The short answer is that they pay their employees so poorly that the majority of fast-food workers are also on public assistance. So what happens is that the Federal treasury (that's *us*, folks) subsidizes those companies' labor costs.
McDonalds ranks 111 on Fortune's 500. Their 2012 revenues were $27 billion and they had over $5 billion in profits. Burger King is much smaller, but they still had $190 million in profits. Yum Brands (Taco Bell, KFC, Pizza Hut) is #213 with $1.3 billion in profits.
And yes, we're subsidizing Wal-Mart to the tune of about two grand per employee. Wal-Mart is #1 on the Fortune 500 list for 2012. They had $469 billion in sales and $17 billion in profits.
Why are we subsidizing these greedy fuckers' labor costs? When you hear the GOP and the Tea-baggers screaming about "welfare queens", why aren't they yelling at Wal-Mart and McDonalds?
The answer is easy: Those corporate welfare kings have the money for lobbyists and lawyers. A single mother working at McDonald's or Wal-mart isn't making campaign contributions to The Canadian Usurper or the Tea Party Caucus.
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7 comments:
They tease the edge of the 19th century name Robber Barons. Aided by the thugs in political power they profit every one else looses.
Eck!
The minimum wage has to be a living wage. That's "all "there is to it.
Lotsa luck, America. WallMart has us screwed.
Very crankily Crank
In the 90's, I worked at one of the last picture tube factories to be built. Our production line was an almost exact duplicate of an existing line in Malaysia. One significant difference was due to labor costs--in many places where our factory had robots the Malaysian factory had people. In my department that would have more than doubled the number of people.
Whenever minimum wage goes up, some entry level jobs go away. Unemployment goes up, entry level unemployment goes up disproportionately. Fast food is no exception. Fast food decided that shoving an empty cup at customers and offering free refills was cheaper than having staff fill cups. There are currently restaurants experimenting with an overseas call center doing drive through orders. In my life, fast food fries have gone from completely manual relying on a person to shake the basket and check the color to a nearly automatic system where the machine lowers the basket into the oil, shakes it as necessary, then raises it when the fries are done.
If minimum wage goes up significantly, I would expect quite a bit more automation at corporate fast food places. It wouldn't be hard to automate or semi-automate cash registers or the preparation of most fast food. The net result is very likely drastically fewer staff, and much lower payroll--but with higher initial investment, discouraging small business competition.
If you are making minimum wage, you shouldn't be starting a family. You should be gaining experience so you can get a better job, whether that is with the same employer or elsewhere. (It is also amazing how many people complain about not earning a "living wage" while puffing on $6 per pack cigarettes)
...and if I'm doing the math right--using your figure of 5 billion per year profit, Google says 31,000 stores, assuming they are open 18 hours (not counting the 24 hour drive throughs) that works out to a bit under $25 per hour per store. Would a local restaurateur be greedy to take that return on a similar investment?
No, you're not doing the math right. More than 80% of the McDonalds are not owned by corporate. They're owned by franchisees and many of them each own a good number of the stores. I've known a few of those folks over the last fifteen years and they do quite well for themselves.
Because, after all, we subsidize their labor costs.
You'd think they'd be lobbying to keep these government subsidies available so that the employees don't go even more apeshit than they are going now.
I'm aware of how franchises work, you are the one talking about McDonald's corporate profits when it is mostly the franchise owners who set wages.
What do you mean by making McDonalds pay a living wage--Do you really believe that they will hire just as many people, just pay them all more?
McDonalds will pay what it takes to get the quality of people it needs to run. Where there are other job opportunities, McDonalds will be forced to pay more. Where McDonalds isn't paying enough...it's because nobody else n that area is paying enough for those workers and those skills. Eliminate those jobs, and we subsidise those people even more.
You act as if working at McDonalds is preventing people from being nuclear physicists.
What I am saying is that McDonalds (and Wal-Mart) are using the Treasury to subsidize their labor costs.
I do not think that is accidental.
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