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


Kindred

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Well, I think that some inflation is guaranteed, and that has consequences. (Good and bad).

I don't think it's GUARANTEED that corporate profits go down. (But my gut suggests it).

I suspect that it's likely that there would be a slight adjustment of money, from the top of the income scale, towards the bottom. But probably not much.

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I kind of have a problem with both ends of the spectrum. I think corporations have too large a profit margin as others have suggested in here. The greed at the top is terrible, when looking back on companies like Enron and such.

But at the other end, if you end up working at minimum wage jobs in your mid 30s or into your 40s, who do you have to blame but yourself? There are plenty of other avenues through education, trades, military and such. I mean, don't take my post as saying all poor people are lazy, as that's not what I think. I know some people have been hit with hard times and that's understandable. But somewhere along the line you have to rethink your position. I also see a cycle of poverty in some families. I've worked at DSS before and I saw one generation come in for benefits and then the next generation coming in the door behind them. The hardest part is breaking that cycle.

We weren't rich or upper middle class growing up. We were working class, did ok for ourselves and could always pay our bills. Myself, I'm 45 and it took me 23 years to get to a job paying over 60K. I had to earn my way up. My first full time job out of college payed $6.60 an hour in an office (1991). I had to live with roomates, had to scrimp and save and had to eat alot of Ramen. It can be done, but you have to be patient. This generation wants to come out of college making 60-100K and aren't willing to work their way up the ladder.

I would like to see minimum wage go up at the expense of profits, but isn't the cost of paying a factory worker to screw in a bolt for $30+/an hour what got the auto industry in trouble? There has to be limits, but I would like to see it go up.

Very reasonable response pj. However, I want to add one more item -- the amount of money wasted by Federal and State Governments, especially by Maryland. Case in point: I have a friend that isn't quite all there, who has some fairly significant emotional issues. He needs the help. His housing is provided by the state...in $2500/mo apartments on Old Georgetown Road, across the street from the Harris Teeter (I forget the name of the complex).

How much money is uselessly wasted like this? How much can this be put to better use?

I used to apply for disabilities when I worked at a hospital and you'd be amazed how angry the patients would get when the didn't get as much money as they thought they would not realizing you get what you put in and if you haven't worked steady it will be low.

I'm not sure we've ever been able to curb gov't waste.

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I want to pick back up, if anyone else is interested. My major question on this topic is this: What are the negative impacts to an increase in the minimum wage? I understand that the bottom line of businesses would be impacted, but I'm talking on the macro level.

 

Thanks in advance.

 

I don't think it SHOULD have an impact, but I think companies would raise prices of things. Just based on the fact that they would be paying their employees more. Also, they would justify it as people have more money, so they could afford to pay more for things.

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I think initially it would raise the standard of living of those receiving higher "lower" wages but eventually prices would rise for rent, utilities, food and it would all equal out resulting in minimum wage being too low. Again.

Edit: Think of it from a landlord's perspective. If the market will bear higher rents, wouldn't you charge more?

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I want to pick back up, if anyone else is interested. My major question on this topic is this: What are the negative impacts to an increase in the minimum wage? I understand that the bottom line of businesses would be impacted, but I'm talking on the macro level.

 

Thanks in advance.

 

I don't think it SHOULD have an impact, but I think companies would raise prices of things. Just based on the fact that they would be paying their employees more. Also, they would justify it as people have more money, so they could afford to pay more for things.

 

 

I think initially it would raise the standard of living of those receiving higher "lower" wages but eventually prices would rise for rent, utilities, food and it would all equal out resulting in minimum wage being too low. Again.

 

That's what I assumed...that it would lead to inflation. So, my question would be to the group...why is this the solution? I envision people making a little more money, temporaritly finding a couple new luxury items that they can afford, and everyone having the same ideological debate in 5 years. How can we possibly sleep at night when we pay hard-working Americans only $11 per hour?

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I want to pick back up, if anyone else is interested. My major question on this topic is this: What are the negative impacts to an increase in the minimum wage? I understand that the bottom line of businesses would be impacted, but I'm talking on the macro level.

 

Thanks in advance.

 

I don't think it SHOULD have an impact, but I think companies would raise prices of things. Just based on the fact that they would be paying their employees more. Also, they would justify it as people have more money, so they could afford to pay more for things.

 

 

>I think initially it would raise the standard of living of those receiving higher "lower" wages but eventually prices would rise for rent, utilities, food and it would all equal out resulting in minimum wage being too low. Again.

 

That's what I assumed...that it would lead to inflation. So, my question would be to the group...why is this the solution? I envision people making a little more money, temporaritly finding a couple new luxury items that they can afford, and everyone having the same ideological debate in 5 years. How can we possibly sleep at night when we pay hard-working Americans only $11 per hour?

 

 

It's a vicious cycle. Minimum wage goes up, prices increase, white-collar workers want raises since the minimum wage went up. Then in starts all over again.

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I want to pick back up, if anyone else is interested. My major question on this topic is this: What are the negative impacts to an increase in the minimum wage? I understand that the bottom line of businesses would be impacted, but I'm talking on the macro level.

 

Thanks in advance.

 

I don't think it SHOULD have an impact, but I think companies would raise prices of things. Just based on the fact that they would be paying their employees more. Also, they would justify it as people have more money, so they could afford to pay more for things.

 

 

>I think initially it would raise the standard of living of those receiving higher "lower" wages but eventually prices would rise for rent, utilities, food and it would all equal out resulting in minimum wage being too low.

Again.

 

That's what I assumed...that it would lead to inflation. So, my question would be to the group...why is this the solution? I envision people making a little more money, temporaritly finding a couple new luxury items that they can afford, and everyone having the same ideological debate in 5 years. How can we possibly sleep at night when we pay hard-working Americans only $11 per hour?

 

It's a vicious cycle. Minimum wage goes up, prices increase, white-collar workers want raises since the minimum wage went up. Then in starts all over again.

 

 

So, is raising the minimum wage the correct decision? Is there something else we can attempt to change?

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I want to pick back up, if anyone else is interested. My major question on this topic is this: What are the negative impacts to an increase in the minimum wage? I understand that the bottom line of businesses would be impacted, but I'm talking on the macro level.

Thanks in advance.

I don't think it SHOULD have an impact, but I think companies would raise prices of things. Just based on the fact that they would be paying their employees more. Also, they would justify it as people have more money, so they could afford to pay more for things.

>>>>I think initially it would raise the standard of living of those receiving higher "lower" wages but eventually prices would rise for rent, utilities, food and it would all equal out resulting in minimum wage being too low.Again.lockquote>

That's what I assumed...that it would lead to inflation. So, my question would be to the group...why is this the solution? I envision people making a little more money, temporaritly finding a couple new luxury items that they can afford, and everyone having the same ideological debate in 5 years. How can we possibly sleep at night when we pay hard-working Americans only $11 per hour?

It's a vicious cycle. Minimum wage goes up, prices increase, white-collar workers want raises since the minimum wage went up. Then in starts all over again.

Thats called a growing economy, and is healthy. It's why salaries and prices in 1st world countries are higher than 3rd world countries. Inflation is only bad when prices and salaries are out of wack - e.g prices are too high without a corresponding increase in salaries and there's a significant decrease in people's purchasing power.

I am ALWAYS in favor of policies which increase the wealth of the masses. Too many of our business practices funnel wealth to the very top and slowly squeeze out the middle class. The result is a top heavy economy where the masses do not have the wealth to supply the demand. Our goal should NOT be to maximize corporate profits, it should be to maximize the wealth/well being of the people. Period.

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If minimum wage increases the employees would be paid more but wouldn't it also give the business a lot more customers to buy their goods & services to offset those costs? For example if you are a small business that employs 20 people.  Increasing their wage would be offset by the 20,000 other folks in the town/city that have more money now to come shop at your store? Wouldn't it ultimately be getting more money into the circulation and in essence help the economy?

 

 

 

Also, those prepaid cards are designed to benefit everyone but the person being paid with the card.  There is virtually a fee to do anything and everything and IMO, every employee should be given the option to opt out, especially if you have a checking account, why would direct deposit not be an option?  I've read articles about just how hard banks are trying to lobby employers to pay their entire employees with those cards instead of traditional checks/cash.

They are selling it as a convenience issue, however when you are a low wage worker, you probably find it rather inconvenient to be charged up to $2.00 for a transaction to access the money you have just earned working.

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http://money.cnn.com/gallery/news/economy/2013/07/17/mcdonalds-worker-budget/index.html?hpt=hp_c3

 

Devonte Yates, 21, is working to get an Associate's Degree in criminal justice and logs in about 25 hours a week at a McDonald's in Milwaukee. To cut down on costs, he lives with his mom and little sister. Still, he struggles to pay his $180 tuition bill each month. He's only able to pay about $90.

 

He said that the school is more forgiving of him not paying his bill in full while he is still taking classes. But when he graduates next semester, he is worried about how he's going to pay it back.

 

Besides tuition, some of Yates' expenses that fall under the "other" category are $40 per month for contact lenses and $50 on clothes. Food, at $300, is his biggest monthly expense, as it is for most of the other workers interviewed.

More at link

Why does he need $50 a month for clothes?  He could apply that $50 towards his tuition meaning he'd be able to pay $140 of the $180 a month in tuition and owe less when he gets out of school.  I buy clothes when I need them.  I've never set aside an amount per month for clothes.  I may go shopping for a few things once every 6 months, depending on the garment needed. I have a pair of cargo shorts that are 8 years old and still in good shape with no holes or worn out places. 

 

I mean, I'm not trying to downgrade what he's doing. Glad he's going back to school and wants to better himself.  Sounds like he'll make it, but sometimes you have to shift your priorities and clothes would be one.  Get your degree and better paying job, then set aside a clothing allowance.

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So yeah. These "payment cards" pretty much sound like robbery to me. I don't know what else to call it.

I have never heard of this.

what a total **** job.

Seriously,,  this isn't America. That's disgusting.

 

Somebody give me a good reason why we should not sharpen up the guillotine and cut off some heads?

**** the ****ing banks.

Bleeding this country dry.

 

~Bang

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1.  Income mobility in the US is now less than in much of Europe.  If that isn't a worrying thing to you, I don't know what to say.

 

2.  I think much of this conversation is off because it doesn't take into account the effects raising the miminum wage will have on jobs leaving the US.  For McDonald's workers that isn't much of an issue, but certainly for some min. wage jobs that is an issue.

 

I've said before, I suspect that the effect of a min. wage increase depends on the conditions under which it occurs.  I suspect that when the ecomony is going well that min. wage increases have little affect on things like unemployment, but I suspect when the economy isn't doing well increasing min. wage does push people out of jobs, in todays world.

 

It might not happen over night, and it might be going to happen anyway (the jobs leaving the US for over seas), but I do think it will speed up the process.

 

Though, you could argue if they are going to leave any way, then speeding them up, but putting more money in the pockets of the person that is doing the job now might be a good idea.

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So yeah. These "payment cards" pretty much sound like robbery to me. I don't know what else to call it.

I have never heard of this.

what a total **** job.

Seriously,,  this isn't America. That's disgusting.

 

Somebody give me a good reason why we should not sharpen up the guillotine and cut off some heads?

**** the ****ing banks.

Bleeding this country dry.

 

~Bang

 

I wanted to, but the executioner charges a fee if I use my prepaid debit card.

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http://money.cnn.com/gallery/news/economy/2013/07/17/mcdonalds-worker-budget/index.html?hpt=hp_c3

 

Devonte Yates, 21, is working to get an Associate's Degree in criminal justice and logs in about 25 hours a week at a McDonald's in Milwaukee. To cut down on costs, he lives with his mom and little sister. Still, he struggles to pay his $180 tuition bill each month. He's only able to pay about $90.

 

He said that the school is more forgiving of him not paying his bill in full while he is still taking classes. But when he graduates next semester, he is worried about how he's going to pay it back.

 

Besides tuition, some of Yates' expenses that fall under the "other" category are $40 per month for contact lenses and $50 on clothes. Food, at $300, is his biggest monthly expense, as it is for most of the other workers interviewed.

More at link

Why does he need $50 a month for clothes? 

 

It didn't say the clothes were a per month charge. They could have written that part a little better sure, but how about you try absorbing the entire message and budget instead of just going after 1 small thing that may be frivolous? You do realize that even if that were a $50 a month thing and taken out of the "other" line that he'd still be coming up short? Maybe he should cut his food budget down and just eat at McDonald's all the time!

 

Or maybe instead of asking why does he pay $50 a month for clothes, why not ask why a multi-billion dollar company doesn't offer it's employees reasonable tuition assistance or even a reasonable enough hourly wage to where higher education is actually possible? You are nitpicking a very small problem and completely ignoring the glaringly obvious one.

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That's what I assumed...that it would lead to inflation. So, my question would be to the group...why is this the solution? I envision people making a little more money, temporaritly finding a couple new luxury items that they can afford, and everyone having the same ideological debate in 5 years. How can we possibly sleep at night when we pay hard-working Americans only $11 per hour?

I said it would lead to inflation.

I didn't say that the inflation would be as big as the wage increase.

If (to just pull some imaginary, made-up numbers out of my Philly) min wage goes up by 100%, and inflation eats up 80% of it, then it still caused a net good, IMO

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I want to pick back up, if anyone else is interested. My major question on this topic is this: What are the negative impacts to an increase in the minimum wage? I understand that the bottom line of businesses would be impacted, but I'm talking on the macro level.

 

Thanks in advance.

 

I don't think it SHOULD have an impact, but I think companies would raise prices of things. Just based on the fact that they would be paying their employees more. Also, they would justify it as people have more money, so they could afford to pay more for things.

 

 

>I think initially it would raise the standard of living of those receiving higher "lower" wages but eventually prices would rise for rent, utilities, food and it would all equal out resulting in minimum wage being too low.

Again.

 

That's what I assumed...that it would lead to inflation. So, my question would be to the group...why is this the solution? I envision people making a little more money, temporaritly finding a couple new luxury items that they can afford, and everyone having the same ideological debate in 5 years. How can we possibly sleep at night when we pay hard-working Americans only $11 per hour?

 

It's a vicious cycle. Minimum wage goes up, prices increase, white-collar workers want raises since the minimum wage went up. Then in starts all over again.

 

 

Prices can only be raised so much based on what consumers are willing to pay. The belief/fear of sky rocketing prices due to a small minimum wage hike is not a reasonable enough one to justify the current minimum wage staying where it is. 

 

The economy does best when the average citizen can purchase consumer goods rather than being stuck on an incredibly tight, almost practically impossible to sustain budget. So while the mom and pop small businesses may have short term difficulty with the new minimum wage they will have a much larger potential-customer base because more citizens will now be able to afford better quality goods instead of just cheapo products from large corps. So in the long term the small businesses have a larger consumer base with an increased minimum wage. Obviously there is a limit so right now you probably can't do $15/hr. But $10 shouldn't be the issue some want to make it out to be. 

 

The real vicious cycle is that of inflation naturally increasing prices, the top line increasing its profits, and the bottom line not being increased at the same rate and instead being kept down by the threat of job loss and higher prices from the top line, thus weakening average consumer purchase power and causing a weaker economy. It has happened quite a bit through US and global history, and sadly keeps repeating. Large corps. do NOT want small businesses to succeed because they are competition. By keeping worker wages so low it is a practically unsustainable living working even 2 jobs it keeps the company's profits higher and keeps the worker dependent on cheap, mass produced consumer goods. That kills small business. What do you think hurts that small business more, $2.75/hr more for its very small pool of employees, or having its potential customer base shrunk by the millions?

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Prices can only be raised so much based on what consumers are willing to pay. The belief/fear of sky rocketing prices due to a small minimum wage hike is not a reasonable enough one to justify the current minimum wage staying where it is. 

 

The economy does best when the average citizen can purchase consumer goods rather than being stuck on an incredibly tight, almost practically impossible to sustain budget. So while the mom and pop small businesses may have short term difficulty with the new minimum wage they will have a much larger potential-customer base because more citizens will now be able to afford better quality goods instead of just cheapo products from large corps. So in the long term the small businesses have a larger consumer base with an increased minimum wage. Obviously there is a limit so right now you probably can't do $15/hr. But $10 shouldn't be the issue some want to make it out to be. 

 

The real vicious cycle is that of inflation naturally increasing prices, the top line increasing its profits, and the bottom line not being increased at the same rate and instead being kept down by the threat of job loss and higher prices from the top line, thus weakening average consumer purchase power and causing a weaker economy. It has happened quite a bit through US and global history, and sadly keeps repeating. Large corps. do NOT want small businesses to succeed because they are competition. By keeping worker wages so low it is a practically unsustainable living working even 2 jobs it keeps the company's profits higher and keeps the worker dependent on cheap, mass produced consumer goods. That kills small business. What do you think hurts that small business more, $2.75/hr more for its very small pool of employees, or having its potential customer base shrunk by the millions?

 

/edit, nm you already covered it.  The insidious part is that these corporations reap the benefit double fold by keeping min wage low and the poor poor because they can only afford to buy walmart products and fast food meals. 

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http://money.cnn.com/gallery/news/economy/2013/07/17/mcdonalds-worker-budget/index.html?hpt=hp_c3

Devonte Yates, 21, is working to get an Associate's Degree in criminal justice and logs in about 25 hours a week at a McDonald's in Milwaukee. To cut down on costs, he lives with his mom and little sister. Still, he struggles to pay his $180 tuition bill each month. He's only able to pay about $90.

He said that the school is more forgiving of him not paying his bill in full while he is still taking classes. But when he graduates next semester, he is worried about how he's going to pay it back.

Besides tuition, some of Yates' expenses that fall under the "other" category are $40 per month for contact lenses and $50 on clothes. Food, at $300, is his biggest monthly expense, as it is for most of the other workers interviewed.

More at link
Why does he need $50 a month for clothes?

It didn't say the clothes were a per month charge. They could have written that part a little better sure, but how about you try absorbing the entire message and budget instead of just going after 1 small thing that may be frivolous? You do realize that even if that were a $50 a month thing and taken out of the "other" line that he'd still be coming up short? Maybe he should cut his food budget down and just eat at McDonald's all the time!

Or maybe instead of asking why does he pay $50 a month for clothes, why not ask why a multi-billion dollar company doesn't offer it's employees reasonable tuition assistance or even a reasonable enough hourly wage to where higher education is actually possible? You are nitpicking a very small problem and completely ignoring the glaringly obvious one.

True the way it was written its hard to tell if he actually spends $50 a month on clothes. If I could trouble you to at least go back to last page and find my quote where I said these companies have too high a profit margin and that I agreed that minimum wage should be raised.

I see that he is saving money by living at home. I don't think I was nitpicking about the clothes as it was more of a suggestion of ways he could save money now and in the future.

You are getting way too angry about this thread. Not sure what's going on with you in here. It's not like you.

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I don't think raising the minimum wage would increase inflation all that much.  I think it would increase unemployment, especially among people with marginal skills (i.e. the people this program is intended to help).

 

It is a basic assumption of economics that businesses will hire someone when the marginal revenue from their services exceeds the marginal cost of their employment.  Meaning, I will hire person X for $7/hr if employing person X will generate $7/hr in additional sales.  So let's imagine that everybody in the world has a certain marginal revenue that they would bring to a given job, and that the spread of marginal revenue among the population is something like a bell curve.  There are people who could only bring $5 in marginal revenue.  There are people who could bring $6.  People who could bring $7.  Etc.

 

So, let's say McDonalds is currently employing a guy who generates $7.25/hr in marginal revenue.  He works relatively slowly.  He does sloppy work that sometimes needs to be re-done by somebody else.  He's unreliable.  He makes a bad impression on customers.  But the job is easy enough that he actually generates enough revenue to justify his cost.

 

One day, Washington DC tell McDonalds that they can't pay this guy $7.25/hr.  That is illegal now. They must now pay him $10/hr. This isn't a problem for many of their employees.  Many of their employees generate more than $10/hr in marginal revenue, so McDonalds doesn't have much of a problem raising their pay.

 

But our low-skilled worker doesn't generate $10/hr in marginal revenue for McDonalds.  Therefore, McDonalds is left with 2 options - fire him, or raise his salary to $10/hr, incurring a loss of $2.75/hr.  It is many people's belief, apparently, that McDonalds will choose the second option.  But I think we all know that they'll choose the first.

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