08-13-2015, 07:42 PM
(08-13-2015, 07:25 PM)jakefromstatefarm Wrote: Where do you come up with the idea that labor is only a fraction of the cost? Labor in MOST cases is the largest expense an employer has.
Before I move on, I'll give you some specifics. When I was running a store, our annual sales averaged roughly 2.8 Million Dollars per year. Our average pre-tax profit was roughly 9%. That's about $250,000 of profit before taxes, on 2.8 Million Dollars in sales.
Now say they were to increase their labor costs by 50% (minimum wage from $8.00 to $12.00) per hour. Our average labor costs (including taxes, overtime, FICA tax-matching, etc...) were roughly 30%. Increasing it by $4.00 assuming the same sales and no cuts in labor hours would take the labor costs from $840,000 per year to $1.26 MM per year.
This kind of stuff is exactly why the McDonald's in France have touch screen kiosks that you order from.
If you ever really ran a store you would realize that 100% of your employees were not making minimum wage.
