quote:Originally posted by bongo66

Egged on by Matt Mc Carten and his commie mate in parliament-i forget her name-Starbucks employees in Newmarket went out for 2 hours over lunchtime.

They want a minimum $12 an hour, no youth rates and guaranteed working hours for part-timers.

If this should come to pass it would almost bury RBD-wages are one of their biggest costs.
A wild claim? There isn't enough declared information in the RBD annual report to be sure. But let's try to verify it anyway.

There is a provision for employee entitlements in note 14 of the annual report. If the 'partners' turn over once per year, there are many lower skilled job employers that don't allow annual leave to be taken until one year in the job has been served. So we might guess that the $5.734m figure quoted represents 3/52 of the total employee wage bill.

If that is true , the employee wage bill is:

$5.734*52/3=$100m. Of course 51 of the 278 listed stores are not in New Zealand. Australian wages tend to be higher anyway, by let's say 20% in NZD terms. That makes the Oz stores equivalent to 61 (ten more) stores in 'NZ wage' terms.

That means we can estimate the NZ wage bill at:

$100m*([278+10-61]/10+278)= $79m

Remember that includes associated head office expenses that I have previously estimated at $4m. take that off and you get $75m

Does that sound reasonable?
$75m/227= $330,000 per store. Spread that over 16 staff and you get an average wage of $20,625pa. Still sound OK?

Boost the wage bill by 20% (from $10/hour to $12/hour) and you get an extra wage cost of $15m, equivalent to last years profit of $11m if tax is added back onto it. So yes, RBD's profit would be wiped out, assuming that they would not be able to recover any of these increased costs (a doubtful assumption). Bongo's claim looks in the ballpark at least. No doubt the economics of other wage paying fast food outlets are similar.

My take on these figures is that 'deep down' the unions know that a 20% wage claim isn't going to happen in one hit. But of course you have to aim high in wage negotiations! Auckland workers may find their plight alleviated by Auckland house prices falling 20% instead!

SNOOPY