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Labor shortage or terrible jobs?

annehelen.substack.com

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Re: Labor shortage or terrible jobs?

#711

Post by hrktb »

closeparen wrote: post #705
blihp wrote: post #548

Earlier quoted context omitted.

A 10% margin also often doesn't tell the whole story of how they make their money. Nearly since its inception, a substantial portion of McDonald's long term profit came from the appreciation of the real estate the stores were built on. Operating a business on it just made it cash flow positive during the holding period. So it was essentially a REIT that happened to operate a fast food chain. Even for many mom-and-pop…

McDonalds is a franchise, isn’t it? Corporate doesn’t own the stores.

There was a good Polymatter video about this very topic: https://youtu.be/kJVj3vp-lho

McDonald’s model is pretty different from standard franchises.

Re: Labor shortage or terrible jobs?

#712

Post by pyuser583 »

deburo wrote: post #618
blihp wrote: post #548

Earlier quoted context omitted.

A 10% margin also often doesn't tell the whole story of how they make their money. Nearly since its inception, a substantial portion of McDonald's long term profit came from the appreciation of the real estate the stores were built on. Operating a business on it just made it cash flow positive during the holding period. So it was essentially a REIT that happened to operate a fast food chain. Even for many mom-and-pop…

>If they honestly can't afford to pay a living wage It's not logical to kill businesses by arbitrarily raising the minimum wage. Do you think the people they employ are better off not working at all? These people may not have a decent enough salary, but they get to work as opposed to staying at home and degenerate (mentally and physically). I always thought the better solution is to help them financially in other way…

If have a hard time believing people are going to just sit at home staring at the wall because they loose their jobs.

If you want to argue that the minimum wage increases unemployment, and that the unemployment tends to be long term, go ahead and argue.

But don’t ask us to take it as an article of faith.

Re: Labor shortage or terrible jobs?

#713

Post by xivzgrev »

I don’t think it’s fair to fully blame these businesses. If they pay their workers a “living wage”, whatever that is, then they need to raise prices just to remain profitable. Customers see the price increase and go to the next restaurant down the street. Of course location, quality, etc matters but price does too, and a business trying to compete in a price-sensitive industry is going to be a bind.

What can help is government regulation that raises the wages at ALL restaurants. Then consumers don’t have a choice. I grumble more about paying an extra 4% on top but what am I going to do, never go out again?

Re: Labor shortage or terrible jobs?

#714

Post by _qwfv »

chii wrote: post #624
_qwfv wrote: post #377

Earlier quoted context omitted.

Means testing in social services is such a terrible idea. It creates nothing but perverse incentives like you describe. Programs like food stamps should be available to everyone who wants them. I don't care if a billionaire uses food stamps, they still need to eat. If too many rich people use the program, tweak tax rates until it balances out. It's a waste of our time to go through and double check that only those th…

> tweak tax rates until it balances out. that just makes the whole system inefficient - the rich pay a bunch of taxes, then try to obtain all of those benefits for having paid those taxes to try even it back out. So why not just tax less, and let them spend the money directly?

Because not everyone has enough money to feed themselves in the US. Start from a position that everyone should have food assistance available if they want or need it.

Re: Labor shortage or terrible jobs?

#715

Post by pyuser583 »

ehnto wrote: post #701
deburo wrote: post #618

Earlier quoted context omitted.

>If they honestly can't afford to pay a living wage It's not logical to kill businesses by arbitrarily raising the minimum wage. Do you think the people they employ are better off not working at all? These people may not have a decent enough salary, but they get to work as opposed to staying at home and degenerate (mentally and physically). I always thought the better solution is to help them financially in other way…

Please think about the holistic nature of your argument. The sum of it's parts essentially suggests that taxpayers should subsidize the employment costs of businesses, which is ridiculous.

Aren’t you essentially saying that because the government spends lots of money on welfare/social support, it gets to control private business too?

If the state chooses to offer benefits, great! But the state shouldn’t blame businesses having to offer those benefits.

If the state wants people to have more money than the market provides, the state can simply increase benefits to that level.

Wage subsidies are supported by both conservative and liberal economists.

Re: Labor shortage or terrible jobs?

#716

Post by ModernMech »

chii wrote: post #624
_qwfv wrote: post #377

Earlier quoted context omitted.

Means testing in social services is such a terrible idea. It creates nothing but perverse incentives like you describe. Programs like food stamps should be available to everyone who wants them. I don't care if a billionaire uses food stamps, they still need to eat. If too many rich people use the program, tweak tax rates until it balances out. It's a waste of our time to go through and double check that only those th…

> tweak tax rates until it balances out. that just makes the whole system inefficient - the rich pay a bunch of taxes, then try to obtain all of those benefits for having paid those taxes to try even it back out. So why not just tax less, and let them spend the money directly?

I’d rather an inefficient system than one with holes in it. Better someone getting aid who doesn’t need it than someone not getting aid who does need it.

Re: Labor shortage or terrible jobs?

#717

Post by ehnto »

caymanjim wrote: post #709
ehnto wrote: post #701

Earlier quoted context omitted.

Please think about the holistic nature of your argument. The sum of it's parts essentially suggests that taxpayers should subsidize the employment costs of businesses, which is ridiculous.

Taxpayers already subsidize the employment costs, by supplementing low salaries and lack of benefits via welfare programs, tax rebates, lower tax rates, subsidized healthcare, and countless other benefits. Walmart et al have externalized almost all of the true cost of labor to taxpayers.

Right, and raising the minimum wage is an attempt to control that by putting the costs back on the employer.

Re: Labor shortage or terrible jobs?

#718

Post by prepend »

selimthegrim wrote: post #501
prepend wrote: post #253

This seems pretty simple to me since the special unemployment insurance is up to $600/week[0] through at least July 31 it’s going to be hard to convince someone to work for less than that. So if it’s a choice between $15/hour, steady to not work and $18/hour variable to bus tables or whatnot I’m not surprised that people choose the $15. I expect this will be different once unemployment goes back to pre-covid and peop…

I think it's only 3 or 400 this go around.

The link I provided says $600 through July 31. It dropped to $300 in Jan, then was brought back up in March.

Re: Labor shortage or terrible jobs?

#719

Post by meowkit »

leesalminen wrote: post #693
blihp wrote: post #665

Earlier quoted context omitted.

If raising the minimum wage will do them in, they're already halfway there if things are really [1] that dire and will end up there soon enough. So yes, people are better off not working for those types of businesses. If a business can only remain solvent by paying unreasonably low wages, it puts downward wage pressure on competing businesses and traps unskilled workers in a labor pool of dead-end jobs with little ho…

> [1] I'm suspicious of the majority of cases where this claim is made. A rational business person would see that such a business is already marginal and that they would likely be better off shutting it down and redeploying the capital elsewhere for a better return. This happens all the time. If the owner can't see this, keeping the business on life support isn't doing anyone any favors. I agree with you, I would nev…

> People like owning restaurants, despite their best financial interests.

And part of the problem is cultural. There is social capital that exists alongside human and financial capital, and because its hard to quantify we end up with this sort of hidden value that isn't accounted for.

Re: Labor shortage or terrible jobs?

#720

Post by Salgat »

jschveibinz wrote: post #2

This article unfortunately doesn't address the business side of the problem. Fast food restaurants, or place like "Dale's" mentioned in the article, make very little profit. It is most likely below 10%. Here is an estimate: https://www.restaurant365.com/blog/what-is-the-average-profi... . A 10% profit is very modest. That's not the story of the "fat cats getting rich on the back of the workers" that the article is al…

No business is entitled to be successful. This is just a case of a business with a no longer profitable business model where they can't compete for employees with other businesses.
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