quote:
Bernie Sanders @BernieSanders
If Amazon can raise its minimum wage to $15 an hour, there is no reason that McDonald’s—a company that took in $1.4 billion in profit and paid its CEO $22 million—can’t also pay its workers a living wage.

In my view, if McDonald’s has enough money to buy back $22 billion of its own stock, it damn well has enough money to pay all of its workers at least $15 an hour.

Bernie doesn't understand the repercussions (or seemingly much of anything about economics). This will only hurt the franchisees, many of whom are small businesses.

According to former McDonald's USA President and CEO, Ed Rensi:

quote:
To understand the impact of McDonald's recent wage announcement, you first need to understand the corporation's current relationship with its franchisees. In recent years, many have lost significant equity because of aggressive required capital investment (e.g. store re-modeling, equipment upgrades). Add to this the increased (and unrecoverable) cost of third-party delivery (e.g. Uber Eats), and you have a recipe for franchisee financial stress.

Left with few options to recover new imposed costs, franchisees are seeing their equity dwindle and margins squeezed. That’s especially the case in high-cost cities like New York, where occupancy costs, taxes, and rapidly rising labor costs are driving restaurant closures.

It's true that, in many states and localities, the starting wage rate is already at $15 an hour or higher thanks to nearly-full employment. But a mandated wage rate that works in one market could be disastrous for franchisees in another market with a lower cost of living.

Make no mistake: Franchisees will pay the price through higher costs, younger workers will pay the price through loss of jobs and opportunity, and shareholders may pay a price in reduced value.

Forbes