McDonalds.....Don't Eat the Food!

[TomSeller]

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If consumers move back to more home food, then employment related to grocery stores would increase. It would not be a simple loss of restaurant employment with no offsets somewhere else..

You got it. People have to eat and if there are no "$1 value meals" to choose from maybe they could eat for a few days for a few bucks like FarmGirl says. And they would be be healthier for it. Maybe they could even even buy in the organic produce section. And since we are on a roll, plant a garden in the spring with non GMO seed.

Speaking of gardens, my snow peas sprouted. I am looking forward to early produce.

 

[smstonypoint]

It seems people are not averse to spending money on food away from home. Changing the minimum wage for restaurant employees does not alter the relative competitive positions of the food outlets; BK and McD's are paying the same minimum wage. Whatever movement occurs between competitors would be due to other factors such as location, marketing and quality. I don't know if economic models such as own-price elasticity take competitors into account?

If consumers move back to more home food, then employment related to grocery stores would increase. It would not be a simple loss of restaurant employment with no offsets somewhere else. Food is only marginally discretionary.

Pinch me -- I must be dreaming. The homogeneity condition and the household production function are relevant to a TBN thread! This is my best Christmas ever!

The homogeneity condition says that the sum of own-price, all cross-price (substitutes and complements), and income elasticities equals zero (http://ux1.eiu.edu/~amoshtagh/Moshtagh/.../Elasticity ecn5402.ch07.ppt‎).

The elasticities depend on the level of aggregation. Substitution possibilities for food are limited and so the own-price elasticity will be close to zero. If we consider separate food categories, substitution becomes possible and the own-price elasticities increase in absolute value. Taking fluid milk for example, possible substitutes would include soy milk, powdered milk, various juices, etc. If we consider fast foods, the substitutes would include the array of choices of food at regular restaurants and foods prepared at home. If we consider fast food at McDonald's, the substitutes include food at other fast food restaurants (e.g., BK, KFC, Wendy's, etc.), foods at regular restaurants, and foods consumed at home. The more and the closer the substitutes, the higher (in absolute value) is the own-price elasticity of demand (i.e., the more elastic is demand).

The household production function provides a framework for analysis of the choice between food consumed at home versus away from home. This approach considers the opportunity costs of food preparation, time constraints, etc. (e.g., http://www.econ.iastate.edu/sites/default/files/publications/papers/p11634-2010-06-22.pdf).

I suppose that grocery stores have employees that would be affected by increases in the minimum wage. It doesn't take much in the way of training for some tasks. They already have self-checkout. I would expect other labor-saving innovations to ensue.

Economics -- I love it so.

Steve

 

[farmgirl19]

You got it. People have to eat and if there are no "$1 value meals" to choose from maybe they could eat for a few days for a few bucks like FarmGirl says. And they would be be healthier for it. Maybe they could even even buy in the organic produce section. And since we are on a roll, plant a garden in the spring with non GMO seed.

Speaking of gardens, my snow peas sprouted. I am looking forward to early produce.

Yep, I even grew tomatoes and peppers outside my door when living in an apartment in college. It becomes its own means of therapy. Ever take out a day's frustrations with a hoe in the garden? It works wonders!

Now you've done it though, TomSeller! I am so ready for winter to pass, so I can begin getting vegetables in the ground, and here you are talking about already having seeds sprouting. It isn't fair, I tell ya!

In the meantime, I guess I'd better think about making soups and spaghetti with last year's produce that I froze and canned. Those are always good, after the holidays have passed!

 

[aczlan]

Agreed. The cost of food cooked at home is surely cheaper than paying someone the labor price to do all the heavy lifting and then paying them to serve it to you on a platter. Paying to eat out in a low income job where you work is not financially prudent.
If I were broke and working for McD's, I would first keep my living costs as low as possible and then springboard that job experience into a different career path where I could work my way up the ladder to better pay and the things that go with it.
McD's has always been a training ground for youth looking to gain work experience into the real world. Those looking to turn it into a meaningful and long term job won't change that premise.

I have a couple of friends who started on the "ground floor" in a fast food restaurant and are now managers. Full time (and OT in most cases), benefits, etc. Its possible, you have to work hard and do a good job, but its not impossible...

Aaron Z

 

[TomSeller]

Now you've done it though, TomSeller! I am so ready for winter to pass, so I can begin getting vegetables in the ground, and here you are talking about already having seeds sprouting. It isn't fair, I tell ya!

I planted the snow peas about 6 to 8 weeks ago in some warmer weather. I had given up on them but I happened to do a double take when I went to throw some compost on the garden. One whole row sprouted and the second row (different variety) came up at about 50%. It is still too cold for them to make much progress and this is my first attempt at snow peas, so I will see how they do.

 

[MossRoad]

:thumbsup: You da man Moss....nice going...

Thanks, but I'm having a crisis.... Christmas cookies!!!!! :licking:

 

[MossRoad]

Your experience is your personal history. You are effectively saying everyone else has, or should have, the identical life history as you. You are but one of many millions, and your story is not everyone's story. What that DQ job was to you, and may typically have been to many, is not what the job would be to all. Nor do people today have the same employment market ahead of them that you did.

Many years ago, Sharon worked as an Occupational Work Study coordinator in the local public school. Some of the students worked part-time jobs at fast food restaurants during the school day. Part of her responsibility was to make home visits. You would not believe the horror stories she would see, and this was in Fremont, OH, a small town in an agricultural area with some small industries, not some big city housing project.

How many of those students were/are capable of repeating your life experience? But, they all grow up to become adults just like you did. No one is ever going to pay them a "high" wage. They work, but earn less than a living wage. That financial shortfall is back-filled, likely all of their lives, with charity and tax payer support such as Section 8 housing, earned income credits, and food stamps.

It may be convenient to think they should have done what you, and most of us here did, but that is a fantasy. There will always be a population segment that falls in that category. Would it not be better to pay a living wage that sets a non-welfare based example for their children? If you think they aren't going to have children because they cannot afford them, that would be another fantasy.

Personally, I would rather see those who do the work rewarded, than having the Krocs, Waltons and Gates people hold the money and later pass it out--maybe. It sounds to me like a reasonable method of encouraging and reinforcing a stronger work ethic--which you are implying is in short supply.

Perhaps you did not read my earlier post? I said that part time jobs used to be just that. Unfortunately, that's all that's available to many people now. However, that does not make McDonalds or any other corporation responsible for society. All raising the minimum wage will do is raise the price of goods, which will offset the raise in wages. It will not make one bit of difference. My mother and several of my siblings were/are inner-city public school teachers. The DQ where I worked was in the worst part of town. My home town is a violent, dilapidated ****-hole. So don't lecture me on the conveniences of my thinking. The reason my home town is in the shape it is in is because of the people that live here. Not McDonalds. The poor elect the officials of the party that promises to give them a hand-out. Those are the same officials pushing for a living wage serving fast food. As I said, raising the wages of low wage workers will only raise the cost of living as the price of everything will go up to offset those mandated wages. And it will drive more small businesses out because they won't be able to survive the penny profit economics that large chains can.

 

[MossRoad]

If you have a job, any job, be it part time or full time, and you are not getting enough money to make ends meet, ask for a raise in income, if that does not work, look for a better paying job.
How comes some people just can't see it that way?
Lets all boycott McDonald's because they don't pay enough money per hour

The problem is, there are not any other jobs for uneducated people in large population centers. Do a google search for election results BY COUNTY for the last 2 presidential elections. You will see that a majority of counties voted for the losing party. But the majority of the population living in urban areas (except Wisconsin and Minnesota for some reason) voted for the winning party. It says a lot. Rural people want to be left alone and urban people want to be taken care of. Again, this will stray into politics, so I will probably bow out soon. My bottom line is.... its too late for America to do anything about it. There are more have-nots with the voting power that will keep electing people to take care of them, as there is no way they can take care of themselves anymore. Its just not possible. We've gone over the cliff.

 

[MossRoad]

The average pay for a McDonald's crew member is said to be ~ $8/hour.
Total labor, not just the crew members, is 25.3% of store costs. (Store revenue / payroll and benefits)

All else being equal, and applying increases to all store labor:
$9/hour is an increase of 12.5% in labor costs, raising labor to 28.5% of store costs.
$12/hour is an increase of 50% in labor costs, raising labor to 38% of store costs.
$15/hour is an increase of 87.5% in labor costs, raising labor to 47.4% of store costs.

For a $5 meal at $8/hour the labor component of revenue is $1.27
For a $5 meal at $9/hour the labor component of revenue is $1.43
For a $5 meal at $12/hour the labor component of revenue is $1.90
For a $5 meal at $15/hour the labor component of revenue is $2.37

If my back of the envelope math and logic are reasonably correct (always iffy :laughing, raising wages from $8 to $15 per hour costs a customer $1.10 on a $5 order, all else remaining equal.

That's a 20% increase in the food budget of millions of Americans.

 

[CobyRupert]

. However, that does not make McDonalds or any other corporation responsible for society. All raising the minimum wage will do is raise the price of goods, which will offset the raise in wages .

Not sure the historical facts bear that out. Corporations are responsible for society. As public charters, We The People allow them to exist. As such, they should serve society, not exploit it. We give them the rights of people, to lobby and sue, buy politicians, commit crimes (yet cant be jailed) ; they are not confined to the limits of a mortal life to accumulate wealth and influence and thus have become more powerful than us mortals. And that folks is called Fascism Welcome to the NWO.