Fast-food chains react to minimum wage increase in California


Restaurant operators in California are expected to increase prices to counterbalance an increase in the minimum wage in the state which takes effect today,

The minimum hourly wage goes to $9 from $8 as an incremental step in a plan to take it to $10 per hour by 2016.

Fast-food stocks: MCD, BKW, WEN, JACK, YUM, SONC, PLKI

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Comments (23)
  • David at Imperial Beach
    , contributor
    Comments (4382) | Send Message
     
    Looks like that may be the last of my $5 burger combo meals.
    1 Jul 2014, 12:10 PM Reply Like
  • redhat63
    , contributor
    Comments (265) | Send Message
     
    Socialism only works with other peoples money. In so far as some of these chains cater to the lower end of the income spectrum, it with delicious irony that they are in effect giving it with one hand and taking it away with another...
    1 Jul 2014, 12:17 PM Reply Like
  • Albright85
    , contributor
    Comments (40) | Send Message
     
    Fantastic news. For every dollar they don't pay their employees, the state and taxpayer picks up the tab in assistance programs. If business wants government to stay out of their affairs, they have to not force the government to step in where they have failed.
    1 Jul 2014, 12:24 PM Reply Like
  • reinaam
    , contributor
    Comments (48) | Send Message
     
    Albright... If the companies raise their prices to offset the increase in salary, then its the customers, NOT the business, that is paying for the increase in salary.
    1 Jul 2014, 12:45 PM Reply Like
  • Albright85
    , contributor
    Comments (40) | Send Message
     
    By that logic a business pays for nothing. It's ALWAYS the customer that pays since that's how businesses get income - it's a moot point. If I have to pay an extra dollar for a Big Mac so that a dozen people can not live in poverty, I'll gladly pay.
    1 Jul 2014, 02:18 PM Reply Like
  • Ford289HiPo
    , contributor
    Comments (975) | Send Message
     
    " If I have to pay an extra dollar for a Big Mac so that a dozen people can not live in poverty, I'll gladly pay. "

     

    Spoken like a true social democrat.
    Those jobs are beginner jobs, not a career choice, so go ahead and [pay that extra dollar. I'll grill my own burgers at home and keep some of my hard earned money in my pocket.
    1 Jul 2014, 02:59 PM Reply Like
  • Albright85
    , contributor
    Comments (40) | Send Message
     
    Interesting you make that assumption about my political affiliation - you are incorrect.

     

    You're welcome to believe that it is a 'starter job' for teenagers, but that would be ignoring reality. Many people work there as their full time jobs - and maybe they move around to other fast food chains or retail stores, but the problem persists - If you're not going to have minimum wage be at least close to livable, why even have one? Let's pay then $2/hour because they're all living at home and it's all disposable income, right?

     

    If you're going to be grilling burgers at home, why do you even care what the minimum wage is? You can exercise your right to not buy a burger from those socialists at McD's.
    1 Jul 2014, 07:15 PM Reply Like
  • betchewiwin
    , contributor
    Comments (54) | Send Message
     
    You may not be a Democrat but I'd be willing to wager you voted for Obama twice.
    An 'Obamconomy' indeed occurred when millions lost their jobs because of the new corporate taxes read: Obamacare plus taxes on 12,000 other products we use each day, like wheelchairs and canes.
    The solution? Since Obamaconomy geniuses realized that virtually everybody looking for work would be forced to take a part-time job, like I have, they started to clang the garbage can lids together for higher minimum wages.
    So, you come along, throwing the 45++ year old wisdom out the window that fast food jobs are for high school kids-we all grew up with this and obviously many aspired to do something maybe bigger and better. IF you want to stay at any of these places and become a manager, owner, licensee, I laud you-there's good money to be had in these endeavors.
    Let me explain in a roundabout way (sorry) what higher minimum wages WILL do.
    Larry Jones can make 250 Sandwiches per hour on his Shift; he will soon be promoted and sent to Management Training, if he wants; he'll get full-time hours plus benefits also. Larry's a good guy and treats the customers very well, to boot-THE complete package.
    Now we have Tonya Starling-hey, her co-workers love her, the customers and she get along famously on her shift-BUT-she only produces 195 Sandwiches per hour-try as she-with company help-might.
    Tough one, but at that new $15/Hour Wage, her hours begin to get cut and cut so until they can find someone else to produce like Larry does. She gets forced out of her job-she realized it was coming-by a gang of ruthless recruiters who NEVER get the right employee in front of management at the company, just another set of numbers. If/when the new 'numbers' don't work, on to the next, ahem, job candidate-who cares any more? Recruiters for the company certainly don't.
    Ergo, how higher wages create 'Lost Wages'-sorry friend, no colloquialism intended there.
    1 Jul 2014, 11:43 PM Reply Like
  • Dirty White Boy
    , contributor
    Comments (18) | Send Message
     
    I always thought that McDonalds was considered a great place for a youngster to get that first job, sometimes even while still in high school. The pay was always bad but the experience, for a young person entering the working lift, was valuable.

     

    Now there are older folks trying to support themselves on these meager wages, whuzupwidat!?!?
    1 Jul 2014, 01:03 PM Reply Like
  • Chazuu
    , contributor
    Comments (263) | Send Message
     
    Redhat63
    So it's socialism when the lowest class of workers gets a raise?
    What is it when a hedge fund manager pays a maximum of 15% income tax (if he is so stupid as to not hide his earnings in overseas accounts)?
    I guess the answer is that the wealthy deserve a break but the peasants don't.
    I am a middle class tax payer and our federal government taxes me at a higher effective rate than the wealthiest. That's what I call socialism - distribution of income from the middle class to the upper class.
    1 Jul 2014, 01:37 PM Reply Like
  • redhat63
    , contributor
    Comments (265) | Send Message
     
    Incentive to work harder and join the upper class - like I did.
    3 Jul 2014, 10:32 AM Reply Like
  • KTOOMBS2
    , contributor
    Comments (113) | Send Message
     
    If we have a minimum wage, why don't we have a maximum wage?
    1 Jul 2014, 04:54 PM Reply Like
  • mhanley
    , contributor
    Comments (60) | Send Message
     
    No Redhat63, the government doesn't tax you at a higher rate. You pay the exact same rates he does on capital gains and on ordinary income (actually, you probably pay a smaller percentage on both than he does). Get your facts straight.
    1 Jul 2014, 05:56 PM Reply Like
  • mhanley
    , contributor
    Comments (60) | Send Message
     
    Albright, you are perfectly within your right to "gladly pay". Where you are NOT perfectly within your right is in your expectation (as a socialist) that you have the right to force me to gladly agree with you by paying extra.
    1 Jul 2014, 06:01 PM Reply Like
  • mhanley
    , contributor
    Comments (60) | Send Message
     
    Sorry Redhat63, I meant to address that to Chazu.
    1 Jul 2014, 06:02 PM Reply Like
  • rayfrechette
    , contributor
    Comments (28) | Send Message
     
    Put tthe figure you want on it folks, it is still minimum wage and within a short period of time an hour of labor will buy the same amount of goods then as it does now. The only gift here is to those mortgaged to their eyeballs as their fixed amount owed will be paid back with cheaper dollars. This is why governments think raising minimum wage is great. Think of the savings bonds bought in past when minimum wage was much less and what you could have bought with the dollars you invested and what you will be able to buy when you cash those in. That is true effect of raising the minimum wage---- those of us who are frugal and save get the short end of the deal.
    1 Jul 2014, 08:53 PM Reply Like
  • Michael Bryant
    , contributor
    Comments (6736) | Send Message
     
    For the economy as a whole, raising the minimum wage will make no difference, as those who get the minimum wage end up spending it, so cash flow through the economy has either no change or actually increases. The higher prices just mean less shoppers, but the total sales will likely stay the same.
    1 Jul 2014, 09:44 PM Reply Like
  • Exbuggywhipmaker
    , contributor
    Comments (114) | Send Message
     
    The $15 minimum wage is coming...and so are the robots to take over flipping burgers.
    1 Jul 2014, 11:39 PM Reply Like
  • SWBanks
    , contributor
    Comments (263) | Send Message
     
    http://bit.ly/1m7I95X
    2 Jul 2014, 02:47 AM Reply Like
  • Nahila1
    , contributor
    Comments (26) | Send Message
     
    As a veteran of 48 years in every phase of the restaurant business, the raising of the minimum wage will cause a large increase in retail food prices in the grocery chains as well as all restaurants. When the minimum wage is raised, it provides all taxing government entities an increase in cash flow into covering their expenses in administering their supervision of operations especially the Health Dept. not to mention the increase in sales tax revenue, FICA taxes (employer and employee pays equally) and income taxes. It also has a ripple affect in that increased labor costs starts at the production level (farms) of all food, then transportation to and from processing facilities and ultimately to the end sellers- grocery and restaurants not to mention Government operated food facilities such as prisons, jails, armed forces, and charitable food centers. So the increase in minimum wage starts the chain of cost increases which are passed on ultimately and cumulative to the end user, the customer. Now add the cost of Affordable Healthcare Act for 2015 and the end user (customer) will be shocked to see the price of their favor meal increase as much as 20-30 percent as the end employer has to recoup all their cost increases. Lastly, the increase in minimum wage has always caused other higher paid hourly employees to get the same per hour increase in pay. Having said all this, when you stop at the gas pump to fill your car if you even have one, it gives new credence that the minimum wage should be increased and is over due. However, it is unwise to legislate an unreasonable at one time increase without causing a massive lay off of employees which will occur and that will translate into slower service or change in service methods utilizing electronics to replace employees. In my 48 years, we have survived many minimum wage increase usually spread over small increases over a three year period and managed to adjust our operations accordingly. The restaurant and food service industry along with the food growing and food processing businesses are by far the largest employers in the USA so careful thought in the size and timeframe of a minimum wage increase is critical to maintain an orderly transition.
    2 Jul 2014, 07:08 AM Reply Like
  • Chazuu
    , contributor
    Comments (263) | Send Message
     
    Nahila1
    Thanks for your thoughtful comments.
    I concur that raising the minimum wage in increments is a wise way to address the problem.
    2 Jul 2014, 08:34 AM Reply Like
  • Nahila1
    , contributor
    Comments (26) | Send Message
     
    The BEST way to offset the rising cost of food and any minimum wage increases is to restrict the use of corn as an additive to gasoline. That corn then can be used to feed the chickens, cattle, swine, and other approved edible meat products. Eliminate corn as an additive period but even substituting switch grass, sugar cane or sugar beets would help make more corn supplies available for the livestock.
    2 Jul 2014, 09:45 AM Reply Like
  • Michael Bryant
    , contributor
    Comments (6736) | Send Message
     
    Better yet, don't feed corn to animals. Let them eat seeds and grass.
    2 Jul 2014, 11:09 AM Reply Like
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