Wednesday, March 01, 2017

Wages vs Capial? No Contest


Wendy's has announced the roll out of ordering kiosks in 1000 locations.  Based on their calculations the ROI is less than 2 years. 

Forbes has this:

As Wendy's Is Proving, Target Has Shown, Higher Minimum Wages Lead To Job Losses


Excerpt:

There are really only three possible reactions to a rise in labour costs. One is to cut the profit margin. Wendy's seems to make about 8% on sales as net margin. Not a lot of room there to cut that. The stockholders are going to want something back for providing their capital to the company after all. Another possible move is to increase prices, or perhaps not be quite as cheap as everyone else. This doesn't seem to work very well as Target has just found out:
Target to cut prices, update stores amid 'seismic shift' in retail industry
Cutting prices now being an obvious sign that trying to raise them isn't going to work. Consumers just aren't in the mood to pay more. At which point there's only one possible tactic left to deal with wage rises. Use less labour.

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Flippin' burgers isn't much of a job but it is a job. 

19 comments:

Mike said...

haven't eaten at Wendy's for years...they are hard to find up here.

LBD said...

Hard to explain to some that minimum wage is not a living wage. We spent the money on education and that has failed so adults (and Illegals) have kicked youth out of the learning wage jobs. What a mess the do gooders have pushed.

Rob Dawg said...

I sent an invite to "dryfly" at his slow address. If I don't hear I'll bother him at his real address.

Mike said...

that would be great to hear from him...I think he's been doing a lot of business in/with China..so would be interesting to hear his impressions

Rob Dawg said...

Something something, Badgers and Packers all bastards. Dryfly is good and i will be talking more with him soon. He might stop by if he gets a chance.

Mike said...

hahahahaha

Rob Dawg said...

Ahhh, just like the old days. I'll try to keep it like that. It will be interesting if/when some of the interlocutors show up.

LBD said...

DOW 21K hats now available. Made in China.

Cinco-X said...

Last I heard he was doing something East of there

Lawyerliz said...

Hope not. Wearing a t shirtmade on usa.

Lawyerliz said...

Dennys is hiring

Rob Dawg said...

I bet within 5 years the hostess handing you a big laminated menu will be the exception rather than the rule.

This stuff happens fast.

Lawyerliz said...

Hi to dry.

Rob Dawg said...

Anybody clue josap in yet?

Lawyerliz said...

I dunno. Self check out never took off.

Cinco-X said...

Holy smokes! Are gonna finish up a slumdog?

Mike said...

Self check out never took off.

I use it all the time..

I'm guessing the labor cost savings are somewhat offset by the increased cost of mis-scans (intentional or accidental) however..

e.g. people buying organic produce but ringing up regular..

Rob Dawg said...

Two slumdogs and a couple pups!

Cinco-X said...

Wow! Closed above 21000