed this out, and it gets pointed out each time the wage raise debate comes up. It is ignored entirely by those issuing the right-wing talking points, and is rarely mentioned in the media.
Businesses grossing less than 500,000 are exempt from FLSA minimum wage and overtime standards. You can see a summary of exemptions here, and I/many people support additional exemptions, and a progressive scale that considers expenses in balance with receipts. http://www.dol.gov/whd/regs/compliance/whdfs14.htm

rgambs

My bad, that is the overview of who is covered, HERE is the list of exemptions... http://www.dol.gov/elaws/esa/flsa/screen75.asp
The first link does state the $500,000 threshold at which FLSA provisions are enacted, so it is entirely relevant.

hedonist

Anyone else get a headache trying to read and actually decipher this shit?

It's as bad as the IRS codes.

(I mean the DOL info, not your posts, rgambs!)

I could just be dealing with brain-fry but damn the fuckers who wrote this language.

rgambs

Hahaha legalese, good fun! The proof is in the puddin, iffin yeh can swaller it.

hedonist

How can ya have any pudding if ya don't eat yer meat?

brianlux

How about this idea- compensate employees according to profit. First eliminate all the bullshit that hides the bottom line (see Tax Scam thread). You have a small business (I do/ but I'm it/I get paid/paid shit) that doesn't bring it a lot of money, you're allowed to pay lower wages. Work for a big company that rakes in a lot of dough be it McDonald's or IBM, pay the bigger bucks to employees. Simple.

rgambs

It works for taxes, why not wages?

Gern Blansten

callen said:

Gern Blansten said:

STAYSEA said:

This makes me so heated. I feel like Jack Donaghy from 30 rock
I will inset a random Jack quote...
"I saw it Lemon. My whole life passing before my eyes. Neil Patterson pitching me the rotating microwave tray. Me personally coining the phrase "what's the upside." Participating in hands across America. And all the time I've been on this earth I have only one regret: I should have worked more. "

I often find myself a conservative liberal.
I work for minimum wage. I tell myself I'm going to finish college one day....

8-|
I would love to be paid more. I would love health benefits .
Sick days? Paid time off? Vacation time? These concepts seem incredible.
A majority of the people I work with have at least 2 jobs if they can not get a full time position at this "minimum wage" job, to make ends meet.
A full time minimum wage job is so scare.....

Hell Yes I would be loved to be paid more.
Am I willing to sacrifice the cost of living increasing as well??

Eh? Perhaps not.
I rather not have a huge raise than have the price of gasoline and food skyrocket.

If they raise they "minimum" wage to 15$ I will likely have to get a 3rd job to afford the inflated prices of essentials.

But just as Unsung said ... We have minimum minds. minimum skills.
Sadly we are not all so smart. What do I know

Prices are based on the market....not what employees are being paid. If McDonald's would try to raise prices to offset their additional wage costs then competition will ramp up to steal away customers. I'm sure Burger King would be glad to make a smaller profit margin to steal McDonald's sales. Unless there is price fixing prices would be fine.

And the price of labor will go up for them all. So thinking they'll pretty much match each other's current offer. Would balance out. Now question is how much? Sooo what percentage of total costs is labor? And

Correct...but that still doesn't mean they will all raise pricing because they are still in direct competition.

callen

Gern Blansten said:

callen said:

Gern Blansten said:

STAYSEA said:

This makes me so heated. I feel like Jack Donaghy from 30 rock
I will inset a random Jack quote...
"I saw it Lemon. My whole life passing before my eyes. Neil Patterson pitching me the rotating microwave tray. Me personally coining the phrase "what's the upside." Participating in hands across America. And all the time I've been on this earth I have only one regret: I should have worked more. "

I often find myself a conservative liberal.
I work for minimum wage. I tell myself I'm going to finish college one day....

8-|
I would love to be paid more. I would love health benefits .
Sick days? Paid time off? Vacation time? These concepts seem incredible.
A majority of the people I work with have at least 2 jobs if they can not get a full time position at this "minimum wage" job, to make ends meet.
A full time minimum wage job is so scare.....

Hell Yes I would be loved to be paid more.
Am I willing to sacrifice the cost of living increasing as well??

Eh? Perhaps not.
I rather not have a huge raise than have the price of gasoline and food skyrocket.

If they raise they "minimum" wage to 15$ I will likely have to get a 3rd job to afford the inflated prices of essentials.

But just as Unsung said ... We have minimum minds. minimum skills.
Sadly we are not all so smart. What do I know

Prices are based on the market....not what employees are being paid. If McDonald's would try to raise prices to offset their additional wage costs then competition will ramp up to steal away customers. I'm sure Burger King would be glad to make a smaller profit margin to steal McDonald's sales. Unless there is price fixing prices would be fine.

And the price of labor will go up for them all. So thinking they'll pretty much match each other's current offer. Would balance out. Now question is how much? Sooo what percentage of total costs is labor? And

Correct...but that still doesn't mean they will all raise pricing because they are still in direct competition.

True.

rgambs

Where are the rebuttals to the exemptions, to the progressive-tax style of wage distribution, to the argument that it would lower enrollment in welfare programs? Liberals get painted as too emotional but when they bring rational arguments they are largely ignored by those on the conservative side of an issue.

unsung

It remains to be seen if the welfare rolls are reduced.

Personally I believe they'd benefit more if the monetary system were fixed and if they weren't taxed on their wages. Of course government wants them to be paid more, more taxation.

I expect sales of fast food to decrease, hopefully to the point that people stop eating it. A healthier society means lower costs for all.

Gern Blansten

Not only would it lower reliance on entitlement programs the companies that it would affect the greatest (i.e. McD's, Wal-Mart, etc.) would see better sales because of it. Low income wage earners spend virtually ALL of their money. And they spend it where food is cheap.

PJ_Soul