Thursday, September 5, 2013

State of Economics : CA Fast Food Workers Demand $15 Minimum Wage

This past week the big economic news in California has been the fast food employees asking/demanding the minimum wage to be raised to $15. Really? What these people and the ones that support them need to do is :
Yes . . Turn on the light bulb in your brain and think of what you are asking for and the repercussions if the CEO's relent to their demands.
I fully understand that it is pricey to live here in California as I have lived here my whole life so I know how it is. I started at minimum wage back in 1993 and was getting a little over $4. Back then it was easier to live but I had no car and took 2 buses everyday back and forth from work and had a $400 a month rent. Not easy but I made it. I agree it is different if you have a family and that minimum wage would not work in that situation. But asking the minimum wage to be raised 90% will cause CA to crash. Let's say it does get raised, this is what will happen sooner rather than later.
A Big Mac costs the consumer give or take $4 and lets say the raise goes into a effect. The company will have to make up their money elsewhere and ultimately everything gets past onto the customer. So lets say it raises the sandwich to almost 40% to the cost of $5.50. Now some people will buy it no matter what but I am talking more of the casual or semi regular customer. In the beginning the employees will be happy as they are now getting paid what they asked for but with the burger costing more the company will probably start to see less and less customers coming into the store as they find cheaper alternatives to eat. That means less money is coming in. The company will look at its bottom line and say since there is less money coming in then they have to cut costs somewhere. The easiest place to do that is the work force. So they layoff a few employees and the company can recoup some of their costs back. So if you are one of the lucky few that don't lose your job you got your raise and stability but those that do lose their jobs will now be on welfare or some type of government aid and jobs will be hard to come by since the new minimum wage that they strived for has handcuffed employers from hiring new employees. Of course people will blame the employers for holding out and not helping the little man but they don't realize that they are the ones that pushed for the minimum wage increase and that there are other costs to be.
If you try to blame the companies about costs lets look at that. Costs have been skyrocketing for years which makes it more costly to make a burger or any other item. Lettuce, onions, meat, etc. All more. Guess what? Most ( not all ) can be attributed to government mandates that drive the costs of EVERYTHING that it takes to make your burger. I am talking about non perishables here now. Machinery has to be built a certain way. Gas must be filtered a certain way. The list goes on and on. All of this mandated by the government. Take a look at gas tax next time you fill up at the station. And then remember that if you visit Arizona or Nevada and look at the first gas station just a mile from the border and see that their gas is routinely 75 cents cheaper than ours and they get the a lot of their gas imported from us. Why? Government? Why do I mention gas? Because if that stays high then truckers have to spend more which means that costs gets sent to someone else which is us the consumers. There is no free lunch in this world.
So all costs have to be passed on to someone. Comes from the top and trickles to the bottom. So when you think that everyone should get a raise remember it has to come out of some one's pocket and in the end it will come out of yours one way or another.

All this is my opinion and you may or may not agree but I'm sticking to it but I do love debates.

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