Things Not Looking Good for McDonald’s in the Face of Minimum Wage Hikes
Despite the increasing mounds of evidence verifying this fact, intellectually challenged lefties are still pushing for hikes all over the country, oblivious to the fact that raising minimum wage will spike the cost of living, putting folks right back in the same situation they were in before the hike.
Well, for what it’s worth, here’s even more evidence proving the minimum wage hike is bad for the economy, this time coming from McDonald’s who is getting hit hard, right in the bankroll.
From Hotair.Com:
The Golden Arches are looking a little less shiny this year and McDonald’s franchise owners see hard times coming. This time it has nothing to do with the raging national debate over whether or not the McRib is awesome or awful, however. The vast majority of their fast food outlets are not owned by the corporation, but by franchise operators. Those entrepreneurs are regularly polled about their outlook for the coming year and most of them aren’t putting on their happy faces. (From CNBC)As a result of all this, McDonald’s shares have dropped two percent, and franchises have reported a 2.9% drop in the month of June.
Just when you thought it couldn’t get much worse for McDonald’s, it did.
The six-month outlook for franchisees is at an all-time low, according to a small survey by Mark Kalinowski, a long-time restaurant industry analyst. (Tweet this).
Some 29 franchisees, who collectively own and operate 208 McDonald’s restaurants in the United States, were asked to give their six-month forecast from 1 (poor) to 5 (excellent). The average response was 1.69, the lowest in the survey’s 12-year history.
Previously, the lowest rating was 1.81, which was recorded three months ago.
“My numbers are not good due to new competitors,” one franchisee said. “Overall, sales are still in a slump and I don’t see much to get excited about in 2015.”
Another respondent said, “At least half of the operators in my region are on [the] verge of collapse. With minimum wage for fast food workers potentially increasing to incredibly high levels, we are facing a crisis situation.”
The math behind why minimum wage hikes are bad is so simple a caveman could do it — such as yours truly who failed algebra in high school, not once, but TWICE — so allow me to explain.
Running a business takes money. A company makes money by providing a quality service or product people want. The cash taken in from sales are what we call “profit.”
Owners of a business — even a franchise like McDonald’s — need to have a certain amount after business costs to take home and live on. When the cost of running a business goes up, there’s less profit available, and sometimes if it goes high enough, there’s not enough money to keep the doors open.
In other words, the extra financial strain that comes from a hike in the minimum wage zaps a business’s resources and prevents them from expanding and hiring new employees, providing for themselves and their families, and on occasion forces them to shut down.
Or, what’s likely to happen in this case, McDonald’s will raise the prices of the products on their menu, in which case, the consumer is the one who really loses.
None of these options are good for the economy.
Unfortunately, this just goes over the top of liberals’ heads like 747.
Maybe one day it’ll click. Probably not though.
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