McDonald's Can't Figure Out How Its Workers Survive on Minimum Wage

[markomalley]

Have you ever seen a plan for the government to pay it back?

There’s a longstanding plan. It is in two phases:

Phase.1: push off the problem to the next guy in office.

Phase 2: repeat phase 1.

Problem is, both phases have been executed. So now we are at emergency phase 3. Borrow the money.

 

[SamH]

There’s a longstanding plan. It is in two phases:

Phase.1: push off the problem to the next guy in office.

Phase 2: repeat phase 1.

Problem is, both phases have been executed. So now we are at emergency phase 3. Borrow the money.

More accurately - print the money and borrow it from the Fed.

 

[kookieduck]

More accurately - print the money and borrow it from the Fed.

No, no - you have it backwards - the Fed prints the money! And it is a private institution and NOT part of the Federal Government despite the name.

Here is an excellent link to learn more about the Federal Reserve: youtube.com/watch?v=RrwbgdtbdXE

 

[Gidge]

No, no - you have it backwards - the Fed prints the money! And it is a private institution and NOT part of the Federal Government despite the name.

Here is an excellent link to learn more about the Federal Reserve: youtube.com/watch?v=RrwbgdtbdXE

Great video.

Here’s a great book on the subject :
amazon.com/Creature-Jekyll-Island-Federal-Reserve/dp/0912986212

 

[SamH]

No, no - you have it backwards - the Fed prints the money! And it is a private institution and NOT part of the Federal Government despite the name.

Here is an excellent link to learn more about the Federal Reserve: youtube.com/watch?v=RrwbgdtbdXE

I think you need to read my post.

 

[Gidge]

I think you need to read my post.

I just read your post – the video gives a good description of the problem/reaction/solution merry-go-round of kicking the can down the road so the only ones who profit from the federal reserve scam are the cabal of bankers, while the rest of us pay the price with too many dollars chasing too few goods and services.

Your example used politicians, but they are merely pawns of the big guys (central bankers) who actually have control of the money supply.

 

[SamH]

Your example used politicians, but they are merely pawns of the big guys (central bankers) who actually have control of the money supply.

The government controls the money supply. While the Fed prints it, it gets into circulation through massive government spending. How long do you think the government would let the Fed not buy new issues of federal debt through the “creation” of money? The government would collapse in a few weeks if they had to rely upon finding suckers to buy hundreds of billions in new debt every month. Even the Chinese have quit buying for the most part.

 

[JamesATyler]

Please explain to me the concept of a “living wage”. If we’re paying people what they need to live on rather than what their labor is worth, then why even require labor from them in exchange for the money? Is the menial job just a token of their willingness to contribute, like a penance is a token of our contrition? Even the minimum wage distorts the market by making unskilled labor cost more than it’s really worth to an employer.

The minimum wage in New York is $7.25, the same as the federal minimum wage. A full time worker at minimum wage gets $290 dollars a week. That’s $15080 per year. A “living wage” should cover the cost of living. That’s the way I understand what people mean by the term.

I disagree with the idea that unskilled labor is worth very little. I think unskilled labor should be worth a living wage. For instance, a retail store is able to operate and generate a profit but is almost entirely dependent on unskilled laborers to make this happen. In fact, they don’t have any need for skilled labor and they would not serve any purpose for the store. They need people who will run the cash registers, stock the shelves, unload the trucks, do inventories, order merchandise, process damaged merchandise, help customers find things, and clean. They need laborers that will show up reliably, work their full shift, have integrity, and possess all of the same basic qualities that all types of workers should have. Unskilled labor is the engine that keeps much of the retail industry operating. It’s the same way for many types of industries like restaurants (especially fast food). That should be worth meeting the cost of being alive. Especially if the store is asking close to 40 hours a week from you. That’s full time work and in my opinion it should be the responsibility of the company, not the government or “people”, to pay you enough that supplemental income like food stamps is not necessary when they ask for a large time commitment from their workers.

 

[JimG]

The problem is that raising the minimum wage always increases unemployment. Because who is really paying the wage? The customers are. The customers pay everyone in the business. So, if customers decline, so does the business, and unemployment increases. Or prices increase, and those who buy the products are hurt, especially the poor.

 

[Tarpeian]

In my area, 40-50k would not meet all those needs for a family of 4. Not unless that family of 4 was living in Section 8 housing. In other areas, 40-50k would be a VERY healthy salary for a family of 4.

Here’s the dichotomy, though…if, somehow, we were able to raise the salary to 70-80k a year for a family of four, we would find that prices would rise so much that we would then be complaining how 70-80k was insufficient.

That’s the problem. Evil CEO salaries aren’t the cause. Profits being distributed to evil stockholders (like union retirement funds and individual 401k accounts) are not the cause. Labor costs throughout the value chain would be the cause.

“Labor costs throughout the value chain would be the cause.”

Could you please explain that quote or give examples, when you have the time? Wouldn’t increased production, and technology bring it down if I understand “value chain”? What do you mean by value chain? Sorry for the ignorance.

I agree in part with the rest but with some distinctions. I don’t like to vilify all CEO’s or Unions without qualifier’s

Many CEO’s are greedy. I can’t say ALL because the founder of my company was the CEO par excellence. They only make money now in spite of themselves. Not to mention they have no competition, and nobody could invest the capital to try and break into the market.

Unions have been demonized by the neocons, and they never distinguish between private unions, and government unions on purpose no doubt. Government unions are subsidized by the taxpayer, and the employees get paid even if production is suboptimal. Private unions have done, and continue to serve a good purpose but the rot is the national and local level bosses.

I still don’t know where that salary would be VERY healthy. If we agree on just three numbers it does not add up. 1) 12K for rent or mortgage 2) 9600.00 for food 3) 6K for gas. For a total of 27,600.00

The problem IMHO comes back to wages." They have been down from the end of 2008, broadly flat over the past decade, and on an inflation-adjusted basis, wages peaked in 1973, fully 40 years ago. Apart from brief lapses, like in the late 1990s, wages have been falling for a generation." (Source WSJ 4/2013)

Pax,
Tarpeian

 

[JamesATyler]

The problem is that raising the minimum wage always increases unemployment. Because who is really paying the wage? The customers are. The customers pay everyone in the business. So, if customers decline, so does the business, and unemployment increases. Or prices increase, and those who buy the products are hurt, especially the poor.

There is a problem with not raising the minimum wage though. Inflation continues to rise at a steady rate. Year after year, unskilled laborers, which are necessary for our economy to function, effectively have less spending power. Although I do not have any actual numbers in front of me, some things can be reasoned. If the minimum wage is not increased, then unskilled labor will cost companies less as each year passes and inflation rises. These savings are passed on to the consumer through competition and lower prices. That is a win for every consumer of products and services which rely heavily on unskilled labor. However inflation will continue and all cost of living expenses will rise. The eligibility requirements for food stamps and other government assistance programs also rise as the years go by. If minimum wages are not increased, more and more unskilled laborers will begin to qualify for government assistance. This in effect allows companies to use the government to subsidize their workforce. Because many companies now try to higher as many part-time workers as possible to avoid paying standard benefits, this is something that is already happening. So the choice is to either raise the minimum wage or have more people qualifying for government assistance. Do you see a mistake in my reasoning?

 

[Tarpeian]

Great video.

Here’s a great book on the subject :
amazon.com/Creature-Jekyll-Island-Federal-Reserve/dp/0912986212

I can highly recommend "The Secrets of the Federal Reserve, by Eustace Mullins.

I can get the hardcover edition for 10 bucks all day if anyone is interested.

Pax,
Tarpeian

 

[markomalley]

“Labor costs throughout the value chain would be the cause.”

Could you please explain that quote or give examples, when you have the time? Wouldn’t increased production, and technology bring it down if I understand “value chain”? What do you mean by value chain? Sorry for the ignorance.

Value Chain: all the steps in processing and distribution that take a product from raw materials to finished consumer good.

I agree in part with the rest but with some distinctions. I don’t like to vilify all CEO’s or Unions without qualifier’s

Many CEO’s are greedy. I can’t say ALL because the founder of my company was the CEO par excellence. They only make money now in spite of themselves. Not to mention they have no competition, and nobody could invest the capital to try and break into the market.

In a publicly held corporation, CEOs are employees of the Board of Directors (and thus the stockholders). They are paid to produce financial results. What those results are is based upon the direction of the board (it could be to generate growth in capital value of the corporation – in other words, to increase stock prices…or it could be to generate revenue – in other words, to produce greater dividends per share, or some other financial goal)

If I was to suggest a place for you to have your concern on “greed”, I would suggest that the proper place to have that concern is with institutional investors. Mutual funds, union / government worker retirement funds, and so on. I will try to do a post on that in a bit.

Unions have been demonized by the neocons, and they never distinguish between private unions, and government unions on purpose no doubt. Government unions are subsidized by the taxpayer, and the employees get paid even if production is suboptimal. Private unions have done, and continue to serve a good purpose but the rot is the national and local level bosses.

As a sidebar: usually when I hear the word “neocon” used by left-of-center pundits as a perjorative, I see it as code language for “filthy jew.” Just as a heads up. I AM NOT SAYING THAT THIS IS YOUR INTENT…but a lot of the published commentators use it in just that fashion.

Back to the thread. In certain environments, I do not have an issue with unions in of themselves. They can play an important role to make sure that management sees the humanity of the workers they direct.

However, I do have some issues with most unions I’ve encountered.

1. Most, if not all, unions are in bed with the Democratic Party (or the equivalent in other countries).

However, the role of unions is not to “play politics” in the sense that the expression is commonly understood today. Unions do not have the character of political parties struggling for power; they should not be subjected to the decision of political parties or have too close links with them. In fact, in such a situation they easily lose contact with their specific role, which is to secure the just rights of workers within the £ramework of the common good of the whole of society; instead they become an instrument used for other purposes.

JPII, Laborem Exercens 20.5​

1. Many unions advocate positions that are directly in opposition to the teachings of the Church (particularly when it comes to abortion)

The Catholic [union] members themselves, however, should never permit the unions, whether for the sake of material interests of their members or the union cause as such, to proclaim or support teachings or to engage in activities which would conflict in any way with the directives proclaimed by the supreme teaching authority of the Church

Pius X, Singulari Quadam 10​

1. As often as not, they tend to demonize management and set up an adversarial environment, even if it isn’t warranted.

1. The great mistake made in regard to the matter now under consideration is to take up with the notion that class is naturally hostile to class, and that the wealthy and the working men are intended by nature to live in mutual conflict. So irrational and so false is this view that the direct contrary is the truth. Just as the symmetry of the human frame is the result of the suitable arrangement of the different parts of the body, so in a State is it ordained by nature that these two classes should dwell in harmony and agreement, so as to maintain the balance of the body politic.
   
   Leo XIII, Rerum Novarum​

(Don’t get me wrong, I do realize that there are really lousy managers who deserve that treatment, but it seems from my end that ALL of management is usually demonized by most unions…at least in my experience)

(continued)

 

[markomalley]

(continued from above)

I still don’t know where that salary would be VERY healthy. If we agree on just three numbers it does not add up. 1) 12K for rent or mortgage 2) 9600.00 for food 3) 6K for gas. For a total of 27,600.00

If you take a look at apartments.com, you will see that there are many places where you can get a 3BR apartment for <$750 a month. For example, Memphis, Indianapolis, Birmingham, and so on. That’s what I’m talking about. Generally speaking, your rent/mortgage should be no more than about 35% of your income. $750 * 12 = $9,000. $9,000/0.35 = $25,714. ($9,000 is 22.5% of $40K…a very modest figure for housing as these things are calculated)

The problem IMHO comes back to wages." They have been down from the end of 2008, broadly flat over the past decade, and on an inflation-adjusted basis, wages peaked in 1973, fully 40 years ago. Apart from brief lapses, like in the late 1990s, wages have been falling for a generation." (Source WSJ 4/2013)

Pax,
Tarpeian

Wages, particularly entry level wages, have not grown in the past 5 years, I agree. But this is the part that absolutely mystifies me about unions (getting back to unions). If there is a constant demand for labor and the supply shrinks, price will increase.

I remember back in the late 90s…and then again in the mid '00s…back when unemployment was below 5%…that businesses had an almost impossible task finding people to perform the “line” – entry level – jobs. At least in this area, they offered signing bonuses…they offered longevity bonuses…and wages went up.

Yet any “labor spokesman” that I’ve heard on TV, read in the news, or whatever, seem to advocate for “open borders” immigration policies. Yet that harms the people they are supposed to represent. Makes no sense to me.

“There are jobs Americans won’t do.” – I fundamentally disagree with that premise. I would rephrase it, “There are jobs Americans won’t do for that price.” An American might not be willing to pick tomatoes for $7.50 an hour. I bet you’d have no problem finding people willing to pick tomatoes for $50 an hour…but, yet, labor seems to want to import people so that the price can remain at $7.50 an hour.

What ever happened to labor leaders like Cesar Chavez in regards to understanding this basic principle:

. . . when the farm workers strike and their strike is successful, the employers go to Mexico and have unlimited, unrestricted use of illegal alien strikebreakers to break the strike. And, for over 30 years, the Immigration and Naturalization Service has looked the other way and assisted in the strikebreaking. I do not remember one single instance in 30 years where the Immigration Service has removed strikebreakers. . . .The employers use professional smugglers to recruit and transport human contraband across the Mexican border for the specific act of strikebreaking . . .

 

[Gidge]

The government controls the money supply. While the Fed prints it, it gets into circulation through massive government spending. How long do you think the government would let the Fed not buy new issues of federal debt through the “creation” of money? The government would collapse in a few weeks if they had to rely upon finding suckers to buy hundreds of billions in new debt every month. Even the Chinese have quit buying for the most part.

I disagree. The government SHOULD control the money supply as it used to prior to 1913 as detailed in the US Constitution, and they want us to think they control the money supply; The FED controls the money supply – look at all the QE, who is buying that debt ?

Remember Henry Paulson’s appeal to Congress in 2008 threatening martial law if the banks didn’t get their bailouts (TARP) – The FED runs the show and is accountable to no one – very dangerous. JFK tried to end the FED with Executive Order #11110 and began printing United States Notes (red seal), we all know what happened to him for daring to cross the powers that be.

 

[JimG]

There is a problem with not raising the minimum wage though. Inflation continues to rise at a steady rate. Year after year, unskilled laborers, which are necessary for our economy to function, effectively have less spending power. Although I do not have any actual numbers in front of me, some things can be reasoned. If the minimum wage is not increased, then unskilled labor will cost companies less as each year passes and inflation rises. These savings are passed on to the consumer through competition and lower prices. That is a win for every consumer of products and services which rely heavily on unskilled labor. However inflation will continue and all cost of living expenses will rise. The eligibility requirements for food stamps and other government assistance programs also rise as the years go by. If minimum wages are not increased, more and more unskilled laborers will begin to qualify for government assistance. This in effect allows companies to use the government to subsidize their workforce. Because many companies now try to higher as many part-time workers as possible to avoid paying standard benefits, this is something that is already happening. So the choice is to either raise the minimum wage or have more people qualifying for government assistance. Do you see a mistake in my reasoning?

Well, your assumption is that all citizens will have their monetary needs taken care of either through receiving a minimum wage / living wage, or by receiving government assistance. If that is the case, there is of course, little incentive to work at all, and labor markets will always be distorted.

Normally the incentive to work arises from the need to work in order to provide for oneself and one’s family. If that incentive is removed, many will work in order to better their situations. But if simply getting by is the goal, many will not.

Any minimum wage of necessity creates a certain percentage of unemployment, by taking a certain number of workers out of the labor pool who might otherwise have obtained entry level jobs that gained them entry into the workforce.

I think of migrant farm laborers. Many object to their being paid low wages. On the other hand, if they came from someplace where wages were even lower, or where there were no jobs available, they may view their status as an improvement. One might pass a minimum wage bill sufficient to attract local labor rather than migrant labor. But then produce prices would skyrocket, or farming operations would move to Mexico.

I think that simply price fixing by governmental action does not solve anything. Rather it feeds inflation.

In fact, governmental action has pretty much established the expectation that there MUST be inflation as a fixed part of life. Our dollars must become worth less with each passing year. (In fact, that is Fed policy.) I don’t see why that must be taken as a necessity. I would much rather see the goal be a stable currency and zero inflation. No one would get a cost of living increase just for staying alive while the dollar lost value.

I think that a free market and a stable currency would help more than a minimum wage and a guaranteed income.

When it comes down to it, no government can really guarantee income if it can’t guarantee a stable currency, and can’t guarantee that it won’t go bankrupt itself.

 

[SamH]

Remember Henry Paulson’s appeal to Congress in 2008 threatening martial law if the banks didn’t get their bailouts (TARP) – The FED runs the show and is accountable to no one – very dangerous. JFK tried to end the FED with Executive Order #11110 and began printing United States Notes (red seal), we all know what happened to him for daring to cross the powers that be.

You might need to explain that one, how would Henry Poulson declare martial law?

 

[Gidge]

You might need to explain that one, how would Henry Poulson declare martial law?

Sorry I was not clear, here’s the run down on what happened : On October 2, 2008 Democratic Congressman Brad Sherman gave a stunning speech on the House floor during which he decried the fact that, “Many of us were told in private conversations that if we voted against this bill on Monday that the sky would fall, the market would drop two or three thousand points the first day, another couple of thousand the second day, and a few members were even told that there would be martial law in America if we voted no.”

A few days before, Rep. Michael Burgess also told the House, “Mr. Speaker I understand we are under Martial Law as declared by the speaker last night,” referring to a temporary suspension of the rules and procedures of Congress by its leaders so that a bill can be passed quickly.

Here’s the video from C-SPAN :

youtube.com/watch?feature=player_embedded&v=gnbNm6hoBXc

 

[SamH]

Sorry I was not clear, here’s the run down on what happened : On October 2, 2008 Democratic Congressman Brad Sherman gave a stunning speech on the House floor during which he decried the fact that, “Many of us were told in private conversations that if we voted against this bill on Monday that the sky would fall, the market would drop two or three thousand points the first day, another couple of thousand the second day, and a few members were even told that there would be martial law in America if we voted no.”

A few days before, Rep. Michael Burgess also told the House, “Mr. Speaker I understand we are under Martial Law as declared by the speaker last night,” referring to a temporary suspension of the rules and procedures of Congress by its leaders so that a bill can be passed quickly.

Here’s the video from C-SPAN :

youtube.com/watch?feature=player_embedded&v=gnbNm6hoBXc

I remember that, and the House voted against the bill earlier and NOTHING happened. Then a couple days later they went wobbly and voted for TARP. TARP then went on to be a slush fund that went to fund all kinds of things other than what it was intended for. All they had to do was vote against it again.

 

[Tarpeian]

Value Chain: all the steps in processing and distribution that take a product from raw materials to finished consumer good.

In a publicly held corporation, CEOs are employees of the Board of Directors (and thus the stockholders). They are paid to produce financial results. What those results are is based upon the direction of the board (it could be to generate growth in capital value of the corporation – in other words, to increase stock prices…or it could be to generate revenue – in other words, to produce greater dividends per share, or some other financial goal)

If I was to suggest a place for you to have your concern on “greed”, I would suggest that the proper place to have that concern is with institutional investors. Mutual funds, union / government worker retirement funds, and so on. I will try to do a post on that in a bit.

As a sidebar: usually when I hear the word “neocon” used by left-of-center pundits as a perjorative, I see it as code language for “filthy jew.” Just as a heads up. I AM NOT SAYING THAT THIS IS YOUR INTENT…but a lot of the published commentators use it in just that fashion.

Back to the thread. In certain environments, I do not have an issue with unions in of themselves. They can play an important role to make sure that management sees the humanity of the workers they direct.

However, I do have some issues with most unions I’ve encountered.

1. Most, if not all, unions are in bed with the Democratic Party (or the equivalent in other countries).

However, the role of unions is not to “play politics” in the sense that the expression is commonly understood today. Unions do not have the character of political parties struggling for power; they should not be subjected to the decision of political parties or have too close links with them. In fact, in such a situation they easily lose contact with their specific role, which is to secure the just rights of workers within the £ramework of the common good of the whole of society; instead they become an instrument used for other purposes.

JPII, Laborem Exercens 20.5​

1. Many unions advocate positions that are directly in opposition to the teachings of the Church (particularly when it comes to abortion)

The Catholic [union] members themselves, however, should never permit the unions, whether for the sake of material interests of their members or the union cause as such, to proclaim or support teachings or to engage in activities which would conflict in any way with the directives proclaimed by the supreme teaching authority of the Church

Pius X, Singulari Quadam 10​

1. As often as not, they tend to demonize management and set up an adversarial environment, even if it isn’t warranted.

1. The great mistake made in regard to the matter now under consideration is to take up with the notion that class is naturally hostile to class, and that the wealthy and the working men are intended by nature to live in mutual conflict. So irrational and so false is this view that the direct contrary is the truth. Just as the symmetry of the human frame is the result of the suitable arrangement of the different parts of the body, so in a State is it ordained by nature that these two classes should dwell in harmony and agreement, so as to maintain the balance of the body politic.
   
   Leo XIII, Rerum Novarum​

(Don’t get me wrong, I do realize that there are really lousy managers who deserve that treatment, but it seems from my end that ALL of management is usually demonized by most unions…at least in my experience)

(continued)

Hello Mark,

I don’t regard all CEO’s as intrinsically evil purely because they are wealthy. That is what the Marxists want you to believe. Our Lord teaches. “And again I say to you: It is easier for a camel to pass through the eye of a needle, than for a rich man to enter into the kingdom of heaven. And when they had heard this, the disciples wondered very much, saying: Who then can be saved? And Jesus beholding, said to them: With men this is impossible: but with God all things are possible.” Matthew 19: 24-27 He is saying that it is EXTREMELY difficult for wealthy people to maintain DETACHMENT from their wealth, and the richer people become, the more attached they tend to be to their wealth.

It has been three years since Congress ordered public companies to reveal actual CEO-to-worker pay ratios under the Dodd-Frank law, (by the way Dodd-Frank is a joke) the numbers remain unknown. Why the delay, why the reluctance? Why don’t corporate executives want us to know their compensation packages? Is it a matter of privacy? In 1998 my employer decided to publish my wages, vacation, pension, and health and welfare package to the world. My privacy was not a factor. It was done because the company was losing a public relations war in the press, over a labor dispute. In a last ditch attempt, out of desperation to paint labor as a bunch of overpaid, ungrateful, prima donnas, and to demonstrate how “generous” the company was to its already “over compensated workers,” compared to the average peasant. The fact that corporate executives don’t want to disclose their numbers speaks volumes.

Continued: