Jump to content
Washington Football Team Logo
Extremeskins

D&T.com: McDonalds’ suggested budget for employees shows just how impossible it is to get by on minimum wage


Kindred

Recommended Posts

Slugg,

Your scenario assumes that corporations don't have the ability to influence wages. "Ooh, gee, there's just too much competition".

On the contrary, I think the evidence is pretty clear that yes, they do have that power, and have been exercising it, with Darwinian brutality, for decades. (And are continuing to attempt to do so, and, IMO, continuing to succeed.)

Link to comment
Share on other sites

Larry, are you referring to wage competition as applied to competency in the workforce? (I mean that as one worker can ask for a better wage due to their reliability, production, etc.?)

Or wage competition by the employers, such as Chik-Fil-A, who just flat out train employees better, and hold their associates to a higher standard (politics aside) so they can either advance, or take what they've learned to a different position outside of the food business entirely?

Link to comment
Share on other sites

What's wrong with you people. Haven't you been listening to the tea party? It's people getting free stuff like Obamaphones and all the drug addicts and foreigners skating off the system that is the problem. These lazy freeloaders need to go out and get a couple more jobs. [/sarc]

Link to comment
Share on other sites

twa... economists pushed for..and got what you are suggsting in stock options.  but in practice that works miserably at capturing actual performance by the CEO (you can benefit from short term gains, so volatility is rewarded, and if the market in general is moving up...the ceo MUST be doing a good job!)

 

i like the idea of rewarding perfomance, but people have to figure out how to measure and capture it better (and in a more incentive compatible way)-- Which managers really are out performing their peers, and how much is the delta between the really good and the pretty good actually worth to a company? currently managers of middling and downright sucky corporate performers are rewarded like they are the Elvis of MBAs.

 

 

aaaaaannnnnd... even if you DO successfully single out the real stars,  rewards in the hundreds of millions of dollars strikes me as ridiculous (as an equity-holder)

Link to comment
Share on other sites

I will say, I'm not certain that $14M is too much for the CEO of McDonald's. It's a heck of a big company.

 

Yeah, and he has so many decisions to make... Like when to run the Mc Rib special again.

 

Seriously man. Mcdonalds hasn't done anything new or different in 20 years. They could set up a computer program to run the company on autopilot at this point.

Link to comment
Share on other sites

While we are talking CEO pay here, I always find it interesting to look at how others handle the problem. While there is understandable resistance to caps on salary, the Brits came up with something that at least helps ensure that the CEOs earn their pay.

 

‎apps.olin.wustl.edu/FIRS/PDF/2009/808.pdf

 

 

In this study, we examine the effect on CEO pay of new legislation introduced in the United Kingdom (UK) at the end of 2002 that mandates an annual, non-binding shareholder vote (“say on pay”) on the executive pay report prepared by the board of directors. Based on a large sample of UK firms over the period from 2000 to 2005, we find no evidence of a change in the level and growth rate of CEO pay after the adoption of say on pay. However, we document an increase in the sensitivity of CEO pay to poor performance. The effect is more pronounced in firms with high voting dissent but it extends more generally to firms with excessive compensation in the “pre” period (2000-2002), regardless of the voting dissent, suggesting that some firms responded to threat of a negative vote by acting ahead of the annual meeting. Anecdotal evidence on explicit changes to CEO pay contracts in response to specific shareholder requests also indicates a shift toward greater sensitivity of CEO pay to poor performance. Overall, these findings appear consistent with calls for less “rewards for failure” that led to the legislation’s introduction. Our evidence may be of interest to regulators and investors who are pondering the merits of adopting say on pay in the US and other countries. 

Link to comment
Share on other sites

Yeah, and he has so many decisions to make... Like when to run the Mc Rib special again.

 

Seriously man. Mcdonalds hasn't done anything new or different in 20 years. They could set up a computer program to run the company on autopilot at this point.

Yep!  Good post.  It's the actual people, hopefully providing good service and product, in a clean atmosphere who keep return business. 

Unfortunately, that's not the case.  It all comes down to people.

Link to comment
Share on other sites

From the yahoo article a few posts up, people on minimum wage are getting "earned income tax credit, SNAP benefits (also known as food stamps), Medicaid, the Children’s Health Insurance Program, and the Temporary Assistance for Needy Families program."  Their gas is probably free for them.

 

We can raise minimum wage, cut their government benefits, and the costs of burgers go up.  The workers' lifestyles stay the same, I pay less taxes but pay more for my burgers.  Looks like a wash for everyone, the corporations get to keep raking in billions of dollars.

 

It's not a wash because the company can only raise the price of food so much before people determine it's not worth it and take their business elsewhere.

 

The biggest issue is that many companies are way too fixated on profits, so much so that they are at the point where any reduction in profits is frowned upon and they try to avoid it at all costs. Wal-mart, for example, could raise wages to liveable rates and take the loss out of the profit end and still rake in billions. That would still be viewed as a loss in profits and they can't have that, so instead they pay workers little and, as the article showed, drain the tax payers to satisfy their own ends. It's greed, plain and simple, and no, it's not good. Costco has shown that there is a successful business model where employees can also be paid well, but that's also because Costco accepted its billions in profit instead of following the Wal-mart model of more and more billions at the expense of literally everyone else.

 

The U.S. is in desperate need of responsible capitalism. The last thing we need is another Gilded Age.

Link to comment
Share on other sites

Well said, elkabong82.  And people also need to realize the difference between food and "food".

If paying folks to cook & sell crap,(yes, I've done it, even as a manager), makes you question how much you're spending, then you probably shouldn't be spending.  I've been a lifelong smoker, not a good thing, I know.  But you'll never hear me ranting over the price of cigarettes. 

I will admit to working in places where what's listed in the "product" is downright scary (Arby's), and until the public knows the garbage they're consuming, it will be a fight.  As long as these companies exist, and their CEOs keep raking in the bucks while cutting R & D in order to make a better, healthier product, (instead of just the "longer lasting" product you just may be trying to ingest now), we won't be able to advance society toward health.

Now back to paying people properly, no matter what they have to do...

Link to comment
Share on other sites

 

 

aaaaaannnnnd... even if you DO successfully single out the real stars,  rewards in the hundreds of millions of dollars strikes me as ridiculous (as an equity-holder)

 

well if you go with enough voting shares someone will listen, if not it is just noise.

 

many things pushed by economists don't work as planned.....or by CEO's (of course one of those usually finds a new home)

Link to comment
Share on other sites

Archived

This topic is now archived and is closed to further replies.

  • Recently Browsing   0 members

    • No registered users viewing this page.
×
×
  • Create New...