McDonalds.....Don't Eat the Food!
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rsallen
Platinum Member
So where pray tell is that equilibrium Mr. Free Marketeer?
Yeah yeah, I know whatever the market will bear.
Well the time is nigh and well past the time to start paying FAIR VALUE IN TRADE.
Yeah yeah, I know whatever the market will bear.
Well the time is nigh and well past the time to start paying FAIR VALUE IN TRADE.
farmgirl19
Elite Member
Dave,
As you know, there has been a good deal of media chatter regarding the effects on McDonald's pricing if their labor costs increased. A point raised by many economists is that other things aren't going to remain equal.
For the sake of argument, let's say that your calculations are correct and that raising wages would increase all fast food prices by 20% (rounded). What's going to happen to fast food sales? The answer depends on the own-price elasticity of demand for fast foods. My brief search turned up an estimate of -1.9 (rounded) based on data for 1992 (http://ageconsearch.umn.edu/bitstream/31162/1/26010058.pdf).* Using that estimate, increasing prices by 20% would decrease the number of meals sold by 38%. That means a lot fewer people would be required to flip burgers.
Economic theory predicts that firms will substitute capital for labor when the price of labor (the wage rate) increases relative to the price of capital (the interest rate). Automation of the ordering and preparation process will further decrease the demand for fast food labor (e.g., Momentum Machines | The Next Industrial Revolution).
Steve
* I was in graduate school with one of the authors, so I know he was well trained.
I think there are enough people in this country that don't know how to cook, or won't cook, and will continue to buy the drive thru food. I can't see a price increase causing a mass exodus.
Soundguy
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that in an of itself is perplexing.
since recorded history.. the basic application of heat to "food' has been the essence of cooking.
I find it odd that many claim no cooking skills. X000 ys ago people squatting over flat rocks with some animal stabbed on a stick over a fire mastered cooking.... ( fill inthe blank on how long you think we've been around )
farmgirl19
Elite Member
that in an of itself is perplexing.
since recorded history.. the basic application of heat to "food' has been the essence of cooking.
I find it odd that many claim no cooking skills. X000 ys ago people squatting over flat rocks with some animal stabbed on a stick over a fire mastered cooking.... ( fill inthe blank on how long you think we've been around )
I know people that don't seem to know what the kitchen is for. Sad, but true! I had a lady ask me once, what a blender was for, when she saw one, and she had 10+ years on me!
I wonder how many of today's teenagers, and twenty something's know how to make a pot of beans and a pan of cornbread.
TomSeller
Super Member
And they don't even sit at a table and eat. They sit on couches and easy chairs eating take out like that TV show Big Bang Theory.
farmgirl19
Elite Member
Yep. What's up with that? That is when the family gets to all connect for the day. By not gathering around the table, you miss the good stuff.
Soundguy
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sad but true. I know a guy that does engineering work for a defense contractor.. a microwave bag of popcorn or tv dinner is pretty much MAX capability. I don't think i have ever seent he guy assemble a sandwich either. anything other than order and eat.. or peel open and eat.. and that's it.
Markcuda
Veteran Member
And, who should make that decision?
You, me, a comity of five, ten, twenty people?
And, should those same people be able to decide on the fair amount per hour?
So, please tell us, who should decide how much I will make at flippin' burgers?
rsallen
Platinum Member
'In those days' McDonalds or The Fatboy or the A&W were treats and not the cheapest thing to fill your stomach.
At home we always knew how to cook beans and rice. How to fry the fish caught (of course one can't eat too much of what is caught now), how to pan fry green tomatoes, make potato pancakes, okra to die for and last but not least chicken and dumplings. Ya know, every day food.
We all knew these things from start to lighting the strike anywhere match to get rid of a stink after visiting the john.
I'll leave it to someone else to figure out why it's now cheaper to go to McDonalds.
At home we always knew how to cook beans and rice. How to fry the fish caught (of course one can't eat too much of what is caught now), how to pan fry green tomatoes, make potato pancakes, okra to die for and last but not least chicken and dumplings. Ya know, every day food.
We all knew these things from start to lighting the strike anywhere match to get rid of a stink after visiting the john.
I'll leave it to someone else to figure out why it's now cheaper to go to McDonalds.