7/25/20
According to this weekend’s (i.e., 7/25-7/26/20’s, page
B3) Wall Street Journal, McDonald’s will require face masks in
all of its U.S. restaurants beginning in August. Since 82% of McDonald’s locations are in
jurisdictions that require masks for people entering businesses, this order is
somewhat redundant, but it adds emphasis to the policy and provides coverage
(literally, one supposes) in those jurisdictions in which masks are not
required. All for the good for those of
us who are concerned not only with our own health but also for the health of
those around us. Furthermore, McDonald’s
said it would make masks available to customers who enter their stores without
sporting a face covering. Doubly good,
one supposes, but certainly expensive; one has to imagine that franchisees,
already working on COVID shrunken margins, are not delighted to paying for the irresponsibility
of their customers. This certainly
looks like another case of a large enterprise, public or, in this case,
private, either virtue signaling or, in this case, doing the right thing and
passing the tab along to somebody else.
The real problem with this policy, however, is McDonald’s
policy toward those who refuse to wear a mask, even when offered one for free
by the owner of the restaurant. As the Journal
puts it
“Customers who refuse to wear a mask will have their
order expedited and served in a pickup area away from other customers.” (Emphasis mine)
Yours truly reads this to mean that if you don’t want to
wait for your food at McDonald’s, simply refuse to wear a mask. Let all the other chumps who are trying to the
right thing, and protect your health, by the way, wait in line. Your order will be “expedited.”
Maybe McDonald’s, and some of you, may think that yours
truly’s view of human nature is far too cynical. Surely, people would not take advantage of this
policy simply to get faster service…would they? Unless you have a hopelessly naïve view of
human nature, born perhaps of not having observed it long enough, the answer is
yes. Maybe not a lot of people will see
this as an opportunity to get in and out more quickly, but enough will to encourage
such behavior on the part of those who will have been made to feel like suckers
for wearing masks and seeing those who don’t get served before they do. Thus, such a policy will have the ultimate
effect of at least marginally further threatening the health and safety of McDonald’s
employees and staff.
So the question remains: Will McDonald’s give faster service to those
who insist on giving the figurative finger (or nose) to their fellow human
beings or is the Journal misreporting this story?
Speaking of restaurants…
Yours truly suspects that those restaurants that,
unlike McDonald’s, that are largely or entirely dependent on sit-down, eat-in
business and that have re-opened as COVID restrictions have been lifted
will join movie theaters and the like and “re-close” their
businesses. Further, they will do so
whether the government, local, state, or national, tells them to or not. Why?
Because the economics of operating at restrained capacity don’t
work. There are so many semi-variable
and fixed costs involved in running a restaurant (what we who consider such
things call a high degree of operating leverage), such as rent, cooks, utilities,
wait staff, bartenders, and the like, that it is nearly impossible to make a ”bottom
line” or “net” profit, i.e., to cover all costs and then some with capacity at
mandated levels of, depending on the jurisdiction, 50% or 25%.
People who run restaurants successfully know their
businesses more thoroughly than does yours truly; hence, they surely know that
they can’t make money at such low capacity levels. So why are they open? One suspects that they opened in anticipation
of a relatively quick full re-opening.
They were willing to open at a level that would allow them to simply
cover their variable costs (We who consider such things define this as “operating
at a contribution margin of 100%.”) in order to take care of their
employees and be up and running, and hence be more prepared, when the
government allows them to operate at normal, or at least somewhat greater than
currently permitted, capacity. Given
the increasing infection and positivity numbers that we are seeing primarily in
the south but more or less everywhere now, it doesn’t look like “normal” capacity
utilization is coming any time soon, either because the government will not
allow it or because consumers will increasingly voluntarily refrain from going
to places where even modest crowds congregate.
Hence, a restaurant owner who has re-opened at a capacity
level that allows him or her to (maybe) cover his or her variable costs but
make little or no contribution to his fixed costs, let alone actual profit,
will soon be faced with a choice between continuing to operate at that level or
walking away from the business, thus eliminating other fixed costs like rent,
taxes, etc. Like some movie theater
operators, and a lot of restaurants who, faced with such a daunting
reality, have not re-opened, the “re-close, and maybe this time for good”
option will look appealing as the prospect of a full re-opening gets more and
more distant, temporally and otherwise.
This, of course, gets back to an expedited development of a vaccine (See
QUINN
ON THE CORONAVIRUS: I HOPE SOMEBODY GETS
REALLY RICH FROM THIS CRISIS, 3/19/20) along with more people taking “this
whole COVID thing” seriously rather than some kind of political litmus test;
see WEAR
A MASK, OVER YOUR NOSE, IN CHURCH; DO YOU THINK ST. PETER “LIKED” BEING
CRUCIFIED UPSIDE DOWN? 7/14/20.
Sorry I couldn’t brighten your day today.
