The latest rage for the unemployable, those who don't want to work and those who are convinced the world is unfair and out to get them, is to have their own protest.
The media in recent weeks has featured the latest villain to be McDonalds. This is the capitalistic company that annually gives tens of thousands their first job. So what is the complaint? Why, how can you pay your rent and raise a family on what a burger flipper earns at McDonalds?
The answer, of course, is that the beginning job at McDonalds, Taco Bell, Burger King or other similar establishments is not intended to pay enough to sustain a family. That rings hollow with the mob of uneducated protestors. Their argument is the individual worker needs more money therefore a company like McDonalds should
They buttress their argument by comparing the compensation of the top man at McDonalds with the lowest. A recent column by a liberal supporter points out in 2011 the head of McDonalds made 13 million in salary while many workers were paid 15 to 16 thousand dollars yearly. This violates one of the artificial and socialistic rules the progressives have invented which states the top person should receive no more than 30 times the lowest paid worker.
There are so many responses to this type of juvenile thinking one hardly knows where to start. First, if these uninformed troublemakers had taken the time to research the issue, they would have found the CEO's salary was $950,000 not 13 million. The amount over $950,000 mostly represents the value of stock options that rewards the top honcho for directing the company so that the price of the company's stock increases. These amounts do not represent money taken out of the cash register leaving less money to pay the burger flippers.
Of course, to understand this concept one has to have some knowledge of the capitalistic system and just how this country has developed to increase the standard of living in gigantic steps. Today in our country the poor have more quality food, better housing, more autos, TVs and other gadgets than hundreds of millions in
communist, socialist and other undeveloped countries.
And why pick on the corporate leaders who have stressful jobs of leading a corporate entity? These same people who complain so loudly say little or nothing about television and movie stars, big time athletes, even porn stars who often rake in millions more than corporate leaders.
As an example the market, in a free enterprise system, pays a movie star, say, 25 million to star in the latest release because the producer of the movie gambles that he is worth this much and people will pay to see and hear the finished product - the same with a highly paid corporate leader. If he is successful, he or she will lead the company through the proper strategies to growth and profitability. Keep in mind not all corporate leaders are successful. Many get fired and the average term for a CEO is about five years. The complaint I have is not the pay for top performance but the way some are fired with a giant pay-out for unsuccessful leadership.
Page 2 of 2 - Back to the McDonald scenario. A professor at the University of Kansas, obviously using professor-type intelligence, proclaimed by his computation McDonalds could pay their workers a minimum of 15 dollars an hour and only raise the price of its quarter-pounder by 87 cents. Sounds like a simple solution, doesn't it? If you hold stock in McDonalds, you can be thankful this professor stays in his cocoon at KU and doesn't lead McDonalds.
Every company has a salary structure and if the lowest paid employee has his pay virtually doubled overnight, it would force a big increase for managers, assistant managers and everyone up and down the workforce line. This of course would lead to tremendous increases in expenses. Keep in mind a large increase in pay would bring about unacceptable increases in payroll taxes, insurance, sick pay and other benefits.
The company then has choices. Do we try to raise prices to cover these expenses? A burger at McDonalds is not that much better, so customers leave in droves for Sonic, Burger King and other fast food operations. When customers leave, revenues go down and there is not enough money to pay wages at 15 dollars an hour.
Still there will be those that will be unconvinced and will declare, "Those large corporations make billions. Just take these salary increases out of the gigantic profits and our desired equality will result."
Sorry folks, it doesn't work this way. What makes this country great is competition. If high prices cause customers to leave, profit decreases or disappears and these companies will no longer receive capital financing to grow and survive.
The result will be stores that have no money to adapt to changes in customer's taste, no money to improve facilities and no money to afford the compensation that is way above competitors pay. Workers are laid off and find jobs where pay makes economic sense.
(Jerry Jackson of Heber Springs writes his "conservative viewpoint" column each week)