retail news in context, analysis with attitude

On Friday, we took a look at a Washington Postpiece about a study suggesting that if McDonald's "maintained its current profit margin of 6.3 percent - which, to be fair, is fairly slim - hiking the pay floor at fast-food restaurants to $15 an hour would mean just a 4.3 percent increase in prices." That would mean a Big Mac would cost about 17 cents more - though "this is just a rough estimate - the numbers would vary based on location and what the minimum wage is now, just as financial needs vary depend on where the employees live."

I commented, in part:

Essentially the question is whether people would be willing to "pay 17 extra cents for a Big Mac if it meant the person who prepared it could earn a living wage." Though I suppose that some might ask whether people should be forced to pay that extra 17 cents for a Big Mac to support a living wage.

Seventeen cents? To me, that's both a no-brainer and an Eye-Opener.

One MNB user wrote:

This is awesome Kevin.  I can't wait to ride my shiny white unicorn through the drive thru at McDonalds and solve poverty with the change I found under my couch pillow.  Unfortunately white unicorns don't exist and the folks at Purdue left some pretty obvious logic out of their model.  Let's say I have been working at the slaughterhouse that provides beef to McDonalds and after breaking my back for the last 10 years, I earn $15/hour.  I am not going to high five the 16 old kid flipping burgers and tell him great job on his raise.  On the other hand, I am definitely going to my boss and demand that my wages be increased so I am not earning the same as a fry jockey.

This will cascade throughout the market and wages/retails will correct; however, in the short term owners will find creative ways to reduce hours and ultimately jobs.  Folks need to keep in mind that currency is merely a symbol of economic value.  This might seem unfair to someone who works really hard at an entry level job but it is a fact of life.

But another MNB user wrote:

I agree, a no-brainer.  They wouldn't have to raise the cost of a Big Mac if they had healthy fast food to go ... Or organic sirloin beef (not mystery meat) grilled burgers?  fair trade with real half n Half, healthy band name organic green juices, Ben N Jerry's ice cream, kale wrap salads.   How about organic milk and lactose free?  What about gyro sandwiches which can be eaten in the long as it is not mystery meat.   They have the facilities and infrastructure -- they just need to sell something healthy but good that people need to buy on the run when there is no time to run into Whole Foods...

Here's a question I would ask. Let's say the study was way too optimistic about the numbers...and the actual amount that a Big Mac would go up is twice that, or 35 cents. Is that too much to pay for a higher minimum wage? Is 50 cents a Big Mac?

I don't know what the numbers are, and I'm no mathematician. But I guess that I think this debate could be connected to another discussion we've often had here on MNB - that Americans are addicted to low prices, and nobody really knows what anything costs ... which ends up artificially driving down prices in a way that may not be helpful to the economy or the culture.

On the subject of the Amazon Dash Buttons now available, allowing people the ability to reorder single items extremely easily, one MNB user wrote:

I can see this catching on. I am also waiting for the very comical story of the toddler that ordered 30 bottles of detergent “helping with the laundry”.

My understand is that there is a failsafe mechanism to prevent this from happening ... but yes, this sort of thing probably is inevitable.

I asked last week if there was anything remotely positive about the Haggen debacle, which led MNB reader Joel Yochem to offer:

Those 146 new Haggen stores could have just gone away, along with the employees…

True. On the other hand, if Haggen had not done it, maybe they would've been sold off piecemeal to a bunch of other companies better equipped to keep them viable.

In writing about a study suggesting that red mean could be carcinogenic, I joked that I was glad I'd ordered the veggie pizza that night and not the meat lovers ... though I conceded that the fact that it was pizza and not a salad probably made the whole point moot. But MNB reader Herb Sorensen wrote:

As someone with nutrition credentials (Ph.D. biochemist, former founder of a nutrition lab and one time Nutrition Advisor to Denny's Restaurants;) and as a lifetime near-vegetarian, here's my comment on: "eating pizza instead of a salad probably mitigates against any health advantages."

It's hard to see how avoiding carcinogens in one food ingredient (red meat,) could be mitigated by eating the kind of salad typical of pizza restaurants.  Other than the significant fat content of the pizza, it is FAR more nutritious than the salad, which would have the advantage on micro-nutrient vitamins common to fresh vegetables.  Any pizza would likely be more nutritious than any salad, in relation to the macro-nutrients of protein and carbohydrates.  For the fat, it depends on your overall diet (and exercise.)  If you've got a problem there, deal with it.

I feel so much better now. And as you read this, I'm probably off on a 12-14 mile bike ride along the Willamette River. So I'm dealing with it...
KC's View: