Wednesday, April 15, 2015

Killing the goose that laid the Golden Arches

Odd beliefs are where you find them, and the CEO of McDonald's provides one here;
McDonald's CEO Steve Easterbrook described the pay hike and other perks as "an initial step" and said he wants to transform McDonald's into a "modern, progressive burger company".
From a profitable burger company? That should get the attention of the shareholders;
The first national pay policy announced by McDonald's includes a starting salary that's 1 US dollar above the local minimum wage, and the ability to accrue paid time off. It only applies to workers at company-owned stores, however, which account for about 10% of more than 14,300 locations.
Which leaves the 90% of McDonald's owned by franchisees free to operate like normal businessmen in a highly competitive environment. Meaning they have to price their burgers low enough to keep the customers from switching from Big Macs to Whoppers.

1 comment:

  1. Maybe Easterbrook is shrewd. How can he deflect criticism of McDonalds in this shrill, lefty-liberal environment? Pay people more and find more productive people, along with a program to automate cooking and delivering the food.

    Attack: You are firing people, replacing them with machines.
    Defense: We are paying our new employees great wages.

    People of higher productivity may offset much of the higher wage. It will still cost more, but not as much as simple addition would indicate.

    The incisive question which will not be asked: What percent of your old employees are working at the higher wage? What percent were let go to pursue other opportunities?