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How unions won a 30% raise for every fast food worker in California

pluralistic.net

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Re: How unions won a 30% raise for every fast food worker in California

#51

Post by sschueller »

credit_guy wrote: post #36
lancesells wrote: post #28

Earlier quoted context omitted.

> Most of the McDs around me are already paying $17-20 (in Minnesota, including rural areas) and the menu prices reflect it McDonalds had $1.9B in profit in 2022. $1.6B in 2021. Starbucks had $3.3B in profit in 2022. $3.6B in 2021. Subway announced they had beaten sales plans by $1.4B in 2021. It's not the wages that are the issue making the prices go up. These companies aren't hurting for profit.

> McDonalds had $1.9B in profit in 2022 Out of curiosity, what does that mean? It appears to me the main business of McDonald's is to collect franchising fees. Most McDonald's fast food joints (93%) are owned and operated by independent local business owners, who have to pay McDonald's-the-company the frinchising fees, which are about $45k/year [1]. So, I can see how McDonald's, the company, can be highly profitable,…

Don't they also pay % on top of the franchise fee as well as are required to purchase all the food and werez from Macdonalds which I assume also got more expensive.

Re: How unions won a 30% raise for every fast food worker in California

#52

Post by DANmode »

MR4D wrote: post #47
lancesells wrote: post #28

Earlier quoted context omitted.

> Most of the McDs around me are already paying $17-20 (in Minnesota, including rural areas) and the menu prices reflect it McDonalds had $1.9B in profit in 2022. $1.6B in 2021. Starbucks had $3.3B in profit in 2022. $3.6B in 2021. Subway announced they had beaten sales plans by $1.4B in 2021. It's not the wages that are the issue making the prices go up. These companies aren't hurting for profit.

There are approximately 40K McDonald’s in the world. That’s about USD 50,000 in profit per location. If you think that’s egregious, then we aren’t going to agree on much.

Does that include the real estate dealings?

Re: How unions won a 30% raise for every fast food worker in California

#53

Post by AlchemistCamp »

lancesells wrote: post #28
garciasn wrote: post #2

Most of the McDs around me are already paying $17-20 (in Minnesota, including rural areas) and the menu prices reflect it. We recently have begun to pay >$50 for a family of four. For context: the two cheeseburger meal is now just under $11. Subway is the same thing, with most sandwiches topping $10/ea and totals coming out around $50 for four of us. What is interesting, however, is that we're not witnessing this wit…

> Most of the McDs around me are already paying $17-20 (in Minnesota, including rural areas) and the menu prices reflect it McDonalds had $1.9B in profit in 2022. $1.6B in 2021. Starbucks had $3.3B in profit in 2022. $3.6B in 2021. Subway announced they had beaten sales plans by $1.4B in 2021. It's not the wages that are the issue making the prices go up. These companies aren't hurting for profit.

Aside from the confusion around franchisee vs franchisor numbers pointed out by others, total profit isn’t a useful metric unless you also provide the number of meals sold per year.

What matters when discussing unit prices is margins.

For example, if a company makes a profit of $10B on a trillion units sold, they likely couldn’t even afford to absorb a marginal cost increase of two cents per unit. In contrast, if they’re making $10B in profit on ten units sold, then a cost increase of a million dollars per unit would have a negligible impact on their bottom line.

Re: How unions won a 30% raise for every fast food worker in California

#54

Post by AlchemistCamp »

OfSanguineFire wrote: post #14
rngname22 wrote: post #13

Earlier quoted context omitted.

Total comp + benefits + social welfare for a fast food worker in Norway or Switzerland is far better than the equivalent for a fast food worker in Minnesota, the price rising in Minnesota to match Norway would not be commensurate as the Minnesota worker has far worse lifestyle economically.

I wasn’t thinking of the fast-food workers but rather the clientele. With American salaries being as high as they are, and a lot of other things in life being priced relatively high, I would have expected the American fast-food industry to easily get away with raising prices up to $20/meal, at least in some US markets.

America is a lot better at logistics and has lower energy costs, too, though.

Lower-end fast food is also pretty price sensitive since most the people who buy it don’t have the high salaries you might be thinking of. In general, the people earning those would never eat at McDonald’s.

Re: How unions won a 30% raise for every fast food worker in California

#55

Post by defrost »

AlchemistCamp wrote: post #54
OfSanguineFire wrote: post #14

Earlier quoted context omitted.

I wasn’t thinking of the fast-food workers but rather the clientele. With American salaries being as high as they are, and a lot of other things in life being priced relatively high, I would have expected the American fast-food industry to easily get away with raising prices up to $20/meal, at least in some US markets.

America is a lot better at logistics and has lower energy costs, too, though. Lower-end fast food is also pretty price sensitive since most the people who buy it don’t have the high salaries you might be thinking of. In general, the people earning those would never eat at McDonald’s.

> America is a lot better at logistics and has lower energy costs, too, though.

Are you sure about that?

The immediate counter example that springs to mind is the suspicion that (say) India feeds a lot more people with a lot less energy consumption (per capita but likely also in total).

Re: How unions won a 30% raise for every fast food worker in California

#56

Post by WWLink »

rtpg wrote: post #44
garciasn wrote: post #2

Most of the McDs around me are already paying $17-20 (in Minnesota, including rural areas) and the menu prices reflect it. We recently have begun to pay >$50 for a family of four. For context: the two cheeseburger meal is now just under $11. Subway is the same thing, with most sandwiches topping $10/ea and totals coming out around $50 for four of us. What is interesting, however, is that we're not witnessing this wit…

I don't think the wage increases are the biggest input to the increase in sandwhich pricing. Some random Quora answer says that you might see 50-120 orders served at peak per McDonalds employee. Increasing the price by... what, 50 cents? Is already looking at an extra $25-$60. Peak hours of course, but given that the McDonalds business model is mostly "sell drinks at pure profit, sell food at cost", price changes at…

Yea but milking the customers and blaming the employees is a great way to make profit!

Re: How unions won a 30% raise for every fast food worker in California

#57

Post by AlchemistCamp »

defrost wrote: post #55
AlchemistCamp wrote: post #54

Earlier quoted context omitted.

America is a lot better at logistics and has lower energy costs, too, though. Lower-end fast food is also pretty price sensitive since most the people who buy it don’t have the high salaries you might be thinking of. In general, the people earning those would never eat at McDonald’s.

> America is a lot better at logistics and has lower energy costs, too, though. Are you sure about that? The immediate counter example that springs to mind is the suspicion that (say) India feeds a lot more people with a lot less energy consumption (per capita but likely also in total).

The commenter I was replying to was speaking of Switzerland, not India. I was referring to the cost of energy, not the total usage. You’re totally right that India uses less energy in general (in total usage per person, but not sure about per McDonald’s meal). And the energy is cheaper there.

For comparison here are the costs per kwh in USD for the three places I see with a quick Google:

    Switzerland: 33¢
    United States: 23¢
    India: 11¢

Re: How unions won a 30% raise for every fast food worker in California

#58

Post by yunohn »

credit_guy wrote: post #36
lancesells wrote: post #28

Earlier quoted context omitted.

> Most of the McDs around me are already paying $17-20 (in Minnesota, including rural areas) and the menu prices reflect it McDonalds had $1.9B in profit in 2022. $1.6B in 2021. Starbucks had $3.3B in profit in 2022. $3.6B in 2021. Subway announced they had beaten sales plans by $1.4B in 2021. It's not the wages that are the issue making the prices go up. These companies aren't hurting for profit.

> McDonalds had $1.9B in profit in 2022 Out of curiosity, what does that mean? It appears to me the main business of McDonald's is to collect franchising fees. Most McDonald's fast food joints (93%) are owned and operated by independent local business owners, who have to pay McDonald's-the-company the frinchising fees, which are about $45k/year [1]. So, I can see how McDonald's, the company, can be highly profitable,…

AFAIU McDonald’s sets menu prices, so presumably they make sure franchises can be net positive despite item costs and fees.

Re: How unions won a 30% raise for every fast food worker in California

#59

Post by dontlaugh »

fallingfrog wrote: post #37

The Drew Barrymore thing is as pretty amazing to me. 20 years ago nobody would have supported the striking writers- they would have complained and called them lazy. Now there was such an outcry that Drew had to back down. It’s a sea change for sure. I’m pretty sure the era of solipsistic politics is coming to a close, at last.

It’s certainly encouraging that the default has changed to pro-union, arguably worldwide.

It’s partly due to those 20 years during which much poorer generations have started working.

Re: How unions won a 30% raise for every fast food worker in California

#60

Post by Yeul »

WWLink wrote: post #56
rtpg wrote: post #44

Earlier quoted context omitted.

I don't think the wage increases are the biggest input to the increase in sandwhich pricing. Some random Quora answer says that you might see 50-120 orders served at peak per McDonalds employee. Increasing the price by... what, 50 cents? Is already looking at an extra $25-$60. Peak hours of course, but given that the McDonalds business model is mostly "sell drinks at pure profit, sell food at cost", price changes at…

Yea but milking the customers and blaming the employees is a great way to make profit!

It was an American called Henry Ford who realised that if you pay your workers enough they will also buy your products.

I consider wages to be a feedback loop system in the consumer economy that America is.

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