The Economy

Undoubtedly restaurants that are already under pressure have been placed under even more of it, but that's only because they've been allowed to skate on low wages for more than a decade now.

 

Right now the reports out of California are anecdotical. It will be interesting to see what the comprehensive reports say. In 1992 New Jersey raised their minimum wage from $4,25 to $5,05 while Pennsylvania did not. A couple of economists surveyed 410 fast food restaurants on both sides of the the state line about employment changes after the New Jersey law changed, The could find no evidence that fast food employees in New Jersey lost jobs when compared to the employees in the Pennsylvania restaurants, despite the New Jersey employees receiving substantial salary increases.

My guess is that fast food employment will not change that much. I do think the number of establishments will decline and the small businessmen who own them will be hurt. But as marginal restaurants close customers will transfer their business to the remaining establishments and hire the displaced employees.

 

I don’t think it is that clean a 1-to-1 replacement because of how much more automation restaurants are using.

 

"Small businessmen"

You must have $2-4 million personal worth to get a McDonalds franchise. And if you're too successful, the parent will take back the restaurant.

 

McDonald's franchisee's will make be able to cover the higher wages. The average McDonald's grosses about $3,000,000. But the owners of places like Subway, with average sales of about $500,000, will really struggle.

 

This is true? What's the reasoning/explanation for that?

 

Again, I don't eat out that much, so I'm not the one to judge. I think the last time I went through a drive thru and ordered any kind of combo might have been October. It was $11. Nope. Not this boy.

 

I’m finding myself eating Subway a lot more than McDonald’s in the last few years. Not only because it’s healthier, but also economic-wise. I can get a foot-long sub, a drink and four chocolate chip cookies for roughly the same price as a double-cheeseburger, medium fries and a drink.

And except for the drink, I’ll eat the six-inch half of the sub and two of the cookies and have the other half and two cookies for a second meal. Can’t really do that with the McDonald’s meal, and the fries suck if you microwave them.
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A few years ago, we were driving to the beach and taking a rural route through Mississippi. We rounded one corner and came upon a Subway in the middle of nowhere. I'm talking miles and miles of row crops in either direction. We couldn't figure out why somebody would pay the franchise fees to put one out there - even if every farm hand in a 10-mile radius ate there every day, there was no way it could be profitable.

 

Hard to believe this thread turning into a nauseating fast food review.

Hard to believe.