Monday, July 27, 2015

McDonald’s Announces It’s Answer to $15 an Hour Minimum Wage

As special interest groups seek to raise minimum wage on individual business owners, business owners will engage in the legendary trade off between the following: Capital and Labor.  Paul Samuelson Phd, the Nobel Prize winning Economist, covers this trade off in most of his Intermediate Microeconomics textbooks.  As Dr. Samuelson analyzed, if the cost of labor rises, the Business owner still must maintain the same level of output to keep his/her operation in business.  If this happens, the business owner may or will seek to acquire more capital equipment to produce the same output as the human labor provided.  Please note: This is only one potential trade off for the business owner, as there are others.

As special interest groups continue to push for an increase in the minimum wage rate, I predict more of this sort of trade off occurring. This is not the only outcome for the minimum wage increase, but this is one to consider.

McDonald’s Announces Its Answer to $15 an Hour Minimum Wage – Touch-Screen Cashiers

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