Posted on 04/11/2016 8:07:57 AM PDT by SeekAndFind
Oh my goodness! I can't imagine either. I attribute the 'affect' to the generous amount of fried onions. And I love onions! :)
Technically, he wouldn’t have to double sales price to handle a 2/3 labor cost, no. That’s not correct.
To maintain the same margins, he would have to add the 2/3 increase in labor x the percentage of labor cost, as you were attempting to illustrate. This assumes all increased labor costs remain consistent.
Nonetheless, I expect screens (like now at Jack in the Box) will replace order-takers, and they’ll use speech recognition.
At the grocery store, you won’t even check yourself out anymore, nor will there be checkers in the future:
https://www.youtube.com/watch?v=eob532iEpqk
Beef is up over 50% since mid 2000’s. That wasn’t an economic crisis but minimum wage increases are treated as catastrophes. That makes no sense to me. I don’t understand the emotional and hyperbolic responses to the minimum wage discussion.
Most resteraunt chains are set up with the following equation:
30% labor cost
30% food cost
30% utility and building cost
= 10% profit
just raising the labor cost will make these businesses unprofitable
food cost is not going to come down, no matter how draconian the cuts to quality or portion size are.
cost of maintainence, utilities and taxes are only going up.
even well run resteraunts are “feeling the bite”( I crack myself up)
I have 28 years of resteraunt experience. Both as Labor and management.
It’s like the illegal alien / H1B thing.
There are folks that make money off it.
Have a relative that way; way overbought on a house but complains they drive old cars. The extra $400,000 to $500,000 upgrade from their previous house would have bought a couple of nice new cars, and still have $320,000 to $420,000 of less debt (assumes two $40,000 cars - which still, even today, will purchase a new car and a new truck or mid-sized SUV).
Sure, there is extra value in the other home - if you can find somebody wealthy enough to afford it. They don’t seem to be in much of a hurry. Nice land, though.
I’m always amazed at some of the house prices around Atlanta (they’re not there). Some homes that looked like they were $400,000 homes going for $200,000 or so (TV show). Must have been some serious deflation in some areas.
[30% labor cost
30% food cost
30% utility and building cost
= 10% profit]
That sounds about right to me, based on what little experience I have with restaurants.
OTOH, going to KFC, shoot even Popeye’s is way, way up.
KFC, you need to take out a loan before you go there. They had some $5/boxes about 10 years ago (when work was plentiful) - those were great. But I haven’t had their regular bucket “deals” for about 7-10 years now. I gave up.
And Church’s Chicken? Last two sandwiches I got there (one visit) I returned both for a refund. Probably almost never go there again.
BS. Meat/buns go up then the price on the menu goes up accordingly. Somehow the restaurant stays in business. But when wages go up then why don't the prices just go up accordingly? Wages are political, meat costs are not.
Couldn’t give a whit about the Democrats. I’m not getting Social Security because I’m paying for my parents and grandparents. Fair trade.
If labor increases from $9/hr to $15/hr, that’s a 66% (rounded low) increase - closer to 67%. 2/3 increase.
Ok using your assumption a 2/3 increase the new cost basis would be :
.50/1.20 = X / 100 = 42%. A 12% increase over the current 30%. No where near 50% increase...
Actually ..
In order to keep the same ratio of 30/70 , a 66% increase on one side has to be offset by a proportional increase to the total. A 50% increase (original price times 1.5) to the total is indeed correct.
1 + 50% = 150 or 30/.66 (.45) + 70/.66 (1.06) = 1.51 times the original price. A 51% increase.
There's a gas station and market chain here in VA, called "WaWa" (don't know how much they're spread throughout the country)... at the snack line, they use the automated kiosk for meal selection as well. Once you pay for the ticket, you hand it to the person behind the counter who preps it all up. It's very efficient.
The cause for the shortfall isn't the expense that Social Security is supposed to cover, which is to provide enough income so that Seniors who've paid in are guaranteed enough income so that they can live their senior years without ending up dying in the streets from poverty.
It's always had problems. When workers in the worst jobs died before they collected, the money ended up subsidizing "rich old ladies with blue hair and funny drinks with umbrellas in Miami". It became a survival of the fittest transfer of wealth.
Then, all the other stuff got added to it and the payments are much more than just providing a base life just-above-poverty level of income. Then there's the cutoff where high-income people don't pay intro Social Security after they reach an income cutoff.
Another problem is that many people who are spending less of their work years paying in because of job instability.
What's my point? Social Security could be fixed if (1) the economy is fixed and (2) it goes back to being what it was supposed to be, a safety net to stop the elderly from dying in the streets.
Wow, is THAT ever true! And... it's not even as good as once was.
I’ll take the robots over illegal alien drug gangs and terrorists holding “friendly nation” passports any day.
When in Chicago, go to the one off the Dan Ryan at 117th in Blue Island. It's.... interesting (or at least it was a few years back).
Yah, it’s scary. I honestly don’t know how people do it, especially since BamBam rose to power.
But then, I’m not sure how some folks are driving $50,000-$60,000 SUV’s, that get 7-9 miles per gallon, and have $2,000-$4,000 of wheels and tires pull it off, either.
Maybe some of them pull cash in the drug trade on the side....
When I made the most money I ever made I bought a $30,000-$31,000 Ford Explorer at discount and the 0.9% payments were a lot of money with all that I had going out.
Ah, the good old days........
The values of these from a supplier change weekly. Prices
(except for those sold at market value) change reletavly
seldomly. I will acknowledge that prices since 2007 have been
rising. I merely pointed out the formule that resteraunts use as a model for sucess.If you mess with ANY of the first three parts of the equation, it WILL cut into profitability. If a business is not profitable, it is finished. the only question is wether customers will be willing to pay for these increases in cost. I DO agree with you on the point that these manditory labor cost increases are POLITICAL.
I worked for Krystal in my teens, circa 1971-1973.......$1.65 an hour!................
Minimum wage!! Of course Twinkies then were 10 or 12 cents a package. As minimum tripled to $4.95, Twinkies more than followed suit to 50 cents; by the time that minimum wage had gone 5x to $8.25, Twinks were now .79 (6.58x) or .99 (8.25x). Try inserting your favorite kid treat— comic books, baseball cards, popsicles— and see that the difference could be much worse.
By the way, got my first job at the same time, bagging groceries above minimum at $1.72!
I'm not buying it. Labor is the same as meat and electricity. They are simply costs. Beef is up 189% since 2000. Did white castle go out of business?
“If 30% of your expense structure increases in cost by two thirds, your overall expense increases by 20%, not 50%.”
The 30% hourly wages went up... Do you think the management salary won’t go up too? Or the costs of their materials to make the food? Or the costs to clean the restaurant... it keeps going.
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