AP (msm): Workers' protests highlight fast-food economics

[Omaha Steve]

http://apnews.excite.com/article/20130901/DA8HN4SG0.html

By CANDICE CHOI and JONATHAN FAHEY

NEW YORK (AP) - American fast-food workers often earn about $7.25 an hour to make the $3 chicken sandwiches and 99-cent tacos that generate billions of dollars in profit each year for McDonald's and other chains.

Thousands of the nation's many millions of fast-food workers and their supporters have been staging protests across the country in the past year to call attention to the struggles of living on or close to the federal minimum wage. The push raises the question of whether the economics of the fast-food industry allow room for a boost in pay for its workers.

The industry is built on a business model that keeps costs - including those for labor - low so companies can make money while satisfying America's love of cheap, fast food. And no group along the food chain, from the customers to the companies, wants to foot the bill for higher wages for workers.

Customers want a deal when they order burgers and fries. But those cheap eats squeeze franchise store owners who say they already survive on slim margins. And the corporations have to grow profits to keep shareholders happy.

FULL story at link.


In this Aug. 29, 2013, file photo, protestors demonstrate outside a fast-food restaurant in Los Angeles. Thousands of fast-food workers and their supporters have been staging protests across the country to call attention to the struggles of living on or close to the federal minimum wage. The push raises the question of whether the economics of the fast-food industry allow room for a boost in pay for its workers. (AP Photo/Nick Ut, File)

[alfie]

1. Does anyone know how the costs/profits are for franchise owners?

The article says "slim margins" for the owners. How much money goes back to the corporations? Do different owners get different discounts on supplies, maybe depending on volume? Just wondered.

[TreasonousBastard]

2. It was over 10 years a go, but I did the payroll for several restaurants...

including KFC, IHOP, and Burger King franchisees.

The rule then was profit was 25% of gross, which would be around 1.25 to 1.5 million per unit.

What the numbers are now, I have no idea. But just remember nobody is going to lay down a couple of million per unit to make peanuts.

[dem in texas]

3. Low Wage Workers get Government Support while the Corporations pocket the profits

People need to understand what is happening. These jobs traditionally were taken by high schoolers as part-time work, but that is no longer the case. The workers are young adults and older people. As the good paying manufacturing jobs have gone away, the only thing left for blue collar workers is service industry jobs such as fast food servers. If the minimum wage had kept pace with inflation, these folks would be making $10.50 to $11.00 an hour. They cannot pay their rent, buy food and take care of their families on $7.25 an hour. Throw in the fact that they have no medical care and you have people living on the brink.

The pay is so low that they qualify for food stamps, housing vouchers and other taxpayer funded public assistance. In the meantime, Walmart, McDonald's and all the service industry giants pocket record profits. We, the taxpayers, are giving the corporations a huge subsidy because the taxpayer is paying for the foods stamps, rent vouchers, medical care, Wic, etc. I wish people would wake up and see this when they go get a 99 cent burger or shop at Walmart. It is time to pay food service and all service workers a decent wage, the least that could be done is to bring up the minimum hourly wage to the inflation adjusted amount.