McDonald’s Owners Are As Pessimistic as Ever, So Let’s Double Their Labor Costs

You would have to be living under a rock in this country to not realize that there are a shipload of fools who think that it is self evident that McDonald’s restaurants should be paying no less than fifteen dollars an hour to their employees. The assumption is that the restaurants have swimming pools full of cash in which the owners are frolicking like Scrooge McDuck. Here’s a little tip from CNBC: “McDonald’s franchisees most pessimistic in a decade.”

McDonald’s franchisees’ sales outlook for the next six months is the darkest it’s been in more than a decade, according to a new Janney Capital Markets report.

Following the report, McDonald’s shares fell 1.5 percent in trade on Wednesday.

When asked to rate their forecast from 1 (poor) to 5 (excellent), franchisees surveyed reported an average of 1.84. This marks the lowest level since the firm began polling franchisees in 2003.

“It is striking to hear the franchisees so concerned about the direction of the business,” said Mark Kalinowski, restaurant analyst at Janney, in a phone interview. “I think that gets to a lot of challenges that McDonald’s is facing.”


Despite hopes that the U.S. consumer would show signs of being on a “better footing” by now, Kalinowski said the fast food giant’s still operating in a challenged environment.

People assume that, when the economy is bad and they are having a hard time coping, that the companies are doing just great with no problems. That may be true of some companies, especially in financial services or who contract services with the government. But for retail and restaurants, they don’t make money if their customers don’t have money. If you are struggling in this economy then so are they. A fast-food establishment like McDonald’s only really makes money when people are out and about who have lots of money in their pockets and are eager to get rid of it.

So, as I have asked before: Do you really think McDonald’s can afford to pay more? I think it is incredible that people treat the tottering fast food industry as if it is some all-powerful giant. Why should they be required to pay more than unions pay people to protest for higher minimum wage? People need to spend less time campaigning for free money and more time increasing their productivity.