Impending Minimum Wage hike causing restaurants to close

[Starlight]

If you're hearkening back to the "good ol' days" when people worked for $2.90/hour entry-level, why not also get nostalgic for when executive compensation was only 30x more than entry-level pay and not 300x?

I am reminded of this recent study which surveyed 55,000 people in 40 countries about what they though CEO compensation should be relative to the unskilled worker:

- Americans, on average, though it should be 6.7x.
- Denmark led the charge for equality, on average saying it should be 2x.
- The people surveyed across 40 countries averaged out at saying it should be 4.6x.

When asked to estimate what they thought the current pay ratio was, the people surveyed consistently reported that they thought the pay-ratio was about 2 to 10 times higher than their ideal rate. However data shows the actual ratios are about 10x higher or more than their estimates:




(from here)

[Littlejoe]

True, but when you're looking to hire skilled labor, a college degree or trade school certificate is usually a minimum requirement. When looking to fill positions at a fast food joint, I'm not even certain that an applicant misspelling his name on the application would disqualify him.

Would you go flip burgers if the pay and benefits were the same as what you do now? I did it in college, and it's not fun...I know I wouldn't trade the job I have now for it even if it paid the same...

[Cow Poke]

Unfortunately, it seems most people don't agree with you...

I know -- and, on a different but kinda related subject, I was helping a Church (as an adviser) set up their pulpit committee, and they were specifying a DMin degree, but their salary wasn't nearly adequate to obtain one --- but the "degree" was much more important than the Spirit's leadership, and I told them that.

Just recently found out about a job I interviewed for last fall. I was the front runner until the guy with the multiple degrees showed up. In the words of one of the interviewers...I was leaning you way until I saw the other guys resume'...it just blew us away...we just had to go his way. He was only a year or two out of college... I've only got 25 years experience and an Associates Degree...

Totally understandable -- when I hired my server administrator, I went for experience over degrees, and glad I did - because the guy I hired - only an associate's degree in an unrelated field - was the guy that the OTHER guys (with big degrees) called when THEY got into trouble with something they didn't know how to handle.

[Cow Poke]

You're missing a part of the picture, there. McDonald's isn't a co-op,

Nobody said it was.

where individual owners group together to enjoy the benefits of scale. It's a corporation and it definitely has executives:

Sam --- slow down and read.... I SAID it has executives, and THEY do have huge salaries, but the guys who operate the franchises.....

You're so dadburned determined to be RIGHT that you don't even take time to think.

Mr. GoogleMonstger!

[Cow Poke]

I've worked for a lot of idiots with college degrees, a piece of paper didn't make them worth more money IMHO...

I'm beginning to think Sam has college degrees.

[Sam]

OR, the price point may have finally been met that justifies MACHINERY to drop the patties on the flattop, flip them with robotic arms, and plop them onto an appropriate wrapper all neatly folded into a "to go" burger with little to no human involvement.

At $15,000/year, a machine that cost $150,000 and had a ten-year life cycle would more than pay for itself. Robotic devices that can displace workers are going to exist at the right price point no matter what. That's a whole new problem a-comin'.

[Cow Poke]

At $15,000/year, a machine that cost $150,000 and had a ten-year life cycle would more than pay for itself. Robotic devices that can displace workers are going to exist at the right price point no matter what. That's a whole new problem a-comin'.

Sam, you're not really up to your usual .. um.. "different" .... standard.....

"at the right price point" is the key, and if that is artificially raised, it only makes sense that the "displacing workers" will take place sooner rather than later. And, yes, it's coming.

A lot of the McDonalds around here actually have the drinks filled by robots at the drive-thru --- in a conveyor type operation. And they're a LOT less likely to give me carbonated prune juice (Dr Pepper) instead of COKE!

[Starlight]

I'm beginning to think Sam has college degrees.

I guess raising the minimum wage is one of those things that is popular among people who have bought degrees and been indoctrinated at universities, but remains unpopular among intelligent people...

[Sam]

Nobody said it was.



Sam --- slow down and read.... I SAID it has executives, and THEY do have huge salaries, but the guys who operate the franchises.....

You're so dadburned determined to be RIGHT that you don't even take time to think.

Mr. GoogleMonstger!

You claimed that executive compensation wasn't part of the discussion and that we were talking about franchise owners, not executives. But executives are most definitely part of the picture, as their salaries have to come from somewhere.

I understood what you were saying. My point remains — an increase in labor costs could just as easily come out of executive compensation and shareholder dividends as anything else.

[Starlight]

"at the right price point" is the key, and if that is artificially raised, it only makes sense that the "displacing workers" will take place sooner rather than later. And, yes, it's coming.

You should offer to pay all your workers $0. You'll be doing them a favor because at that price point they will never be replaced by robotics and they can keep their jobs forever-ever.

[Cow Poke]

You claimed that executive compensation wasn't part of the discussion and that we were talking about franchise owners, not executives.

I specifically said "the last few pages" where we were INDEED talking about hiring workers in local stores.

But executives are most definitely part of the picture, as their salaries have to come from somewhere.

So, you can see THAT "gotta come from somewhere", but you have a real hard time figuring out where the huge increase in minimum wage comes from.

I understood what you were saying. My point remains — an increase in labor costs could just as easily come out of executive compensation and shareholder dividends as anything else.

You don't work in the real world, Sam ---- the pressure is on the middle management and below to "cut corners" and increase the bottom line. I'm thinking you really don't understand how a franchise works.

[Sam]

Sam, you're not really up to your usual .. um.. "different" .... standard.....

"at the right price point" is the key, and if that is artificially raised, it only makes sense that the "displacing workers" will take place sooner rather than later. And, yes, it's coming.

A lot of the McDonalds around here actually have the drinks filled by robots at the drive-thru --- in a conveyor type operation. And they're a LOT less likely to give me carbonated prune juice (Dr Pepper) instead of COKE!

So let us say that a robotic burger-flipper with a ten-year life cycle can be bought for $100,000. That's $10,000/year or, in wage-terms, ~$4.85/hour. Is that a sufficient income, a "living wage"? If not, it shows that the issue of robotics displacing workers isn't really about the minimum wage "pricing out" laborers but simply an issue of automation replacing labor, regardless of wage.

[Cow Poke]

You should offer to pay all your workers $0.

Idiocy personified!

You'll be doing them a favor because at that price point they will never be replaced by robotics and they can keep their jobs forever-ever.

They won't show up for work! There HAS to be an incentive to get them to accept the job, and apparently, that WORKS, because there are millions doing it. Are you really this dumb in real life?

[Cow Poke]

So let us say that a robotic burger-flipper with a ten-year life cycle can be bought for $100,000.

Even if that were an accurate figure, there has to be an incentive for the R&D to design and build such a machine. SOMEBODY would have to spend a bunch of capital investing in an idea that may not even work.

That's $10,000/year or, in wage-terms, ~$4.85/hour. Is that a sufficient income, a "living wage"?

Are you claiming that a burger flipper job SHOULD be a "living wage"?

If not, it shows that the issue of robotics displacing workers isn't really about the minimum wage "pricing out" laborers but simply an issue of automation replacing labor, regardless of wage.

Nope. There HAS to be some incentive to do the R&D, and radically change how local businesses operate. It wouldn't be about "breaking even" - it would be about saving substantial amounts of money.

[Sam]

I specifically said "the last few pages" where we were INDEED talking about hiring workers in local stores.



So, you can see THAT "gotta come from somewhere", but you have a real hard time figuring out where the huge increase in minimum wage comes from.



You don't work in the real world, Sam ---- the pressure is on the middle management and below to "cut corners" and increase the bottom line. I'm thinking you really don't understand how a franchise works.

Ah, so the "free market" isn't really going to sort this out, after all. If the pressure is "on the middle management and below" to increase the bottom line, that strongly implies that the pressures of the market are insufficient to curb excesses above middle management or protect labor interests.

So a solution must come from somewhere else. If you're against an increase in wage floors and you don't think these corporations are going to start dropping executive compensation closer to the 30:1 ratio of previous decades on their own, what do you propose? Higher income taxes? Taxes on accumulated wealth? Higher capital gains tax?