Most workers are unable to find 60 hours of employment each week, which means they bring in even less money — hardly enough to live on and support a family. As a result, fast-food workers and union organizers are demanding a raise in the minimum wage to $15 per hour — an enormous wage hike. Fast-food workers cite the billions of dollars in profits that McDonald’s makes each year as evidence of its ability to hike wages, while McDonald’s sympathizers say a doubling of wages would be catastrophic for the company. As usual, both sides have distorted their respective positions, so investors should ignore the noise and get the facts. Can fast food chains afford a wage hike? First of all, doubling the federal minimum wage would not double the amount fast-food chains like McDonald’s, Burger King Worldwide (NYSE: BKW ) , and Jack in the Box (NASDAQ: JACK ) pay their employees. According to Businessweek, the typical wage worker at fast-food restaurants earns about $9 an hour.The workers making minimum wage are predominately seasonal workers, such as high-school and college students. So a wage increase to $15 per hour would be a two-thirds increase, not a doubling. However, even a two-thirds wage increase would be devastating to fast-food chains’ profits. Although information on franchisee profit margins is hard to come by, public fast-food chains release enough data about their company-owned restaurants for investors to get insight into their ability to increase wages. McDonald’s, Burger King, and Jack in the Box pay wages that equate to 25% to 30% of restaurant sales. An aggressive (i.e., inflated) calculation of these restaurants’ profit margins yields a 10% to 20% margin — this excludes corporate-level sales, general, and administrative expenses (SG&A) that are necessary to advertise and run the company.
Charities Decry Food Aid Cuts Pushed by House Republicans
Chipotle’s name shows up in small print only in the game’s introduction, and its logo is displayed only after the video is over. The move precedes a series of four, TV show-length Big-Food-busting dark comedies, Farmed and Dangerous, that Chipotle will post online sometime in 2014. For Chipotle, it’s all about linking its name with the strong Millennial values to eat better, eat local and brand lightly. It’s all in the hopes that Millennials who are the heart of Chipotle’s target customer will make Chipotle’s better-for-you messaging go viral. “We’re trying to educate people about where their food comes from,” says Mark Crumpacker, chief marketing officer at Chipotle. But, he says, Millennials “are skeptical of brands that perpetuate themselves.” Both the game and film depict a scarecrow’s journey to bring wholesome food back to the people by providing an alternative to the processed food that dominates his world. The film is set in a spooky, fantasy world where all food production is controlled by fictional industrial food giant Crow Foods, run by evil crows. “The crows control the scarecrows,” says Crumpacker. “It’s a parallel of the industrial food system in the U.S., which is upside down.” The Crow Foods factory is staffed by scarecrows who have been displaced from their traditional jobs on the farm and are now relegated to working for the crows by helping them maintain their unsustainable processed food system. The game and the film were created with Academy Award-winning Moonbot Studios. Chipotle will be giving away up to 1 million buy-one-get-one offers to consumers who successfully play the game.
Can Fast-Food Chains Survive a Wage Hike?
Purvis said her food bank is the largest in the nation, providing as many as 62 million meals a year. Almost 48 million people in 23 million U.S. households relied on the Supplemental Nutrition Assistance Program, the official name for food stamps, the largest of the nutrition programs. The figures are for June, the last month for which preliminary data were available, according to the USDA. Monthly food stamp usage has risen more than 18 percent over the past four fiscal years, according to data compiled by Bloomberg. The proposed reduction would remove 76 million meals a year from New York City alone. Where would we get that?, Purvis said in a telephone interview from a soup kitchen in Harlem. Thats more meals than we provide in a year. Able-bodied Adults Republicans have said their measure would cut spending by tightening eligibility requirements including on able-bodied adults younger than 55 who dont have dependents. Backers of the bill say they want to curb waste and abuse. I think a lot of our members want to finally make real reforms to the food-stamp program, said Representative Steve King, an Iowa Republican and senior member of the House Agriculture Committee, which has jurisdiction over the programs. The goal is to ensure that while you have a safety net you shouldnt be giving welfare benefits to people who are able-bodied and capable of getting a job who just choose to continue to get food stamps when they can actually go and work. Spending on domestic nutrition assistance programs would reach $764 billion over 10 years if current policies continue, according to a June report on farm bill spending from the Congressional Research Service .
GOP bill would ban using food stamp funds on junk food
News Newly proposed legislation in Congress would ban recipients of food stamps from buying junk food. The Hill reports that a bill proposed by Rep. Phil Roe, R-Tenn., would require food stamp recipients to purchase only healthy food. The Healthy Food Choices Act, H.R. 3073 is the latest salvo from Republican members of Congress who have criticized the Supplemental Nutrition Assistance Program (SNAP), also known as food stamps or the Women, Infants and Children program (WIC). In August, it was reported that House Republicans hoped to cut some $40 billion from future SNAP budgets . Roes legislation is specifically in response to a 2012 study, which showed that recipients from the food stamp fund spend approximately $2 billion a year on junk food. As a physician, I realize the importance of healthy eating, and as an obstetrician, Ive seen how the WIC program helps empower families receiving assistance to use taxpayer dollars to purchase healthy, wholesome foods, Roe said in a statement published on his congressional site . If these guidelines are good and healthy enough for women and children, then SNAP recipients should also benefit from adhering to the same standards. In June, Roe voted in favor of proposed legislation that would apply work to welfare standards to food stamp fund recipients . Critics of Roes proposal say that the tighter nutritional requirements would actually be more of a burden for low-income individuals and families who rely on SNAP funds. They also point out that Roe previously opposed efforts by first lady Michelle Obama to improve national school lunch nutritional standards . Roes bill would require SNAP food purchases to adhere to the same nutritional guidelines required under the WIC program. But some critics have said that even WICs requirements are not based on science and need fine-tuning to ensure they are nutritionally sound. Still, Roe said his intention is to improve the health of SNAP recipients by helping to ensure that they eat more nutritious meals with their funds. Already states like Wisconsin and South Carolina have shown interest in improving the healthfulness of choices in their SNAP programs, Roe said.