This is a nice story that illustrates some important features of free markets:
-Buyers of last resort, in this case buyers of labor, perform an important role that is not always appreciated by moralists who themselves have better options. To put it differently, McDonald’s is a vulture capitalist that lowballs labor markets and exploits vulnerable low-wage workers who lack better alternatives, and that’s a good thing. Those workers are better off employed at modest wages than unemployed at higher wages, as many of them will soon find out if McDonald’s is forced to raise its entry-level wages to accommodate proposed increases in legal minimums. The author of this piece deserves credit for his insight.
-There is always a big market for inexpensive products of adequate quality that are made to high standards of consistency. If you are on the road or in a hurry or in an airport, a standardized McDonald’s burger for a buck or two can look pretty good as compared to no food or to an overpriced bagel or sandwich of unknown quality and freshness.
-Tastes differ. The people who criticize McDonald’s for the quality of its food may not consider that many people actually like McDonald’s food.
(Via Instapundit.)
In Europe with its higher minimum wages and regulations they’ve replaced counter workers with self-serve kiosks and mobile ordering. I know they were working on a burger making robot, but I’m not sure how that’s coming along.
” Those workers are better off employed at modest wages than unemployed at higher wages”
True but both understated and incomplete.
The employers are also better off with employees working for modest wages, than overloading managers, higher-skilled workers, or imperfect and inflexible machinery with the scut chores dispatched by “those” lower-skilled, teachable, workers.
The customers are better off to have some help — even it it’s just somebody to say “someone [else] will be along in just a moment”.
The voters and taxpayers are better off. Even if, as in Friedman’s “Negative Income Tax”/ Earned Income Tax Credit notion, the voter/ taxpayer WANTS workers to have “a living wage” — it’s better for society to subsidize the actual wage as a separate transaction than to interpose preferences into the market-based trade of labor for wages. The labor is worth what it is worth to the employer, the taxpayer gets the value of that labor and a reduction in the subsidy paid to support an unemployed person at the minimum desired subsistence level.
The future is better off, as the low-skill, low-wage, workers polish up their skills and experience, getting ready to move up the ladder in that future.
OTHER workers are better off, as each learns more about the “diverse” community in which they live and serve. (See various Mickey Kaus articles about how the long-term unemployed become radicalized and dangerous to the working class “others” around them.)
It is difficult to express how much WORSE results are obtained by the minimum wage requirement imposed on McDonalds and similar employers, than by alternative policies already tried and proven.
I wonder if Thermomix (which McArdle oft praises) will form the basis of robo-chefs.
Economics aside, there’s a lot of snobbery towards McDonald’s. I like McDonald’s. I get lunch there maybe once a week. I can get a cheeseburger, fish sandwich and strawberry milkshake in a few minutes for about $8. A nice quick lunch I always enjoy.
I’ve found over the years most people like McDonald’s. An enormous number of people are embarrassed to admit that, which goes to show how effective social activist propaganda really is.
I love this story: http://nypost.com/2013/07/28/the-greatest-food-in-human-history/
How much better for you and how much more enjoyable than the average school cafeteria lunch?