Even in countries with a high minimum wage, the golden arches manage to turn a profit. Here’s how.
Last week, fast-food workers around the United States yet again walked off the job to protest their low pay and demand a wage hike to $15 an hour, about double what many of them earn today. In doing so, they added another symbolic chapter to an eight-month-old campaign of one-day strikes that, so far, has yielded lots of news coverage, but not much in terms of tangible results.
So there’s a certain irony that in Australia, where the minimum wage for full-time adult workers already comes out to about $14.50 an hour, McDonald’s staffers were busy scoring an actual raise. On July 24, the country’s Fair Work Commission approved a new labor agreement between the company and its employees guaranteeing them up to a 15 percent pay increase by 2017.
And here’s the kicker: Many Australian McDonald’s workers were already making more than the minimum to begin with.
The land down under is, of course, not the only high-wage country in the world where McDonald’s does lucrative business. The company actually earns more revenue out of Europe than than it does from the United States. France, with its roughly $12.00 hourly minimum, has more than 1,200 locations. (Australia has about 900).
So how exactly do McDonald’s and other chains manage to turn a profit abroad while paying an hourly wage their American workers can only fantasize about while picketing? Part of the answer, as you might expect, boils down to higher prices. Academic estimates have suggested that, worldwide, worker pay accounts for at least 45 percent of a Big Mac’s cost. In the United States, industry analysts tend to peg the figure a bit lower—labor might make up anywhere from about a quarter of all expenses at your average franchise to about a third.* But generally speaking, in countries where pay is higher, so is the cost of two all-beef patties, as shown in the chart below by Princeton economist Orley Ashenfelter. Note Western Europe way out in the upper-right hand corner, with its high McWages and high Big Mac prices.
Read more at The Atlantic
Too many of America’s working poor have become victims of a bizarre kind of socioeconomic Stockholm Syndrome. I’m talking about poor people who vote the interests of rich people. They’re like dogs begging for scraps from the table of a master who has no intention of sharing anything. But I’m being unfair to dog owners. Most dog owners treat their pets better than some of America’s wealthiest treat their fellow citizens.
3 thoughts on “The Magical World Where McDonald’s Pays $15 an Hour? It’s Australia”
It seems like one of the significant takeaways from the graph shown here might be that in the relationship between employee wages and product cost, raising wages has had a greater impact upon the cost of product in poorer, more authoritarian countries than it has in wealthier, democratic countries. This study refutes the core Republican argument that raising the minimum wage dramatically increases product costs. Instead, what we see in classic free market economic terms is that paying a higher worker wage actually produces increased competition in the market place, which, in turn, has a leveling effect on consumer costs.
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The wealthy corporations are going to make their bottom line no matter what the circumstances. If they pay a higher wage, the cost of their product is going to go up.
They sure aren’t going to make less profit to give their employees a livable wage.
The GOP wants it both ways. Low minimum wage but more people off food assistance.
Some of the most right wing want to get rid of the minimum wage completely.
You aren’t going to curb or cure greed…..it’s a sickness….it’s catching, and it’s an addiction.
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The American right these days is dominated by unintelligent ideologues and opportunists. And you’re right–they want it both ways. They seem to think that a nation can thrive even while its people struggle for survival. It’s a logical absurdity that demonstrates an inability to engage in critical reasoning.
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