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Comment by gruez | Hacker News Reader

>There is quite some gap between the minimal wage that's enough for subsistence and the maximal wage that still won't ruin the business, so the actual wages land anywhere in the middle as a result of those conflicting constraints.

Source? My impression is that fast food restaurants run on thin margins.

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If they can afford a CEO that makes millions, the fact that they don't make a ton of profit (this is rhetorical: They definitely do) is immaterial: The margins could be thinner, the workers could be better paid.

Maybe the rents are too high and both the owners and workers are being squeezed by a housing and healthcare cost crunch, driving thousands of businesses out of the profitable range.

One of my friends likes to recall an experience from about a decade ago: he was working at a small firm and once went to the boss/owner to ask for a raise. The boss explained that right now the times are tough, there is no spare money in the business so he can't do anything but he'll keep his request in mind. Okay, but literally next week the boss drives to the job in a new (luxury) car. When my friend, after congratulating him with the purchase, asked about the money situation he was told to not count other people's money. The friend left the firm a couple of months later, without getting any raise during that time.

Sure, "the goal and purpose of any business to exist is only so that its owner can buy himself a new Ferrari" but... some workers tend to disagree, especially when they feel that they're doing the bulk of the actual of work without a correspondingly large compensation for it.

McDonalds had a gross profit of ~10B and net income of ~6B in 2018.

Maybe we have different ideas of thin margins.

1. what's their revenue? Walmart has 13 billion in net income. That might sound like a lot, until you realize that they make 559 billion in revenue, which works out to a relatively thin margin of 2.4%.

2. not an accountant, but the fact that mcdonalds licenses their brand to franchisees probably messes with their profitability figures. They might be making 50% margin on franchise fees, but that doesn't mean the actual restaurant has 50% spare cash to spend on employees.

Revenue was ~21B, =~ 28% margin.

I'm also not an accountant so I'm not about to speculate on the rest. Maybe your right and it's a factor.

That's at the corporate level though. They are largely making their money from selling food or renting space to franchisees. The individual store's margins (the ones paying the actual burger flippers) would be quite a bit lower I assume.

Assuming franchisees make less margin (which I guess is fair to assume): What does that matter?

If the parent company took less margin overall and distributed that ver each franchisee they could pay more.

According to a quick Google there are a bit more than 38000 McD restaurants in the world. So still around 500k. I'm not sure what number of people an average McD employs as I'm reading numbers that differ wildly.

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