On Sat, 1 Nov 2014 17:46:29 -0700 (PDT), "
wrote:

On Saturday, November 1, 2014 5:44:04 PM UTC-4, Ed Huntress wrote:
d have to eat healthier foods. Win/win, wot?

While you're practicing your arithmetic, you might want some
real-world prices to put into your homework.

Fast-food restaurants' average labor costs -- total, front- and
back-operations -- run around 25% of sales.

McD's workers average around $8.50/hour. Figure one manager for eight
employees (which is about right), at $11.50/hour, you get an average
of $8.83 for all employees. That represents $1.00 of a $3.99 Big Mac.

If you raised them all to $15.00/hour, that would add $0.80 to the
price of that burger: It would sell for $4.79.

That's significant, but before you start thinking "$20 burgers," try
running the numbers and get real.

--
Ed Huntress

Are your labor costs including the cost of benefits?

That's a figure I got from a trade association. It's supposed to be
total labor costs per restaurant, across the fast-food indisutry.
Another source said that the restaurant industry as a whole averages
33%. Fast-food outlets are more efficient, as one would expect.

And how many businesses are going to raise the cost of the burgers above that $4.79 and blame the extra price increase on the minimum wage increase?

As; many as can get away with it. And if they *do* get away with it,
it tells us that labor was underpriced before the increase.

--
Ed Huntress



Dan