Hacker News Reader

Comment by larrywright | Hacker News Reader

There’s a compelling argument that unions, combined with the fight for $15 minimum wage, will do nothing but make the situation worse. Nobody is going to pay $20 for a burger and fries. McDonald’s would either have to go almost entirely automated or cease to exist as a company.

View on HN

McDonalds workers are unionized in Australia (https://www.sda.org.au/media-release-new-mcdonalds-agreement...).

The Australian minimum wage is AU$19.49.

A burger and fries doesn't cost you $20.

No, it’s closer to $15 (depending on what you get), which is still too high to be tenable here.

https://www.aussieprices.com.au/mcdonalds-prices/

That page indicates a Big Mac meal (which includes a drink, too) starts at $9.80, which is US$6.70.

The cost for this meal appears to be US$5.99 in the US - quite similar.

That's not close to $15 (or $20) by any stretch of the imagination.

I was basing it on the other meals, which were on the order of $11-13. A Big Mac meal isn’t $5.99 where I live so the gap feels larger to me.

Either way, I think that the assertion of “this thing worked over there so it will work the same way here” is overly optimistic. But ultimately I don’t much care - I rarely eat there, so if McDonald’s got very expensive or went out of business, it wouldn’t have much impact on my life. If they want to unionize, more power to them.

I’m not a fan of unions overall. I recognize that they’ve done some good things, but the people I’ve known who were in unions or worked in union shops don’t describe places that I’d want to work in.

If your going to convert to USD, you need to do the same for the wage. So about $13.60 USD per hr.

Fair enough. That still compares quite favorably to the US version's $7.25.

If unionization and a near doubling in minimum wage makes a hamburger, fries, and Coke cost $0.71 more, I think I can accept that.

In 2017, McDonald's had 235,000 employees and paid its shareholders $7.7 billion. Compelling argument, all right.

The restaurants are almost entirely owned by franchisees and run on fairly tight margins. You can argue that the corporation makes too much money or whatever, but they’re not the ones who will be screwed if I’m right.

Are you arguing the franchisees are hurting as well?

Or are you just arguing that the franchisees are also getting rich by paying people as little as possible?

I’m arguing that the restaurants aren’t especially profitable and their margins are thin. It’s a bit like a rental property, in the sense that you have to have more than a couple in order to make much money at it.

This has never been my understanding about the major ones, at least. The licenses are incredibly expensive to buy, but they are quite profitable. But I recognize we're both speaking totally vaguely and without sources, so I'm not sure why I'm replying when I have so little to add myself :)

If those franchises will not be able to make ends meet, corporate will have to reduce their tithe. Trust me, there's a lot of money that can be squeezed from the shareholders.

Some math to really drill this home: that's 32K per employee. Literally a livable wage around 50% higher than the minimum they offer currently for someone working 40 hours year round, no vacation.

Many localities in the US have instituted higher minimum wages. In DC, the minimum wage is $14, and I can assure you that a burger and fries is not $20, the local McDonald's have not automated, and they seem to be doing fine.

They would have to accelerate their automation of front of house. But other than that they won't get rid of the rest of the workers. One day they might work out how to automate some things but given the broken blizzard machine is a meme I don't think McD has the ability to automate anything else. So they McD will move upscale which is fine. They don't have playplaces anymore and they're no-ones favorite burger anymore. Lots can be said against unions but they have their place and a single company union sounds like it could work here.

I pay $20 for a burger and fries all the time. Just not at McD's.

Right, my point wasn’t that people won’t pay $20 for a burger and fries, just that they won’t pay $20 for a burger and fries at McDonald’s .

Then maybe a business that can't make enough money to pay livable wages should cease to exist? I thought this was the idea all along?

> "Then maybe a business that can't make enough money to pay livable wages should cease to exist?"

Sounds like a recipe for business closures en masse and ballooning unemployment, which I don't think is something anyone wants.

McDonalds is run well enough that they'd never do that anyway. They'd phase in changes to adapt to market conditions.

McDonalds, the corporation, would have some financial runway in which to adapt. The franchisees that own and operate individual McDonalds restaurants, however, they would most likely be decimated.

I'll pay $9 at Five Guys all day long.

If you doubled the wages of every McDonald's worker, burger prices would have to go up by 30 cents or so to compensate, if I recall the math properly.

If you’re referring to that Huffpost article from a few years ago, that got pulled because their math was faulty. It was based on assumptions about costs that weren’t rooted in reality, namely that the ingredients were the largest expense in the cost of the food. It’s not, it’s actually the labor, which is why increasing the employee wages has a disproportionate impact on the cost of the menu items.

Correction: I said that it got pulled, but as I recall they updated the article to reflect the inaccuracy in the original piece.

Pappa John's own previous CEO claimed it would cost 13 cents per pizza more to provide all his employees health insurance.

He cited this as a reason to not give his employees health insurance

That’s not an apples to apples comparison, but I agree that this is stupid.

Reply on news.ycombinator.com