Former McDonalds CEO Warns Minimum Wage “Will Wipe Out 1000s Of Jobs”

by Arthur Foxake

This blog is not a big fan of McDonald’s, their food does not appeal to us and their business practices are appalling. but they have been a very successful business over the past 50 years and so when a former CEO speaks out against one of the left’s great sacred cows, the minimum wage.

For some reason that can only be related to their economic illiteracy, the left; USA’s Democratic Party, UK’s Labour Party and Europes Social Democratic parties seem to think the imposition of a minimum wage must improve the lot of ‘the poor’.

Nothing could be further from the truth, we have written on the negative effect of minimum wage laws on the income of low wage workers. The first minimum wage scheme, The Speenhamland Poor Relief System, introduced in the late eighteenth century in England was disastrous for the people it was supposed to help. Faced with having to pay a legal minimum hourly rate, employers simply cut workers hours. Things are no different now, as former McDonalds chief Ed Rensi explained in a Forbes op – ed recently:

(While his words might shock the big government worshipping, Nanny State tit suckling ‘progessives’ should be no surprise to any rational businessman or accountant.)

“A $15 minimum wage won’t spell the end of [fast-food brands]. However it will mean wiping out thousands of entry-level opportunities for people without many other options.” The $15 minimum wage demand, which translates to $30,000 a year for a full-time employee, is built upon a fundamental misunderstanding of a restaurant business (and we add simple supply and demand fundamentals) – just “do the math” Rensi rants…

“They’re making millions while millions can’t pay their bills,” argue the union groups, suggesting there’s plenty of profit left over in corporate coffers to fund a massive pay increase at the bottom.

In truth, nearly 90% of McDonald’s locations are independently-owned by franchisees who aren’t making “millions” in profit. Rather, they keep roughly six cents of each sales dollar after paying for food, staff costs, rent and other expenses.

Let’s do the math: A typical franchisee sells about $2.6 million worth of burgers, fries, shakes and Happy Meals each year, leaving them with $156,000 in profit. If that franchisee has 15 part-time employees on staff earning minimum wage, a $15 hourly pay requirement eats up three-quarters of their profitability. (In reality, the costs will be much higher, as the company will have to fund raises further up the pay scale.) For some locations, a $15 minimum wage wipes out their entire profit.

Recouping those costs isn’t as simple as raising prices. If it were easy to add big price increases to a meal, it would have already been done without a wage hike to trigger it. In the real world, our industry customers are notoriously sensitive to price increases. (If you’re a McDonald’s regular, there’s a reason you gravitate towards an extra-value meal or the dollar menu.)

Instead, franchisees can absorb the cost with a change that customers don’t mind: The substitution of a self-service computer kiosk for a a full-service employee.

Rensi concludes on a sombre note…

I suspect that the labor organizers behind this campaign for a $15 minimum wage are less interested in helping employees, and more interested in helping themselves to dues money from their paycheck.

They’re unlikely to succeed in their goal of organizing the employees of McDonald’s franchisees, but they may well succeed in passing $15 into law in other sympathetic locales.

You’ll see their legacy every time you visit the Golden Arches, where “would you like fries with that” is a button on a computer screen rather than a phrase spoken by an employee in their first job.

While Mr. Reni is referring specifically to a familiar situation at McDonalds, similar things will happen in other businesses and industries. A business can only survive if it pays what the job is worth. And what the job is worth must be dictated by market rules and not by Barack Hussein Obama, Killary Clinton and their elitist cronies.

Unsurprisingly, while governments are prepared to condem the children and grandchildren of their own nationals to the gringing poverty of part time work and zero hours contracts, there are some groups who have contributed nothing to society and in many cases have no legal right to be in the country, for whom special arrangements are made

Denmark Gives Large Bonuses To Get Migrants To Work – How Is That Fair To Danes

In a move that tells us much about what is wrong with the politically correct Culturalk Marxism that dominated European politics, the government of Denmark has announced a plan to persuade migrants to work for a living instead of claiming state handouts by offering companies 40,000 kroner to hire them.

This new plan for migrants is part of the ‘integration basic education’ plan that hopes to get migrants working so they are not as huge a drain in the Danish welfare system as they are becoming more and more in places like Germany and Austria. It is difficult to see any logic behind that, surely it is no more expensive to pay out doles than to employ people who have no skills and cannot speak the national lanugage to do nothing. How many office cleaners and kebab stuffers does a sma;; country like Denmark need?

The programme announcement follows the leaking to Danish media of figures showing non-Western migrants made up a startling 84 per cent of all Danes on welfare. Migrants currently cost the government around 1.1 billion pounds every year.

TheLocal.dk reports the new programme aims to get migrants into short-term jobs at an apprentice salary of around 50 to 120 kroner an hour. This is the equivalent of around 12 pounds an hour which is almost double the current wage for British apprentices who are paid the legal minimum wage of £6.70 an hour, although that will increase to £7.20 in April.

The migrant jobs will last up to two years and they will also be offered 20 week courses to increase their skill development and further their education. The companies that participate in the scheme will also be eligible for a bonus of 40,000 kroner (£4,179), if the migrants remain employed for the two-year term of the contract.

The Danes will also pay for accommodation for the migrants who take part, making sure that they are able to live close to their employer or at least in the same city or town. Relocation and transportation costs will likely also be paid for by the state.

This is just another example of the wrong headedness of political elites, it will do nothing to help integrate new immigrants into Danish society, but by sending out the message that foreigners are given special treatment and their interests are prioritised over those of local people it will encourage more to come and thus make the crisis worse.

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Denmark Gives Large Bonuses To Get Migrants To Work – How Is That Fair To Danes


Doner Kebab shop in Copenhagen: When will Danish government subsidise kebabs to create more work for immigrant kebab stuffers? (Image source)

In a move that tells us much about what is wrong with the politically correct Cultural Marxism that dominates European politics, the government of Denmark has announced a plan to persuade migrants to work for a living instead of claiming state handouts by offering companies 40,000 kroner to hire them.

This new plan for migrants is part of the ‘integration basic education’ plan that hopes to get migrants working so they are not as huge a drain in the Danish welfare system as they are becoming more and more in places like Germany and Austria. It is difficult to see any logic behind that, surely it is no more expensive to pay out doles than to employ people who have no skills and cannot speak the national language to do nothing. How many office cleaners and kebab stuffers does a small country like Denmark need?

The programme announcement follows the leaking to Danish media of figures showing non-Western migrants made up a startling 84 per cent of all Danes on welfare. Migrants currently cost the government around 1.1 billion pounds every year.

TheLocal.dk reports the new programme aims to get migrants into short-term jobs at an apprentice salary of around 50 to 120 kroner an hour. This is the equivalent of around 12 pounds an hour which is almost double the current wage for British apprentices who are paid a minimum of £6.70 an hour, although that will increase to £7.20 in April.

The migrant jobs will last up to two years and they will also be offered 20 week courses to increase their skill development and further their education. The companies that participate in the scheme will also be eligible for a bonus of 40,000 kroner (£4,179), if the migrants remain employed for the two-year term of the contract.

The Danes will also pay for accommodation for the migrants who take part, making sure that they are able to live close to their employer or at least in the same city or town. Relocation and transportation costs will likely also be paid for by the state.

This is just another example of the wrong headedness of political elites, it will do nothing to help integrate new immigrants into Danish society, but by sending out the message that foreigners are given special treatment and their interests are prioritised over those of local people it will encourage more to come and thus make the crisis worse.

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UK Asylum Seekers DEMAND ‘VIP’ Treatment

Arguments will rage for some time over how Britain should respond to the immigrant crisis. The left insist we should allow in anyone who arrives at our borders without travel documents or even a national ID card to prove they are who they say they are (including the one wearing suicide vest and carrying AK 47s), more level headed opinions is saying, “OK, genuine refugees and children maybe, but illiterate men of working age, maybe we should question them and send back those whose only skills are begging or making IEDs.

Without getting involved in that issue right now, I do get the impression that many of the ‘refugees’ are labouring under the misapprehension that they are somehow doing Britain a favour by coming here to live well at the taxpayers expense. Take the example below:

Taxpayer-funded three-star hotel accommodation provided for asylum seekers has been labelled discriminatory because paying guests receive better food than migrants who demand their “VIP status” be recognised.

Private contractor Clearsprings is housing 129 refugees at the Mediterranean-themed Europa Gatwick Hotel where migrants have their own rooms, with en-suite bathrooms, plus a television and tea and coffee-making facilities.

Yet, according to the Mail on Sunday, one of them was indignant about the conditions and demanded that they should be treated like VIPs.

The man, who has previously worked at hotels in Dubai, said: “We should be considered VIPs because we are long-staying guests. We are making money for this hotel.”

Who the fuck do these gimmegrants think they are? Many British people who have JOBS and pay taxes to the British government could not afford that standard of accommodation if they went to London.

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The Great Recovery Illusion

On the BBC television political discussion show last night, in which a panel drawn from the political, media and academic communities field questions from an audience drawn from the general public, a panellist who I assume was a conservative was squawking about how well the UK economy was doing, citing that unemployment had fallen again in recent months and was now down to levels last seen before the dotcom crash in 2000.

An audience member was quickly on his feet to point out, to applause from the whole audience that the figure was misleading as people in zero hours contracts and part time jobs are classed as ‘in work’ to get them off the statistics. The young man could also have reminded the programmes studio and television audience that people who are out of work for two years are reclassified as ‘not economically active’ and removed from the unemployment register. Even if these people would love to work and are eager to grab any reasonably well paid job available, they are not counted as unemployed.

Then there are the lost legions of the partially disabled, the thousands encouraged to sign up for toytown degree courses at tenth rate colleges and universities. and don’t get me started on the non jobs in the public sector, the equalities offices, gender awareness councillors and so on.

This manipulation of statistics to create a false impression of economic – if not health then only ‘feeling-a-bit-off-colourism’ is not only going on in Britain and among our EU colleagues. With every months employment statistics from Washington, Tyler Durden at Zero Hedge return to one of his favourite themes, the the recovery in the US waiter and bartender economy.
Every month, if we look back, we see Washington claiming the U S economy has created stupendous numbers of ‘new jobs’ (I’m not sure but I have the impression a lot of these are just a case of hiring a replacement for someone who retired, but changing the job title slightly.

Overall however, due to population growth via immigration, in Europe and North America the proportion of the whole population actually in work is regularly hitting new lows. We live in an era of universal deception.

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The lies and deceit of official unemployment statistics

Economy Booming, Unemployment Dropping So Why Are So Many People Out Of Work?

by Phil T Looker, The Daily Stirrer

Unemployment is in freefall the latest government figures tell us. So why aren’t we feeling it?

More people are working, but work doesn’t pay a living wage. Employment is up, but tax revenue is down. The economy is humming again, yet Britain is still in debt. What exactly is going on?

The latest statistics, published today show unemployment rates have fallen to their lowest level in five years. The Coalition has presided over an incredible boom in employment, with Britain gaining jobs at the fastest rate of any country in Europe. This week David Cameron even resurrected the old dream of “full employment”; our own leader column calls it a “jobs miracle”.

So why isn’t it doing us any good?

Lefties will screech about the need to raise the minimum wage, but the minimum wage has never worked and never will. Employers imply cut hours.

Even with more people in work than ever before tax revenues aren’t as high as were predicted. Why? The usual suspects are involved, part time working, zero hours contracts, and the statistical trick of only counting those claiming job seekers allowance as unemployed and classifying the long term unemployed (jobseekers allowance runs out after two years,) as not economically active. Count the real unemployed rather than the ‘scientifically’ unemployed and the figure has dropped little since its peak in 2009. As it happens, two analysts at Citigroup – Michael Saunders and Ann O’Kelly – have been considering exactly this question.

They found that the problem is not corporation tax – higher profits mean revenues have grown at almost double the rate predicted. Nor is it VAT, which has grown by exactly as much as expected. Stamp duty has gone up by 34 per cent. Neither high-rolling executives nor ordinary shoppers have slowed down their contributions. You can read the full analysis with charts in this Daily Telegraph article.

It is an excellent analysis and confirms all of the suspicions cited by business managers and accountants. It will be useful however, for the benefit of those who are not accountants, to expand on the bare statistics in order to highlight where the under-employed, and those who claim the lion’s share of working tax credits, are coming from. See this report created by a statistician with the help of a Freedom Of Information request. Yes, its another indictment of uncontrolled immigration and the eagerness of main pary politicians to smooth the path of those who arrive in our country illegally, to full residency rights.

The problem with the Government / Office of National Statistics methodology is the manner in which the UK assigns ‘nationality’ to anyone who wasn’t born in this country, and excludes naturalised British citizens (i.e. it doesn’t include non-UK born children who were naturalised).

From Table 2 in Saunders and Kelly’s analysis it is notable that of lower income tax credits families with children – i.e. whose awards include both Working Tax Credit and Child Tax Credit – over a quarter (27.13%) are migrant families.

From Table 3 this group of lower income families with children forms almost half (48.25%) of all migrant families claiming tax credits. Lower income families with children form a smaller proportion of non migrant families claiming tax credits (39.14%).

From Table 3 a slightly lower proportion of migrant families are out of work families with children (26.5%) than non migrant families (31.4%). However, from Table 2 migrant families comprise nearly a fifth of tax credits families who are out of work couples with children (19.49%) but only half that proportion of out of work single parents (10.59%).

The key issue however is that despite the increase in employment numbers there has not been a corresponding increase in the income tax take.

Clearly there has been an increase in low paid low skilled jobs. The influx of labour from eastern Europe and the subcontinent combined with Gordon Browns working tax credits has meant that the elasticity of labour supply has depressed wage growth and it may be simply that the treasury models have incorrectly forecast, in their models, this effect.
Secondly, there has been a significant increase in self employment, many of these self employment jobs have been created by East Europeans typically your Polish/ Romanian builders and as such the tax take from such employment is generally much lower than PAYE as a result of cash transactions etc.

Additionally, at least from my experience, much of the self employment increase has also been driven from higher Salary earners particularly in the media and IT sectors (so fed up with high levels of Tax and what they see as Government waste) that they opt out of PAYE employment and take on contract work under IR 35 where they can reduce their Tax charge by as much as 30% to 40% as well as their NI charges.

Thirdly, the very low even negative yields on fixed income investments that have resulted from low interest rates must have a significant impact on the tax take.

Statisticians delude themselves that those not inducted into the mysteries of the dark arts are easily fooled by graphs and charts, in truth it is statisticians who are easily deceived by their own deceptions. People who live in the real world do not look at and graphs, they look at the bottom line of their payslip and think about how they will stretch it to pay the bills and put food on the table

The do – gooders can screech all they like and demand that the minimum wage be raised to £10 per hour or even higher. If like a young woman I know, somebody is bullied by public servants into taking a minimum wage ‘job’ that only provided seven and a half hours a week work, in order to get her off the unemployed register, it still isn’t going to giver her family a living wage.

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Nice Work If You Can Get It

This is a satirical report on as US Federal job creation program from The New Yorker:

Sixty-four unskilled workers will report to new jobs in Washington, D.C. on Tuesday as part of a federal jobs program that provides employment for people unable to find productive work elsewhere.

The new hires, who have no talents or abilities that would make them employable in most workplaces, will be earning a first-year salary of $174,000.

For that sum, the new employees will be expected to work a hundred and thirty-seven days a year, leaving them with two hundred and twenty-eight days of paid vacation.

Some critics have blasted the federal jobs program as too expensive, noting that the workers were chosen last November in a bloated and wasteful selection process that cost the nation nearly four billion dollars.

But Prof. Davis Logsdon, a University of Minnesota economics professor who specializes in labor issues, said that the program is necessary to provide work “for people who honestly cannot find employment anywhere else. Expensive as this program is, it is much better to have these people in jobs than out on the street,” he said.

Borowitz is referring to the newly elected congress members who will be taking their seats this week. Reads will be pleased to learn that the UK government has not been left behind in its efforts to create new jobs for useless fuckers the otherwise unemployable. And unspecified number of people fortunate enough to have been selected for a similar scheme in the UK will take up their positions in early May.

Seeking a job in France? Think . It’s no wonder migrants want to get to Britain

Thinking Of Moving To France To Find Work? You might be in for a shock. While lefties, i.e. human-like creatures that lack the power of rational thought) will tell you Britain is the only EU member where people think that those authoritarian EU regulations that stifle progress and favour immigrants over long term residents in jobs, housing etc., a look around Europe tells a very different story. Yesterday we reported that the Neo – Nazi Social Democrat government of Sweden has passed a law making it a criminal offence to criticize their immigration policy whic involves plans to import fifty million immigrants from the third world into that nation of less than ten million people (OK, fifty million may be a slight exaggeration but you get my point.)

SPEISA

Sweden passes law to criminalize any criticism of immigration

A new law will come into effect in Sweden after Christmas 2014, that will allow people to be prosecuted for criticizing immigration or politician’s unwillingness to tackle the issue. The Constitutional Committee’s report has been voted for in parliament, seen in a letter from the Parliamentary Offices. Member of Parliament Andrew Norlén, member of the Constitutional Committee, has been pushing the issue and he says it will rapidly become a deterrent.

“I do not think it takes very many prosecutions before a signal is transmitted in the community that the internet is not a lawless country, the sheriff is back in town” Norlén said during a one-sided ‘debate’ on the issue in Swedish parliament.

This new law is meant to stop Swedish people from complaining about their country being turned into a third world nation.

Without freedom of speech there can be no democracy. If you are not allowed to say certain things then parties that support your ideas cannot exist and Sweden is at high risk of turning into a communist USSR-like country.

Meanwhile in France, thanks to loonytoons economic and emplyment policies and an open doors approach to immigration finding a permanent job is like winning the lottery, and new figures suggest that it’s getting harder and harder with companies overwhelmingly preferring to hand out temporary contacts.

Short-term job contracts and the equivalent of zero hours contracts dominated the French labour market last year, representing more than eight out of ten new hires, cementing the notion that landing a permanent job in France is like finding the pot of gold at the end of the rainbow.

The figures, released by the Labour Ministry’s statistics office Dares (link to french language site), showed that short-term CDDs (Contrat à Durée Déterminée) represented 83.6 percent of all new hires in 2013, up 2.3 percentage points from 2012.

But by the second quarter this year, the situation had got even worse. Dares said that by then, the number of temporary hires had climbed to a staggering 84.2 percent – a new historic high.

The agency said the trend was hitting all age categories, but that the number of permanent positions handed out had seen a particularly strong decline among those aged between 15 and 49.

Despite government efforts to reverse the trend by slapping employers with higher charges for very short contracts – often lasting just a few days – Dares said employers are still more willing to take the hit of extra costs than transforming such contracts into permanent jobs, known as CDI (Contract à Durée Indéterminé) contracts.

The agency also said the duration of short-term contracts are continuing to shrink, with about half of them lasting ten days or less in 2013, compared with 14 days or less the year before. Around a quarter of them didn’t last longer than two days, it said.

The figures come as France faces record-high unemployment levels, at 10.4 percent, mostly hitting the country’s young.

President François Hollande has said he will not stand for re-election in 2017 unless he manages to cut the unemployment rate.

His presidency seems to hinge on the so-called “responsibility pact” which will cut payroll taxes for employers by €40 billion in return for companies boosting recruitment. He has pledged to create half a million jobs by 2017.

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Unemployment falling? The Great Statistical Con Trick
President Barack Hussein Obama in his “State Of The Union” speech earlier this week was the president’s claimed that his administration had turned the economy around and was creating millions of ‘new jobs’ every year. The US Labor Department claims the economy created 292,000 jobs in December alone … In spite of the US economy having created almost 6 million jobs over the last two years according to official figures, more Americans than ever (93 million according to estimates) are out of work.

The Great Recovery Illusion
An audience member was quickly on his feet to point out that the figure was misleading as people in zero hours contracts and part time jobs are classed as ‘in work’ to get them off the statistics. The young man could also have reminded the programmes studio and television audience that people who are out of work for two years are reclassified as ‘not economically active’ and removed from the unemployment register. Even if these people would love to work and …

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