McDonald’s Pay Strike…Missing The Point

I saw some clips today from the McDonald’s employees protesting their low wages. I can sympathize with that..hell, I’d like a pay raise too. What I think everybody is missing here is that it’s not McDonalds who ultimately decides their employee wages…it is the end customer, and how much he is willing to pay for the product.

In that $0.99 value burger…McDonald’s has to pay for the direct cost of bread, the meat, and the secret sauce. Furthermore, they need enough left to cover the cost of the storefront, the equipment, the property taxes, the employee wages….and of course still have a few pennies left to make the whole thing worthwhile for the franchise owner. If the price of anything in that equation moves…either the owner can eat it…or he can raise prices.

So…let’s double the wages…from $8 to $16. Now the price of the value burger isn’t $0.99..it’s $1.50. And now…everybody’s happy right….except that the customer goes next door….to the place that didn’t raise their employees wages. Now…the entire restaurant goes out of business….and not only do they not make $16 an hour…they now are making $0. So…who do they have to blame for low wages? Ultimately…blame the customers…who just like everyone else, want to pay less for things…not more…including how much they ultimately pay you…to the extent your wages are part of the price of my burger.

That’s not just true for low wage fast food workers…it’s true for everybody…everywhere. You’re wages are a reflection of what the end customer is willing to pay you for your time. If you are an athlete, or an actor or musician ….maybe you are able to get paid a huge amount for your time…If you can sell out a 50k seat stadium at $100 per seat, well, you may be able to net a couple million bucks for a couple hour show….good for them right?

But let’s be honest here…you probably are not Paul McCartney. You take orders and cook hamburgers… something that anybody with a pulse can do…. Your job exists because…sometimes people (like me) are too lazy to cook their own hamburger…or maybe they just don’t feel like doing dishes tonight. Look…I don’t doubt that it sucks trying to live off of minimum wage…I’ve been there…but I just think the blame is misplaced. Unfortunately for our McDonald’s workers…nobody is ever going to be willing to pay a lot of money for a McDonald’s hamburger….or the employees who manufacture them.

McDonald’s simply fills a niche…they bring customers willing to pay a certain price for a certain quality of burger together with employees who have the skillset to deliver that burger, within that budget. If  wages go up…the price of the burger goes up, and if the price of the burger goes up….the balance is broken and there are no customers, and there is no job at all. If you think your time is worth more than they are willing to pay…well…go find someone willing to pay you more…and quit your job at McDonalds. Until then…you can protest all you want…but you will never be able to force customers to pay $2.00 for a $0.99 burger. Well…I’m off to lunch…Chinese anyone 🙂