# McDonalds budget for minimum wage employees



## sags (May 15, 2010)

It would appear McDonalds and Visa have teamed up to provide a little financial help for their minimum wage employees.

A sample "budget" was created, showing it is possible to live on minimum wage.........and save an impression amount of money.

Only problems.........you have to work two full time jobs (72 hours) at minimum wage, live somewhere that heat isn't required, don't buy gas for the car, and have a $20 a month health care premium. McDonalds charges their employees $12 a week for a basic level health care plan though, so the employees would have to get it somewhere else.

I am thinking whoever the McDonald executive is...........who dreamed up this helpful resource for their employees, reminds me of the executive with Coca Cola who thought changing the formula was a great idea.

Sometimes you just gotta wonder how some people sitting in the corporate board rooms managed to get there.

http://www.theatlantic.com/business...ers-would-survive-on-the-minimum-wage/277845/

Interesting observation from the author of the article.............

_Of course, minimum wage workers aren't really entirely on their own, especially if they have children. There are programs like food stamps, Medicaid, and the earned income tax credit to help them along. But that's sort of the point. When large companies make profits by paying their workers unlivable wages, we end up subsidizing their bottom lines. _


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## andrewf (Mar 1, 2010)

A large percentage of people earning minimum wage aren't members of low-income households. Think teenaged burger flippers.


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## none (Jan 15, 2013)

The average age of MCdonald's employee is 29.


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## GoldStone (Mar 6, 2011)

dotnet, check your math.

(10*16 + 65) / 11 = 20.5


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## MoneyGal (Apr 24, 2009)

sags said:


> _Of course, minimum wage workers aren't really entirely on their own, especially if they have children. There are programs like food stamps, Medicaid, and the earned income tax credit to help them along. But that's sort of the point. When large companies make profits by paying their workers unlivable wages, we end up subsidizing their bottom lines. _


I've never thought or heard of universal health care and income-based refundable tax credits as "subsidies to corporate bottom lines."


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## Eclectic12 (Oct 20, 2010)

sags said:


> ... I am thinking whoever the McDonald executive is...........who dreamed up this helpful resource for their employees, reminds me of the executive with Coca Cola who thought changing the formula was a great idea.
> 
> Sometimes you just gotta wonder how some people sitting in the corporate board rooms managed to get there ...


What's hard to figure out?

As one reporter emailed me, the over-worked media types "don't have time to vet the details" of the story handed to them. The story gets printed as-is, even if there are obvious issues and if few analyse the details - maybe wages don't go up, possibly increasing profits.


Cheers


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## KrissyFair (Jul 8, 2013)

sags said:


> _When large companies make profits by paying their workers unlivable wages, we end up subsidizing their bottom lines. _


Bang on. Externalized costs


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## MoneyGal (Apr 24, 2009)

Or just possibly minimum wage jobs are not intended to provide a "living wage," however defined, and workers should govern their expectations in line with the signals the economy provides. 

(need a popcorn gif here, probably)


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## HaroldCrump (Jun 10, 2009)

Part of the reason for this apparent perception gap is our culture and expectation around food.
Consumers (we) demand that food be one of the cheapest products out there.
Cheaper than clothing, cheaper than consumer electronics, cars, education, etc.
Consumers (esp. American consumers) refuse to pay more for food and will always seek out cheaper and cheaper food options.

Thus, food service companies (incl. MCD) are simply responding to these consumer demands.
They have to protect their profitability, of course.
Therefore, the only lever that gives is the compensation of employees at the lower end.

This cheap food does not apply just to service only, but to the quality of the food itself.
Companies are constantly cutting costs and sourcing cheaper and cheaper food, regardless of how it is grown, how it is prepared, the environmental impact, and the health impact of consuming such food.
Anyhow, that is another topic.

In our society, we are happy to pay $800 for cell phones that last barely a year, but dare ask us to pay a dollar extra for a McBurger.


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## the-royal-mail (Dec 11, 2009)

LOL Harold. Your comments remind me of Food Inc. Factory farms etc, pretty scary stuff. Pretty much all the food we buy in stores and restaurants came from such sources. It doesn't matter if you walk to the store or you knew the owner. The food comes from these sources.

About the only thing you can do is deal with the farmers directly. We used to do this when we lived in the country; esp for milk, eggs, meat.


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## KrissyFair (Jul 8, 2013)

@MoneyGal hmmm.... Regardless of the signals the economy provides, I think that someone who works 40 hours at _any_ job should reasonably expect to have a roof and a full stomach. Oh, and heat under that roof even though McD's execs seem to think that's audacious even after 70 hours of work.


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## MoneyGal (Apr 24, 2009)

KrissyFair said:


> @MoneyGal hmmm.... Regardless of the signals the economy provides, I think that someone who works 40 hours at _any_ job should reasonably expect to have a roof and a full stomach. Oh, and heat under that roof even though McD's execs seem to think that's audacious even after 70 hours of work.


OK, leaving aside for the moment that we are talking about minimum wages in the U.S., which are quite different than in Canada, the signal the economy provides is that minimum wage jobs cannot provide (for those employees) "a roof and a full stomach" if related to as the only source of full-time employment. That was my point.


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## KrissyFair (Jul 8, 2013)

I get that. But from a totally pragmatic point of view, if no one can live off that, then everyone will have to seek higher wages. The higher wages will then become the defacto minimum. We moved to Calgary at the start of the last boom and Tim Horton's jobs _started_ at $15/hour (when legal minimum was 9-something) for exactly this reason. Either way, the cost of living is set by the lowest paid jobs. So as the OP pointed out, if that's not enough to live on independently then the rest of us subsidize it through social assistance.


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## MoneyGal (Apr 24, 2009)

Except...that isn't true. 

The "social assistance" being pointed to in the original article was 1. Medicare (we have universal health care in Canada; it isn't only for low-income earners and it isn't for "earners" in any case, but citizens), and 2. something called the Earned Income Tax Credit, which is a U.S. tax credit for low-income earners. We have those in Canada too, through the CCTB, NCB, HST/GST credit, etc. -- but I don't think anyone, ever, has related to those as "corporate subsidies" or "social assistance" (in the narrow sense of "welfare"). 

Besides which, if the solution is to have the minimum wage set by the market (as you have outlined in your last post, which TRM, note that I did not quote), what is your argument, exactly? When demand is sufficiently high for the skills required in "minimum wage" jobs, the minimum wage rises. 

Are you arguing that we should artifically raise (i.e., legislate) higher minimum wages and then drop "corporate subsidies" / "social assistance" such as universal health care and Canada's system of refundable tax credits? If not, what is your argument?


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## HaroldCrump (Jun 10, 2009)

MoneyGal said:


> Are you arguing that we should artifically raise (i.e., legislate) higher minimum wages and then drop "corporate subsidies" / "social assistance"


I can't speak for KrissyFair, but this won't help at all.
A mandatory minimum wage increase (in the US, just to stay in context), will simply cause the employers (MCD, WMT, Target, etc.) to raise the price of their products to compensate for that.
But the people that earn minimum wage also eat/shop at these exact retail outlets.
They have nowhere else to eat and shop at their income level.

Therefore, the increase in their wage will be offset (partially or entirely) by the increase in prices.
Yet, at the same time, they will stop receiving the social assistance that they are now receiving.

The _net_ result will be a reduction in their disposable income and standard of living.


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## MoneyGal (Apr 24, 2009)

HC, no argument from me on those points. 

And just for additional context, hourly minimum wage in the U.S. for tipped labour is $2.13. Lowest hourly minimum wage in Canada is Alberta at $9.25, with every other province & territory above $10.


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## Spudd (Oct 11, 2011)

But you can't compare the tipped labour minimum wage to the untipped. 

US tipped labour minimum wage is $2.13, but Canadian is $8.90 in Ontario. 
US non-tipped minimum wage is $7.25 according to the linked Atlantic article, and $10.25 for Ontario. MUCH less discrepancy than on the tipped labour front. 

http://www.labour.gov.on.ca/english/es/pubs/guide/minwage.php

I am too lazy to look up the minimum wage for the other provinces.


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## MoneyGal (Apr 24, 2009)

Sorry - the other discussion I read on this issue (not the Atlantic article and not here) extrapolated to all food servers, not just McDonald's, and I forgot that we were discussing McDonald's only here. 

I actually didn't know that there was a tipped minimum wage in Canada. I worked in bars and restaurants all through university, but that is 20+ years ago. If I ever knew there was a tipped minimum wage, I had forgotten!


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## Toronto.gal (Jan 8, 2010)

HaroldCrump said:


> In our society, we are happy to pay $800 for cell phones that last barely a year, but dare ask us to pay a dollar extra for a McBurger.


Also, many are happy to pay $$$$ for water and McCafés, but complain about gas prices, yet they also like to drive cars that have equally expensive drinking habits, LOL.


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## KrissyFair (Jul 8, 2013)

I think we're getting a bit muddied by mixing US and Canada in one convo. In Canada we have higher base pay and universal social nets to everyone's benefit.

Low skilled jobs are the foundation of the economy - you can't have a consumption based economy without devoting a significant chunk of your workforce to minimum wage service and retail jobs. And sure, a portion of those workers don't need to make their entire living from those jobs because they're teenagers or whatever. But a good chunk do - and always will. If they can't provide for their basic needs from that full time job, then something is out of whack with the market. Either their costs are erroneously high (real estate bubble) or their salaries are erroneously low because someone other than the employer is making up the difference. e.g. health care. Eventually everyone needs medical attention whether they have health insurance or not. If the bill can't be paid the loss gets distributed and inflates the cost of care for the next person or for those who earn more and can pay.

To say that a person can't expect to live off of the earnings from a low-skilled job displays an incredible amount of privilege in the assumption that everyone can get a higher paying job. The crummy US school system means that if your parents earn minimum wage, your assigned school will likely be total crap. Meaning you might come out of school unable to read (as is the case with almost half of their adult population). If you can't read, what are your chances of getting the better-than-minimum-wage job? And if legislating the wage makes it artificial, then the very existence of a minimum means all labour is artificially overvalued from the outset. So maybe we should scrap minimum wages altogether? 

My argument is that eventually someone pays the true cost of getting people through life. Whether government steps in to rejig the settings or to prop up the underpaid workers or not. For my part (and as someone who owns McDonald's shares) I'd rather see the corps pay their fair share at the outset.


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## none (Jan 15, 2013)

KrissyFair said:


> My argument is that eventually someone pays the true cost of getting people through life. Whether government steps in to rejig the settings or to prop up the underpaid workers or not. For my part (and as someone who owns McDonald's shares) I'd rather see the corps pay their fair share at the outset.


Thank you for being a responsible investor.

edit: Look at the Costco vs Walmart comparison. Costco treats it's employees well - health care, solid pay - reasonable (I think) executive pay and they have done extremely well despite what all the 'race to the bottom: IF YOU PAY PEOPLE A LIVING WAGE THE ECONOMY WILL COLLAPSE!!" Bull.

People who believe that economic efficiency is about getting as much money to the top as fast as possible in the hope that it'll trickle down ignore all evidence to the contrary. Economic inefficiency can actually be a very good thing for an economy and as importantly a society.


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## KrissyFair (Jul 8, 2013)

Thanks, none


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## fatcat (Nov 11, 2009)

HaroldCrump said:


> I can't speak for KrissyFair, but this won't help at all.
> A mandatory minimum wage increase (in the US, just to stay in context), will simply cause the employers (MCD, WMT, Target, etc.) to raise the price of their products to compensate for that.
> But the people that earn minimum wage also eat/shop at these exact retail outlets.
> They have nowhere else to eat and shop at their income level.
> ...


false harold and gal, labor is only part of total costs ... 

a rise in the minimum wage would only have a small effect on retail costs of food and other goods, since it is only part of the cost of the product and service

low skilled workers would have more money in their pocket to spend and prices would not rise at the level of their increased wages ... 

and with better wages they might not need food stamps and the social assistance they now get

when i lived in seattle, wal-mart was hiring part time workers and instead of giving them health care, was actually telling to apply to the state low-income health plan which was subsidized by the state ... i think wal-mart has the highest gross sales in the world and they can't even offer health care to their workers 

this is the kind of stuff that will ultimately prove karl marx right ...


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## kevinlk (Jul 9, 2009)

CNN has already picked up the story and replied with budgets given by McDonald employees: http://money.cnn.com/gallery/news/economy/2013/07/17/mcdonalds-worker-budget/index.html?iid=HP_LN

Not talking about the US, but I firmly believe that the minimum wage in Canada is high enough to provide a very good standard of living. The eternal problem is that people sees luxuries as essentials, which shouldn't be mixed up.


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## KrissyFair (Jul 8, 2013)

To go a little off topic onto the expensive cell phone issue... I used to think the same thing. If you're barely making ends meet, how can you afford a cell phone plan? But I work with a lot of very low income families and the reality is that cell phones are a spin off cost of housing insecurity and low wages. When you have either no fixed address (FYI most homeless people don't live on the street they couch surf amongst friends or relatives) or when your address changes frequently, the cell phone often becomes the only available option. Even if you have a permanent residence, you might not be able to come up with the security deposit for a landline, whereas cells often require no outlay. It's an example of the weird irony that being poor often means you pay more for things a wealthier person could get for less.


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## Toronto.gal (Jan 8, 2010)

*fatcat:* I was not arguing the issue of wages at all, as others had already made valid points!


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## none (Jan 15, 2013)

It's hard for me to imagine living on ~20K a year (full time minimum wage rate) but I'm pretty sure it's possible - of course if houses were actually rented at 'fair value' based on current sale prices minimum wage wouldn't be.

Of course we all know that Canadian RE is overpriced thought ammiright


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## MoneyGal (Apr 24, 2009)

He might have been referring to me. I wasn't making the argument, personally, that wages represent the majority of McDonald's costs. Commodity prices are a much bigger factor.


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## andrewf (Mar 1, 2010)

Even if you can't live on minimum wage, some people will be willing to work for it because not everyone needs to live on it. Many of them are just teenagers paying for their iPhone and movie tickets.


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## Toronto.gal (Jan 8, 2010)

*M.Gal* you're definitely one of the few here, that consistently make valid points.

I bet you made a good waitress btw [with the tips].


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## Eclectic12 (Oct 20, 2010)

HaroldCrump said:


> I can't speak for KrissyFair, but this won't help at all.
> 
> .... But the people that earn minimum wage also eat/shop at these exact retail outlets.
> They have nowhere else to eat and shop at their income level ...


For a range of stores - yes but I'm not so sure it's true for food, especially in parts of the US.

Some of the restaurants my parents frequented in Florida were regular price, week in - week out - significantly cheaper than MCD's or Arby's or a whole host of other national chain brands.

Where MCD's is the cheapest - that's different.

So it would appear to be a range that may or may not apply.


Cheers


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## Eclectic12 (Oct 20, 2010)

fatcat said:


> false harold and gal, labor is only part of total costs ...
> 
> a rise in the minimum wage would only have a small effect on retail costs of food and other goods, since it is only part of the cost of the product and service
> 
> low skilled workers would have more money in their pocket to spend and prices would not rise at the level of their increased wages ...



True ... the example the Texas gov't rep used as part of his election campaign was "let's double the farmer's income. 

But wait, I hear the outcry that the cost of food is going through the roof because of it. Using this box of cereal as an example, if the distributors & middle man only pass on the cost increase based on the farmer's income - the box now costs $0.06 more.

The farmer now has more money to buy a tv, replace the truck etc."


Of course, part of the challenge is to get the distributors & middle man to not tack on extra for themselves.




fatcat said:


> ... i think wal-mart has the highest gross sales in the world and they can't even offer health care to their workers ...


Can't offer or choose not to?


Cheers


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## HaroldCrump (Jun 10, 2009)

fatcat said:


> a rise in the minimum wage would only have a small effect on retail costs of food and other goods, since it is only part of the cost of the product and service


Yes, it is only a part of the costs, agreed, but all else being equal, the money has to come from _somewhere_.
Either profit margin of the company has to go down, or the increased wages must lead to a significantly increased demand of products and services that it raises the real GDP.
Will the latter happen? I believe there is no clear historical evidence for this.
What is more likely to happen is a surreptitious increase in the price of low end food.



> and with better wages they might not need food stamps and the social assistance they now get


The bar for social assistance may have to be raised as well.
Even if it doesn't, will it actually lead to lower taxes (which fund the social assistance programs)? I doubt that.



> this is the kind of stuff that will ultimately prove karl marx right ...


IMHO, he has already been proven right over and over again, as far as his analysis of capitalism is concerned (not the prediction of communism). But that's a topic for another time.


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## fatcat (Nov 11, 2009)

HaroldCrump said:


> Yes, it is only a part of the costs, agreed, but all else being equal, the money has to come from _somewhere_.
> Either profit margin of the company has to go down, or the increased wages must lead to a significantly increased demand of products and services that it raises the real GDP.
> Will the latter happen? I believe there is no clear historical evidence for this.
> What is more likely to happen is a surreptitious increase in the price of low end food.
> ...


do a search for "effect minimum wage on retail prices" and i see mostly stories that indicate a very, very small effect on retail prices
View attachment 268




> IMHO, he has already been proven right over and over again, as far as his analysis of capitalism is concerned (not the prediction of communism). But that's a topic for another time.


well said, i agree


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## avrex (Nov 14, 2010)

I think the minimum wage in Canada should increase.
Perhaps to $12-$13.

It's not as if the jobs at the Canadian McDonald's at the corner of Main and King would be at risk to moving offshore. 
The company would have to pay this increased wage. An increased wage lowers the burden placed on other government programs.

So we'll end up paying 18 cents more for a burger. So, what.
We should all consider cheaper, healthier meals at home anyway.


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## MoreMiles (Apr 20, 2011)

They now want $14 per hour?! I guess it's to pay for their $80 / month cell phone plan. :hopelessness:

http://www.thestar.com/news/queensp...anel_to_look_at_more_than_just_inflation.html


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## HaroldCrump (Jun 10, 2009)

fatcat said:


> do a search for "effect minimum wage on retail prices" and i see mostly stories that indicate a very, very small effect on retail prices


I did searches for correlation between minimum wage in the US and GDP growth rate, because IMO, that can be the only argument for raising min. wages from this level.
There does not seem to be any evidence of that.
I have not had the time to delve into the details of the studies and examine the source data, and it is possible that most of the studies done are from political "think thanks" opposed to the idea ("confirmation bias"), but there doesn't seem to be any evidence of this.

To me, if raises in minimum wages were accretive to GDP growth, we could have solved lots of problems by now.
Just keep raising minimum wage every year and we would have had glowing GDP growth around the world.

The fact that we have rampant inflation in essential goods and services (food, housing, energy) while wages have stayed stagnant (dropped in real terms) shows that it is not a simple problem that can be solved by Congress mandating wages and salaries like in Soviet USSR.


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## andrewf (Mar 1, 2010)

fatcat, clearly raising minimum wages has to have a big effect eventually. Raising minimum wage to $100 an hour, for instance, would result in mass inflation and unemployment. $100 per hour in real terms would result in a shutdown of the economy.


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## Dmoney (Apr 28, 2011)

Eclectic12 said:


> True ... the example the Texas gov't rep used as part of his election campaign was "let's double the farmer's income.
> 
> But wait, I hear the outcry that the cost of food is going through the roof because of it. Using this box of cereal as an example, if the distributors & middle man only pass on the cost increase based on the farmer's income - the box now costs $0.06 more.
> 
> ...


If you double the farmers' income, the tractor maker will want his wage doubled.
Double his wage the banker who finances the tractor company will want his wage doubled.
Double his wage, the CEO of the bank wants his wage doubled.
Double his wage, the wall street protesters want their wage doubled.
In the end, everyone earns twice as much, prices double, and relatively speaking, we're back to square one.

Reality is, people don't care as much about the $$$ amount they make, they care far more about the $$$ amount they make *relative to others*
People assign a value, whether consciously or unconsciously, to certain jobs, and if their pay is less compared to the pay of a worker doing work deemed "less valuable", they will demand more.
If a burger flipper is making as much money as me, I'm going to be pissed off. If you suddenly double the pay of a burger flipper, damn right I'm going to want a *significant* increase to my pay, if only to demonstrate that I'm more valuable than a burger flipper.

http://www.uc3m.es/portal/page/portal/actualidad_cientifica/noticias/Happiness_at_work
I'm sure there are better links, this is first one when I searched online. I know I've read others, and I only read the introductory paragraph here.


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## Hawkdog (Oct 26, 2012)

none said:


> Thank you for being a responsible investor.
> 
> edit: Look at the Costco vs Walmart comparison. Costco treats it's employees well - health care, solid pay - reasonable (I think) executive pay and they have done extremely well despite what all the 'race to the bottom: IF YOU PAY PEOPLE A LIVING WAGE THE ECONOMY WILL COLLAPSE!!" Bull.
> 
> People who believe that economic efficiency is about getting as much money to the top as fast as possible in the hope that it'll trickle down ignore all evidence to the contrary. Economic inefficiency can actually be a very good thing for an economy and as importantly a society.


Costco is also a "club" you need a card/membership that you pay an annual fee. That probably contributes to the extra benefits. I wonder what Costco makes in a year off of memberships? Walmart survives due to that the fact that people want cheap disposable stuff. Costco survives for those customers who want bulk stuff - businesses and such plus individuals who are willing to pay a membership fee to enter the store (and those of us who like the hotdogs).
I really have difficulty with the comparison. Use Target or a store that doesn't sell bulk. what are the wages there?

Its all supply demand anyway, your gonna make more at a mickey d's in Fort Mac than in Victoria. If no one works for what they are paying then I am sure they raise the wages.


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## none (Jan 15, 2013)

How about Costco versus Sam's club (owned by Walmart)


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## Eclectic12 (Oct 20, 2010)

Dmoney said:


> If you double the farmers' income, the tractor maker will want his wage doubled ... (insert a lot of other workers who would want more) ...
> 
> In the end, everyone earns twice as much, prices double, and relatively speaking, we're back to square one.


Where all else is relatively equal - that may happen but then again, there's lots of examples where it doesn't.


The whole point of the politician's proposal was that the farmers targeted were making drastically less than anyone else on your list, with the possible exception of the protesters (I'm not familiar with protester pay scale ... :rolleyes2.

I don't have the numbers but a similar Canadian example from about the same time that uses hourly wages is the former Niagara grape king (i.e. award winning farmer) who had the opportunity to buy a garage in town. At the time, minimum wage was $4 an hour and he calculated he was making $0.50 an hour. 

If I recall correctly, the disparity the politician was pointing out was far worse than what I've listed.




Dmoney said:


> Reality is, people don't care as much about the $$$ amount they make, they care far more about the $$$ amount they make *relative to others*. People assign a value, whether consciously or unconsciously, to certain jobs, and if their pay is less compared to the pay of a worker doing work deemed "less valuable", they will demand more.
> 
> If a burger flipper is making as much money as me, I'm going to be pissed off. If you suddenly double the pay of a burger flipper, damn right I'm going to want a *significant* increase to my pay, if only to demonstrate that I'm more valuable than a burger flipper.


So you are saying that if a burger flipper works 85 hour weeks to end up with an income of $15K while you work 50 hour weeks to end up with an income of $80K or more, you are going to be unhappy about that the burger flipper is making $30K and demand a salary increase as well?




Dmoney said:


> http://www.uc3m.es/portal/page/portal/actualidad_cientifica/noticias/Happiness_at_work
> I'm sure there are better links, this is first one when I searched online. I know I've read others, and I only read the introductory paragraph here.


That's all well and good but ignores that the suggested adjustment is more like some but not all janitors having their salary adjusted while the managers and above is not adjusted. 


Cheers

*P. S.*

To being the burger flipper analogy closer to what the Texas politician was suggesting - the burger flippers making an income of $20 to $200K are not having their income adjusted, just the ones from $0 to $20K.


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## fatcat (Nov 11, 2009)

andrew and harold
you guys get your economists and i'll get mine :chuncky:

i have no real idea what it would do
i would be willing to roll the dice that an increase in the wages at the bottom would defintely outpace whatever increased costs they would pay in food and living costs

the rest of us would bear the burden in higher costs also ... this strikes me as fair

even at $10 an hour that is around 1300-1400 monthly net and would be damn hard to live on in any major north american city

don't forget, increasingly, these are _permanent_ jobs for more and more people, not stepping stone jobs, not starter jobs

it's a gamble worth taking


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## HaroldCrump (Jun 10, 2009)

fatcat said:


> don't forget, increasingly, these are _permanent_ jobs for more and more people, not stepping stone jobs, not starter jobs


Since you bring up _permanent_ jobs, keep in mind that all the min. wage workers with permanent jobs have _already_ received a wage increase - and a rather significant one - as a result of ObamaCare.
Their employers are now footing the additional bill for providing ObamaCare.
Corporations like Wal*Mart etc. tried to resist it as best as they could, but it did not work out.

So, there you go, the minimum wage increase is already done.


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## Hawkdog (Oct 26, 2012)

none said:


> How about Costco versus Sam's club (owned by Walmart)


Thats a better comparison, although not relevant in Canada. All the Sam's were closed in 2009.

My point was that low income earners are not likely to have Costco as an option for shopping due to the membership fees and its mostly bulk food. The membership requirements at Costco are annoying (i do shop there)
What are the wages for a great canadian superstore? that would be a good comparison to Walmart (Canada) IMO.

I am not huge fan of Walmart or McDonalds but there not going away anytime soon. In fact I recently refused to sign a petition aimed at bringing Walmart into our town. There has been a push every since Zellers closed its doors, no where to buy cheap kids clothing and that sorta thing (at least thats what the petition stated) - It was actually at the counter in the Mark's work wear store - and I asked the girl wouldn't that be competition? she just wanted cheap clothes.


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## Eclectic12 (Oct 20, 2010)

Hawkdog said:


> ... Walmart survives due to that the fact that people want cheap disposable stuff.
> Costco survives for those customers who want bulk stuff - businesses and such plus individuals who are willing to pay a membership fee to enter the store ...


Hmmm ... I'm not sure "survives" is really the right description for either one. According to these links, Walmart is the world's largest retailer and Costco is the seventh. 

http://www.ask.com/wiki/Walmart
http://www.ask.com/wiki/Costco




Hawkdog said:


> ... (and those of us who like the hotdogs).


I'm also not sure why one would need a membership for the food stand. At least in Ontario, it's always located through the exit door, past the "sign up here for a membership" desk. The only place one that I've seen people asked for their membership is the entrance door and never at the food stand.




Hawkdog said:


> ... My point was that low income earners are not likely to have Costco as an option for shopping due to the membership fees and its mostly bulk food. The membership requirements at Costco are annoying (i do shop there).


Near as I can recall, it was "pay $55" so I'm not sure what annoying requirements there are.

As for low income earners - I suspect it depends on how location and competition. I also suspect that they'd be more willing to split bulk purchases compared the higher earners I've approached who see such a split as a waste of their time.




Hawkdog said:


> ... What are the wages for a great canadian superstore? that would be a good comparison to Walmart (Canada) IMO.


Not sure but it does have union involvement like Loblaws.
http://www.ufcw1000a.ca/index.php?o...nadian-superstore-agreement-online&Itemid=326

Cheers


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## cainvest (May 1, 2013)

Hawkdog said:


> What are the wages for a great canadian superstore? that would be a good comparison to Walmart (Canada) IMO.


They are on par with Walmart and they also maintain a large "part-time" staff to reduce costs. 

With the lower pay rate places (Walmart, Mcd's, CSS) also comes a much better chance of unskilled kids to get their first job, not likely to happen at Costco.


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## kevinlk (Jul 9, 2009)

fatcat said:


> even at $10 an hour that is around 1300-1400 monthly net and would be damn hard to live on in any major north american city


It can certainly be done. I live in Montreal, in a nice location (near public transport, 50 mins on foot to work and downtown), in a 4 and a half apartment. Here's a rundown of my expenses for the last month:

Rent: 728$
Insurance: 20.61$
Grocery/misc: 189.70$
Entertainment: 108.62$
Electricity (2 months): 84.94$
Telecom (Internet, TV, landline and mobile): 171.13$
Public transport for bad weather: 24.50$
Total: 1327.50$

While this doesn't include items such as clothing, this doesn't include the 425$ month + 50% electricity bill I get from the roommate that I have. That in itself would be enough to cover clothings and small unexpected bills, while allowing to save. Can be considered a simple living but it works. The point is, it is possible, at least in Quebec, to make a decent living on minimum wage, as long one keeps their head on. 

Note: It is true that I don't have kids, but in this example, if someone wishes to have kids, a significant amount of money could be saved if both partners work a few years, considering these expenses, before having kids.


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## andrewf (Mar 1, 2010)

$171 for telecom is a lot. It's a lot more than I spend as a non-min wage earner.


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## kevinlk (Jul 9, 2009)

It's indeed a lot and could certainly have cuttings be done.The landline is more or less required for my work, and the TV, while I personally don't really watch it, is always welcome for the roommate, who pays half the telecom bill anyway (except for the mobile part). I just wanted to point out that a minimum wage worker could live in a major city like that. While I'm currently no minimum wage worker, I'll be taking a sabbatical soon, so these low expenses won't make a big dent to my savings.


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## Sampson (Apr 3, 2009)

dotnet_nerd said:


> The _average _human being has one breast and one testicle.


Priceless, I will have to use this.


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## Dmoney (Apr 28, 2011)

Eclectic12 said:


> So you are saying that if a burger flipper works 85 hour weeks to end up with an income of $15K while you work 50 hour weeks to end up with an income of $80K or more, you are going to be unhappy about that the burger flipper is making $30K and demand a salary increase as well?
> 
> Cheers


In a vacuum, where the change in burger flipper's wages don't impact anyone buy me, no, I don't care if their pay is doubled, because I'd still be significantly better off than a burger flipper, and if the price of a burger went up, I'd eat a chicken wrap instead.

But nothing in economics ever happens in a vacuum.

Real world example... Will use Ontario numbers since that's where I live. I suppose US numbers would all be about 30% lower.

Burger flipper, graduated high school, works 40 hours a week at minimum wage ($10.25/hr), 52 weeks a year - Earns $21,320
Hairdresser, one year beauty school, works 40 hours a week at $15/hr, 52 weeks/year - Earns $31,200
Communications officer, 4 year degree + 1 year post graduate, on salary, works 40-50 hours a week - Earns $45,000
Accountant, 4 year degree + certification, on salary, 40-50 hours a week - Earns $55,000
Bank branch manager, 4 year degree + a number of courses + 15 years experience, works 40 hours a week - Earns $75,000
Investment banker, 4 year degree + MBA, works 80 hours a week - Earns $150,000 

What happens when a burger flipper suddenly doubles his pay and is now making $42,640? 
Is the hairdresser going to be content making only $31,200, despite some education and time spent developing a skill? Or is the hairdresser more likely to also want double the salary? Now the hairdresser is making $62,400... more than the communications officer and the accountant, both of whom have invested significant money and time in an education. I can't see them being too happy to be making the same as a burger flipper, less than a hairdresser. Double their salaries.
Of course now the bank manager, who has an education, numerous finance/investment courses, and 15 years of experience won't be thrilled that a couple fresh graduates out-earn him, despite all the time he's put in. He'll want his salary doubled as well.
Well, now he makes the same as the big bad investment banker. But the I-banker graduated top of his class, puts in 80 hour work weeks and spent $100,000 on an MBA. Well you can probably see where this is going. I don't think he'll be too thrilled to be making the same as the guy working half as hard. 
So now the I-banker wants his salary doubled as well.

So to double back to your question, I wouldn't be in any way unhappy that a burger flipper is making $40K instead of $20K. But everyone else earning less than or close to $40K would. And I would be unhappy if suddenly teachers, police, accountants, lawyers, bus drivers, journalists etc. all earned twice as much, and I was suddenly making less money than them. 
So it's not the fact that people earning minimum wage will now earn more that's an issue. That would be wonderful in the utopian world of fairytale economics. The issue is that if minimum wage were to increase, everyone else would want a similar raise.

The cost of a burger wouldn't double if the guy flipping it was paid double. But it sure would if the guy at the cash, the manager, the truck driver who delivered it, the farmer that raised the cow, the guy who butchered the cow, the food inspector that inspected the slaughterhouse etc. etc. etc. all got paid double.


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## nathan79 (Feb 21, 2011)

Maybe the investment banker's salary already doubled, so the burger flipper is just catching up to where he should be? Even if the investment banker's income didn't increase, he'd still be making nearly 4X as much as the burger flipper. Granted, I'm sure that's perfectly fair since he does work twice as many hours, and invested significant resources in his education. But does that entitle him to earn 7X as much as a burger flipper?

"...The richest 20% of Canadians increased its share of total national income between 1993 and 2008, while the poorest and middle-income groups lost share."

"...the 246,000 people whose average income was $405,000—took home almost a third of all growth in incomes from 1998 to 2007."

http://www.policyalternatives.ca/si...e/2012/07/CCPA-BC-Inequality-Taxes-slides.pdf

A low minimum wage is bad for the economy because it necessitates higher taxes to facilitate transfers to low income workers, which costs everyone including the investment banker. Wouldn't he rather pay less tax?

And we needn't double the minimum wage -- most studies have shown that about $16/hr is a sufficient living wage for most of Canada (outside perhaps Vancouver and Toronto).


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## Spidey (May 11, 2009)

Jim Rohn says the trouble with debating minimum wage is that we should realize that this wage is meant to be a "ladder" not a "bed". I was just speaking to an acquaintance on a recent trip to BC. Her son struggled through school all his life and started working at McDonalds in the BC lower mainland. He eventually was offered a manager position in the Whistler area. He has just recently accepted an extremely well-paying job as a McDonalds district manager in the Fort McMurray area. He is only in his mid-20s and he's making more than most university graduates. This all from a kid who at one point looked as though he had a questionable economic future. I wonder if he would have had this opportunity if minimum wage jobs were made more competitive salary-wise.


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## Dmoney (Apr 28, 2011)

nathan79 said:


> Maybe the investment banker's salary already doubled, so the burger flipper is just catching up to where he should be? Even if the investment banker's income didn't increase, he'd still be making nearly 4X as much as the burger flipper. Granted, I'm sure that's perfectly fair since he does work twice as many hours, and invested significant resources in his education. But does that entitle him to earn 7X as much as a burger flipper?
> 
> *Jose Bautista spent countless hours perfecting his batting style... Does that entitle him to earn 660X as much as a burger flipper?
> If he sells out ball games, then hell yes!
> ...


Also, in 2007 only about 5% of workers earned minimum wage... So is this really going to change that many people's lives? There are very few people actually living on minimum wage, so increasing minimum wage would probably be largely irrelevant.


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## nathan79 (Feb 21, 2011)

The question is why are the rich improving at a greater pace.. what are we doing as a society that is causing income inequality to increase? Is this something we should continue doing?

I have no problem with Justin earning an exorbitant income, but at least I can refuse to contribute to it, the same way I refuse to pay for sports tickets. It's much harder to avoid paying the wages of CEOs and other professionals. Almost every day I'm paying for some good or service that is provided by a corporation.

It may be true that only 5% earn actual minimum wage, but more are earning just a few dollars over minimum wage.

This is a bit out of date, but the general idea is valid: http://www.poornomore.ca/files/workingpoor.pdf


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## donald (Apr 18, 2011)

High income earners have to perform!There is much expected of a investment banker and to a large degree from what i have read-base pay is under 50% of compensation.
Most high-paid business people are getting their compensation largely due to the revenue they generate for their employer(your extremely ''exposed")by your results.Education aside,a employer/firm of a investment banker does not care about his ''new'' hires past,it is not like you get the job as a investment banker and than coast on your ''pedigree''Not to mention you have thousands vying for your spot-sink or swim-I'm sure every quarter a banker is under the gun(part of thriving in the job)
Min-wage jobs as a ''rule'' zero is almost expected(and pay matches that)I'm sure tim hortons is happy just to have ''warm'' bodies pouring coffee!I own a construction company and if some of my ''general'' labourers show up i'm happy(i expect very little out of them)
If any professional uses a min-wage employee as a sliding scale your likely doomed imo.
Almost everyone with a high paid job is getting high pay because that is what value they produce.There is ''no'' free money in the market-place.


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## Eclectic12 (Oct 20, 2010)

Dmoney said:


> In a vacuum, where the change in burger flipper's wages don't impact anyone buy me, no, I don't care if their pay is doubled, because I'd still be significantly better off than a burger flipper, and if the price of a burger went up, I'd eat a chicken wrap instead.
> 
> But nothing in economics ever happens in a vacuum.
> 
> Real world example... Will use Ontario numbers since that's where I live. I suppose US numbers would all be about 30% lower ...


Again - it is not all burger flippers and the adjustment does not put the affected farmer ahead of many. Bear in mind that at the time, a fair chunk of those higher up were being fired as there weren't enough sales.




Dmoney said:


> The cost of a burger wouldn't double if the guy flipping it was paid double. But it sure would if the guy at the cash, the manager, the truck driver who delivered it, the farmer that raised the cow, the guy who butchered the cow, the food inspector that inspected the slaughterhouse etc. etc. etc. all got paid double.


Agreed ... the disagreement is whether the sub-set of farmers the Texas politician was targeting was enough & would be bumped up enough for anyone to notice.


Cheers


*P.S.*

IMO, there is also an issue with comparing the farmer to a burger flipper - the number of burgers sold over the course of the year won't affect what the burger flipper is paid. The farmer, on the other hand, is directly affected by how much is sold and for what price. The owner of the burger joint or of a similar small business is a better analogy.


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## sags (May 15, 2010)

With 101 Million people in the partaking in one of the 15 food aid programs supplied by the US government at a cost of 114 Billion dollars a year, something is going to have to change. That is 1/3rd of the population.

http://www.usda.gov/oig/webdocs/27001-0001-10.pdf


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## Eclectic12 (Oct 20, 2010)

donald said:


> High income earners have to perform!
> There is much expected of a investment banker and to a large degree from what i have read-base pay is under 50% of compensation ... .


That depends on a lot of variables including the contract signed and what management is enforcing ... there are lots of examples of little or under-performance, with healthy pay cheques. 

Or are you arguing the CEO that presided over the decline of the company to the point that the board fired him nine months after hiring him, somehow performed to deserve a payout of $22 million CAD? 

Or maybe you think the investment bankers at a Toronto firm that were profiled in the newspaper should be offered loans & when they informed the company they "couldn't pay them back", in addition to forgiving the loans, the company paid extra taxes to the CRA (forgiving the loans instead of charging interest made the loan a taxable benefit). If I recall correctly, the paper had identified fifteen people who had done this at one firm, with the cost being absorbed by the business over several million. 




nathan79 said:


> ... I'm sure every quarter a banker is under the gun(part of thriving in the job)
> Min-wage jobs as a ''rule'' zero is almost expected(and pay matches that)I'm sure tim hortons is happy just to have ''warm'' bodies pouring coffee!
> 
> I own a construction company and if some of my ''general'' labourers show up i'm happy(i expect very little out of them)
> If any professional uses a min-wage employee as a sliding scale your likely doomed imo.


Again - it depends on variables. In areas like Calgary and Fort McMurray during boom times, outlets like McD's and Tim's offered flexible shifts, health benefits and well above the minimum wage to combat the labour shortage. Others here in Ontario, were getting out of similar jobs asap as just showing up was not enough for the boss.




nathan79 said:


> Almost everyone with a high paid job is getting high pay because that is what value they produce. There is ''no'' free money in the market-place.


Let's see - as CEO I stuck my head in the sand as the company business slows down while I keep saying business is booming. The board hires a replacement for me at $400K to turn the company around, changes my responsibilities and keeps paying my multi-million dollar salary for at least another year to two years.

Sounds like pretty close to free money ... 


Then there's the CEO contract written so that if the company changed the CEO's responsibilities without the CEO's agreement, a $6 million payment could be triggered by the CEO. The part the newspapers were the most taken aback about was that unlike severance, this dandy did not require a firing to take place - it was just an extra payment.


Cheers


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## KrissyFair (Jul 8, 2013)

Keeping in mind that this is a Huffington Post article (ie take it with a grain of salt), I still thought it was interesting...
Doubling McDonald's Salaries Would Cause Your Big Mac To Cost Just 68¢ More: Study


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## andrewf (Mar 1, 2010)

But doubling minimum wage would cause many things to rise in price by 10 - 20%.


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## none (Jan 15, 2013)

andrewf said:


> But doubling minimum wage would cause many things to rise in price by 10 - 20%.


Evidence? (Well, big mac costs about $4 so you are right it would increase the cost by ~15%) but is there more evidence to this?

If it is true though, why is that necessarily a bad thing?


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## andrewf (Mar 1, 2010)

Well, if many prices rise, the Bank of Canada will have to tighten monetary policy to contain the sudden rise in inflation, leading to unemployment. 15% is 7 years worth of inflation at the target rate.

I'm not convinced that having a high minimum wage is socially optimal. I'd rather we have a guaranteed annual income.

Believe it or not, but whether an individual earns minimum wage is very weakly correlated with whether that individual is a member of a low income household. Many minimum wage earners are teenagers living with middle class parents trying to pay for their iPhone or tuition. If we want to help poor people, a good place to start would be to give them money. Saying that they are not allowed to work for less than $22 is probably not going to be socially optimal.


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## none (Jan 15, 2013)

In the article minimum wage would become ~$15 not $22 - this is an american study after all.

I am aware that many making minimum wage are not heads of households - although about 50% are. Further, it has been shown numerous times that many of those trying to live on minimum wage also rely heavily on social services.

Why should tax dollars be subsidizing a poor business model. I'm all for taxation and 'we're all in this together' but I don't see how this model is sustainable in the long term.


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## andrewf (Mar 1, 2010)

How is it subsidizing a poor business model? People work for minimum wage when there is no more productive job for them to do. Raising minimum wage would drive businesses to automate away many low wage positions, as you see in Europe.


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## none (Jan 15, 2013)

Here: http://www.forbes.com/sites/rickung...-no-more-taxpayer-subsidized-profits-for-you/


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## fatcat (Nov 11, 2009)

andrewf said:


> But doubling minimum wage would cause many things to rise in price by 10 - 20%.


taken from article here: How Much A Big Mac Would Cost If McDonald's Doubled Salaries http://huff.to/153NnZk 

it would mean that fast-food workers would have a lot more money to spend on only somewhat more expensive fast food ...



> Doubling the salaries and benefits of all McDonald's employees -- from workers earning the federal minimum wage of $7.25 per hour to CEO Donald Thompson, whose 2012 compensation totaled $8.75 million -- *would cause the price of a Big Mac to increase just 68 cents, from $3.99 to $4.67*, Arnobio Morelix told HuffPost. In addition, every item on the Dollar Menu would go up by 17 cents.
> 
> Morelix's research comes as fast-food workers across the country strike for a $15 per hour minimum wage. Workers are also protesting for the right to unionize without fear of retaliation. Protesters are holding strikes in seven cities over a four-day period, according to Salon.
> 
> ...


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## andrewf (Mar 1, 2010)

none said:


> Here: http://www.forbes.com/sites/rickung...-no-more-taxpayer-subsidized-profits-for-you/


Politicians make arguments that aren't valid all the time. It's their MO.


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## sags (May 15, 2010)

Big corporations, like Walmart and McDonalds move into an area and force out the existing small, local businesses, putting those owners and employees out of work.

They are only a net benefit to the community if they replace the lost jobs with higher paying jobs.

The Walmarts of the world need the community.............the community doesn't need them.

It is interesting that Walmart and others don't dispute the cost to the taxpayers, but rely on "job killer" rhetoric.

One problem with that argument, is if Walmart or McDonalds were to disappear............the vacuum would be replaced by someone else.


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## andrewf (Mar 1, 2010)

You're getting trapped in the money illusion. Everyone in the community benefits from better products and services at lower prices. This is an increase in real purchasing power. It's like everyone in the community gets a small raise when more efficient companies enter a community.

In my experience, small restaurants abuse their employees even more than chains like McDonalds.


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## peterk (May 16, 2010)

If a local diner can make me a delicious egg and bacon sandwhich that's greasy but not too greasy, with a side of delightful hashbrown patties of just the right crispiness, and charge me $5, and have it ready 90 seconds after I walk in the door.... then I'd gladly go to their establisment.


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## Eclectic12 (Oct 20, 2010)

peterk said:


> If a local diner can make me a delicious egg and bacon sandwhich that's greasy but not too greasy, with a side of delightful hashbrown patties of just the right crispiness, and charge me $5, and have it ready 90 seconds after I walk in the door.... then I'd gladly go to their establisment.


The cafeteria at work has a Friday breakfast special. Two eggs to order, two slices of toast, choice of bacon or sausage, potatoe wedges and coffee for $5.10, taxes included. Since I'm an employee, it gets discounted to $4.60. Depending on the lineup, it's between three to five minutes.


Cheers


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## donald (Apr 18, 2011)

There will always be room for mom&pop establishments imo esp catering to the affluent!A large % of people don't want or won't visit the souless/faceless/corporate machines that are mcdonalds ect.
I was just in cabin country near kenora ontario over the weekend.
It was so nice to leave capitalism behind for the wknd!!
I think if anything mass expansion of walmart/mcd ect is targeted in all middle/lower class communities.
It was refreshing going to the locally owned shops/restaurants
If given the choice most people i would think(not incl time sensitive people here rushing to work ect)would choose non-commercial establishments.You can't always put a price-tag on everything----when i think of capitalism expansion i think of communities that do not have a say(affluent neighborhoods keep them out---i noticed)you never see mcd/wmt ect in a 5/10 mile radius of were the wealthy live,there is a reason)


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## andrewf (Mar 1, 2010)

Higher income individuals want to consume 'authenticity'. Hence all the conspicuous authenticity, which is just an evolution of conspicuous consumption.


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## donald (Apr 18, 2011)

I'm not sure about that but it makes sense(authenticity)I was thinking of more ''urban decay" Once a community puts in a walmart(which in turn creates spawning of their ''brotherhood'' it signals a lower-class/middle class ''shift'' imo.

Walmart sets up/home depot gets planned___mcd/timmies comes on board across the street and than superstore & applebee's(they all come together!!)Developer need to address the low-paid worker's that are being employed and viola low-end apartments........And the demographic being the demographic(crime/drugs/gangs/ect)
This why you don't see a walmart enter a affluent neighboorhood.It's like a cancer once the tap opens for corporate machines(by the way us stock holders are part off it,it is what it is,i got no problem with it-this is what capitalism is.


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## donald (Apr 18, 2011)

There is no ''net'' benefit for some communities,it's actually a negative net benefit.


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## cainvest (May 1, 2013)

donald said:


> This why you don't see a walmart enter a affluent neighboorhood.


We have Walmart/Mcds/Timmies all a few minutes away from every "class" of area here ...


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## donald (Apr 18, 2011)

I've just noticed usually they are not in the ''area'' more like authentic boutique's grocer's maybe sbux/whole food/trader joe's(high-end companies)private investment booutique ect ect.
Area's have the character buildings intact ect.(not sprawling eye sore's like tim's ect)
I've been to white-rock bc/naples flordia ect(example/multi-million residential real-estate)and you never see walmart invading.It is just me?


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