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Tuesday, July 30, 2013

It’s Time For A New Business Model

Thousands of minimum-wage workers are taking to the streets in protest against low wages that they are receiving from McDonald’s, Wendy’s, Burger King and other fast food establishments. Representatives of those establishments ran a full-page ad in the USATODAY saying that raising the minimum wage would cost jobs. The workers responded by saying that they were crappy jobs anyway.

A new study by the University of Kansas stated that doubling McDonald’s salaries and benefits would cause your Big Mac to cost just 68¢ more. There you have it; McDonald’s can raise the burger by 68¢, and still keep their profits and expenses at the level they are now. Yes, McDonald’s CEO, Donald Thompson could keep his 8.75 million yearly compensation package.

McDonald’s 2012 annual report showed that the fast-food giant only spent 17.1 percent of their revenue on income and benefits for more than their 500,000 U.S. employees.

I think the workers would see a pay raise before the fast-food chains allow them to unionize without fear of retaliation.

In the 1970s, the fast food jobs were mainly for high school and college kids who used them as entry-level jobs. With unemployment at 7.6% many of these jobs are now held by older workers who need their job to support their families.

The Walmart business model of low-cost goods and low wages and benefits for their employees has made them the world’s largest retail giant in the world. The retail giant’s lobbyists have spent a lot of money trying to convince us that increases in employee wages and benefits would mean that they would have to cut back their workforce. That’s ludicrous; they pay so little now, that a price increase on their merchandise wouldn’t be that much and they still could maintain their current profit margin. It’s the same way for the fast food industry.

The low paying corporations are being called out but they’re not going to be embarrassed into doing the right thing, so it’s time for a Federal minimum wage increase.

My wife cracked up when I told her that a man offered me a job to bale some hay. I went to get my annual truck inspection at Larry’s Texaco this morning. I was sitting in the crowded office, surfing the web on my iPhone when a man who was also waiting for his truck to be inspected, told me that he was on his way to bale some hay and asked me if I was interested in making some extra money by helping him. I assume by the look on his face that he was surprised that I turned him down. He said it was impossible getting help these days, and then he went on to say that as a kid, he used to bale hay for 3¢ a bale. I don’t know how much he was paying, but I bet it’s nowhere near minimum-wage.

Last month the Washington D.C. city council stood up to Walmart and this is being followed by low wage workers protesting for decent pay. Perhaps the worm is beginning to turn.

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