Inflation and the $15 fast food employee.
MGLICKER
Posts: 7,995 ✭✭✭
Fast food workers have been "demanding" a $15 per hour wage recently.
That is not going to happen anytime soon, but we are seeing a certain restlessness in the ranks of the retail workers. I expect wages to begin to rise perhaps by 10% in the next year or so.
If that happens, we will see an accompanying increase in retail prices. You may say that the bricks and mortars are at the mercy of the Amazons, but Amazon has been chomping at the bit to raise margins and would quickly jump aboard.
This may or may not be a positive for the PM's as an ever reactive fed would certainly push up rates to combat the inflation!! But would they?
At the same time that the resident president is pining for a higher "living" wage, his bookkeepers continue to feverishly juggle the numbers to show continued lack of inflation.
Imagine Walmart and McDonalds taking 10% across the board markups and Janet Yellen slowly shaking her head saying that there will be no measurable inflation until at least 2018.
Stay tuned.
That is not going to happen anytime soon, but we are seeing a certain restlessness in the ranks of the retail workers. I expect wages to begin to rise perhaps by 10% in the next year or so.
If that happens, we will see an accompanying increase in retail prices. You may say that the bricks and mortars are at the mercy of the Amazons, but Amazon has been chomping at the bit to raise margins and would quickly jump aboard.
This may or may not be a positive for the PM's as an ever reactive fed would certainly push up rates to combat the inflation!! But would they?
At the same time that the resident president is pining for a higher "living" wage, his bookkeepers continue to feverishly juggle the numbers to show continued lack of inflation.
Imagine Walmart and McDonalds taking 10% across the board markups and Janet Yellen slowly shaking her head saying that there will be no measurable inflation until at least 2018.
Stay tuned.
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Comments
Needing higher wages is only a symptom of a broken and mismanaged economy. Fix the economy using leadership that can get the job done.
New menu item: Stagflation.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>I want a HIgher living wage. >>
Is $3 a day per diem for Ramen Noodles not enough?
Most of these so called fast food workers are union members spread throughout the country.
<< <i>Fast food workers have been "demanding" a $15 per hour wage recently
Most of these so called fast food workers are union members spread throughout the country. >>
Organizers are indeed in play. The restlessness is no doubt real as retail jobs are now career jobs for many folks.
<< <i>It's probably as much that low wage workers have figured out that dropping out is a better benefit package. Whether that means shooting for disability, or having more kids, or now insurance subsidies or whatever. So now they are partially protesting to have more money in their pocket but also to put some space distance between them and the shiftless. >>
Well said Coup.
A single worker with no kids may be earning $10 an hour with a new Obama full time, 26 hour work week. He would earn $13,000 a year, pay little in taxes and be eligible for Medicaid. If he takes a second similar job, he would no doubt pay 50% of the next $13,000 in income/fica taxes and for his federally mandated health insurance. Not much of a financial incentive to take that second position.
Over here on my side of town,several don't deserve half that, The service is terrible, food orders incorrect, and most of the time I see several doing absolutely nothing but standing around BS'in.
I always stated its a management problem in most of em
Burger King, Wendys, and Hardee's are terribly managed in most cases,
Mc Donalds is a little better, but not by much.
Chik fil -A in my area is top knotch , you can feel the difference in the way the company runs and handles there employee's and business.
Taco Bell in my area is also pretty good, they are run by a tip top franchise group, in fact the live up the street from me.
to keep it coin related, when I go in to some of these places, some of the people always ask me about coins they found in the register. sometimes its a decent find.
<< <i>Im for anybody wanting to get paid a little more, but man 15.00 hr for fast food workers. >>
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I have heard the activist talking heads state that a Big Mac would only go up by a dime, fries by a nickel etc.....
Untrue. If a segment of a businessman's costs increase, he will attempt to raise his prices by close to or equal to the percentage increase. So the Big Mac would rise by a buck and not the dime.
Many here have predicted soaring inflation. Low wage workers may well be the flashpoint to this money printing inevitability.
<< <i>
<< <i>Im for anybody wanting to get paid a little more, but man 15.00 hr for fast food workers. >>
\
I have heard the activist talking heads state that a Big Mac would only go up by a dime, fries by a nickel etc.....
Untrue. If a segment of a businessman's costs increase, he will attempt to raise his prices by close to or equal to the percentage increase. So the Big Mac would rise by a buck and not the dime.
Many here have predicted soaring inflation. Low wage workers may well be the flashpoint to this money printing inevitability. >>
Yep... we can believe all that they tell us. Just like 'we can keep our health plan if we want' and 'we can keep our doctors if we want'....
$15 an hour will mean loss of quite a few jobs IMO, and also less business for the fast food places.
<< <i>
<< <i>I want a HIgher living wage. >>
Is $3 a day per diem for Ramen Noodles not enough? >>
Have you seen the exchange rate in Asian countries?
Jim
My salary will not double with a $12 combo meal reality, but every cost I have will increase to more than absorb the overall hit, bringing my family down instead of bringing another one up for the better.
<< <i>I wonder what it really cost us to have someone work at McDonalds. Anyone who works there full time qualifies for food stamps, medicaid, housing assistance and a decent freaking financial aid package if they are taking classes at a state university. Talk about screwing the people over with a smile. McDonalds and Walmarts and the rest of them have a sweet deal happening and guess who is footing the bill. I don't even like McDonalds junk food but still have to pay for all their employees benefits. I say pay them properly and quit sticking it to the rest of us.
Jim >>
If they weren't working at Walmart or McDonalds they would still be collecting all these benefits. And guess who would be footing the bill.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
Paying higher wages is only a temporary relief. Once the affect of higher wages reaches prices, the wage earner is right back where he/she started, looking for another wage hike. Vicious circle that can only be broken by fixing the "need" for higher wages.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>. Vicious circle that can only be broken by fixing the "need" for higher wages. >>
Lots of fixing needed with a quadrupling of the US money supply in 5 years.
Happy days are here again.
Jim
If fast food workers end up making $15/hr., I better be getting a huge, and I mean huge, raise on my next evaluation.
<< <i>I'll state the obvious...minimum age jobs are not intended to be a job that supports a family. To me, it's that simple. >>
It's not that obvious or that simple. Don't confuse minimum wage jobs with "summer" jobs. Lots of people with a family have little education, weak skills, or poor personal responsibility/reliability and have no option but to accept a full time minimum wage job. Additionally, economic conditions (available jobs) have forced a large number of overqualified workers to accept minimum wage jobs. Wages, like prices, are subject to the rules of supply and demand. The difference is that a minimum wage law ensures a "bottom" to protect workers from the full force of supply and demand.
If those jobs were "intended for teenagers" then those businesses would not be operating during school hours. Those businesses want the best employee they can get at the cheapest price. A reliable college graduate who lost his high paying job and has a family depending on him is a godsend to them.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>
<< <i>I'll state the obvious...minimum age jobs are not intended to be a job that supports a family. To me, it's that simple. >>
It's not that obvious or that simple. Don't confuse minimum wage jobs with "summer" jobs. Lots of people with a family have little education, weak skills, or poor personal responsibility/reliability and have no option but to accept a full time minimum wage job. Additionally, economic conditions (available jobs) have forced a large number of overqualified workers to accept minimum wage jobs. Wages, like prices, are subject to the rules of supply and demand. The difference is that a minimum wage law ensures a "bottom" to protect workers from the full force of supply and demand. >>
...and may I add the millions of folks that are living here illegally and competing for the lower wage jobs.
<< <i>...and may I add the millions of folks that are living here illegally and competing for the lower wage jobs. >>
this is why corporate America supports keeping them illegal - they increase the supply of labor that will work cheaply. High unemployment also increases the supply of cheap labor. Were it not for a minimum wage law you would currently see lower wages because the job situation has created workers who would accept less pay if they had to. This is demonstrated by the number of workers who make more than minimum wage but still have accepted less pay (just to have employment) than they would have accepted a few years ago. Supply and demand.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>Remember "Income inequality is a threat to democracy" >>
I'm all for being treated to some income equality, where do I sign up for the income equality the president gets? Can we start at the horses ...ummm mouth? Oh yeah I'd like the perks and benefits too.
<< <i>Remember "Income inequality is a threat to democracy" >>
Socialism and the forced redistribution of wealth is a far greater threat to democracy.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
And I should make the same as a brain surgeon.
And what would they expect as results in my field or in brain surgery when everyone is "equal pay".
What bs.
I knew it would happen.
<< <i>
<< <i>Remember "Income inequality is a threat to democracy" >>
Socialism and the forced redistribution of wealth is a far greater threat to democracy. >>
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
<< <i>Fast food workers have been "demanding" a $15 per hour wage recently. >>
maybe it's time for consumers to demand better fast food.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>Fast food workers have been "demanding" a $15 per hour wage recently. >>
Those so called food workers were bused in paid union professional protestors.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
<< <i>
<< <i>Fast food workers have been "demanding" a $15 per hour wage recently. >>
Those so called food workers were bused in paid union professional protestors. >>
What's funny is I was watching the local coverage here in ATL yesterday morning and the reporter asked 4 people protesting/"striking" in a row, all with fancy signs of crafted protest glitter....not a single one was an actual food worker. They cut the live coverage immediately.
To add: this was 6am live coverage, ~20ish folks
<< <i>
<< <i>Fast food workers have been "demanding" a $15 per hour wage recently. >>
maybe it's time for consumers to demand better fast food. >>
The market participants continually make supply, demand, pricing, and quantity decisions, for example in raw materials, labor, plant and equipment, logistics, and finished goods pricing.
If a worker wants to "demand" higher per-hour wages, they ought to "supply" a better quality of labor.
I agree with those who say that if someone stays in an "entry-level" job for an extended time, they ought not blame someone else for their decision not to upgrade their skills and seek better work.
Liberty: Parent of Science & Industry
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< Fast food workers have been "demanding" a $15 per hour wage recently. >>
maybe it's time for consumers to demand better fast food.
LOL, soooo true.
There are so many subjects brought up in this thread that would be fascinating to pursue. However, on the subject of inflation and cost I have a couple comments.
In a prior lifetime, I began working as a carhop when I was 12. In a small town prior to any kiddie laws, nor people giving a darn about it. Worked in fast food thru HS, nearly 40 hrs/wk. I can tell you this, for someone that lasts past the first year and is a trusted member of a fast food team, they work harder than many professions. It's a daily grind with no let up. Some of the worst hours. Nothing like getting to the store 2 hours before sunrise to prep. Mgmt working double shifts to cover some immature employee that didn't show. 7 day a week grind for many on Salary.
I'm much older now and have done a lot of things in life since then. I did however end up owning 3 Restaurants (Fast Food) simutaneously (sp) and sold or closed them down 20 years ago.
It's not as simple as Employee wages being increased as a cost to the Restaurant. There are all the other costs on a percentage basis as well. Matching FICA , both State and Fed unemployment tax, Workmans Compensation Insurance. Those costs as a percentage at 7.25/hr is no small number, All the hidden costs would be nearly doubled at 12/hr.
It's not easy for Restaurants to raise prices, it's exceedingly hard. The profit margins are very thin, with many locations loosing money for many mths out of the year. If the min wage was increased that substantial, simply put, there would be thousands going out of business. Wages in my locations ran about 40% of gross sales. Meaning food prices would have to increase by about 65% give or take at 12/hr. No way the public would instantly pay that kind of increase overnight. As many pointed out, all the rest of middleclass America would be clarmoring for higher wages then. So would the farm workers and food processors. Henceforth, the cost of food to the Restaurant would greatly increase, and overnight. Much much easier for wholesalers to raise their prices than retail. Soon, those hamburgers would have to double in cost to the consumer.
It would wreck havoc to the Country. No way they would increase the wages by that much. Probably just a starting point to compromise thru the Houses for maybe a dollar or 2. Even that though will be very painful for middleclass. I believe it will happen though. IMHO we're in the greatest social change in the last 100 yrs and nothing is going to stop it.
I came across something interesting regards inflation concerning wages and Silver. I'll try to post it later.
We may consider the imbalance to be a product of the recession, particularly in the richer west, and surges of economic participation in the Third World. But we might contemplate the likelihood that the labor imbalance is in fact a permanent one, with technology rather than temporarily excessive human bodies being the source of relentless over-supply. Productivity per worker has risen significantly even in the throes of recession, and technology is almost certainly going to expand productivity further, in the fast-foods industry, as well as among middle-income people (sales/services) and among the professions.
I remember in the 50s futurists were predicting vastly diminished work weeks as a result of technology, and were contemplating what the human species would do with all this leisure time, attended-to by robots. This didn't happen in the middle term; indeed, people in the US, at any rate, worked harder than ever, women entered the workforce, etc. But belatedly, this permanent cultural change appears to be taking hold, and not very smoothly.
Now, we have the accumulating prospect of human workers not needed for wealth creation. Work as a defining and character-building cultural cornerstone may well diminish, along with all the moral attributes we have considered so defining for us.
At this juncture, then, we're confronted with the fact that the economy no longer needs as many people, particularly those without particular, targeted and well-honed skills to maintain the robots. Hard work may well no longer be a sufficient commodity to exchange for a reasonably comfortable, secure lifestyle for one's self and one's family.
We reminisce about how fast food jobs were entry-level training posts for teens. But consider the phenomenon that these positions are now filled with adults trying to support selves and families: surely something more fundamental is going on than over-indulged teens and lazy unambitious adults.
Here's a warning parable for coin collectors...
<< <i>Labor costs are indeed a matter of supply and demand. Right now, there is a BIG surplus of labor, not only in the US, but world-wide.
We may consider the imbalance to be a product of the recession, particularly in the richer west, and surges of economic participation in the Third World. But we might contemplate the likelihood that the labor imbalance is in act a permanent one, with technology rather than temporarily excessive human bodies being the source of relentless over-supply. Productivity per worker has risen significantly even in the throes of recession, and technology is almost certainly going to expand productivity further, in the fast-foods industry, as well as among middle-income people (sales/services) and among the professions.
I remember in the 50s futurists were predicting vastly diminished work weeks as a result of technology, and were contemplating what the human species would do with all this leisure time, attended-to by robots. This didn't happen in the middle term; indeed, people in the US, at any rate, worked harder than ever, women entered the workforce, etc. But belatedly, this permanent cultural change appears to be taking hold, and not very smoothly.
Now, we have the accumulating prospect of human workers not needed for wealth creation. Work as a defining and character-building cultural cornerstone may well diminish, along with all the moral attributes we have considered so defining for us.
At this juncture, then, we're confronted with the fact that the economy no longer needs as many people, particularly those without particular, targeted and well-honed skills to maintain the robots. Hard work may well no longer be a sufficient commodity to exchange for a reasonably comfortable, secure lifestyle for one's self and one's family.
We reminisce about how fast food jobs were entry-level training posts for teens. But consider the phenomenon that these positions are now filled with adults trying to support selves and families: surely something more fundamental is going on than over-indulged teens and lazy unambitious adults. >>
Very well put dpoole. I believe this scenario is playing out also. A shift is definitely taking place, with less and less jobs; I do not see that reversing very quickly. Eventually, those fast food positions WILL be replaced with automation, and people will look back on the good ol days when they used to be able to have a job at McD's.
We have heard about drones possibly delivering mail... less jobs for postal workers or other delivery people coming up?
Technology is rapidly increasing for self driving vehicles. How many long haul truckers will be needed once that is in place??
On a related note, the Govt needs to end unemployment benefits as this promotes sitting on ones arse. Imaging the look on current McDonalds employees if suddenly there was a line out of the door of people looking for jobs.
Even with all the Govt restraining labor supply and QE they still cant create inflation.
Knowledge is the enemy of fear
SeaTac feels special
I'm not one for eating at any of these places, because, well...I eat real food. I don't agree that they deserve $15 an hour. Minimum wage in this state is already $10/hr, and now these burger 'bots want more?
<< <i>PM bulls would be well advised to join in the McDonalds protests. NOTHING breeds inflation faster than increased wages.
Even with all the Govt restraining labor supply and QE they still cant create inflation. >>
QE hasn't put "cold hard FIAT" in anyone's pockets. Excellent point re $15 wages and inflation.
From a PM perspective and on topic
<< <i>
<< <i>PM bulls would be well advised to join in the McDonalds protests. NOTHING breeds inflation faster than increased wages.
Even with all the Govt restraining labor supply and QE they still cant create inflation. >>
QE hasn't put "cold hard FIAT" in anyone's pockets. Excellent point re $15 wages and inflation. >>
This is too true, wage increase will result in a across the board increase in the cost of living!!!
Strengthen the buying POWER of the US DOLLAR would be a better alternative
Steve
<< <i>PM bulls would be well advised to join in the McDonalds protests. NOTHING breeds inflation faster than increased wages.
On a related note, the Govt needs to end unemployment benefits as this promotes sitting on ones arse. Imaging the look on current McDonalds employees if suddenly there was a line out of the door of people looking for jobs.
Even with all the Govt restraining labor supply and QE they still cant create inflation. >>
And when inflation hits after giving into the extortion........they will want $20.... the reality is a burger flipper, bus boy, yard guy, register ringer, etc will always be on the "bottom lower" rung of a ladder that is firmly built with multiple steps. The bottom and lower steps will never provide enough to "live on" as our current and ever moving society sees it. Having governmental policies to try to force that "every job is a living wage" is nothing more than socialism.
There are already lines of people applying for those jobs daily and thruout the country.
Your connection about higher wages creating inflation and higher metals price is correct but that too is relative.
Liberty: Parent of Science & Industry
<< <i>PM bulls would be well advised to join in the McDonalds protests. NOTHING breeds inflation faster than increased wages. On a related note, the Govt needs to end unemployment benefits as this promotes sitting on ones arse. Imaging the look on current McDonalds employees if suddenly there was a line out of the door of people looking for jobs. Even with all the Govt restraining labor supply and QE they still cant create inflation. >>
PM bulls are better advised to not become part of the problem and to continue positioning themselves to be protected from those that are the problem. Extended unemployment benefits promote sitting on one's arse. Initial unemployment benefits provide much needed relief between jobs lost because of events beyond the employee's control - usually a result of pi$$ poor central bank planning. There's already a line of people awating jobs at McDonalds. It's what will happen to the line at the cash register that has McDonalds fighting the wage increase. Face it, they won't pay it, the customers will.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
I once applied for a position as a scuba instructor at a Jamaican resort frequented by supermodels. The job paid almost nothing, yet the waiting list for it was hundreds of candidates long..
... on the other hand, some jobs are so disgusting ("it's a dirty job, but somebody has to do it) that they have to raise and raise the pay to get anyone who will do it.
the current system of putting in a minimum wage floor and letting the market sort out the rest seems to be the worst way to do it, except for all the other suggestions...
Q: why do entertainers and athletes make millions? A: because they can. Act or sing or throw a ball that well, and you can too.
Liberty: Parent of Science & Industry
for higher minimum wages, but this will likely result in fewer employed persons
at the bottom of the wage scale.