...Surviving the $15 Minimum Wage: McDonald’s Struggle to Remain Competitive Rasel Ahammed Dario Colon Gonzalez Gregory A. Delts Valerie Demas Keller Graduate School of Management Professor Vera Daniels MGMT 530: Managerial Decision Making November 27, 2015 Table of Contents Page 3: Executive Summary Page 4: Introduction-Overview of Decision Problem Page 4: Problem Statement Page 5: Objectives Page 6: Summary of Key Objectives Page 6: Alternatives Page : Description of Alternatives Page : Selection Page : Consequence Table with Original Values Page : Ranking Alternatives Page : Scoring Model: Title Page : Weighted Scoring Model: Title Page : Consequences Page : Risk Profile: Title Page : Implementation, Monitoring, and Control Page : Timeline Page : Summary Page : Works Cited Executive Summary McDonald’s restaurant chain, long considered an industry and community leader, has begun to experience a reversal of its corporate fortunes. They have seen a steady decline in total profits, sales, and a weakening of their corporate image. To add to their troubles, New York State Governor Andrew Cuomo, and a growing number countrywide are in the process of approving a bill almost doubling the minimum wage for fast food workers from $8.75 to $15. The problem is, knowing that there will be a dramatic increase in salary expenses in the next few years, how can McDonald’s alter its business practices...
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...the biggest issues that are going on today is should we raise the minimum wage? According to Bureau of Labor Statistics, “In 2011, 73.9 million American workers age 16 and over were paid at hourly rates, representing 59.1 percent of all wage and salary workers. Among those paid by the hour, 1.7 million earned exactly the prevailing Federal minimum wage of $7.25 per hour. About 2.2 million had wages below the minimum. Together, these 3.8 million workers with wages at or below the Federal minimum made up 5.2 percent of all hourly-paid workers” (Characteristics of Minimum Wage Workers In 2011, 2012). According to the data, there are very few people getting paid at or below the federal minimum wage. Yet, people are complaining that the current wages are not enough. With wages at the current state, people are still living in poverty. With the new Fair Minimum Wage Act of 2015 (H.R. 1010), the minimum wage will rise from $7.25 to $10.10. The debate is whether the increase in wage will either benefit everyone (employees and businesses) or will this increase have negative effects and create more issues instead of fixing them. Will we end up paying more to get less? Background Here is some history on H.R. 1010 or better known as the Fair Minimum Wage Act. “The federal minimum wage originated in the Fair Labor Standards Act (FLSA) signed by President Franklin Roosevelt on June 25, 1938. The law established a minimum wage of 25 cents per hour for all employees who produced products shipped...
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...Some people think that raising the minimum wage to $15.00 per hour is a good thing. They think that it will make the economy stronger and that those that got to take advantage of the wage increase, will benefit. If they raise the minimum wage to $15.00 per hour , are they also going to raise the wage of people to fought to make that much? People should be more concerned raising the wage of the teachers that are responsible for the education and growth of our children. Or perhaps the wage of the medics and first responders should be raised, as they are supposed to arrive in an timely matter in response to o emergency. What ever the case, fast food restaurants are considered entry level employment. One is not required to have any experience or special skills, just the ability to follow directions, administer good customer service and have good time management. This paper will discuss the reasons why raising the minimum wage for a fast food worker to $15.00 per hour is a negative thing. Fast food workers should receive an increase in wage, but not $15.00 per hour. If the wage increases to $15.00 per hour this may cause a negative effect on unemployment for low-skilled and teenage workers, an increase in debit, and a change in job qualifications. According to Senate Republican Party Committee (2013) “Raising the minimum wage could hurt opportunities for teens to land their first job -- and with it the chance to learn valuable life and work skills that cannot be taught in the classroom...
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... Think back to your first job...what was your pay starting out? Entry levels jobs in the past certainly did not earn higher wages like those being fought for today. Fast food workers are raging for an increase in minimum wage-to perform jobs that don’t require a high school diploma, or college education...little to no academic requirements are needed to work at a fast food restaurant. Minimum wage in North Carolina is currently $7.25, whereas fast food workers would like to raise minimum wage to $15.00. A person with minimum skills should not receive higher than current minimum wage. Fight for $15 is a Workers Organizing Committee, a union of fast food workers raging ands striking for higher pay. This organization was founded in November of 2012. These workers believe that they are forced to live in poverty, because they earn a wage of $7.25. “We work for corporations that are making tremendous profits, but do not pay employees enough to support our families and cover basic needs.” (Fight for $15) These jobs are not meant to be careers for adults with families. These jobs are meant for teenagers that live at home and are in high school or college. Clearly, no one can raise a family off of $15,080 annual income, before taxes, if they worked 40 hours a week. But, a high school or college student can. One of the strikers says, “Low wage jobs are the fastest growing jobs in the nation, and they need to pay more.” (Fight for $15) They claim that they are ‘re-building...
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...Todd Palmer said it best when he commented, “An increase to the minimum wage won’t help workers in the long run.” Minimum wage workers have plenty of reasons why they should be make more, but most of their reasons can easily be dismissed. Sure, the workers will be making more money, but only trouble can come from an increase in minimum wage. An increase in cost of everyday things, a negative affect on young workers, and an increase in unemployment, companies replacing workers with robots are just a few of the problems that can unfold. If we increase the minimum amount that people can make, then companies have to increase the price for their products so that they can pay their employees the minimum. “[B]usinesses tend to react to minimum wage increases by raising the prices of the goods and services they provide” (Hirby). Also, if you increase how much people make, now because you have more money to spend, you should be able to pay more for your necessities. This is going to cause for another demand for an increase in minimum wage. Workers protest that they are unable to adequately finance their families, but the point of minimum wage was never to support a family. Minimum wage was meant for high school and college students with...
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...the additional effects raising the minimum wage income has on society. The United States low wage workers, namely the fast food industry workers are currently demanding higher wages. We will discuss the effect of those higher wages to businesses, the workers and those who we would not think to be affected. Effects of Minimum Wage Increases Chapter 1 Introduction Anyone who watches the local or national news has heard of the recent debate over raising the nation’s minimum wage requirements. Employees of McDonald’s, Wendy’s and Burger King are protesting in the streets and going on strike demanding a $15 per hour minimum wage (Fast Food Workers). These restaurant chains and others do not believe the minimum wage should be raised to $15 per hour for fast-food workers. There are many arguments to support both the demand to raise the minimum wage and not to raise the minimum wage. This paper will focus on different arguments and the impacts of raising the minimum wage will have on society from different angles, the first being how employers may respond to the wage increase by reducing the amount of employees they employ. The second focuses on who the mandated increase will most likely impact. And the third and final being the artificial inflation effects on the consumer. History Raising the minimum wage is not a new idea for the United States. In 1938 congress passed the Fair Labor Standards Act (FLSA) which ensured minimum wage of 25 cents per hour (USDofL). The...
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...AFL. The two agencies serve as organizations that advocate for the rights of the workers in their organizations. Essentially, they act on their behalf and ensure that they enjoy the full benefits of an employee within a given society. The paper discusses the ability of the unions to organize service worker in industries like custodial maintenance, food service, and similar low-income working environments. Further, it will address the argument in support and against increasing the minimum wage. It will examine the situation in which McDonald and their franchise are being investigated by the NLRB regarding benefits, job security and wage issues. Finally, it will indicate how the enactment of the ACA may have had an impact on increased numbers of part-time and lower-wage jobs. Discussion In any given country, the labor unions play a significant role in the manner in which employers treat their employees. The workers that are represented by the labor unions enjoy the protection concerning wages and...
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...No Economist would disagree that when you raise the minimum wage, you kill jobs for the poor. The debate to raise minimum wage has lasted for years. While it is true that the minimum wage has not kept up with inflation, that is unimportant when looking at the grand scheme of how it would affect the economy. Raising the minimum wage would cause catastrophic issues for the United States economy. The federal minimum wage should not be raised because it will hurt small businesses and increase unemployment. Raising the minimum wage will kill small businesses. Small businesses will have to raise all hourly rates, resulting in less money in the owner's pockets and the employees alike. Many employees would be laid off or have hours reduced,...
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...Industries: Surviving the Economy The first thing that comes to mind when I think of going out and grabbing something to eat is burgers and fries. McDonald’s, Burger King, and KFC are the first place that my mind would wander to when choosing a place to grab a meal to go. These three places are part of an industry that has been around for centuries. Fast food industries have been around for centuries. They have played a part in structuring our economy in the workforce and the market place. They also impacted us, the consumers, on how we eat and manage our budget. When it comes to employing teenagers, unskilled, or low skilled workers, fast food industries is the answer. Fast food industries are the top employers for low wage or minimum wage earners. To understand how fast food industries became one of the top employers for minimum wage earners, we first need to understand the industry. It does not require a lot of skills to work in one of fast food restaurants. Fast food industries focused on high volumes of preheated or precooked food that were served or prepared by an assembly line (Fast Food Industry Analysis 2013). This type of system gave fast food industries the opportunity to employ workers who are willing to work on minimum wage. For a long time fast food industries have been reaping the rewards of low wage earners. “Roughly 90% of the nation’s fast food workers receive no benefits and are scheduled to work only as needed. There are a few if any possibilities...
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...Mgt Course School/Level B/UG Coursework Report Assessment Weight 100.00% Tutor EA Warren Submission Deadline 19/03/2015 Coursework is receipted on the understanding that it is the student's own work and that it has not, in whole or part, been presented elsewhere for assessment. Where material has been used from other sources it has been properly acknowledged in accordance with the University's Regulations regarding Cheating and Plagiarism. 000652920 Tutor's comments Grade Awarded___________ Moderation required: yes/no For Office Use Only__________ Final Grade_________ Tutor______________________ Date _______________ 2|Page 0006529208 Strategic Financial Management Report: McDonald’s Part 2: External Analysis Zaheer Mansuri Word Count: 3038 Tutor: Liz Warren 3|Page 0006529208 Contents PESTLE ..................................................................................................................................................................... 4 Political:............................................................................................................................................................... 4 Economic:............................................................................................................................................................ 5 Sociocultural: ................................................................................................
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...McDonald’s By Philip Wolfe and Carrie Lettiere Contents Introduction 2 Strategic Focus and Plan 3 Mission Statement 3 Core Competencies 3 Competition/SWOT Analysis 4 Competitors 4 SWOT ANALYSIS 5 Strengths 5 Weaknesses 5 Opportunities 6 Threats 8 Franchise Costs 9 Conclusion 10 Works Cited 12 Introduction McDonald’s was started as a drive-in restaurant in 1940 by Dick and Mac McDonald as McDonald’s Bar-B-Q in San Bernardino, California. After shutting down for three months to make renovations, in the December of 1948, they reopened as McDonald’s. In only a decade after that, they were able to open 100 McDonald’s restaurants and sell over 100 million hamburgers. As the years went on, they opened even more restaurants not only nationwide, but also around the world. They introduced memorable mascots such as Ronald McDonald, provided new options such as the famous Big Mac, and began giving to those needy with the construction of McDonald Houses. Later on they went to acquire other businesses such as The Boston Market, Chipotle Mexican Grill, and Donatos Pizzeria, “in an attempt to diversify its operation” (“McDonald’s Corporation”). Around the world there are currently over 36,000 McDonald’s restaurants in 119 countries. In 2011, McDonald’s was approved of the trademark Mc. From 2012 through 2020, McDonald’s shall be, “the official restaurant on-site at the Olympic Games” (McDonald’s Corporation”). BrandZ ranked McDonald’s as the #5 Most Valuable...
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...protest demanding a wage of $15 per hour. Fast food workers in more than 100 cities in the US joined the protest hoping to disturb the fast food chains enough to get their executives’ attention. This protest was part of the movement that was organized by the Service Employees International Union (SEIU). A previous strike was organized on May this year and it took place not only in the US but in at least 33 countries like The UK, Philippines, India, Japan, and Belgium among others. The protests were supposed to be peaceful, but there were some instances of protesters blocking streets. The police had to intervene and at least 430 people were arrested. Kendall Fells, the organizer director of Fast Food Forward organization that helped organize the protest said “There has to be civil disobedience because workers don’t see any other way to get $15 an hour and a union” Protesters were hoping that their absence from work would make these fast food restaurants lose revenue and create chaos forcing executives in these establishments to accept the protesters’ demands. A similar strike took place when the Market Basket workers abandoned their posts when the Market Basket Board of Directors decided to replace their CEO. Although the fast food protest was highly organized and the majority of workers joined, some workers decided to show up for work. Restaurants were shorthanded but were able to run their activities. This was a setback for the protesters because it showed how workers can be replaced...
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...How do you know what job pays more than others? Is working at, above or below the minimum wage important? Many companies are increasing pay for low-wage workers, in tune with the amount of people arguing for a higher minimum wage standard. These companies include McDonald's, Walmart, TJ Maxx, The Gap, and Target, according to an article from Forbes Magazines. First, with big companies increasing their wages above the minimum wage, some people believe that other companies should also raise their wages above the minimum wage so that they won’t have their employees seeking jobs from these bigger companies. Companies should attempt to find a balance between the wages they can supply and meeting the needs of workers who are attempting to provide for themselves or their families. The cost of goods and services have increased, and with this, it is harder for people to create sustainable living circumstances with the current minimum wage. An article named “Our Research: Minimum Wage” claims “[this] will enhance consumer spending, which can increase the demand for small firms’ good and services and boost their businesses’ bottom lines while strengthening the economy” (Small Business Majority)....
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...McDonald’s Job Satisfaction Hai Viet Le haile1505@gmail.com MGMT 591-Leadership and Organization Behaviors Professor: Tad Hove Introduction McDonald’s is a one of biggest fast food company all around the world. They have more than 34,000 restaurants and serving around 69 million people over 119 countries each day. My position is with a team member as a crew of one of McDonald’s restaurant. Their main focus is improving performance by implementing changes to increase productivity. These changes can include improved validation rules for approving financial content to new software implementations to increase productivity. McDonald’s Corporation directly about 15% restaurant, they develop their business thought franchise agreement. By collection franchise fees and marketing fees help them have more chance to bring their restaurant go around the world. With some agreements in the contact, they make sure that the franchisee follow their rule that they have to build all of restaurant is exactly the same with the order. McDonald’s Corporation a. Brief History “Dick and Mac McDonald opened their eponymous burger stand in 1948 in San Bernardino, Calif. Under the guidance of Ray Kroc, a onetime milkshake-mixer salesman wowed by the restaurant's success, McDonald's franchises grew swiftly: by the end of the 1960s, there were more than 1,000 across the U.S. The first international franchise opened in 1967 in British Columbia” (James, 2009). On the other hand, with the creation...
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...The authors of this paper are in search for how employers in a low-wage labor market respond to an increase in the minimum wage. Specifically the raise in the minimum wage of New Jersey (NJ) on April 1st 1992 from $4.25 to $5.05 per hour and how this effected the surrounding areas employment level. This question is of interest to students of economic because we would expect to see a case study like this follow the labor of demand theory, as wage increase, employment decreases. However this paper finding indicates that the rise of minimum wage does not reduce employment. Which for someone studying economic comes as a shock, and the opposite of the models we have learned in previous class. This paper is not alone in these findings because as mentioned in the paper its self earlier studies have come to the same conclusion. So as a student this gives us a real life example of the labor demand theory being disproven, at least for this case study. Both of the authors of this paper have credibility and useful backgrounds. Dr. David Card earned his Bachelor of Arts degree from Queen’s University in 1978 and his Ph.D. in Economics in 1983 from Princeton University. His main field of study is labor economics; having authored 4 books over 90 journal articles and book chapters, while currently teaching at the University of California Berkley. Dr. Alan B. Krueger received a Bachelor of Science degree from Cornell University in 1983, a Master’s of Arts in Economics from Harvard University...
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