Impending Minimum Wage hike causing restaurants to close

[Bill the Cat]

That can't logically be true or every business in Americas would have closed long ago. Prices go up everyday for a variety of reasons.

Usually in very small increments. Rarely in such a drastic manner as is being proposed.

[Sparko]

I already showed where the money comes from in POST 43 .

The total sales increase of 20% would be strictly for the laborers of the business.


Except for the fact it would not be voluntary, the increase would be the same as if the customers added a 20% tip.

...how would it be any different than the restaurant bills that add a gratuity to the bill automatically? Its just a separate cost to the customer.

....exactly what is the problem with a "tax" like that , if it only benefits the laborers?

A 20% "tip" doesn't pay for a 300% increase in labor costs (not to mention material costs) to the employer. Your math sucks. Not only that, but restaurants work on about a 4% profit margin, and you want to give a 20% profit to the employees? How stupid is that?


The purpose of unskilled jobs is to give those who are unskilled a job. It is not to make it a freaking career. They are meant mostly for teenagers who have not learned any skills yet. You don't go to work at McDonalds thinkin that you are going to make a lifetime of it, or that it is supposed to pay for you and your entire family. You go there to get a job bacause you don't have the skill to get a higher paying job. So, you work and learn some skills, maybe pay for some schooling, while sharing living costs with some roomates, and then you go get a skilled job that pays more. Then you learn some more, and get more skills and move up.

[Littlejoe]

OR, let the market drive the numbers.

Market economy supposes owner/operators who are just and fair. I remember working in a cafeteria in High School. There were many "older" people working full time there as well. This paid below minimum wage because they gave you free meals. Most of the people working there walked to work...because they couldn't afford a car. Turn over was pretty high of course, but it was all they could get. I used to be as conservative as you are CP, but, I've seen this country's decline since we started emphasizing businesses over the individual. America became the superpower it did the wealthiest country on earth, because of our booming middle class. People used to be able to raise a family on one worker(usually a father but not always) working in a factory. Now, it's hard to make it with both parents working. Where I live, factories routinely paid decent wages...$12-$18 in the '80's and early '90's. Most of those have closed because of Nafta, or moved production to China. The factories that took their place pay about $8 - $9/hour to start and top out about $12 - $13. People are going to work there regardless because...It's ALL there is.

"Those who cannot remember the past are condemned to repeat it" - George Santayana

Anyone remember before we began regulating industry? Does the phrase "I owe my soul to the company store" ring any bells?

[Littlejoe]

Usually in very small increments. Rarely in such a drastic manner as is being proposed.

Well, you have to admit that the prices you pay at say a fast food restaurant, rarely "creep" up. The $3 burger doesn't go up next week to $3.03 (1%), then another 1% to $3.06 the week after. The price usually jumps 5% or more when they change the price. That should result in a 4% drop in sales. By that logic, eventually sales should drop to nothing...

[Sparko]

Well, you have to admit that the prices you pay at say a fast food restaurant, rarely "creep" up. The $3 burger doesn't go up next week to $3.03 (1%), then another 1% to $3.06 the week after. The price usually jumps 5% or more when they change the price. That should result in a 4% drop in sales. By that logic, eventually sales should drop to nothing...

Answer me this. Why do prices go up in the first place over time? Are the businesses just being greedy? Or are their costs going up behind the scenes?

I remember when I could buy a big mac for under $1. Why has that changed?

[Bill the Cat]

Well, you have to admit that the prices you pay at say a fast food restaurant, rarely "creep" up. The $3 burger doesn't go up next week to $3.03 (1%), then another 1% to $3.06 the week after. The price usually jumps 5% or more when they change the price. That should result in a 4% drop in sales. By that logic, eventually sales should drop to nothing...

They typically level off as people adjust to the minor increases.

[Cow Poke]

Market economy supposes owner/operators who are just and fair.

And the market helps to sort those out.

I remember working in a cafeteria in High School. There were many "older" people working full time there as well.

They accepted those jobs at the pay offered, yes?

This paid below minimum wage because they gave you free meals. Most of the people working there walked to work...because they couldn't afford a car. Turn over was pretty high of course, but it was all they could get. I used to be as conservative as you are CP, but, I've seen this country's decline since we started emphasizing businesses over the individual.

LJ - I worked for a company the in the last 15 years that paid OVER the going rate, and gave the cadillac bluecross blueshield insurance plans to the employees at NO COST to them....

America became the superpower it did the wealthiest country on earth, because of our booming middle class. People used to be able to raise a family on one worker(usually a father but not always) working in a factory. Now, it's hard to make it with both parents working.

And I think government policies often have a lot to do with that - it's often more "affordable" to draw welfare than to go to work. It's a totally messed up system.

Where I live, factories routinely paid decent wages...$12-$18 in the '80's and early '90's. Most of those have closed because of Nafta, or moved production to China. The factories that took their place pay about $8 - $9/hour to start and top out about $12 - $13. People are going to work there regardless because...It's ALL there is.

Yeah, government "solutions". Every problem is the result of a previous solution.

[Cow Poke]

Answer me this. Why do prices go up in the first place over time? Are the businesses just being greedy?

And, note that "greed" and "self interest" are not one and the same.

A franchisee, for example, takes the risks and invests time and money because he/she hopes to make a good living and retire comfortably. Nothing wrong with that at all.

[jordanriver]

I picked Heritage Foundation because they are conservative, so that there would be no dispute about the graph (at least not with the conservatives)

That does not mean I agree with the rest of the studies they cite.

Minimum wages have increased several times:
US DEPT OF LABOR:

The minimum went to $2.65 an hour in January 1978, $2.90 in January 1979, $3.10 in January 1980, and $3.35 in January 1981.

The minimum wage was raised to $3.80 an hour beginning April 1, 1990, and to $4.25 an hour beginning April 1, 1991.

The 1996 amendments increased the minimum wage to $4.75 an hour on October 1, 1996, and to $5.15 an hour on September 1, 1997.

The 2007 amendments increased the minimum wage to $5.85 per hour effective July 24, 2007; $6.55 per hour effective July 24, 2008; and $7.25 per hour effective July 24, 2009.


SO has the number of Americans who eat at minimum wage paying establishments gone down all this time?

Not according to the National Institutes of Health

"Fast-food consumption has increased in the United States over the past three decades."

and in an article from Bloomberg about the decline in growth, it is because they have peaked (that happens eventually)

BUT during the years of all the minumum wage increases, 1979 to 2009, the amount of stores increases:
Have We Reached Peak Burger? By Leslie Patton September 04, 2014
Bloomberg source

in other words, if you see a store that doesnt have very many customers, its not because there are less people eating fast food, its because there are now too many stores , and the customer base is spread thin

[jordanriver]

A 20% "tip" doesn't pay for a 300% increase in labor costs (not to mention material costs) to the employer. Your math sucks. Not only that, but restaurants work on about a 4% profit margin, and you want to give a 20% profit to the employees? How stupid is that?


The purpose of unskilled jobs is to give those who are unskilled a job. It is not to make it a freaking career. They are meant mostly for teenagers who have not learned any skills yet. You don't go to work at McDonalds thinkin that you are going to make a lifetime of it, or that it is supposed to pay for you and your entire family. You go there to get a job bacause you don't have the skill to get a higher paying job. So, you work and learn some skills, maybe pay for some schooling, while sharing living costs with some roomates, and then you go get a skilled job that pays more. Then you learn some more, and get more skills and move up.

sparko, you just want to punish low skilled workers.

[Cow Poke]

sparko, you just want to punish low skilled workers.

wow. That's just dumb, Jordan.

[Cow Poke]

I picked Heritage Foundation because they are conservative, so that there would be no dispute about the graph (at least not with the conservatives)

That does not mean I agree with the rest of the studies they cite.

"The Jury will disregard the evidence the defense has presented....."

[jordanriver]

wow. That's just dumb, Jordan.

i showed where the revenue comes from.

there is no reason to object to it , other than to keep low skilled workers 'in their place'

[Bill the Cat]

The minimum went to $2.65 an hour in January 1978, $2.90 in January 1979, $3.10 in January 1980, and $3.35 in January 1981.

A 15% increase

The minimum wage was raised to $3.80 an hour beginning April 1, 1990, and to $4.25 an hour beginning April 1, 1991.

A 12% increase

The 1996 amendments increased the minimum wage to $4.75 an hour on October 1, 1996, and to $5.15 an hour on September 1, 1997.

11% and another 8% increase

The 2007 amendments increased the minimum wage to $5.85 per hour effective July 24, 2007; $6.55 per hour effective July 24, 2008; and $7.25 per hour effective July 24, 2009.

13%, 12%, and 11%

So, even those hikes were miniscule compared to the 107% increase pushed for by the "Drive for 15" people.

[Sparko]

sparko, you just want to punish low skilled workers.

No. I was one. I had several unskilled jobs in my lifetime. The incentive was to get out of that and get paid more. And I did. I paid my own way through school and worked at KFC and Burger Queen (remember them?) and some other places until I gained enough skill to get a job doing electronics.

unskilled jobs are exactly what they are called. They are jobs that require no special skills, other than being willing to work and learn. They are ENTRY level jobs. They benefit teenagers because they give them a foot on the ladder to better jobs, they benefit the employer because he can hire them at a lower rate, and they benefit the consumer because the company can sell the product at a lower cost. win/win/win.

If someone wants a higher paying job, they can always move on, gain some skills and climb that ladder. Maybe from burger flipper to manager, then getting their own franchise, or moving to another field like I did. Everyone has to start somewhere. Nobody is going to hire someone without skills to be a nuclear scientist are they?