Essay talk:The finances of a fast-food giant
Doubling wages would result in only a slight increase in prices, perhaps 30%. There are a couple of issues: even at these wages people submit many more applications than are hired, and any solution would have to encompass most other fast-food restaurants.
- Sounds about right. If the minimum wage was raised so that McDonalds' wages bill doubled, it looks like they would have to raise menu prices about 30 percent to keep their margin from shrinking. Of course, they might choose to take a bit of a hit on their margin and not raise menu prices quite so much. Tribal (talk) 00:10, 10 October 2013 (UTC)
There is a great deal more work involved than simply making the food and working the counter. The secret of McDonald's success is having that work done by small elite groups. The result of that work, such as menu items and logistics, is then passed on to the franchisee, for a price. User:Fred Bauder Talk 21:53, 29 September 2013 (GMT)
- OK, it is true that, in cooking and serving a hamburger at McDonalds, not all of the value-added in that process comes from the cook and cashier right on the spot. Some is the result of "behind the scenes" work. For example somebody had to come up with the design of the kitchen layout, the menu, the ingredients of the special sauce, and other things that are necessary or helpful to the production of the hamburger. However, that does not affect the logic of my essay. Either the "behind the scenes" work is contracted out – in which case it appears as "expenses" in McDonalds' books and so the "new Value" that I speak of really is from the on-the-spot employees, OR the behind-the-scenes work is done by people employed by McDonalds, in which case their wages are included in the "payroll" figure that I use from the Annual Report. In the second case, the way to look at things is that I am considering all McDonalds employees together – whether they happen to punch in at the restaurant, the lab, the planning office, or wherever – and the fact still is that, as a collective, they are producing 82 % more value than what they are paid. And this has the ethical implications under a desert-based system of justice that I mentioned, as well as meaning that they could all be paid 82 % more if unearned income to capitalists ceased.
- Your comment brings to mind another issue though. Pay differentials. McDonalds pays some of its employees considerably more than others; eg., employees with PhD's in food chemistry and marketing who walk the hallowed halls at Oak Brook probably get more than burger flippers on main street. There could be some unfairness in that. To consider a hypothetical case, there may be a genius at Oak Brook who is worth more to the Corporation than 100,000 of its regular employees; ie., losing her would hurt the Corporation financially more than would the loss of 100,000 of its regular employees. I think that a strict free-market philosopher might say that the Oak Brook person, in that case, should be paid 100,000 times as much as a regular employee. But I take a different view, and I notice that even McDonalds only pays its C.E.O., Don Thompson, one thousand times as much as a regular employee. A pay formula that I might suggest, which I think is in line with desert-based justice, is that a person should be paid in proportion to her work effort. Work effort could be calculated, roughly, as work intensity times duration, or we might consider gallons of sweat excreted, number of calories expended, number of stress-induced nightmares endured, and such-like measures of the actual disutility to the individual of working. On this standard, I don't think a doctor deserves to be paid much more than a cook. The only qualification I would make concerns education. If the doctor has to go to university for ten years to learn her craft, she should be paid for that (because it's effortful and will benefit society), and if she isn't paid at the actual time of her schooling, her wage after schooling should be adjusted upward so that over the course of her career she receives the "back wages", so to speak, that society owes her for having exerted herself in school.
All of this fits with the slogan of first-stage socialism: "From each according to her ability, to each according to her work." (I think "work" in that slogan has to be interpreted as work effort. If we intepret it as work output, we are essentially adopting the free-marketer's position where we would be paying the Oak Brook wonder-employee a million dollars an hour.)