Here's what fast food will cost with $17 an hour wages

My wife is a manager at a local McDonald's. Her maid of honor is a manager, too. My younger cousin was in a national McDonald's commercial and has one of the Golden Hats (that like 1 percent of management can earn).

All three make way more than I do (and I've been at the same paper since 2000) and I'm 34.

When I ask them about the minimum-wage increase for McD's though, they all three said it would have a huge impact.

At my wife's store - located inside a 24-hour Pilot truck stop right off Interstate 65 - they employee over 100 people. I'm not sure my daily paper is that big now (not including temp drivers).

Any lunch or dinner shift, and most breakfast shifts, have 25 people scheduled to work. Not all do, because you'll have call-ins, no-shows, illnesses, doctor's appointments. Also like three people on break at any given time. Sometimes as many as 16 people in just the grill area itself (two open-sided grills, four people on each side of each grill). Plus the four order takers, two window people, runners (bringing food to window or counter or the "parked" cars outside), etc.

So their labor-per-hour cost will go through the roof compared to where it is now with as many people as it is now. My wife said except for late night or pre-breakfast rush, there's usually at least 12 on staff, but the average is more than 15 per hour per day (because of the bumped-up staff for breakfast, lunch and dinner rushes).

The article said the combo is an extra $1.70. Local McD's people have already talked about it going to $1.99 for a combo or $2.49 (you might think that's crazy, but around these parts, McD's is the only place you can still get any size fountain drink, in styrofoam or plastic, for just a buck plus tax. Dairy Queen is over $2. So is Steak n' Shake. Wendy's and BK are in the high $1s, low $2).

Other changes being talked about include
- dropping 24 hours (6 a.m.-10 p.m. seems likely)
- upping drink prices (most every other fast-food joint already has)
- changing napkins (going to cheap as possible, even if that means brown paper over white when white is considered the norm)
- closing the double-drive thru lanes and one drive-thru window (which means you only need one person to take order, get payment, hand out food ... BUT wait times will now be drastically slower)
- Vacation days, sick days, insurance could be dropped to bare minimum
- no longer giving drink cup choices (styrofoam or plastic). Believe it or not, some people prefer one over the other. McD's would likely go with what is just plain cheaper (and easier on inventory)
- Not go crazy with condiments at drive thru (you get one straw, one napkin per drink, one per sandwich, one per fry, one per dessert ... no more just grabbing handfuls of napkins and salt and ketchup because it's fast and easy)
- No more self-serve drinks (want a refill? Go to front counter and wait)
- No more ketchup pumps, no more napkin pullers, no more salt packet holders (have to get all of those at front counter too)
- Trays could be gone. Everything in paper bags. Would no longer have to worry about washing them or replacing them. Would no longer have to have customers get mad about "I said that was for HERE."

And all of this is at the local level. No telling what changes the corporate strategists have in play.

The study may have sounded plausible at first, but it's way off. Not to mention, how much of a raise do those currently in management get (my wife is under $17 per hour and she's been a manager for at least six years)? If it's about getting "mimimum wage + X" as a manager, that changes payment. Some managers get double what minimum wage get (because of their status, experience, importance, whatever). You really think McD's can start paying managers $30 (probably more) per hour?

As someone in the comments part of the article said, the article didn't take account into rising cost of goods delivered (because they would have to pay their employees more, too. Cost of buns, milk, ice cream, veggies, meat, condiments, drinks, paper all likely to go up ... yet McD's is just supposed to absorb all that and not change food cost at all? OK. Sure.

 

McDonaldsageddon,

 

McDonald's will be able to handle it better than most small newspapers.

 

So if Starbucks has to pay baristas $17/hour, does that mean a cup of coffee will be $5?

Oh, wait...

 

Your $2,000 an hour is $80,000 a week, not $80,000 a year. Maybe you could hire a tutor.

 

Maybe that's why he later said workers would be limited to one week a year.

 

Maybe I should hire a tutor.

 

In recent years, their profit margin seems to have swung between a robust 15% to an even more robust 20%. Maybe paying their employees a wage that doesn't qualify them for public assistance will cut into this a little but oh well. C'est le vie.

McDonald's Profit Margin (Quarterly) (MCD)

 

I do see the distinction but I don't see it making much difference. It's the low wages that prop up the entire system.

Independent owners can raise their prices but that'll start a death spiral. Customers go elsewhere, owners raise prices more and cut service, more customers flee. Better, in the medium term, for corporate to ease up on the franchise fees a bit. That'll make buying into a restaurant more attractive and it'll at least help with the low-rent image that's been plaguing the business for the past few years.

 

Again, I'll ask: Why all this for some fry cooks who make $15 per hour? Does it really chap your ass that much?

Because, in the annals of "blown deals" in the American economy, somebody getting a little too much money for working there - which means they might have to work somewhere else one day - seems rather small.

In capitalism, there are always losers. Always. Always. Someone will lose. A job. A wage. Some money on a stock. Someone. Something.

So here's a few people gaining a little in the short term. Will it last? Probably not. But it may not have anyway - it's not easy to work in a fast-food restaurant for however many years - and, in the interim, maybe some person saves a little for their kid's college, or for a vacation, or for a money-management course. Maybe somebody buys stock. Maybe someone pays off a collection, which helps their credit rating, which helps get them a loan, which becomes a small business.

Some people will lose from $15 per hour wages. And some people will win. Maybe some people who don't usually win. Is that a crime?

And if all of the fast food world goes to automated system out of sheer sore-ass syndrome, well, it wouldn't be the first company that did. And a whole bunch of companies did it for no particular reason at all.

 

Alma's right in many respects regarding there always being winners and losers in business. It's just the nature of the beast. But, it is the sheer size of companies like McDonalds or, in my case, Walmart, that will cause so much impact, over both the short and long term, when it comes to a significant, across-the-board increase in the minimum wage.

As I posted on another thread regarding a CEO who decided everybody in his company would start at $70,000 a year, somebody has to pay for that initial substantial bump up in pay to new hires or people who were below the newly determined required minimum. In the case of that company, the CEO offered to dip into his high/exorbitant salary to do it.

I can assure you that is unlikely to happen at McDonalds or Walmart, or most other businesses, which are operated by money-conscious bean-counters and shareholders, not benevolent executives.

So, who is paying for it in our case? Essentially, the employees who are already there and making more than the new minimum, whether by just a little bit, or a lot because they've been there a long time. They get nothing because it's not required under the law, and now, their hours are being cut.

Voila, the new, improved starting pay is covered, at no, or certainly much less, expense to the company.

Additionally, the pay structure is being changed and the annual raise system is being revised, going from pretty substantial flat-rate increases based on performance ratings, to standard, small-percentage increases, also based on ratings, but so small as to be comparatively insignificant to in the past.

In general, people coming in are happier, and people who have been there a while are less so. But basically, it's the current employees who are paying for these changes. Thinking of it all on the world-wide scale of companies like McDonalds or Walmart is what gives a better, more real sense of the costs of these increases.