On the radio this morning, the DJs were talking about how McDonalds was planning on removing the double cheeseburger from its dollar menu. This led to discussion of the increase in prices in general, and the DJs concluded that it was due to the cost of gas.
It is unfortunate that gas prices have increased recently, because it masks the real reason. Before giving the real reason, consider this. One of the DJs said (paraphrased, of course): “You gotta think that the profit for a double cheeseburger is like 80%.”
I think we can go with this for the moment, because if you consider just the cost of the beef and the hamburger buns and the cheese, it’s not that expensive. But just like when you pay $1.99 for a large drink you’re not really paying for the beverage, when you pay for your hamburger you’re not really paying for the burger either. What you’re paying for is the labor costs for the workers to make your food and to give you your drinks. The costs you pay don’t go much toward the actual cost of the materials, in other words; it’s almost all labor costs.
So, given that, let’s use some common sense.
What are most McDonald’s employes paid?
Answer: minimum wage.
What just increased?
Answer: minimum wage.
You wanna know why the dollar menu might be gone?
Answer: minimum wage.
This has a much larger impact on the cost of food (and everything else) than does $4.00 gasoline.
I wonder who would have predicted this?
