Unfortunately for U.S. fast food workers, the capital structure in the (American) fast food industry will keep them from making anything close to a living wage. McDonald’s, the corporation makes profit consistently, no disputing that. The franchisee motivation is where things get twisted. For most franchisees, the margins are paper thin, allowing them to mostly barely pay the operational expenses, debt service, and improvements over time. Who in their right mind would buy a franchise for $2.5M? That’s where things get twisted. A franchisee may invest $1.4M of their own money, finance the remaining debt for 7 years. At the end of the 7 years, the debt is paid off and the franchisee has an asset worth $2.5M. This works out to about a 9% rate of return. The problem is that the franchisee is really in the real estate flipping business. He/she is not making money selling burgers and fries but rather the business itself. The restaurant is really inside a black box as far as capital is concerned. That is why the food is absolute rubbish and it doesn't matter. And the employees get treated like cattle. Fast food business model is terrible for labor because almost any increase in the cost of labor causes the disinterested capital to simply not invest. Even a small increase in labor cost causes the capital to shift to another equally heartless investment (payday loans?)
@Ester Bloom Fascinating indeed. Your point about Oregon being unusual is also manifested in the numbers. Oregonians need 95% higher income to be happy as opposed to neighboring Washington which needs just 36% higher income to be happy. I guess the Seahawks really did make Washingtonians happier...
Alaska had the second highest median income in 2011 at $67.8K vs US median at $50.5K. So Alaska had median income which was 34% higher than the US median. $98.9K is 32% higher than $75K so it seems in line.
@apples and oranges No doubt we live in a racist society. The writer was making a case that STEM education does not help blacks. I was pointing out that in fact it does, and by a significant factor. Since black STEM graduates have 181% (.58/.32) the rate of employment of black non STEM graduates, it is irresponsible to say that STEM education does not work for blacks.
STEM does work for Black people. STEM grads have employment rate of 58% vs 32% for non STEM grads (not counting underemployment.) That's pretty significant. Underemployment of 32% vs 56% comparing STEM to non STEM. It may not be "Magic" but something significant is at work.
Work is love made visible. And if you cannot work with love but only with distaste, it is better that you should leave your work and sit at the gate of the temple and take alms of those who work with joy. For if you bake bread with indifference, you bake a bitter bread that feeds but half man’s hunger. And if you grudge the crushing of the grapes, your grudge distils a poison in the wine. And if you sing though as angels, and love not the singing, you muffle man’s ears to the voices of the day and the voices of the night.” - Kahlil Gibran, (1883-1931) from The Prophet – “On Work” To the OP's credit, he recognizes that there is no work that he can do with love. So he prefers to sit at the gate...
@jquick Assumption that I would make is that EmmaP is one disciplined young woman. From her responses to some of the posts, she's also a thoughtful, decent person. I only hope that I can teach my own daughter a fraction of these traits... I've been lucky enough to come across many young people like EmmaP. So much for the caricature of the entitled millennial.
For me, it was behavior more than knowledge. I did not begin to save until my mid-30’s. It wasn’t for lack of information. My undergrad major was economics and I had taken a personal finance class with a brilliant, funny, and dynamic professor and to this day remember some of his class presentations. I did not capitalize on this knowledge for a long, long time. It took me almost 15 years after graduating before I began to save in any meaningful way. What changed was my behavior rather than my knowledge base. It was a sort of a gradual awakening and I stopped rationalizing my financial behavior and stopped counting on magical solutions regarding finances. It’s the classic two marshmallow problem. I’m lucky that I somehow went from a one marshmallow young man to a two marshmallow middle aged one.
@calamity You are 100% right. These small amounts do add up. Not very fast nor to enormous amounts but they add up nonetheless. A little over 10 years ago, I started a 529 plan for my daughter with the contributions from the Fidelity cash back card paying back 2%. I also started an auto deposit of a nominal amount as not to get charged an account maintenance fee. I contributed $5.7K over the years in “real money.” The account is at $23.6K largely due to the cash back contribution and appreciation. What I wanted to do was to conduct a real life experiment in saving, investing, and capital appreciation. Due to the volatile markets the return has been only around 7% annualized over the years but considering my real contribution the return is more like 27% annualized. The account is only going to pay for a year of college (if that) but I’m looking forward to being able to craft some money lessons for my daughter based on this experiment.