741–750 of 1001 posts
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That’s a really excellent idea. On the off chance that you may be wrong in a few cases, what happens if you go out of business after raising your prices enough to get wages high enough to be where you think they should be?
There is a working restaurant a few blocks away.
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Has it reduced demand in Europe? In general. Americans regularly have deep-rooted fears about giving fellow humans a chance at a decent life. Are any of those fears substantiated?
Economic theory says yes. If prices of A go up and B is a close substitute, some people will shift from A to B. I doubt anyone has studied that rather specific question empirically, though, and even if they had it's not an easy question to study. So theory and common sense is our best bet when it comes to forming expectations here. I'm sure there are empirical studies about how demand shifts from A to B for other exa…
1. Is this number at all significant?
2. Should theory prevent working Americans from having a decent life given that empirically restaurants and cafes are plentiful in Europe and are filled to the brim with customers?
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I guess the question is what do you do when you find people who present with that situation: that they’re perfectly capable to hold down a job but only to create $10/hr of economic value by their labor. If you set the minimum wage at $15/hr and do nothing else, you have made that person worse off than today. Everyone around them now has more money, so everything is becoming more expensive. They now can’t find or keep…
Generally the math works the other way. I worked in a Wendy's for a while; I made minimum wage and most of the people made a little bit more. We cleared $30,000 a month profit for the owner ($100K revenue, $70K for expenses including all of our wages). If a company is so inept they can't generate a bit of value from people, then to be frank, as a society we can afford to be without them. Look at the minimum wage as a…
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Ah yeah. You can always look at how Europe is empty and has very few, if any, restaurants with their minimum wages and healthcare. Oh wait...
Or unemployment..oh wait...
https://www.statista.com/statistics/268830/unemployment-rate...
5.8% to 16%
Comparable to the U.S. https://www.statista.com/statistics/273909/seasonally-adjust...
4.4% to 14.7%
Something tells me though that you really don't want to be unemployed in the US... And that a huge number of those jobs in the US are indentured servitude in all but name.
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A 10% margin also often doesn't tell the whole story of how they make their money. Nearly since its inception, a substantial portion of McDonald's long term profit came from the appreciation of the real estate the stores were built on. Operating a business on it just made it cash flow positive during the holding period. So it was essentially a REIT that happened to operate a fast food chain. Even for many mom-and-pop…
>If they honestly can't afford to pay a living wage It's not logical to kill businesses by arbitrarily raising the minimum wage. Do you think the people they employ are better off not working at all? These people may not have a decent enough salary, but they get to work as opposed to staying at home and degenerate (mentally and physically). I always thought the better solution is to help them financially in other way…
Maybe it is worthwhile killing some businesses, and pushing some people to get new jobs or to live on benefits, if the wage increase for others is a greater benefit to society.
Its also worth noting that practically no businesses close when minimum wages have been increased in the past. People suggest its a problem,and logically it makes sense, but it doesn't seem to actually happen in practise.
This article unfortunately doesn't address the business side of the problem. Fast food restaurants, or place like "Dale's" mentioned in the article, make very little profit. It is most likely below 10%. Here is an estimate: https://www.restaurant365.com/blog/what-is-the-average-profi... . A 10% profit is very modest. That's not the story of the "fat cats getting rich on the back of the workers" that the article is al…
A 10% profit can be a lot, if like many restaurants you're pulling $5-10k in revenue in a day. Many owners own multiple restaurants, too.
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Aren’t you essentially saying that because the government spends lots of money on welfare/social support, it gets to control private business too? If the state chooses to offer benefits, great! But the state shouldn’t blame businesses having to offer those benefits. If the state wants people to have more money than the market provides, the state can simply increase benefits to that level. Wage subsidies are supported…
I'm not an economist, but isn't it bad for overall economic health to have huge swaths of your country's workforce tied up in failing firms indirectly propped up by the government?
My own experience is that failing firms pay more. They can’t offer security, and tend to lay off as many people as possible. The layoffs leave the firm top-heavy. In order to recruit new staff they have to pay more. Who wants to be VP of a failing company?
Regarding propping them up, I don’t see how making up the difference between a given wage and the amount necessary to live a decent life is propping up the company.
I’m very much in favor of minimum wage laws. But I don’t see them as government propping up failing companies.
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Imagine scenario where you have $100k and you can open a small restaurant, create jobs, maybe not best jobs but still some people will be putting food on the table with your help, some students will pay for their collage. But you count the costs and it turns out you will break even in 50 years or if anything goes bad never, like, one bad hire will drown you. You look at Google, Apple, Facebook stocks ... there is alw…
https://academictimes.com/economic-news-reporting-suffers-fr... No. News sources are focusing on business instead of labor's issues, because news statistically favors business interests, not labor's. If your hypothetical business owner is unable to start a business without paying a reasonable wage, then that business should not exist. And your hypothetical business owner should invest in Apple, Facebook, or otherwise…
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Yeah but the job market is not a free market, because not getting a job is existential for those seeking the job, while the company can usually just survive when a position is not filled for a certain time. This means to make this a free market many nations did the reasonable thing and introduced measures like minimum wages and unemployment benefits. This way when you loose your job the balance of power evens out a l…
> Yeah but the job market is not a free market, because not getting a job is existential for those seeking the job, while the company can usually just survive when a position is not filled for a certain time. This is, to begin with, not true. It's common for small businesses to be operating at the margin. If you don't have someone making the sandwiches then you don't have revenue and you still have rent and utilities…
I will never stop being amazed at how Americans argue that something decent is wrong, or untrue, or even impossible... when Europe exists.