Nations Agenda™ - Constructive Political Thought
Informative articles and commentaries on politics, economics, and climate change
Millennials, Seize the Future or Lose It All Coming in January: The Future Project
 
Dorian's Corner - Commentaries / Opinions

Fooling the Public

It's easy to fool the public with smoke and mirrors if the public is confused on a topic. The economy is one such topic. Even very smart people don't understand it, and I dislike it, but it has to be.

I laughed at a recent commentator who said if McDonalds employees get $15.00 an hour, they will simply lay off people, so there will be fewer jobs. This is common rhetoric from people who don't understand business. McDonalds isn't the Hostess company that failed to innovate products, so was in the fragile position of having to close when employees refused lower wages. (Hostess is now on the comeback trail.)  McDonalds is a corporate Goliath.

City leaders of New York, St. Louis, San Francisco, Los Angeles, and others have studies that clearly show that all of the threats about moving the business out of town or state, closing the business, reducing employees, etc., are inaccurate. Studies show that there are no such impacts.

Walmart found that raising wages to just $9.00 saved them money.

Realistically McDonalds will state publicly as propaganda that they will lay off employees. It makes people afraid, and fear motivates. What they will actually do is look at how much a price increase will hurt business, and what $ amount is required to maintain profits in a wage decline economy, while losing a few customers. They will also look at whether additional automation will affect the quality of their product. Automation will probably do more harm than good because of the quality problem and cost of equipment.

They make take a combination of measures, but probably not. They will then raise the price of a hamburger 20 cents, and other businesses will do the same, for the same reasons. Business will go back to normal, and consumers will barely flinch.  Gotta' eat. Their actual profit, as a percentage of sales, will increase. Investors will be pleased because the increased profit will line their pockets.