Economics 101

 

Three MacDonalds on Navy Bases will close their doors over the next three weeks, and other fast food operations are closing on military bases. As the article in the Army Times says, “this is the tip if the iceberg.”
 
So why is this happening, and why will it increase as leases on military bases come up for renegotiation?
 
The answer is that the federal government is hitting fast food operators with a double whammy: a rise in the the federal minimum wage to $10.10  an hour from $7.25 an hour, and, additionally, there is to be imposed a new “health and welfare” charge of $3.81 an hour.
 
That just about doubles the cost per hour for each employee for the employers.
 
There are establishments that can absorb a portion, and then raise prices to cover another part, but in the increased cost but in the end someone pays the cost of the increases and that is usually the consumer.
 
Economics 101.
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