I’m trying to be illustrative through glibness here, but…
If consumers can’t afford the prices required to pay a restaurant’s labor living wages, then perhaps they’re not viable customers of that restaurant.
Minimum wages above the market-set rate are a form of price control. The distorting effects of price controls—in this case, contributing to shortages of low-margin restaurant meals—are economically inevitable.
Wage is not a determining factor for McDonald's pricing and has nothing to do with that.
They successfully converted from a neighborhood fast food shop into a new chain of automats with almost no staff once touchscreens got cheap enough and the necessary software could be suitably amortized. They ditched the employees, minimized community features like playplaces and tables, dropped the low margin dollar menu that many poorer people relied on, and focused on getting higher-margin products with better photography to busy professionals with brand attachment.
Trying to turn this into the tired debate about minimum wage just distracts from a discussion about what's actually happening to this brand.
OK so what’s the problem then? Surely if McDonald’s made their own decision to move up-market, competitors have swooped in to serve the customers they’re leaving behind?
It is quite the juggling act: you have employees demanding to be paid more, the cost of goods/inflation steadily rising, while customers wanting everything to be cheaper.
Something has to give somewhere, the challenging part would be to know where.
I'm not sure if there's a more sophisticated way of doing this. But just looking at revenue vs net income for 2024 suggests McDonald's operates at about a ~33% margin.
I'm not suggesting everyone would be a millionaire with a more egalitarian distribution of wealth. But, to suggest America's skyrocketing inequality has nothing to do with the poor being unable to afford a burger is a bold claim to make.
Because if the wealthy are not extracting their fortunes from American companies, what then?
Where did you get the $311B number? Because I get a net profit of $59.25B which is only 40k per employee. This assumes that the company doesn't need to keep any profit for future usage which may or may not be case depending on how big their war chest is. Not to say that 40k couldn't be life changing for many of the Amazon employee but the 311B number seems to be pulled out of thin air.
True, but to prevent those restaurants from hiring children, feeding us poison, and dodging all taxes the market must be regulated. And we're back to the same discussion we've been having for 150 years - how do we best regulate markets.
There’s an entire academic field studying ways in which it’s not that simple. Housing, employment, and transportation are somewhat famously areas where markets need help due to information and power disparities.
Can't wait for the glorious day when Big Macs are $100 because the Market has willed it. Verily, I say unto thee, for mine eyes have beheld the Market's glory, thou art blessed to pay $100 for a Big Mac, and thou ought to bend thy knee and worship at the feet of the Market, for it is all-knowing, and all-powerful, and perfect. Selah.
Yea whenever the idea of a company's profit is under a microscope, people often reflex to exec "greed" but it's typically because it's easier to blame a fictional disney villain, than it is to dig into the root of the problem.
If you can explain why anyone needs $8.469 billion of profit (2023), I'll gladly hear you out about greed. But something tells me I'm not going to get a great answer. :)
It would however have second-order effects; having less wealthy people would drive down rents/etc. If the wealthy just keep getting wealthier you'll end up in a situation where the wealthy just trade between each other out because of higher margins and the working class has nowhere to buy things.
I don’t think this is very related to what’s actually going on here.
It used to be that fast food was always cheap. But now, fast food is a broad market that’s aimed at a wide variety of demographics.
McDonald’s just so happens to be closer to the “premium” side of the market. They have a strong brand and don’t have to be the cheapest fast food restaurant on the block. People don’t buy McDonald’s because it’s cheap.
There are plenty of fast food restaurant chains that still mainly serve lower income demographics.
Rally’s/Checkers, Church’s Chicken, Popeyes, Sonic, and maybe you could even count Arby’s, or Taco Bell depending on what you’re ordering.
Some of the bigger brands like McDonald’s do have some deals to be found but you’ll need to be on their apps hunting for them.
> Minimum wages above the market-set rate are a form of price control. The distorting effects of price controls—in this case, contributing to shortages of low-margin restaurant meals—are economically inevitable.
The article cited analysis which said California's $20 minimum wage increased fast food prices 2% approximately.
Is McDonald still a labor intensive shop? Last time I visited one I had the impression that it had become vastly more automatised: you order on a machine, and most customers just grab a bag from their car before they drive away.
>Does it magically prove I’m making a bad salary if I can’t afford my employer’s product?
Yes, if the entire premise of your employer is "here's the cheapest hot food imaginable".
>Is a five star general making a bad salary because he can’t afford a nuclear submarine?
No, because the entire premise of the military is not "here's the cheapest nuclear submarine imaginable".
What a ridiculous strawman you set up, although you swung pretty earnestly at it, Mr. Quixote.
A better example would be Walmart, whose entire premise is "we sell the cheapest goods imaginable". Despite this, a lot of Walmart (and McaDonald's employees, actually) are on government assistance. If you have a justification for why there should ever be a society where someone working at a job that boasts "we have the cheapest shit" still can't afford their job's cheap shit, then please, be my guest.
> if the entire premise of your employer is "here's the cheapest hot food imaginable”
My argument elsewhere in this thread is that this description is not what McDonald’s is nor claims to be. It might have been that at some time in the past but it’s now a relatively well-regarded and reputable option. Low end cheap would be a restaurant like Rally’s or Church’s Chicken.
Regarding your last paragraph, I think you’re completely misunderstanding what point I am making. I am not defending employers paying low wages or putting employees on food stamps. Our society shouldn’t work that way.
I’m just pointing out that whether an employee can afford a good their employer makes is essentially an irrelevant detail in isolation.
Even comparing McDonald’s to Walmart for this purpose is pointless because Walmart isn’t a franchise. McDonald’s restaurant wages are determined by local franchise owners and vary a lot.
When I worked in fast food, they gave you a meal allowance, but it didn't really matter because I would grab a hamburger patty right off the grill and chow down. God damn, now I'm getting hungry.
Supposedly you would get fired for doing it, but when the managers accused me of doing it I would just deny it with my mouth closed while still chewing, and the managers would do it too.
They probably have cameras now or something. Those were the days.
You are eating in the same place were the cooking happens, without going outside replacing your gloves, putting of your hairnet, apron and mask, and without washing your hands? That sounds like a fast way to get your store closed by the food regulation authority for insterile handling and contamination of food.
>> You are eating in the same place were the cooking happens, without going outside replacing your gloves, putting of your hairnet, apron and mask, and without washing your hands?
I'm not now, that was decades ago. We didn't wear gloves, hairnets, or masks. The guy working the grill would wear an apron.
I mean there was a bucket of dish rags under the sink there once that had maggots in it. I worked in two restaurants and as far as I know the "food regulation authority" never showed up at either of them.
I don't have any illusions that things are different now. Sometimes it's just better not to know.
I like Michael Hudson's answer: repress financial rent-seeking. Inequality is driven by rents that siphon wealth from the productive economy. Therefore: nationalize natural monopolies and destroy monopolies of privilege.
I think the bigger issue is the 500 mil/quarter stock buybacks and the several million compensation packages for the executives than the burger flipper wanting enough money to make it worthwhile to leave their house.
And they've been complaining for decades at this point that corporate is failing them. Not enough new products, bad business and advertising strategies, store renos, the list goes on.
The burger flipper making a lot more money is doing a lot more for their franchisee's than the executives are as of late.
If consumers can’t afford the prices required to pay a restaurant’s labor living wages, then perhaps they’re not viable customers of that restaurant.
Minimum wages above the market-set rate are a form of price control. The distorting effects of price controls—in this case, contributing to shortages of low-margin restaurant meals—are economically inevitable.