Friday, April 24, 2015

McDonald's Struggles To Survive

I am of the belief that raising the minimum wage during the Great Recession made it both deeper and wider than it had to be.  The reason for that is simple.  If you, as a business owner, are forced to raise wages when you are already losing money in the midst of a recession, your only choice is to lay people off; or, worst case, close your doors.  During the recession years of 2007 to 2009, the minimum wage was raised 40%.  Over that time,  more than 200,000 small businesses -- the type that hire many minimum wage workers -- ceased to exist.  It is anyone's guess as to what percentage of those places had to close because of the higher salaries, but, for sure some -- maybe many -- had to.

Now, in 2015, fast food giant McDonald's is struggling.  Hundreds of their under-performing stores have already been closed; with hundreds more slated to shut down later this year.  As each one closes, an average of 61 workers will lose their jobs.  Yet, many of those McD's employees seem to think their wages should be doubled to at least $15 an hour as this picture from the New York Post clearly shows.

Maybe they should rethink that.  In my opinion, having a job is a lot better than not having one at all. Especially in an economy that still has 17 million workers still unemployed based on the U6 alternative measure of employment.


McDonald's to Shutter Hundreds of Stores As it Bleeds Money:

April 15th: Fast-food workers picket, demanding wage hikes:

Economy lost more than 200,000 small businesses in recession, Census shows:

McDonald's Statistics from Michigan:

Bureau of Labor Statistics Employment Situation Report for March 2015: Table A-15. Alternative measures of labor underutilization:

No comments: