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.

References:

McDonald's to Shutter Hundreds of Stores As it Bleeds Money: http://www.eater.com/2015/4/22/8467915/mcdonalds-shutter-hundreds-locations-china-us-report

April 15th: Fast-food workers picket, demanding wage hikes: http://nypost.com/2015/04/15/fast-food-workers-picket-for-wage-of-at-least-15-hourly/

Economy lost more than 200,000 small businesses in recession, Census shows: http://www.foxnews.com/politics/2012/07/26/economy-lost-more-than-200000-small-businesses-in-recession-census-shows/

McDonald's Statistics from Michigan: http://www.mcmichigan.com/2661/30770/default-page/

Bureau of Labor Statistics Employment Situation Report for March 2015: Table A-15. Alternative measures of labor underutilization: http://www.bls.gov/news.release/empsit.t15.htm

Obama's Lawless NLRB Hits McDonald's With Pro-Union Rulling

In another effort to increase unionization, the primarily Obama appointed National Labor Relations Board (NLRB) has struck a labor negotiations blow to any McDonald's restaurant franchises. In its recent ruling, the NLRB claimed that as a franchiser, McDonald's is actually a "joint employer"; meaning that they are responsible for the wages and working conditions of all those operations in the U.S.  Therefore, they are being forced to collectively bargain with all labor; rather than have a small group of employees collectively bargain with an independent franchisee.

The problem with this ruling is simply: one of reason.  The NLRB claims that its decision is based on 43 cases that have had poor labor relations "merit" since 2010; roughly 10 cases per year.  McDonald's combined corporate and franchise owned employment is almost one-half million workers in the U.S.   So, 43 cases out of 500,000 employees is an infinitesimal percent of those yet-to-be-litigated labor violations (0.086%).  Further, the vast majority of those cases dealt with the 90% of restaurants that are independently owned. 

As McDonald's has noted,  their corporation makes no decision as to who is hired, fired, or paid in any of its franchises.  While they have a say as to what the buildings, equipment, and operations must entail, they has no input beyond that.  Pricing for products is independently determined by each of its franchisees. Each sets its own pay scales (assuming they are within federal and state laws) and also files and pays taxes independently.  It is the independent payment and collection of taxes and the private issuance of paychecks which undermines the NLRB claim that McDonald's is, somehow, a "joint employer". 

This is just another case where the left thinks they can break the dam and create mass unionization by going after the biggest.  In the past, the NLRB went after Boeing for moving manufacturing of the 787 to a non-unionized plant in South Carolina.  It's the reason that there have been so many attempts at trying to unionize the nation's largest retail employer Wal-Mart.  And, now, with the McDonald's decision, Obama, the NLRB, and the unions think they can end up unionizing all fast food operations in the country if they could only force it on the big guy, McDonald's.

As with most of what the President has done, this too will be found lawless when its constitutionality  is invalidated by the courts.  This is the same reason the Boeing decision was withdrawn in 2011 and it will be the reason that this decision, too, will ultimately be dropped or negated in law.

References:

NLRB goes after McDonald’s and franchise systems everywhere: http://legalinsurrection.com/2014/07/nlrb-goes-after-mcdonalds-and-franchise-systems-everywhere/

McDonald's Ruling Sets Ominous Tone for Franchisers: http://online.wsj.com/articles/nlrb-decision-could-make-mcdonalds-liable-for-labor-practices-of-franchisees-1406660591

NLRB withdraws Boeing complaint: http://thehill.com/policy/transportation/198399-labor-board-withdraws-boeing-complaint

George F. Will: Illegitimate NLRB ignores the rule of law: http://www.washingtonpost.com/opinions/george-f-will-illegitimate-nlrb-ignores-the-rule-of-law/2013/05/22/4be5db9a-c248-11e2-8c3b-0b5e9247e8ca_story.html