The Math Behind Higher Pay at McDonald's - what do you think?

I realize this hasn't much to do with the wage issue, but:

Walmart will never put a McDonald's out of business... at least in my part of Canada. Every Wal Mart in my city (4 and plenty more in the surrounding towns) has a big ol' McDonalds in the store. Isn't it like that in the US? Here, it's a symbiotic relationship - like oak trees and mistletoe, only without any of nature's aesthetic appeal. Want to buy junk? Wal Mart. Want to eat junk? Same place, different counter.

I think all the people involved get around the same pay. :sad:

Johann

 

It's both.

Workers earning an honest living deserve the dignity of a living wage.

The skills situation is very real. This is why I (a) point to the East Asian Tigers' "miracle," (b) recommend the implementation of a strong qualifications framework that (c) focuses on specific, governed markets. And laissez-faire capitalism isn't designed to address either (wages or skills).

A corporation exists for one main reason above all others: to create wealth for its owners. It serves its owners, not society, even at the expense of said society. If you're an investor/stakeholder/stockholder, you would expect nothing less. But society is capable of creating other organizations to offset this unfettered capitalistic power and, in turn, create greater common good. Unions, professions, and governments all do this. Guess which element of society tends to attack these things?

The 1980's saw two forces unleashed that changed the employment scene forever. First, we saw the destruction of trade protections (like NAFTA in the '90's) and other forces (like the rise of other countries' capabilities) that moved much manufacturing overseas. Why pay workers $40 an hour to do a job someone somewhere else will do for a tenth of that amount? For example, there was a time when being able to build a quality car and ship it to the U.S. for sale at a competitive price was beyond the reach of most countries. No more. G'Bye, Detroit. And just about everything else on a large, low-tech scale. Even IBM decided it shouldn't be in the industry it practically invented and sold its PC works to Lenovo.

The fact is, low-tech American workers are no longer protected.

The other dynamic is the destruction of the "defined benefit" retirement plans (pensions based on service) to "defined contribution" plans (like the 401K). This not only took the employer off the hook for its workers' retirements, it also encouraged workers to move on to new employers, taking their retirements with them. (Vesting schedules dull, but do not eliminate, this factor.) With workers no longer tied to their employers and moving more frequently, the employers have less and less incentive to invest in worker development. Instead, workers are taking on a greater portion of their own development and employers then compete for them. And where do workers go to do this? Without a strong qualifications framework, they go where they can get credentials recognized by employers: degrees and certifications. Thus, the inflation we see in credentials and the next bubble: student loans.

(Healthcare will be next. As we move away from a system of running health insurance through employers, along with other liberating aspects of the ACA, you'll have employees who are even more mobile.)

What to do? This is too big for companies--and they're not incentivized to make these investments. Government will have to step up to set up these frameworks so workers in old industries can retrain, workers coming out of secondary school can have recognized alternatives to college, and by focusing on certain aspects of the job market we can grow our nation's capabilities in areas where we enjoy a comparative advantage while, simultaneously, de-emphasizing areas in which we do not anymore. This can be done in cooperation with business, tertiary education systems, governments at all levels, school districts, and professional/occupational bodies. Other countries have done it. We can, too.

 

I suppose I just come across as more approachable than you. What can I say, people love me.

 

Not sure how remarkable it is. If you treat people in real life the way you treat people on these boards I've got to imagine your list of friends it pretty short.

 

I have a lot of family who worked for the automotive industry. They were pretty much unskilled laborers with high school educations. They made a LOT of money (~$70k) and had excellent benefits. My cousin worked nights and said he would work 2 hours to meet his quota then sleep for 6 hours. My uncle's job was to check off parts on a clipboard as they were loaded into a semi. My uncle is now retired with a good pension from GM and now has a new career. He got a job with the local city mowing grass for 6 months of the year then gets unemployment for the other 6 months. Every year!

Do you think any of the above contributed to the loss of manufacturing jobs? It sure didn't help.

 

American workers are, relative to other countries, quite productive. Your anecdotes, while interesting, don't actually prove the point.

Job losses in manufacturing have much more to do with increasing technological capabilities in other countries, the shift towards an information-based economy, etc. We might joke about call centers in India, but they work cheaper and there is no loss in delivery time by fielding those calls in another country.

Again, microeconomics isn't macroeconomics.

 

Well, it will get worse before it gets better, according to this article income could fall for the next 30 years.

 

Listen everybody, we should probably just agree with Dick on this one. After all, Dick has a Ph.D in Higher Education Administration from the Union Institute and University and an MBA from National University and he's led training classes for organizations including AT&T, Verizon, UVA, SDSU. Dick was a damn officer in the US Air Force! We should not only listen to, but blindly agree with, everything Dick has to say ever (regardless of how absurd most of it is)! Clearly, with educational and professional credentials like those Dick holds he must be deemed the community expert on economic theory and what's best for the U.S. economy.

 

How come you didn't mention Unions as a reason for manufacturing job flight out of the US? Anyway its not as bad as most people assume it is (manufacturing). I think (last I read) the US is still one of the top manufacturers in the world (maybe second to China?).

 

Because that wouldn't support his position. Dick doesn't like to deal with things like "facts" and "reason" when constructing his arguments.

 

"Rich."

You've made two ad hominem attacks just today. Please stop. Thank you.

 

I normally don't spouse the same views as Rich does. However, belittling his education or work experience is uncalled for. The whole thing just reeks of academic elitism and snobbery. :nono:

 

I was hoping we'd get a gradual recovery, but I knew it was possible we could end up like Japan with a "lost decade". Now it looks like it could be worse than Japan's troubles were.

Huge portions of the problems lay with bad decisions made not only by the government but by the populace as well. We have huge cultural, governmental and infrastructure issues that will take longer than a 4-year or even 8-year presidential administration to fix. People forget that America didn't get to its place of economic prominence overnight. Getting back there may require monumental amounts of time, patience and hard hard work.

 

We are crossing the line on this. RICH has an opinion and he does have background that would lend to a strong knowledge base. Let's take the higher road.

 

I so agree with this, but who will do it? It's a big thing, as you clearly point out. Personally, I think only government--in partnership with other entities--can pull it off.

 

Wow. Where someone goes to college doesn't seem to make a difference, clearly.