Some restaurants face pressure to trim menus and staffs under California's wage hike

[sandorski]

What you're going to see is a net negative impact on the folks which are supposed to be benefited by the increase on wages...lower cost services/goods will increase in cost, minimum wage jobs will decline, and more employers who hire minimum wage employees will find new ways to eliminate workers and or make better use of smaller staff....instead of government subsidizing a piece of their livelihood you will see a larger portion of folks just out of work and on 100% assistance.

Nope. In fact, the opposite is far more likely. Decrease in people needing Assistence and an Increase in Jobs. Just not initially.

This path has been gone down before, it has resulted in Net Benefits every time.

 

[Ns1]

$10 meal becomes $12. I see what you mean......

In a hyper simplified example...

If I have a "go out to eat" budget of $300 which used to last ~ 8 meals at an average cost of $37.50, with a 20% increase in prices I will now only be able to afford ~6.67 meals at an average cost of $45.

 

[ivwshane]

What you're going to see is a net negative impact on the folks which are supposed to be benefited by the increase on wages...lower cost services/goods will increase in cost, minimum wage jobs will decline, and more employers who hire minimum wage employees will find new ways to eliminate workers and or make better use of smaller staff....instead of government subsidizing a piece of their livelihood you will see a larger portion of folks just out of work and on 100% assistance.

That will truly be amazing considering it has yet to happen anytime the minimum wage has been increased.

I take it you have some studies you have read that back your prediction?

 

[sandorski]

In a hyper simplified example...

If I have a "go out to eat" budget of $300 which used to last ~ 8 meals at an average cost of $37.50, with a 20% increase in prices I will now only be able to afford ~6.67 meals at an average cost of $45.

ok, and?

 

[Ns1]

ok, and?

yes, a 20% increase in my going out to eat costs would result in me going out to eat much less. I would probably still eat high end and low end, but everything in the middle would be wiped out.

 

[Sonikku]

In a hyper simplified example...

If I have a "go out to eat" budget of $300 which used to last ~ 8 meals at an average cost of $37.50, with a 20% increase in prices I will now only be able to afford ~6.67 meals at an average cost of $45.

Except a 20% increase isn't needed to cover a minimum wage increase. A study on McD shows them needing to up prices 3-4% to raise their wages to $15. Even if the minimum was raised only from $7.25 to $10 it would make a difference, and for a far smaller hike than what would be need for a $15 minimum.

Still doesn't stop people from throwing around 20% or even a ludicrously gigantic 100% markup in such a scenario. It's difficult to have an earnest conversation on minimum wage and the resulting markups when most pull figures out of no where.

 

[Ns1]

Except a 20% increase isn't needed to cover a minimum wage increase. A study on McD shows them needing to up prices 3-4% to raise their wages to $15. Even if the minimum was raised only from $7.25 to $10 it would make a difference, and for a far smaller hike than what would be need for a $15 minimum.

Still doesn't stop people from throwing around 20% or even a ludicrously gigantic 100% markup in such a scenario. It's difficult to have an earnest conversation on minimum wage and the resulting markups when most pull figures out of no where.

I don't give a shit about McD, I give a shit about the restaurant around the corner that employs 20 people and makes 5% gross margin. Tell me more about how that restaurant is going to be able to absorb a 50% wage increase while only increasing prices 4%.

FFS $15/hr is probably more than what some of those restaurant owners make.

 

[sandorski]

yes, a 20% increase in my going out to eat costs would result in me going out to eat much less. I would probably still eat high end and low end, but everything in the middle would be wiped out.

Why would the middle be wiped out? That makes no sense whatsoever.

 

[Ns1]

//edit

n/m, don't really feel the need to justify my dining habits. thanks for the posts!

 

[ivwshane]

//edit

n/m, don't really feel the need to justify my dining habits. thanks for the posts!

No what you mean to say is that you are unable to justify your position without pulling facts and figures out of your ass.

 

[UglyCasanova]

Why would the middle be wiped out? That makes no sense whatsoever.

I would assume because to him the rise in prices means the quality of the food no longer justifies it. I doubt this would affect the really high end restaurants all that much, and that they have the elasticity to absorb the price increase. The mid to lower end doesn't enjoy the same elasticity and for them price is king.

 

[sandorski]

I would assume because to him the rise in prices means the quality of the food no longer justifies it. I doubt this would affect the really high end restaurants all that much, and that they have the elasticity to absorb the price increase. The mid to lower end doesn't enjoy the same elasticity and for them price is king.

He said he would continue consuming High end and Low end, but not the Middle.

 

[UglyCasanova]

He said he would continue consuming High end and Low end, but not the Middle.

I know.

 

[sandorski]

I know.

Which is why his willingness to eat High and Low, but not Middle makes no sense.

 

[Ns1]

I would assume because to him the rise in prices means the quality of the food no longer justifies it. I doubt this would affect the really high end restaurants all that much, and that they have the elasticity to absorb the price increase. The mid to lower end doesn't enjoy the same elasticity and for them price is king.

this is much more eloquent than what I wrote, but accurately reflects my feelings.

 

[michal1980]

don't worry all those jobs that went to china, and mexico and other countries left because we were paying americans too little.

 

[ivwshane]

don't worry all those jobs that went to china, and mexico and other countries left because we were paying americans too little.

What point do you think you are making here? Be careful I don't want this to be another Michael1980 self ownage post.

 

[Vic]

If prices always go up when costs go up, then why don't prices always go down when costs go down?

 

[elitejp]

So you take one impossibly small portion of the minimum wage population (HSers working at an ice cream parlor, parlor??, really?) and then determine how much money they do or don't deserve without ever meeting them. Yeah, maybe stick to ranting about your cold grits to the geriatric staff.

honestly, isnt that exactly what the govt is doing?

 

[sandorski]

honestly, isnt that exactly what the govt is doing?

Not really. The Government is merely trying to set a Living Wage. It is the opposition trying to place a $value on HS Workers.

 

[michal1980]

What point do you think you are making here? Be careful I don't want this to be another Michael1980 self ownage post.

rise the wage too much, the jobs will go away.

Be it through outsourcing. Insourcing (both legal and illegal), and automation.

 

[elitejp]

I don't give a shit about McD, I give a shit about the restaurant around the corner that employs 20 people and makes 5% gross margin. Tell me more about how that restaurant is going to be able to absorb a 50% wage increase while only increasing prices 4%.

FFS $15/hr is probably more than what some of those restaurant owners make.

Most will just go out of business. Its not like your all of a sudden going to get quality workers that are trying to help your business succeed. Your still going to get the staff that is looking at ways to slack off or steal some food for themselves. Thats just how restaurant workers are. Maybe we should start a thread about those that have worked in restaurants and what goes on behind the scenes.

This minimum wage hike will just cause a rise in prices on all products which will most likely just cause a rise in inflation and devalue the dollar even more. If the value of the dollar doesnt diminish then just be prepared to be paying dbl or triple what you used to pay for all goods.

 

[elitejp]

Not really. The Government is merely trying to set a Living Wage. It is the opposition trying to place a $value on HS Workers.

How is it opposite. They didnt interview the worker, nor did they test their skills or ability but rather said you should earn 15 an hr.

 

[cubby1223]

That will truly be amazing considering it has yet to happen anytime the minimum wage has been increased.

I take it you have some studies you have read that back your prediction?

Considering it's only been recent when the ability to communicate globally has exploded...

Have you worked for a company who has half their employees living in India? It's not uncommon. And, the workers there are pretty damn skilled, much more intelligent than the average American who believes s/he is entitled to greatness by the mere fact of luck being born in the U.S.

 

[elitejp]

I think we should also raise the minimum grade in school to a C. No one gets lower than a C because everyone should have the right to pass.