Seattle approves $15 minimum wage

a reply to: pointr97

There is a pretty big difference between gross profit and net. Unless you think there are no overhead costs involved.
Not sure where you got those number though, See above.

McDonald's is subsidized? That's news to me.

originally posted by: Phage
a reply to: pointr97
Here's McDonald's (Corp.) P&L. Being publicly held, they need to report this stuff.

www.marketwatch.com...

Gross (excluding D&A because those just go to the balance sheet): 12.49B
Pretax Net: 6.61B
Posttax Net: 4.00B

Pretax margin: 5.3%
Posttax margin: 3.2%

25 cents on a Big Mac combo.

Insane?
Do you think the franchisees (who actually determine payroll rates) do a lot better?

I don't think we are looking at the same numbers in 2013 from your link, McDonald's spent 17.2B and made 10.9B pre tax dollars......that is far from a 5.2% margin.

a reply to: pointr97
Again...gross profit is not the same as net profit....unless you have no overhead.

Yeah, I messed up.
14% post tax.
$1.12 on a Big Mac combo.

originally posted by: Phage
a reply to: pointr97

There is a pretty big difference between gross profit and net. Unless you think there are no overhead costs involved.
Not sure where you got those number though, See above.

McDonald's is subsidized? That's news to me.

Gross costs include overhead....look at your link, the available net income to common(common stock holder) is 5.59B, that is 5.59B in profit to common sharholder per the costs at 17.2B in costs for 2013.....Gross profit is by definition taking all costs=labor, inventory, marketing, and capitol goods against all sales........Takes another look at the numbers, fast food is not hurting.

A company that has an employee working a full schedule of 30+ hours a week AND receives government subsidies is receiving governmental subsidies themselves.....If Mc'd's has an employee that makes a product for them and works a full time schedule, receives food stamps or subsidies, and McD's makes a profit off that employee.....then sorry, but they receive subsidies.

originally posted by: Phage
a reply to: pointr97
Again...gross profit is not the same as net profit....unless you have no overhead.

sorry phage, but net profit is after all other expenses are taken out......gross profit is simply the operating cycles costs vs sales......net includes more of the long term debt, capital devaluation....overhead costs are figured in that operating cycle....ie, rent, electricity, and so on.....whatever it takes to sell the burger.

a reply to: pointr97

net includes more of the long term debt, capital devaluation

Nope. Look at the statement.
Depreciation, Depletion & Amortization are deducted from sales and I omitted them from gross profit on purpose because they carry to the balance sheet.

a reply to: pointr97

then sorry, but they receive subsidies.

That's ridiculous. The subsidy goes to the individual, not McDonald's.

McDonald's pays unemployment insurance premiums. Disability premiums. Worker's comp premiums. Payroll taxes. All based on gross payroll. Payroll goes up, so do those costs.

originally posted by: Phage
a reply to: pointr97

net includes more of the long term debt, capital devaluation

Nope. Look at the statement.
Depreciation, Depletion & Amortization are deducted from sales and I omitted them from gross profit on purpose because they carry to the balance sheet.

Think we may be getting mired in the mud......My initial point is that I think the free market won't react as the doomsayers are predicting....Your point, those companies aren't doing as well as I think they are....sum it up?

i don't understand why we don't make businesses and just sell to each other. maybe we could form cooperatives, where we agree to buy only from each other. i mean, we're a big enough nation that we could feasibly survive not partaking in a global community. it's forcing us to compete with global slave wages, that has screwed the pooch.

a reply to: pointr97
My point(s).
No "insane" profit margin.
No subsidies.
Massive increase in minimum wage has ripple effects. Not only minimum wage workers will require increased wages in order to be fair. Skilled workers and those with seniority will expect (and deserve) increases.

a reply to: undo
Well, for one thing, we want things that we don't have here.
For another, we want to spend as little as possible for them and if someplace else can make them for less...guess what?

originally posted by: Phage
a reply to: undo
Well, for one thing, we want things that we don't have here.
For another, we want to spend as little as possible for them and if someplace else can make them for less...guess what?

yeah but those are just side effects of business being forced out. you don't need super cheap goods if you have enough money to buy more expensive goods.

a reply to: undo
I'm not saying super cheap.
I'm saying that if something costs less people are going to buy more of it instead of the same thing that costs more.
It's a very basic economic principle.

originally posted by: Phage
a reply to: pointr97
My point(s).
No "insane" profit margin.
No subsidies.
Massive increase in minimum wage has ripple effects. Not only minimum wage workers will require increased wages in order to be fair. Skilled workers and those with seniority will expect (and deserve) increases.

But if a McD's employee can't make enough to support themselves from a 40 hr work week because McD's pays them min wage.....Doesn't that mean that McD's profit, even if it is a single dollar, is subsidized by my tax dollar?

a reply to: pointr97

Doesn't that mean that McD's profit, even if it is a single dollar, is subsidized by my tax dollar?

No. In fact it's the opposite.

If that person had no job at all they would be receiving more from the government.

If McDonald's lays that person off because the increase in wages reduces profitability, that person will receive unemployment insurance (decreasing government benefits) for which McDonald's has been paying premiums (and thereby increase their premiums)

External assistance is not a bad thing....Goodness knows, i believe in helping those on hard times....However, the first thing an investor will ask is how will this product stand on it's own....A business model that integrates long term government assistance is not a viable model.....A proper business model should be able to create, market and sell their product at a profit without external assistance..........min wage employees that receive food stamps means that those employees could not make that product for that company at the price of labor the company is willing to pay......chalking it up to 'unskilled' is actually moronic, the industrial revolution proved that one......but you are welcome to look up all the subsidies that companies like Walmart and McD receive besides employee food stamp and subsidized living.......Walmart for example, when a company goes in to build a location, they front the money to build the facilities.....not walmart.

originally posted by: Phage
a reply to: pointr97

Doesn't that mean that McD's profit, even if it is a single dollar, is subsidized by my tax dollar?

No. In fact it's the opposite.

If that person had no job at all they would be receiving more from the government.

If McDonald's lays that person off because the increase in wages reduces profitability, that person will receive unemployment insurance (decreasing government benefits) for which McDonald's has been paying premiums (and thereby increase their premiums)

I'll challenge you with that.....give me the numbers, an average SNAP benefit for a min wage worker vs completely unemployed.....

a reply to: pointr97

A business model that integrates long term government assistance is not a viable model

It doesn't. It doesn't matter to McDonald's business plan if their workers have government assistance. One way or the other. McDonald's business plan involves hiring entry level, unskilled workers. That's it.

originally posted by: Phage
a reply to: undo
I'm not saying super cheap.
I'm saying that if something costs less people are going to buy more of it instead of the same thing that costs more.
It's a very basic economic principle.

that's where the idea of a cooperative comes into play. lets say you make furniture. you join the cooperative. i need some furniture, i go to your catalog and order the furniture i need. i could've went to walmart, but since i'm part of the cooperative, i want the cooperative to succeed and buy from you instead. one way to get this to work is to have a fee for being in the cooperative and then using that fee to invest in interest bearing commodities like, real estate, gold or silver or some other real thing of value (platinum and even some of the rarer metals, for example), then sharing the profits with the members of the cooperative at the end of each fiscal year.

to keep people from cheating and buying cheaper goods from outside the cooperative, make it part of the agreement that they must purchase from members of the cooperative x-amount of times per year, and the more purchases from other cooperative members, the higher their slice of the profit pie will be, at the end of the year, based on the actual dollar amount they've spent. in other words, buying a ton of small items, will net them small profit bonus. whereas bigger more substantial purchases, will net them larger profit bonuses.

it's not the love of money that's at center stage, it's an attempt to stop the entire country from falling into abject poverty.