The Real Cost of McDonalds Wages; Why Treating Symptoms Only Worsens the Problem
McDonalds employees are protesting a raise in their wages to a more “livable” wage. While none will argue that wages are low and costs are high for nearly everything as our dollar collapses and our currency is printed to infinity by the Federal Reserve. Rather than tackle the source problem, people are looking at mob rule and force, two things that DO NOT belong in a Capitalist Republic, to fix a symptom of the real problem.
The US Dollar has declined in value and buying power tremendously over the last several years and has lost a total of nearly 97% of its value since the Federal Reserve began in 1913. A hundred dollars in 1913, is only around $3 right now. No matter how high and how fast we increase wages, the market can’t sustain a dollar dropping this fast. The stock market is currently being held up by Quantitative Easing 4 Unlimited, which prints billions of dollars each month to inject into the market to keep outlooks high.
What we see above is a tale of two charts. Both show the decline of the dollar but only one shows the reason the purchasing power drops. When our country goes to war, our government prints money to fund that war. Each time the government prints up large quantities of money, they devalue the currency already released.
Even though the purchasing power of the dollar is going down and fast, the cost of goods is rising dramatically. From gasoline to food, consumers are forced to pay out much larger amounts of money for the same amount that could easily be purchased before. Now, couple this with the lowering value of the dollar and we can see where the real problem lies.
Now, back to McDonalds: Since we know that food prices are increasing and the dollar value is decreasing, we also know people are in a money crunch like no other time before in US history. Naturally, people want more to make up the difference of inflation of goods to the deflation of the currency. Unfortunately, this only compounds the problem. In 2013, McDonalds made $5.6 billion in profits worldvide (*A). In 2013, McDonalds employed some 1.6 million workers worldwide, with 716,000 of that number within the US. if McDonalds were to give out 100% of their worldwide profits to ONLY American workers, the average wage increase would be $3.75, thus destroying the company and its stock prices leading to the company’s demise.
Now, what if they doubled the minimum wage pay and put that money into the Big Mac? The Minimum wage is $7.25, multiplied by the 716,000 US workers, which equated to an increase in overhead of nearly $5.2 million dollars per HOUR. This equates to 11 BILLION dollars in yearly overhead. If McDonalds increased the cost of their American sold Big Macs (McDonalds sells 550 million per year in the US), the cost would have to increase $20 per burger. Yes, you saw that correctly, $20 in addition to what they cost today per burger to eat the added cost of the new wages.
As anyone can see, not only would the increase be destructive to the McDonalds franchises and would lead to the mass unemployment of hundreds of thousands of US workers but also the implications would be devastating to the US economy. These “bandaids” do nothing but compound the problem because it doesn’t address the source.
Although the fix is not simple, the best place to start would be to stop printing our dollar into oblivion. It is up to us, as Americans, to stand up and repair what crooked politicians and greedy banks have done. If we allow ourselves to act without thinking, such as what the implications of these fast food “strikes” will bring, we only compound a problem and let the real criminals continue their looting. McDonalds employees are not the only victims here, every single American is having their wealth and wage devalued for the sake of a select few. Unfortunately, the Middle Class American gets the brunt from both sides on situations like this, which is why Middle Class America is in such decline. The time to act is now and the action is the complete opposite of demanding a $15 minimum wage. Working for wages that aren’t enough to survive is slavery but it isn’t the wages to blame, it is those who devalue those wages’ purchasing power. It is time to end the Fed and free our country.
– *A – http://www.marketwatch.com/investing/stock/mcd/financials
