FrumCA

Triple G

Look at the math. You don't have to eat fast food.

https://www.kiplinger.com/taxes/california-minimum-wage-increase-tax-impact

Your state is betting that the economic variable of elasticity (or inelasticity in this case) will bring them more operating revenue. CA will find out if Californians will forego their fast food purchases.

robertjerl Loc: Corona, California

It hurts poor people and singles most. Fast food is over all less expensive and of course already cooked than buying fresh, having all the cooking implements and cooking yourself. Unless you eat very simple, basic foods only.

It is also hurting the fast food and other restaurants that are exempt since their workers, esp the best ones, are bailing out for places the $20 minimum applies to.

In a couple of local places I have already noticed the lower quality service.

Triple G

Survival of the fittest. I don't need 5 McDonalds each within 5 miles from me.

The truly needy are visiting the 10 church and community food banks and meal centers in our 4 community area.

It does hurt the young families who are juggling 2 parents working and day care. I do sympathize for them because we were them in the high inflation of the 1970's

robertjerl Loc: Corona, California

You don't need 5 McDonalds', but if they are all surviving then all the people in the area must need them. We have 3 within a 2 mile drive and all have cars in line all the time.

Triple G

Unless that demand goes down because of prices, the equilibrium of supply and demand has been met.

FrumCA

It looks like the trend is moving away from fast food.

"California's decision to increase the wages of fast-food employees to $20 an hour was aimed at bettering the lives of workers.

Unfortunately, it has caused a trickle down effect and increased the prices of the menu, prompting consumers to rethink how they allocate their dining dollars."

https://www.msn.com/en-us/foodanddrink/foodnews/skyrocketing-prices-mean-fast-food-has-become-a-luxury-in-california/ss-AA1nrmcb?ocid=msedgntp&pc=DCTS&cvid=cb70eecc03474def8f60d4d64f5e028a&ei=19

Triple G

That could be a good thing. It will takes months to see any real trends. Let's hope those RIF'd will find new jobs at $20/hr or more.

RixPix Loc: Miami, Florida

McDonalds increased prices last year. That increase in prices led to record increases in profits. The increased profits were used to buy back stocks and not to compensate front line workers.

FrumCA

But don't forget, McDonald's is a business. Consider this...

McDonald’s has indeed been making record profits. In fact, their stock buybacks have been quite substantial. As of December 31, 2023, they bought back approximately $851.80 million worth of their own stock1. This practice of stock buybacks involves a company purchasing its own shares, effectively reducing the number of outstanding shares in the market. As a result, the remaining shares become more valuable, and company earnings are distributed among fewer shares1.

These buybacks are part of McDonald’s financial strategy, which has contributed to their impressive financial performance. For instance, in 2023, they reported pre-tax charges related to the sale of their business in Russia, as well as gains from selling their Dynamic Yield business2. These strategic moves have bolstered their profitability and allowed them to allocate funds toward stock repurchases.

So, in a way, you could say that McDonald’s used their record profits to enhance shareholder value by buying back their own stock!

And this....

The price hike implemented by McDonald’s last year indeed had a significant impact on their financial performance. The company experienced record profits, likely due to a combination of factors, including the price increase, operational efficiency, and consumer demand.

It’s essential to recognize that pricing decisions can have multifaceted effects. While higher prices may boost short-term profits, they can also influence customer behavior, brand perception, and overall market dynamics. Companies must strike a delicate balance between maximizing revenue and maintaining customer satisfaction.

In the case of McDonald’s, the price increase appears to have been a strategic move that paid off. However, it’s crucial for businesses to consider long-term implications and customer loyalty when adjusting prices.

jcboy3

A QPWC is $5.39 in Hawthorne, CA (Los Angeles).

It was $6.49 in Christiansburg, VA.

High cost of living states...cost more to live in.

FrumCA

CA is the third highest cost of living state in the country. I'm surprised at the cost variance.

Triple G

Somehow wages are always lost in that business operations equation.

I'll bet there aren't many of their hourly part time employees who benefit from the stock price values or dividends. Just like trumps corp. tax breaks were used for buy backs instead of increased wages.

Maybe CA should have asked for stock shares instead of increased minimum wages like Ray Kroc's secretary did.

FrumCA

I'm guessing you support Barbara Lee's proposed $160,000 minimum wage.

Triple G

Haven't even seen it. I'll do some research and get back to you.

You're guessing wrong. Wages are local in nature and fit the supply-demand market forces. I'm not keen on federal minimum wages except as a floor level amount to keep horrible employers from exploiting workers or colluding with other employers to keep wages low.

$7.25 is not an adequate wage here in TN. The initial hiring rate is over $15 so a move to $15 federal MW won't affect much here, but it will in other states. As long as there is a federal rate - $15 seems like a good peg number to up date from the current 2009 setting.

https://www.dol.gov/agencies/whd/mw-consolidated#:~:text=No%20state%20MW%20or%20state%20MW%20is%20lower,FLSA%20must%20pay%20the%20federal%20MW%20of%20%247.25.