Corporate bonuses are tied to revenue expectations. A shareholder may vote either way on a pay raise for the big girls and boys at the top of the ladder.

 

Shortbus,

Start your own Corp and give yourself all the raises you want. Train your people so you become the least valuable to the operation and then work your 1 hour or so a week.

 

Shortbus,

Start your own Corp and give yourself all the raises you want. Train your people so you become the least valuable to the operation and then work your 1 hour or so a week.

Okay? what am I dong wrong?

I started my own business myself, I pay myself $1 million an hour and I am by far the most useless of my own employees and no matter what I do I am always one hour short of ever being able to cash a single paycheck even if it's just for one hour of work. Heck, I can't even swing cashing a 1-minute paycheck for myself either.

 

Is the business actually lost? Or is it merely displaced? A minimum wage law update would affect all participants equally, thereby disincentivizing displacement. Innovative companies may shift the displacement in their favor, but it is the consumer who will have the final vote.

Yup. average consumer has to decide if he keeps eating a combo#1 at McDonalds at $5.50 vs the new price of $6 or his likely alternative of making his own sandwich from $1.25 worth of ingredients in the morning and carries it to work. Over a full year of work, 250 days, that makes $125.00 difference if he eats fast food every day. How many consumers are going to get out of bed 5 minutes earlier to pack their own lunch? Oh, and they have to make sure they have cold cuts and bread the night before - I don't think mcdonald's will notice a drop in customers. And, I think it is the perfect opportunity to raise prices $0.50/meal while the higher per-meal costs increases due to higher minimum wage will not be close to $0.50/meal - bonus time for the CEO!

 

@tcmtech

What is your shop hourly rate?

how do your prices compare to your competition?

Have you attended the small business workshop?

How did you compute COGS?

How much inventory do you have on hand?

What was your expected rate of return on your investment?

What was your investment?

Did you write your business plan?

Did you follow your business plan?

What succeeded and what failed in your plan?

What are the demographics in your service area?

The list goes on and on.

Have you been to SCORE ... to consult with some retired executives.

For instance, if you lived in a 1600 square mile county with 3000 residents, assume a family of 3 or 1000 households, how many times do you expect that area requires your services on an annual basis? How many service calls would you expect if only 50 percent of the households use your company?

What is the price break to determine to pay you or buy new?

 

I don't think mcdonald's will notice a drop in customers. And, I think it is the perfect opportunity to raise prices $0.50/meal while the higher minimum wage will not be close to $0.50/meal - bonus time for the CEO!

The problem is you have five employees on the shift that has the increased minimum wage. You have peak two hours where productivity is close to 100 percent followed by three hours of 25 percent productivity, followed by three hours of 50 percent productivity. Minimum wage increased to 15 per hour or an increase of $7.50. Along with that increase you have increased costs of social security and medicare for each employee. Assume 15% for both SSA and medicare for each employee. Assume a peak sales of 10 meals per minute.

The question becomes, is the 50 cent increase enough.

It represents a 14 percent decrease in the vendors profit of that scenario. McDonalds corporation may have big profits, but, the franchise owners are operating on a 2 percent margin.

Changing the percentages in the off peak to a lower number can put that meager 2 percent ROI in jeopardy.

In my scenario, I assumed zero loss in customers.

 

An article in Forbes says a single McDonalds store averages 2.4M and has 150k of profit after all is said and done. The article goes on to day that a pay increase to $15/hr will wipe out 100% of profits, $150k.

Although the article rules out price increases, an across-the-board price increase at all competitors makes a price increase feasible and, with many customers getting raises in their minimum wage, feasible.

Now, a 10% price increase on $2.4M sales to an otherwise break-even business means sales become $2.64M with all of that price increase becoming bottom line profit. $240k. Oh, a 60% increase in profitability! Bonus to the CEO, even though a former CEO says it's not a good idea.

http://www.forbes.com/sites/realspin/2016/04/25/mcdonalds-minimum-wage-reality/#b9d4de158bb8

 

Although the article rules out price increases, an across-the-board price increase at all competitors makes a price increase feasible and, with many customers getting raises in their minimum wage, feasible.

Very true. The article goes on to say the entry level jobs will be a thing of the past. McDs also said replacing one in four employees with a kiosk or data terminal where the customer can do their own ordering, can mean a million more people out of work if the whole fast food industry goes that route.

Even the banks today have the self service kiosks. I had asked at my bank if they displaced any employees. The manager said the customer base was growing so none were lost. A nearby bank was closed ... two robberies in three years was probably enough for the bank.

 

Very true. The article goes on to say the entry level jobs will be a thing of the past. McDs also said replacing one in four employees with a kiosk or data terminal where the customer can do their own ordering, can mean a million more people out of work if the whole fast food industry goes that route.

Even the banks today have the self service kiosks. I had asked at my bank if they displaced any employees. The manager said the customer base was growing so none were lost. A nearby bank was closed ... two robberies in three years was probably enough for the bank.

The kiosks are coming to all industries. In out area, Sheets convenience/gas stores have developed a massive fast food market share with kiosks. I cannot figure out why mcDonalds has waited so long. It works great at Sheets and the biggest disappointment I have at Fast food places is interfacing with the minimum wage labor willing to work fast food. The better kids are working for minimum wage (or near minimum wage) at sit-down restaurants and other retail.

It will be a Million kids out of work. However, McDonalds still gets away with scheduling short-shifts, having kids come in to cover only the rush hour 4:30 to 7:00. They are often sent home after only 90 minutes. If you figure that they drive 3 to 5 miles each way (6 to 10 miles round trip) to earn $7.25 x 1.5 hours = $10.85, then cover their driving costs (IRS claims to be about $0.50/mile fully loaded) then transportation alone is $3 to $5 each shift. Add the time, supplies and utilities to wash their own uniform before the shift and I would say the employee is better off not going to work for that shift.

A kiosk may be better for the environment and no net loss for anyone other than a resume line item.

I worked for McDonalds as a high schooller. I "needed" a car so I could go to work. I needed to work so I could pay for my car. Viscous loop, all for access to a 1974 Pinto. I would have saved time by taking the bus to visit friends and skip work.

 

@tcmtech

What is your shop hourly rate?
You mean I should charge for stuff I do?

how do your prices compare to your competition?
I don't know. I never hire them because they're the competition.

Have you attended the small business workshop?
Yes but they tossed me out when I ate all the cookies and fell asleep in the corner.

How did you compute COGS?
With Geometry and a rotary indexing table.

How much inventory do you have on hand?
Too much or not enough. Depends on what's going on.

What was your expected rate of return on your investment?
Little to none. Expectations lead to disappointment.

What was your investment?
Do what now?

Did you write your business plan?
Yes. In crayon while I was drunk.

Did you follow your business plan?
No. It was written in crayon by some drunk guy.

What succeeded and what failed in your plan?
Reasons to buy crayons as an adult. Everything else sort of went downhill from there.

What are the demographics in your service area?
I tend to vote independent.

The list goes on and on.
That's what they all say yet never actually go on. Leaves me with lots of unanswered questions.

Have you been to SCORE ... to consult with some retired executives.
No. I can't play golf worth a sh!t.

For instance, if you lived in a 1600 square mile county with 3000 residents, assume a family of 3 or 1000 households, how many times do you expect that area requires your services on an annual basis? How many service calls would you expect if only 50 percent of the households use your company?
I don't know. I never answer the phone if it's a number I don't recognize.

What is the price break to determine to pay you or buy new?
How do you put a price on desperation and last resorts?

 

@tcmtech

You might want to consult with the one professional who knows the range of values for their services and the minimum value of their service.

You will find that, just like Walmart to Tiffany's, value varies. Who are they? They are members of the reputed "oldest profession."

 

You will find that, just like Walmart to Tiffany's, value varies. Who are they? They are members of the reputed "oldest profession."

Hunter-Gatherers?

 

Hunter-Gatherers?

Close.

 

Hunter-Gatherers?

More like stress-relief therapists for the Hunters.

 

Sports show and magazine crews and sales people pandering their overpriced gear to gullible idiots who love guns?

If that's who I need to talk to , screw that. I will continue blindly guessing at things on my own thank you.

 

screw that.

getting closer ....


Just visit the street corner in a major city or stop by the ranch in Nevada ...

 

The fight for higher wages is an integral part of capitalism. So what I say to a person who got a job as a street sweeper earning $50 per hour is "Congratulations!"

 

If the minimum wage was a livable wage, there would be less people dependent on big government.

 

Such discussions of kiosks and alternative technologies have nothing to do with laws regarding minimum wages. Minimum wage laws are a violation of the US Constitution and of international laws governing human rights.

There should be no minimum wage.

John

Please quote the paragraph in the US Constitution that declares minimum wage unconstitutional.

 

The minimum wage would have prevented me from getting my first job, if it had applied to my employer. I scooped ice cream at a Baskin Robbins. My first wage was 55¢/hour. Minimum wage at the time was $2.10. I forget the exact rule that exempted ice cream scoopers, but I know I would have never been hired if my wage had to be so much higher.

Some useful reading on the topic.

Milton Friedman responds to President Obama's proposal to raise the minimum wage, the most 'anti-black law in the land' - AEI

Renegotiating the numerous international trade treaties and protecting US businesses from the effects of cheap labor overseas would allow the minimum wage to increase without destroying jobs.
Minimum Wage's Discriminatory Effects

More recent research: The Minimum Wage and the Great Recession: Evidence of Effects on the Employment and Income Trajectories of Low-Skilled Workers