Thursday, April 16, 2015

$15.00 an hour will not make you happy

There is a mini-movement afoot across the U.S. pushing for an almost doubling of the federally mandated minimum wage of $8.25/hour for full time employees.

This movement is primarily focused on the fast food industry, namely McDonald's.  These low skilled disgruntled workers main gripe is that they can't pay their bills on $8.25 per hour.  How can they possibly maintain their 55' luxury yacht payments, pay their beach front condo mortgages in St. Thomas and service the loans on their  Maseratis?  

These were of course rhetorical questions, easily answered by anyone:  they can't.  Anyone currently working for minimum wage just doesn't have the skills in the workplace demanded by employers, they flat out don't.  They are not able to provide any employer any value beyond flipping a burger, or mopping a floor.  These skills are easily obtained with 15 minutes of training, and can be mastered by the most simple minded among the population.

But earning more than a minimum wage requires more than the ability to swing a mop or handle a spatula.  Do these morons know that McDonald's turnover in employees per year is around 480%, and that level is acceptable to the McDonald's front office as a cost of doing business?  That means that a single station behind the counter that only flips burgers has 4.8 different low skilled workers per year on average handling that single spatula.  Or, for those who are really obtuse and feeble minded (typical incumbents of this position, frankly), this means that the average tenure of a burger flipper at McDonalds is something around less than 3 months before they move on to bigger and better things, or are terminated, or die.  

Their skills don't earn McDonalds any more than $8.25 per hour, and if they did, they would receive it.  Simple supply and demand.  If your work exceeds the value of what your employer is paying you, they will recognize such, and reward you accordingly so that you will continue earning them money.  

But that's not what these stupid burger flippers and mop swingers think.  They think that the franchise owners or McDonalds corporate folk have bags of money just sitting around in hallways doing nothing. And these same stupid burger flippers and mop swingers think that they should be allowed to dip into those bags of money, because that would only be fair. And once they get this arbitrary figure of $15/hour, they will be happy.

This is completely not the case.  They will not be happy, and here's why:

A McDonald's franchise and corporate margins are not all that much above 6% of  the total cost of operating a restaurant, maybe 8%, tops.  That is not a huge margin, and forcing labor rates arbitrarily to $15.00 an hour will likely drag those margins underwater at most locations.  No McDonalds can consistently turn a profit at those kind of labor rates given to completely unskilled doofs. 

All of this hooplah displayed by unskilled rabble waving signs and chanting stupid slogans will not result in any desirable outcome.  If the hooligans are successful in swaying some to jack up the minimum wage at these facilities, then that money has to come from somewhere.  And that usually comes at the expense of labor costs: the franchise owners or the corporate office will find a way to operate using less labor: you know, less burger flippers.  An automated burger machine costs much less in the long run than a retarded, unmotivated human doing the same job.  

In the long run, there will simply be less burger flipping jobs.  

This is always they way it goes.  Duh.  But there is no convincing the dummies out in front of McDonald's waving signs.  They want more.  

Don't we all?  But this is not the way to get more.  Getting more requires an employee providing more value to the employer, though hard work, education, improved skills, loyalty and hustle.  

This stupidity isn't going to accomplish anything.


10 comments:

LL said...

Minimum wage jobs were never thought of as "career moves", however in the Age of Obama where equal opportunity is being equated with equal outcome, the socialist meme is taking hold.

The rising generation wants at age 18 what it took their parents 40 years of hard work to achieve, and the government wants to use their brand of income distribution (bread and circus) to deliver it...in exchange for a vote.

We all want money for nothing and chicks for free, but raising the minimum wage to $15/hour will fuel inflation and as you point out, it will spur automation and will end up eliminating many starter jobs such that the company will pay the same overhead amount for fewer people. Or they will go out of business and then there will be no jobs -- but never fear, the workers can simply get their $15/hour from welfare and food stamps as they swing in the safety net.

Woodsterman (Odie) said...

I hear in Seattle restaurants are closing in large numbers because of their new minimum wage law of $15.00 and hour.

Gorges Smythe said...

For the most part, I agree with you, yet some European McD's pay nearly triple what they do here and still make a good profit. SOME greed is a good motivator, but I think that American owners are entirely TOO greedy.

Kid said...

You probably know that many union workers wages are tied to/based on the minimum wage +.
That's what this is really about imo.
As far as the little pissants, it seems they go from one absurd attack to the next and accomplish nothing but anger people who have brains doing themselves no favors in the process. This whole thing is easily solved. If you don't want to work for minimum wage go get a skill and a real job.
The idea that the idiots can't figure out that increases in payroll amount to increases in product prices, reduction of demand, and therefore reductions in work force, well, they must all be recent college grads.

At least when the hippies were protesting stuff in the 60's it was serious stuff like war and death.

Fredd said...

LL: who could be against money for nothin' and your chicks for free? Well, certainly not the recipient.

Now, who ever has to provide that money and those free chicks, they will likely have a beef with all of that nonsense.

And providing $15/hour to a stupid retard to flip burgers, only the government can make that happen. And of course, when the government does that, things go to shit.

Fredd said...

Gorges:

I lived in Europe for 6 years, and I loved eating at those German Mickey Dees, it was a slice of home for me.

And when those franchise owners pay those Deutsch burger flippers $24/hour, and still make a good profit, there is a reason for this: my quarter pounder with cheese was almost $10 bucks! And an order of fries was $4 bucks! Of course, I had to have a beer with my quarter pounder, nice touch over in Germany, that was another $7 bucks.

And I paid $21 for lunch, AT MCDONALDS! In 1984, to boot. Of course this was all in Deutschmarks, before the Euro, but still, it was pricey for all of that socialism.

Of course, I ate there at least once a month over those 6 years.

Fredd said...

Odie:

I could have told those stupid Seattle politicians that would happen, but they still don't believe that the reason those franchises are closing is because they went broke. These Seattle hippies posing as politicians think those restaurants closed simply out of pure mean spiritedness of the horrible owners.

Heaven forbid that thier socialist policies are flawed, that can never be the reason for failure.

Fredd said...

Kid: those hippies also wanted money for nothin' and your chicks for free. That, and they didn't like war and death, either.

deborah harvey said...

Heard one of the protesters say she lives with grandparents and the McD money couldn't get her an apartment and support her and her daughter.
I didn't know that an employer was supposed to provide a job AND a lifestyle, too.
Where is her child's father [if she knows who he is]?
Why does she think McD's is responsible for her and her child's everything? Where do these ideas come from?
DJH

Fredd said...

Deborah Harvey:

The main jist of that Mickey Dee's employee living with her gammie and gampie that I took away is that she was living with gammie and gampie.

With her grandparents subsidizing her miscreant lifestyle (no education, no husband, child out of wedlock, no future, no brains), she can continue on in her current situation indefinitely, until her gammie and gampie croak.

Then all bets are off. You ask where she gets these ideas, that McDonalds owes her big time, that one's easy: from liberal politicians, starting with Barry Obama at the top.