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Wendy's Explains What Happens When Fry Cooks Make $15/Hour
By now, it should be abundantly clear - even to the most vocal proponents of a higher minimum wage - that across-the-board raises have very real, and sometimes unpredictable consequences.
At Wal-Mart for instance, a move to hike the pay floor for the retailer’s lowest paid workers hurt morale among higher paid employees, may have led to discussions to cut up to 1,000 jobs at the company’s home office in Bentonville, and quite possibly contributed to a decision to close five stores for "plumbing problems."
Meanwhile, at Seattle-based payments processor Gravity Payments, one CEO’s quest to create a better life for his 120 employees backfired when a move to raise the company-wide pay floor to $70,000 was accompanied by a myriad of far-reaching and unintended consequences.
At the most basic level, the argument against hastily construed wage hikes is that forcing employers to pay everyone more will simply prompt companies to fire people or at the very least, curtail hiring. As one Burger King franchisee recently told CBS, "[fast food] businesses are not going to pay $15 dollars an hour [because] the economics don't work in this industry. There is a limit to what you're going to pay for a hamburger."
With that in mind, we present the following commentary from Wendy’s most recent conference call with no comment:
Todd A. Penegor - Chief Financial Officer & Senior Vice President
Yeah. So we continue to see pressure on wages two fronts, one is minimum wages at the state level continue to increase, and as there is a war on talent to make sure that we're competitive in certain markets. So we've made some adjustments to that starting wage in certain markets. The impact hasn't been material at the moment, but we continue to look at initiatives on how we do work to offset any impact to future wage inflation through technology initiatives, whether that's customer self-order kiosks, whether that's automating more in the back of the house in the restaurant, and you'll see a lot more coming on that front later this year from us.
John William Ivankoe - JPMorgan Securities LLC
Okay, understood. I mean there is obviously a lot of discussion of wage prices, wage costs and that there would be increased pricing at the franchise level to offset those increased wages, especially in markets like New York for example that are going to see some very severe increases in wage costs. So can you juxtapose the franchisees' desire and/or need to take pricing at the store level with what sounds like an increased focus overall for the brand on value, can those two things be achieved simultaneously?
Emil J. Brolick - President, Chief Executive Officer & Director
Yeah, John, this is Emil. And our franchisees, I find them to be very astute business people, and they have a great sense of their trade areas where their restaurants are and a great I think understanding of what the competitive environment is in terms of their capacity to price. I think the reality is that what you will see in like some of these markets, the New Yorks, where there is these very significant increases, is that they will be – our franchisee will slightly likely look at the opportunity to reduce overall staff, look at the opportunity to certainly reduce hours and any other cost reduction opportunities, not just price. There are some people out there who naively say that these wages can simply be passed along in terms of price increases. I don't think that the average franchisee believes that, and there will have to be other consequences, which is why we have pointed out that unfortunately we believe the some of these increases will clearly end up hurting the people that they are intended to help.
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You simply hire undocumented Mexican guests; problem solved.
Lulz.
The dollar is dying.
It doesn't matter whether "minimum wage" is raised, or not.
Crap is crap.
why not catch your own,
and grow your own,
assuming you have shelter and clothing.
"All who are under the yoke of slavery should consider their masters worthy of full respect, so that God’s name and our teaching may not be slandered. Those who have believing masters should not show them disrespect just because they are fellow believers. Instead, they should serve them even better because their masters are dear to them as fellow believers and are devoted to the welfare of their slaves." - 1 Timothy 6:1,2
An engineering professor did this in class 30 years ago.
Take a ruler and place it on a desk with one end on the edge.
Now move it 5% off the edge. Move it another 5%, Each 5% is just 5% until you have 6 inches left on the desk.
The last 5% is catastrophic failure.
At some point, the 5% increase in the meal makes the meal cost prohibitive. Right now, I have 4 teenagers and fast food meals cost about $7.50 each. With wifey and I that is $45 and you want 5% more which is probably a low estimate. It puts the meal at $47.50. Unless we're travelling, I can take $45, $47.50, or $50 to the store, buy a 12 pack of soda, 6 1/2 lb burgers, rolls, and chips for what, $30?, and no one is getting 1/2 lb of beef at fast food place.
dood
you have a wife that doesn't know?
Why?
Answer: US "culture".
Your analysis fails to take in the value of the service provided by the fast food restaurant in buying, preparing, cooking and serving the food. This is consistent with an attitude that denigrates the work of the staff and gives little importance to their legitimate need for a living wage. What happened to America's reputation for fairness?
I contacted that study's author with some questions about his conclusions. Still no answer (although his email did say he's be OOO for a bit).
$15 an hour also means more spent on FICA, UI, WC, etc. Likely comes out to well over $20 and hour. Now, why should someone in NYC have the same minimum wage as someone in Tupelo, MS?
No one NEEDS to eat fast food crap
Sheeesssh, you make it sound like they are necessary.
Are people really that fucking lazy, that they can't cook at home?
I went to the supermarket last week. 8 large pre made lean ground beef patties (grass fed). 3 euros. 12 seeded buns 2 euros. Large bag of frozen oven fries (Belgian cut) 2 euros.
When people are more concerned with the stock holders than the customers. its a very sad day.
Do good Mom and Pop restaurants have stock holders?
And some fucking imbeciles here have the nerve to say we are ''commies''.
SMDH
One of Obama's black women shooting her bf
http://www.cnn.com/2015/08/10/politics/white-house-staffer-arrested-dome...
Hands up! Don't Shoot! Black Lives Matter, Bitch!
No you can't play the "only blacks can shoot blacks" card. Her bf is a cop.
If I did that I'd be looking at 3-5 for assault + 5 for the gun + $#!^ I can't imagine because he's a cop. She got charged with domestic violence.
Local Walmart is switching from open 24 hours to closing from 1:00 AM to 6:00 AM next week. Enjoying that $1.00 pay raise Wally Associates?
,,
Is there really a need to be open 24 hours?
Or supermarkets here in NL and Germany are open from 8 AM to 8 PM. and closed on Sundays.
Many stores also don't open until Monday afternooon in NL and in Germany they are closed on Wednesday afternoons.
And all pay good wages and everyone gets 5 weeks a year vacation and they STILL make a profit.
Does NL and Germany flush all their money down the toilet of war? I thought not.
PS How is that multi-culturalism thing working for you?
Its become just like the USA. blacks, moroccans, turks etc. all melding together.
Makes sense, they have to give you vacation days so you can go grocery shopping during banking hours instead of the 10 hours a week when the whole rest of the county is in the check-out line.
Minimum wage workers are like the water boys for the football team. Anyone can do it, so it doesn't pay very well. If you want more income, you have to compete with the players for their jobs. It takes knowledge, skills and dedication, but it pays much better. Or you can prove you have the ability to organize and motivate the players well enough to be their coach. Some who can accumulate the resources will become owners. Even if you become a player, coach or owner, you must compete with other players, coaches and owners who are constantly working to beat your team. But in all of the teams, the waterboy has very little effect on the quality of the team and will always get minimum compensation from the team.
It's the governments way of putting the mom and pops out of business so corporate can gain a bigger market share and raise prices even higher. Easy to see that. It's all about the corporations. Shop local when you can folks.
Reduce CEO and Exec. wages and perks lets start there.
When Target left Canada all of the emplyees severence pkg's added up to a little over $5M, the CEO that could not make it work. ie FAILED to do his job received $6 M go figure.
The big cheese at Wendy's made $2.66+ million last year. He and his million/year cohorts can tighten their belts a little bit. See WEN pofile at finance.yahoo.com.
Meanwhile, 100 fry cooks will long ultra vix contracts for (literal) pennies on the dollar and will cause several banking managers to trip out the window. That's capitalism babe.
There actually are economic laws. Who would have thought?
The Fed desperately needs across the board wage hikes to trigger price inflation. That is the impetus behind the minimum wage hikes. If some prole who can't read and who digs a hole out back gets a 50% raise, the engineers will want a 50% raise. It happened in the late 70s; the Fed badly needs it to happen again. I can't wait, as it will inflate away my mortgage - in the same way our parents got rich in the 70s by having inflation wipe out half or more of their mortgage debt.
OT...
Speaking of insurance companies... My med ins. premium jumped up $120 this month. Freakin BCBS!
Bastards!!!
http://www.nytimes.com/2015/07/04/us/health-insurance-companies-seek-big...