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Comment by staticassertion | Hacker News Reader

> Rising the wages across the board raises prices sooner or later.

Does it actually have to though? If a company is still profitable it doesn't actually have to raise its prices just because its profits go down.

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Typical margins in various unskilled labour jobs are under 10%, and labour is usually one of the big ticket items on the budget. If payroll goes up 30%, prices have to go up - or the business goes bankrupt.

Next up, someone who saw Founder is going to point out that McDonalds makes money from rent, not selling food. Sure, that might be true for McDonalds-the-corporation, but the McDonalds-down-the-street franchise will have to come up with the payroll money somehow.

Your average business is way less profitable than you think.

If a company relies on wage slavery and the implicit American threat of 'no work: no housing, no food, no medical', then those companies should die.

Edit: it's funny how I'm modded down, but this is straight up 'Socialism for the rich, and capitalism for the poor'. And it's doubly insulting that the unemployment "insurance" is being pulled en masse, with only regard to the monied elite.

Then again, I'd expect no less coming from a den of VC's and their ilk. They certainly don't care about the human.

For sure, I'd heard that 10% before and it makes sense - also aware of the McDonald's use case. I wasn't trying to imply that this was a simple or universal fix. Still, pulling unemployment to force people back to work feels really gross and I think we need to start to look at where there's room in that 10% (or more for other companies) to help people.

That said, do we need so many McDonald's? If, say, half of them closed, but the people who worked there had better lives and more free time, I'm inclined to believe the world would benefit. So maybe we end up with fewer low-skill jobs, but ultimately was society really benefiting greatly from that labor anyways?

And if the answer is "yes", ok, that's probably a case for the government to start providing or assisting in that service.

The McDonald's where minimum wage is $15 don't really charge that much more than the places where it's $7.25 though.

It's a lot more risky for the business though, which means that more marginal areas will not have a McDonald's if they can't do the volume.

A Sausage, Egg and Cheese McGriddle meal is $5.99 in Montgomery AL, but $9.19 in New York NY.

How much of the difference is wage and how much is rent?

I don't think this proves anything at all, but certainly not about wages. Food in big cities is often 2-3x the cost, which you can attribute to:

a) Customers having higher salaries

b) Property being massively more expensive

c) In the case of NYC, much higher property taxes

d) Yes, perhaps the cost of labor as well

Seems really hard to draw any conclusion given all of that.

>I don't think this proves anything at all

It absolutely disproves the statement "McDonald's where minimum wage is $15 don't really charge that much more than the places where it's $7.25"

McDonalds charges >50% more in this comparison of $15 vs. federal minimum wage locales.

I'm not making any claims whatsoever about why the price is higher in NYC. I just want people to stop relying on the canard "McDonalds prices are similar everywhere" during this debate.

Fair enough. You're right, and my response was attacking a straw man argument that you never made - sorry about that.

What's your source for those? I checked UberEats and it's $5.06 in Seattle.

>If a company is still profitable it doesn't actually have to raise its prices just because its profits go down.

Because companies/executives are known to be altruistic?

If it sounded like I was implying that companies would do that, that's my mistake - I was only saying that they could do that.

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