Fast Food’s Profit & Loss

Anthony Puzder, CEO of CKE Restaurants, the parent company of Hardee's and others, provides some data to work with in this Wall Street Journal op-ed. His typical franchised restaurant employs 25 people and earns about $100,000 a year in pretax profit—about 8% of the restaurant’s $1.2 million annual sales. To the 24 employees other than the manager, he attributes 75% of the profit — about $3,125 an employee. If minimum-wage crew members working 25 hours a week received a 40% raise, they would earn an additional $3,705 a year. That is $580 more than what the employee contributes to the restaurant’s profits.

First, let's point out that the $3,125 works out to be 52 weeks; no one gets time off, apparently. At minimum wage Mr.Puzder's part-timers make $9,425 a year. At a 40% increase (to $10.15 an hour) that would become $13,195. One can only hope that they have second or third jobs. Even at full-time they'd only earn $21,200.

These are unlivable wage rates that force people into public assistance. So what Mr. Puzder is really telling us is that we're fooling ourselves to think cheap food is a bargain, because we're paying the rest of its true and hidden cost to the government.