1y ago

I'm a California restaurant operator preparing for the $20-an-hour fast-food wage by trimming hours, eliminating employee vacation, and raising menu prices

www.businessinsider.com I'm a California restaurant operator preparing for the $20-an-hour fast-food wage by trimming hours, eliminating employee vacation, and raising menu prices

A Fatburger franchisee in Los Angeles shares survival strategies as California chains brace for $20-an-hour wage for fast-food workers in April.

Work Reform @lemmy.world

www.businessinsider.com /fast-food-operator-kills-vacations-hikes-prices-calif-wage-law-2024-1

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128 comments

They really offered 2 possible outcomes:
Increase prices
Fire people
Why not just . . . make less money?
The increase was $4. The article kept using percentages to make it seem like some big scary change, but the increase is 1 meal per hour per worker. I'm pretty sure any half decent restaurant can handle that extra $4 per worker hourly.
But no, the solution is clearly to just nuke your vacation policy so you can save $1000 per worker per year. Yeah okay.
- American notions of profit and loss are fucked up.
  It doesn't matter if you're profitable. Let me say that again. It does not matter if you're profitable.
  You have to be making MORE profit than you did same time last year, last quarter, last month.
  If you don't keep making more profit, you are somehow "losing money". Money that's "rightfully owed" to you. Money that should and would have otherwise been yours.
  And if you're a publicly held company and you miss that profit goal, the stock market will PUNISH you.
  Hell, you could make more profit and STILL get punished if you didn't "beat expectations".
  
  That's because investors only make money when the value goes up. The pressure to always make more money than before is baked into the public ownership system we created. I think we should make all companies employee owned instead of investor owned and then you'd fix the broken incentive structure.
  
  You bring up a great point. Once I applied for a mortgage and showed that I had a part time job and a small business. I had made some changes in my financial structure so it looked like on paper that year my company was failing even tho personally I made more money consistently over the years. Didn't matter, my loan got rejected cuz technically the business was making less money.
- 1 meal per hour per worker
  Fat Burger in LA is charging $17.29 for their most basic meal. That comes out to one extra meal per hour, per every 4 employees.
  That franchise owner is really just a cheapskate asshole.

"Eliminating employee vacation"
His workers had an average 48 hours of yearly vacation time. That is not vacation time.
What trash
- At $20 that’s less than a thousand dollars a year.
- I'm shocked they had any vacation time at all! I've never heard of anyone in the food industry (besides managers) that get any PTO. I'm also surprised how much PTO they get! Teachers only get 40 hours a year.

Mark owns fatburger franchises and he and his family are BARELY scraping by... They only took two European vacations last year and their kid that just turned 16 had to get a tesla instead of electric Porsche? It's just not sustainable and this ASSAULT needs to stop or hard working vampires like Mark and his loved ones suffer.
Edit: oh, that's weird... Autocorrect formed "families" into "vampires".
- I think it works

Never once crossed his mind to take less from the top. American businesses should fail more often.
- Something like 90% of restaraunts fail in 3 years or something like that. It's a famously competitive industry.
  
  The unfortunate thing here is that small businesses fail often, there should be improved regulations to prevent predatory capitalism so small one offs can thrive. But I lose my sympathy for a franchisee or corporation that can't skim as much cream so the soulless bastards make life worse for the workers instead of taking a slightly smaller top cut.

Boohoo, a capitalist that owns 4 restaurants is passing the costs of labor on to their customers and is still blaming us for it. Sounds like the playbook of an abuser.
If paying people what they are worth causes businesses to fail, then that is just Daddy Capitalism working right?
- For sure, record breaking profits never get passed on to the customer, if anything it pushes companies to see how much they can squeeze from nothing.
  But hard times always fall on the customer.
  Greed is evil.
  
  In fact the opposite is often true, such as when Huggies Diapers recently cut production costs and raised prices several years in a row.
  
  The older I get the more I think that capitalism is incompatible with a moral society. I dont know what could replace it, but chasing "profit" has caused so much harm to our society.
- Imagine this guy, Marcus Walberg, having the sales volume that comes with operating 4 restaurants in LA and saying "doing business in California has never been more strained" LMFAO.
  Sell the properties cheap, then, I'll take a loan for that lot no problem! I'd open a Bakery that sells Yeast Donuts and my specialty Meal in a Focaccia (Vegan Options Available).

"how will I buy my next four franchises if I have to pay my employees a living wage?"

Lol, 48 hours of paid time off. I don't even work full time and get 120 hours, by law. Fuck the US.
- Do you mind sharing roughly where that is? Obviously don't dox yourself completely lol
  I've been at my company for 7 years this August and will just now hit that 120 hours vacation time, naturally just as I'm looking to quit lol
  Companies here start at 0 hours vacation for the first year, and then slightly increase it for the 2nd year. I'm considered "lucky" for the time I get now...
  
  In civilized nations 120 hours would be far below the legal minimum for a full time position. Here in the Netherlands the legal minimum is 4 weeks (20 days or 160 hours) but pretty much every company offers at least 25.
  In a previous job I had 57 paid days off.
  
  Australia has 20 days annual leave for full time employees mandated by law, and it carries over year on year so you can build up a significant chunk of time if you work somewhere for a long time. Also those hours belong to you, not the company, so you get it paid out if you quit.
  We also have a Long Service Leave program where if you work somewhere for 7 year you get roughly a week off for every year of employment with a company, it does vary slightly state by state.
  The construction industry has made an arrangment that as long as you are working construction in some way, your long service leave entitlement carry over between employers and jobs.
  Lot of companies also add carers leave on top of this, which may not carry over year on year, and sick leave can be fairly variable between everywhere I've ever worked has been pretty casual about it, if you call in sick a day here or there then they don't hassle you, but for longer periods you might need a doctor's certificate.
  It's pretty good.

If a business cannot survive paying its employees a liveable wage then it should not exist. Businesses that do not pay a livable wage but can afford to are exploiting its employees.
- Imagine thinking the employees are the entitled ones when running a business and feeling entitled to their labor at your price.
  I'm sorry, who's the entitled one? Those businesses should 100% not exist. It's called having a shitty business model.
- I hear this all the time but the reality is probably a third of us work at places that are barely surviving. Imagine if all of those people were suddenly unemployed.
  
  More resources for better places. It's not like laid off people just suddenly die.

eliminating employee vacation
Man shut the fuck up, the only employee that got a vacation was you numbnuts
- Walberg said he used to offer paid time off to eligible workers. The average worker earned about 48 hours of paid time off, capped at 72 hours a year, he said.
  Jesus fucking Christ. Shit like that has been illegal for a century where I live
  
  America is a dystopia unlike any other, where we smile and fuck each other over and then say "hey this is just the way it is!"
  I hate it here.
  
  Wait, what?
  Americans only get 3 days off a year? What?

If you’re in L.A. Make sure to boycott Fatburger.

TLDR: “Hey, everybody. I'm a stupid moron with an ugly face and a big butt and my butt smells, and I like to kiss my own butt.”
- Thank you, Bart.
  
  It's good that Bart did that. It's very good.

The paid vacation he's eliminating was capped at 72hrs per year. He warns that high schoolers will have a tough time competing with more valuable employees, but this is due to the wage increase only applying to fast food. Also, the big layoffs in in-house delivery are similarly due to the narrow scope of the law which excludes gig workers.
"Landlords won't lower their rents"-- these things take time.
- “Landlords won’t lower their rents”-- these things take time.
  For sure. A market correction on landlords require businesses leaving the property and then the landlords defaulting their loans to the bank. But no matter what that still needs to happen, because an economy where we value parasitic capital over paying labor a living wage is fundementally broken.
  
  I agree, but it takes a strong stomach in local government to not step in and prop up "market rates" for the benefit of banks and landowners.

If you can't do business in CA, then don't. OR treat your employees like shit. Sure.
- Not one fucking word in this article about what the ratfuck owner clears every year from his four franchises. Nobody bothers to ask the question, because wage increases are a sin borne only by the consumer, so sayeth supply-side Jesus.
  A building full of well paid employees serving high quality food can pay for the building, the livelihood of all its employees and all of the quality food used to make its offerings. But it can't pay for all that PLUS the guy sitting on top of it all skimming off $100K every year while literally doing nothing. HUH. Well, fuck 'em.

Eliminating employee vacation, as though he was already offering them some extravagant amount of paid time off. And what does he think cutting hours will accomplish? You either have enough people working the store, or you don't. Running a skeleton crew and overworking your people isn't going to be sustainable, not when literally every other fast food place is paying at least as much as you and they have choices.
- Especially when they can go earn the "extraordinary " minimum wage literally anywhere else.

In N Out in California pays $20 or more an hour starting wages, their burgers are (IIRC) less than $5, and they still make a shit ton of money.

Oh no! What will those poor employees do now that they can work at literally any fast food chain for $20/hr!

The new California law doesn't apply to employees at full-service chains such as Chili's or Cheesecake Factory.
That's really strange. A minimum wage for just fast food?
- Full-service chains have their own minimums because of our shitty tipping culture.
  
  But the kitchen staff isn't getting tipped at those restaurants.
  
  Funny thing I've noticed over the years, the people actually working for tips are never the ones bitching. What do you make of that?
- More demanding/easier to abuse probably.
- That's because they have a joke of a governor. They didn't raise the minimum wage, just for fast food.
  
  yeah fuck baby steps. and fuck the governor because other governors are doing better, right?
  right?

Defending scamming as a business model isn’t a business model.
- He eliminated employee vacation and then used it as a flex. Greed is gross y'all.
  
  I’ve never once heard of fast food workers getting vacation or any sort of paid time off

I REALLY want to see the last few years of profit margins that these asshats are earning that are so vital to maintain that they are “forced” to pass the financial hit on to their workers (who are doing ALL the actual work). "If the minimum wage goes up, they either have to increase prices so that they can cover the increased expenses for labor, or they're going to have to consolidate their labor and let people go," Lederman told BI. Thanks Lederman, you tone deaf douchnozzle. Why can’t they earn slightly less profits so everyone can, I dunno, live their fucking lives?

Ok, then show us your books or I'll assume you are full of shit

Good, pay a livable wage and ditch tips

The beatings will continue until morale improves!

He should probably just close his stores, saving the public from ever accidentally ingesting his disgusting food.
Two Pizza Hut franchisees, who own hundreds of stores in California, are eliminating their in-house delivery fleets. The labor-gutting strategy has left 1,200 drivers without jobs
Sooo....are they going to rely on Doordash and Uber Eats exclusively? Doesn't that come with significant uncertainty? Isn't this guaranteed to result in fewer orders being fulfilled?

The is a poor excuse and will cause lost of business because this guy wants all the money, not just some.

Hope this dude goes under and never recovers.

Friendly reminder that the "restaurants have razor thin margins!" is a lie. Their margins might seem slim, but doing huge amounts of sales means big money.
- You've got to be wildly popular for that to work though. I've run about two dozen restaurants. The ones that are always packed make good margins. Many are razor thin.
  
  The risk in running a restaurant is exactly this. Sometimes good businesses just can’t support themselves. Their employees need to earn enough to live and the owners need to earn enough to keep the business afloat. You can’t have the latter without the former so if your costs are too high, you have to close. No one deserves to run a business and the food world is full of the absolute best ideas and people that totally bomb.
  
  This line always bothers me. When I worked broiler I realized that a NY strip steak retailed at 23 bucks. I made 14/hr and would make dozens of steaks an hour on average with most happening Friday night. The NY strip at cost was just under 7 bucks. It took me less then one hour on that busy shift to pay my entire weekly salary with the revenue I generated in steaks alone, but almost 2 hours of work to afford one for myself. Steamed vegetables, soda, pasta, anything with minimal prep had even better margins.
  That particular store went under but not before the owner literally bought three yachts. THREE. That experience alone would radicalize any reasonable person

Down goes neoliberalism. Wages go up and so does business whenever minimum wage goes up.

If I cry harder I will be the real victim mentality.

Hey everyone, look at me! I'm a total piece of shit!

Oh boo fucking hoo. I think OP just posted this to piss people off. Worked, at least a little, on me.

ghvhbmnkl,mn [Updated Menu

Where does the owners say that the owner is Click here sacrifices? I read the article, but the title actually tells most of it, for once: I’m a California restaurant operator preparing for the $20-an-hour fast-food wage by trimming hours, eliminating employee vacation, and raising menu prices.

an help manage labor expenses, while raising menu Click here may offset increased costs. However, eliminating employee vacations could impact morale and retention, so exploring efficiency improvements, automation, or menu adjustments might provide additional relief.

Fuck Door Dash.
These assholes ripped me off for over $90 dollars.
Then their automated system called me and woke me up at 1:30 am to ask me about my customer service experience.
I would drink poison before I ever did business with these shit sucking assholes again.

Prices are based on supply and demand, neither of which involves employee wages, so this guy is lying about the reason. Wages affect profit. If a company is increasing prices, it's because they think demand will support it. This guy can lie to his customers for a bit saying it's because of the wage increases to try to squeeze something out of people, but ultimately, people will start buying somewhere else and he'll need to lower prices again to balance demand.
The other things, trimming hours and denying vacation, are things they constantly do, with or without wage hikes, so again, he's lying about the reason.
- You should run for president with all that confidence and zero knowledge of what you speak of.

Fun facts:
fast food margins are really thin. Not razor thin, but very thin
the biggest single outlay is labour. It's a huge percentage, and I remember it to be like 35% of costs
a 25% bump is not insignificant to the biggest cost with margins so thin
I invite someone with more recent time in fast food who knows better to correct me. My experience is 25 years old and I only got as high as shift manager before I got a better job related to my field.
- Fun facts: The rest of the west figured out how to survive it, while also offering employees more.
- Cool. Counterpoint: thin margins is not a good excuse to pay someone poverty wages.
- And yet
  https://www.reuters.com/business/retail-consumer/us-fast-food-chains-report-fatter-margins-cheese-chicken-avocado-costs-fall-2023-07-27/

128 comments