Just saw a video where the CEO of Popeye’s Louisiana Kitchen chicken, Cheryl Bachelder, was talking about the ramifications of a $15 minimum wage. She said there are three parties involved in the issue:
– Employees deserving a fair wage
– Customers deserving a fair price
– Local owners deserving a fair profit
Interestingly, she left out the franchise owner – her employer – and how much profit corporate takes.
She then said if wages increase there are “only two levers” left, either:
– Higher prices or,
– Lower hours for employees.
Notice how the profit of local owners and the franchise corporation is untouchable.
There it is, in a nutshell. Not to pick on Popeye’s chicken, but this is a common theme. Workers are angry about wage disparity and not making it with the current minimum wage.
So the employer, when faced with increasing wage costs does everything EXCEPT take a lower profit to decrease the wage disparity.
Nothing touches profit. The disparity is not going to be fixed.
If you were wondering, Cheryl Bachelder’s 2014 compensation was $3,200,000 (3.2 million) according to Salary.com.
Cheryl Bachelder went on to say top store revenue was up from $1,000,000 (one million) to $1,400,000 (1.4 million). Obviously, all of the profit is going to the local owners and corporate. None is going to increase the minimum wage of employees unless there is a forced increase.
Bachelder also said a store hires 30 employees. $400,000 increased profit the last few years over 30 employee is $13,333 per employee.
Over a 2000 hour work year, $13,333 is $6.67 extra profit per employee per hour.
I don’t know about you, but I see room for paying employees more than a minimum wage. A lot of room.
But now you also see the local owner and corporate being upset about minimum wage increases. Popeye’s is a national chain. If the minimum wage in California goes up from $10 an hour to $15 an hour, that $5 an hour increase (over 7 years) takes up most of the $6.67 bonus profit the company has made the past few years. In Louisiana, where Popeye’s Chicken is headquartered, there is no state minimum wage. Instead, the federal $7.25 minimum wage applies. (Again, why isn’t Popeye’s paying its employees more than $7.25 an hour given all the extra profit from its stores?) If $7.25 doubled to $15, and assuming prices to customers cannot increase to cover it all, then yep, local owners and corporate have to make less.
To address this Cheryl Bachelder then mentioned how in response to the minimum wage increase there would be more automation facing customers, and on the backend, to make stores “more efficient”. That is, few employee work hours.
So, the end of the day result:
– Corporate and local owners keep their profits. Maybe even make more profit!!!!!
– Customers pay more
– Fewer employees working fewer hours will make more money
Looking further at Cheryl Bachelder’s $3.2 million compensation, and if we assume a 2000 hour full-time employee making the minimum wage in Louisiana of $7.25, Popeye’s begrudgingly pays (would probably be less without a federal minimum wage), $14,500 per year to a full-time employee.
Work full-time at Popeye’s Louisiana Kitchen and you are officially impoverished and probably getting federal tax subsidies.
This also means Cheryl Bachelder earns as much as 220 employees each year, or 7 stores. How about that! Every employee working a full year at seven Popeye’s stores makes enough to pay Ms. Bachelder her salary so she can go on television complaining about how much they make and how the company will not do anything to dampen the corporate profits paying her salary.
(Let me know if any of these numbers are wrong. Took me forever to get this post done, rewriting, fixing errors, doing math over and over. Thank goodness for calculators.)
No wonder so many workers are pissed.