Can Walmart and McDonald’s Afford a $15 Minimum Wage?

[Origanalist]

You have to put some blame on the employers for hiring adults for jobs that are supposed to be for teens. I used to hire a lot of minimum and low wage employees for my businesses. If someone of adult age old applied for a job scooping ice cream for minimum wage, that would be a HUGE red flag.

It's getting a lot harder to hire teens. Entitlement mentality gone wild.

 

[HOLLYWOOD]

 

[CaptLouAlbano]

It's getting a lot harder to hire teens. Entitlement mentality gone wild.

Maybe so, but it is still a huge mistake to hire a 30 year old guy to work full time for minimum wage. If someone is that age, and hasn't obtained the skills in life to rise above the minimum wage job, I wouldn't want him as an employee. I'd much rather have a high school or college kid with some intelligence and drive working for me.

 

[Origanalist]

Maybe so, but it is still a huge mistake to hire a 30 year old guy to work full time for minimum wage. If someone is that age, and hasn't obtained the skills in life to rise above the minimum wage job, I wouldn't want him as an employee. I'd much rather have a high school or college kid with some intelligence and drive working for me.

Of course.

 

[Lindsey]

No one seems to factor in that small and mid-size employers employ somewhere around 2/3 of employees. Can they afford $15/hr for their low-skill workers? Or can they do business with ~40% less of their low-skill workers, or will this force them to change their business model or even go out of business causing all of their employees to be unemployed?

 

[Paulbot99]

Just have everyone make a hundred dollars an hour in every job. There is no way that won't go wrong!

 

[ctiger2]

I think they can. What I'd do is replace as many workers with computers and/or robots. Just have the customers order/pay off a screen. Then you just eliminate 80% of the workforce and increase the pay on those who are left. Oh wait... http://www.slate.com/blogs/future_t...li_s_race_to_eliminate_human_interaction.html

 

[PaulConventionWV]

$15 no.

Slight raise in prices, small reduction in profit and give them $10 or 11 might be workable.

No, that's ridiculous. If they're going to get a raise, it should be 50 cents at best.

 

[DamianTV]

No one seems to factor in that small and mid-size employers employ somewhere around 2/3 of employees. Can they afford $15/hr for their low-skill workers? Or can they do business with ~40% less of their low-skill workers, or will this force them to change their business model or even go out of business causing all of their employees to be unemployed?

No one wants to shoulder the Financial Burden of paying their employees more than they have to. Many times, they cant.

What does happen constantly is to Shift that Financial Burden to someone else. The small and mid size employers will have no choice but to raise their prices. A Financial Burden that is shifted to the shoulders of the Consumers. (I hate that word too). Alternatively, they could go under and close their business, cut back on either the total number of employees, or emplyee hours. Those alternatives shift the Financial Burden of the increase in cost to the Govt by way of Welfare, Food Stamps and other forms of Financial Assistance.

The trick here is that YOU and I are paying for these people to not be given a livable wage, either by paying more for products and services or by an Increase in Taxes. And Inflation is a Hidden Tax on the VALUE of everyones money.

Do they need more? Yes. Do we also need to retain what we have? Yes. For one of us to get what we need, one of us must lose. And thre in lies our dilema with the Minimum Wage cunundrum. If our Economy continues to decline at this pace, we will end up seeing Price Freezes AND an increase in the Minimum Wage, and that is not a good solution because it further perpetuates Govt dependancy (Inflation) and creates more incentive for new businesses to rise up anywhere BUT the United States.

 

[anaconda]

Of course they can.

They probably can, but microeconomics 1A tells us they will only hire labor units until the worker's marginal revenue product equals the wage. So McDonald's will reduce both their staff and their burger output, and the price of their product will rise for consumers. In a nutshell, increased unemployment and higher prices.

 

[RickyJ]

If 75% of the workers at both companies make $8 and the number rose to $15, Walmart's expense increase would be $18 billion a year. McDonald's would be $4.5 billion. In the case of McDonald's, profits would be cut in half. Walmart's profit would be cut by 80%.

This is interesting that McDonald's profits would only be cut in half by paying $15 an hour. By offering a $15 an hour starting salary I think they could get double the amount of work done from half the people so their profits would remain the same. This would mean that the slower workers would lose their job though.

 

[RickyJ]

Of course they can.

I seriously hope they choose not to though.

I'd like to see 'em both voluntarily shut down for 90 days, just shut the doors and send everyone home. Call it a "paid training seminar" and give every employee $10.00 a week to log in to the company website for training...That way they'd not be liable to foot unemployment during the 90 days.

Why would a company making the profits McDonald's does on a daily basis shut down for even 1 day much less 90? They are making a good profit, they won't shut down just to "discipline" workers, that would be crazy!

 

[RickyJ]

http://finance.yahoo.com/news/walmart-mcdonald-afford-15-minimum-111559234.html


Comment from site:

Richard 2 hours ago 1 41
Something that none of these types of articles seem to deal with is these jobs in retail and fast food and low skill/unskilled entry level jobs. So if these workers get $15 an hour, what does that do to the workers that now make $15 an hour doing skilled work that is not an entry level job, like carpenters, electricians etc? They will want a raise above what is a low skill entry level job rate. And then the workers that are in that wage level that the skilled low wage workers moved up to will want a raise too. And it keeps going up the ladder

Yeah, it would move up the ladder all the way to the CEO which then must receive a hefty raise to keep his/her salary 3000 times over the average pay for employees of his/her company.

 

[Carson]

I'm certain there is room to treat the people doing the work fairly.

I'm suffering under the basic premise that the people putting up the money for a business and the people doing the labor should split the profits equal.

I'm not sure where we are at today but I'm thinking we are way out of balance. Some time I have to look at some books. I suppose I shouldn't really go by life styles, dress, or toy piles but what they hay; I'm not getting paid for this.


Beside I can't get over the root of the problem being, some can counterfeit what ever amount of money they want to get their way and stiff others with the bill and inflation it causes. I've seen the counterfeiting escalate and the problems created by the haves and the have-not's expand. We are at a breaking point.

We are going to have to regain control of our currency to address this problem and so many others that plague us.

It seems they are three steps ahead of us at every turn. With unlimited funds they have educated several generations with fallacies that pave the roads for their agenda. Well at least in my opinion at the moment.

This isn't just a local problem either. I've heard there are only three countries left free of the global network of central banks. Even they get the business big time.

 

[anaconda]

I'm suffering under the basic premise that the people putting up the money for a business and the people doing the labor should split the profits equal.

The wage in a free and competitive market is determined by supply and demand. If investors were required to split their profits with their workers, they would substitute their labor input with more capital and/or invest in more capital intensive projects. Many workers would be unemployed who would otherwise work for the market wage, without any profit sharing, let alone 50%. Even without shifting toward capital vs. labor, producers would realize that the profit sharing would increase the wage and therefore reduce the amount of labor units hired to achieve profit maximization. The result is unemployment at the margins, lower output, higher prices, social deadweight loss, and a poorer society.

 

[Seraphim]

They can once their raise all of their prices.

 

[parocks]

We've had a minimum wage since 1938. Every so often it goes up. It doesn't effect the economy too much when it goes up. It really isn't something to worry about.

 

[Carson]

The wage in a free and competitive market is determined by supply and demand. If investors were required to split their profits with their workers, they would substitute their labor input with more capital and/or invest in more capital intensive projects. Many workers would be unemployed who would otherwise work for the market wage, without any profit sharing, let alone 50%. Even without shifting toward capital vs. labor, producers would realize that the profit sharing would increase the wage and therefore reduce the amount of labor units hired to achieve profit maximization. The result is unemployment at the margins, lower output, higher prices, social deadweight loss, and a poorer society.

I think people are going to start looking for greener pastures regardless of any noble gesture of taking one for the team to create a gravy train for the elite.

Perhaps people are being ripped off with in so many ways that the free market is a load of bull. The criminals in the government are over looking the immigration laws globally to bring in cheap labor. Then they the honest people trying to make a living pay for much of their social services. That's not a free labor market. I remember when if businesses really needed someone they brought people in legally. We all worked for the same wages side by side.

Even that aside we have hit points when working for a living didn't pay the worker or the business enough to keep up with these hidden cost. I'm thinking only defaulting on loans and bankruptcy stripped enough money out of the system that it once again became a tiny bit profitable enough to call people back to work and workers the ability to answer the call.

Take a look at this chart of the housing bubble burst and the following bubble of people being lain off after they fired up the counterfeiting for bailouts and crashed us again.

http://www.barchart.com/chart.php?sym=%24DOWI&style=technical&template=&p=MO&d=X&sd=05%2F03%2F1970&ed=05%2F03%2F2013&size=L&log=0&t=CANDLE&v=0&g=1&evnt=1&late=1&o1=&o2=&o3=&sh=100&indicators=&addindicator=&submitted=1&fpage=&txtDate=#jump

Looking at the chart now I see the crash around 2001 around 9-11. We lost a huge portion of our business and in turn, work force where I was working then. It seemed mighty contrived.


Like you seem to imply though, maybe we are at some sort of freaky equilibrium with supply and demand.

Perhaps those that keep firing up the fake money presses for wars are going to have to go off and fight them themselves.

We really need to regain control of the fake money presses. That is the one overriding factor that has driven us into the dirt over the years.

A new world order of things doesn't appear to be cheap. It seems really sad to me that so many of the truly important things in life can be destroyed by a inequitable currency system.

 

[Carson]

Saw this on Fark.

Yes, Sure Bank of Montreal DID make a record 4th quarter profit of $4.2 billion, but that doesn't mean they didn't have to lay off those thousand workers too, after all, they had been gone sooner it might have been a $4.21 Billion profit

Fark comments;

http://www.fark.com/comments/8048922/Yes-Sure-Bank-of-Montreal-DID-make-a-record-4th-quarter-profit-of-$42-billion-but-that-doesnt-mean-they-didnt-have-to-lay-off-those-thousand-workers-too-after-all-they-had-been-gone-sooner-it-might-have-been-a-$421-Billion-profit

 

[susano]

http://finance.yahoo.com/news/walmart-mcdonald-afford-15-minimum-111559234.html


Comment from site:

Richard 2 hours ago 1 41
Something that none of these types of articles seem to deal with is these jobs in retail and fast food and low skill/unskilled entry level jobs. So if these workers get $15 an hour, what does that do to the workers that now make $15 an hour doing skilled work that is not an entry level job, like carpenters, electricians etc? They will want a raise above what is a low skill entry level job rate. And then the workers that are in that wage level that the skilled low wage workers moved up to will want a raise too. And it keeps going up the ladder

Before I formulate a response about the wages, I don't think that figure (Walmart's profit would be cut by 80%) is accurate. Regarding the comment, electricians and carpenters (in the US) don't work for 15 bucks an hour! Whoever wrote that comment must be living in a 1970s parallel universe.