How Will White Castle Respond to the Increased Minimum Wage?

[Master PO]

With the increased minimum wage, White Castle, the burger chain, is in a quandary. Their one of their biggest costs is the payroll for hourly workers. They have the choice of passing the cost on to the customer or cutting employees. They would have to increase the menu costs by 50% in order to make of the difference, and that would be a disaster, they think. They've seen big effects from even small increases in prices. People would just stop coming to eat there and would go to the grocery store instead. So much of the pain will be borne by lower level employees. More young people will be unable to find word, to take a step up to the first rug of the latter. White Castle promotes from within and there are many success stories about people who started out at the bottom, but there will be a lot less of that. White Castle has stayed in distressed neighborhoods where such jobs are really needed. Too bad. The 40% or more unemployment among young poor people will just get a little higher. Even worse is the danger that stores will have to close entirely if the new business model doesn't work.

The liberals who did this won't care because they won't see or realized the damage they did. I suspect that they are happier with more people dependent on the government. To paraphrase the chief financial officer of Venezuela, they don't want people earning their way into the middle class because those people are more likely to become Republicans.

New York Minimum Wage -- White Castle Adjusts, Entry-Level Workers Lose Out

To put it another way, the real minimum wage is always zero. That's what more people will be getting now.

well we will have to see how this things plays out, price increases or workers reduced.

of course no matter what happens WC will be blamed

 

[eohrnberger]

Increasing labor costs isn't going to have no impact at all, it will have an impact. Where and how much is the real question.

From personal experience, I know is this: Over the course of the last 2 years the local BK has hiked prices of my lunch order by $2.
So rather than regularly eating there 2 times a week, I'm eating there 2 times a month, maybe, and only when I really get a hanckering for a burger.

They lost much of my business in response to their price hikes.

It's likely the same will happen to any fast food joint that hikes their prices.

The price sensitivity of the customers comes into play, and will have a 'make or break' impact on each fast food joint.

After all, fast food isn't really all that good, or that good for you, so price and convenience are probably the 2 most important factors here in the buying decision.

 

[fmw]

These are the symptoms of allowing government telling businesses how they must operate. I remember when government did what it could to help the business climate rather that trying to control it. That has all gone down the drain along with the economy.

 

[LowDown]

A White Castle Slider costs 72 cents. "Increasing costs by 50%" means it would go up to about $1.00.

White Castle is not exactly something to be proud of on one's resume. That may be connected to the fact that they serve terrible food in small portions for a low price. [snipped]

I'm amused by how some liberals are turning out to be such snobs. They don't know what it's like to be poor or to have to rely on cheap goods from places like White Castle, I'm guessing. It's "let them eat cake" all over again.

As to the truth of what White Castle people are saying, many fast food outfits are walking the walk, buying computer kiosks to replace hourly workers and the like. Why would we think it's any different for White Castle?

 

[Beaudreaux]

Your argument does not negate my conclusion that the impact on unemployment will be negligible - only that the increase in minimum wage may be not incredibly beneficial. The research on this issue also supports the position that the question is murky at best.

You even stated, and I quote: "Businesses will adjust their business models or they will die. Nothing new to see here." That is not negligible. The companies that will be effected are the ones that will actually hire unskilled, uneducated, and otherwise unemployable people.

The article in the OP describes how one of those companies has researched, evaluated, and determined the affect on their company that a $15.00/hr minimum wage will have. The result that you are discarding, is that when companies like White Castle move out of markets that regulate them out of being able to compete, it is the very people that NEED those minimum wage jobs, the unskilled, uneducated, and otherwise unemployable people that will suffer. Even if the company has to shut down, the owner of the business will be able to recover, their employees probably will not.

Those that are championing a rise in the Minimum Wage to $15.00/hr are doing so at the peril of those they are claiming to be fighting for. You're ****ing the poor, not the businesses.

 

[eohrnberger]

I'm amused by how some liberals are turning out to be such snobs. They don't know what it's like to be poor or to have to rely on cheap goods from places like White Castle, I'm guessing. It's "let them eat cake" all over again.

As to the truth of what White Castle people are saying, many fast food outfits are walking the walk, buying computer kiosks to replace hourly workers and the like. Why would we think it's any different for White Castle?

'Let them eat cake'? Hmm. I wonder who's going to prepare the guillotine and escort them there?

 

[LowDown]

These are the symptoms of allowing government telling businesses how they must operate. I remember when government did what it could to help the business climate rather that trying to control it. That has all gone down the drain along with the economy.

If a potential employer offers a certain wage for work and someone is willing to do the job for that money what business is it of the government?

 

[longview]

Not related to White-castle,
On April 1, 2015, Seattle increased the minimum wage from $9.75 to $11.00 per hour.
For a full time employee, this would be a monthly increase of $216.25.
From Feb 2015 to Dec 2015 rent on a 1 bedroom increased by $213 per month.
https://www.rentjungle.com/average-rent-in-seattle-rent-trends/
This means the first step towards $15 /hour yielded the minimum wage employees
a whopping $3.25 a month.
In January of 2016 the minimum wage increased to $13 per hour,
so now the full time minimum wage worker will make an extra $563 per month.
I wonder how much this last increase will "help" the employees.

 

[Beaudreaux]

and i would say that is a bogus analysis
this is a convenience fast food seller in a convenience fast food industry
the substitution of any fast food product for grocery store goods exists for all enterprises within the convenience fast food industry

I hear ya...

Substitution of one product source for another product source is based on more than one factor (convenience in your argument) and price point is what has kept White Castle and others in that industry viable against, as you say: "the substitution of any fast food product for grocery store goods exists for all enterprises within the convenience fast food industry" Once you take the price point to a level where the convenience does not offset the cost to the customer, those customers will acquire the commodity or product from another less expensive source. For the companies to survive, they may need to automate those functions where minimum wage workers once were the most cost effective means of production. Once automation and labor approach an equilibrium in cost effectiveness, automation will win every time - no labor disputes, no injuries, no strikes, no law suits, no human induced problems for the employer.

Since I'm not in the fast food industry, I have to take the analysis of one of the most successful companies in US history in that industry over that of what you or I may come up with based on arbitrary statements originating from our various political and economic viewpoints.

 

[KLATTU]

well, there you have it
minimum wage employees do nothing to earn their money
i look forward to your next economics lesson

Ok here it is/

The worker makes x based on y production.
The gov't forces the company to pay x+1, while y stays constant.

Thus, the " +1" is pay for for doing nothing.


You're welcome.

 

[Hicup]

With the increased minimum wage, White Castle, the burger chain, is in a quandary. Their one of their biggest costs is the payroll for hourly workers. They have the choice of passing the cost on to the customer or cutting employees. They would have to increase the menu costs by 50% in order to make of the difference, and that would be a disaster, they think. They've seen big effects from even small increases in prices. People would just stop coming to eat there and would go to the grocery store instead. So much of the pain will be borne by lower level employees. More young people will be unable to find word, to take a step up to the first rug of the latter. White Castle promotes from within and there are many success stories about people who started out at the bottom, but there will be a lot less of that. White Castle has stayed in distressed neighborhoods where such jobs are really needed. Too bad. The 40% or more unemployment among young poor people will just get a little higher. Even worse is the danger that stores will have to close entirely if the new business model doesn't work.

The liberals who did this won't care because they won't see or realized the damage they did. I suspect that they are happier with more people dependent on the government. To paraphrase the chief financial officer of Venezuela, they don't want people earning their way into the middle class because those people are more likely to become Republicans.

New York Minimum Wage -- White Castle Adjusts, Entry-Level Workers Lose Out

To put it another way, the real minimum wage is always zero. That's what more people will be getting now.

I am not sure why no republican can articulate exactly why price fixing wages is ever a good thing. Look, if a burger flipper gets paid $15 and hour, whose going to put a new roof on your house, or build things? I can tell you that a construction laborer who now makes on average $15 an hour will not lift 12in split-rib concrete blocks if all he needs to do is flip burgers and ring out customers.. Why the hell would he? It's why socialism and communism fail.. Eventually no one wants to work harder than the lowest common denominator.. It's not politics, it's not ideology, it's human nature. We're not ants or worker bees for God's sake, we have brains, and feelings, and when we see someone cashing out customers at a local burger joint making $15 and hour, we tend to look at how money we make doing what we're currently doing, and then the natural progression (Key word here) is to ask oneself why am I working harder than that guy when I don't have too. In addition, all these punk ass radicals that are pushing for this have no idea that in so doing, they are pushing themselves out of the very jobs that they're in now. You think if an employer has to pay someone $15 to take his customers cash is going to pay that person if they have tats on their forehead or piercings through their lips, or wear their pants below their ass? Nope, guess who'll be getting those jobs? Clean, well spoken, friendly people that show up to work and are reliably reliable, not just some days, BUT everyday.. Good job stupid liberal progressives.. You're too stupid to even realize your "issue was coopted by the left politicians in this country, not for you, but because they exploited your idea to serve their political interests.. You're still going to be out of a job because you took no time to invest in yourself, and or your skills, and in a market where $15 buys you the most basic job, guess what, now the most basic job requires qualifications.. Don't ya all feel so smart now..


Tim-

 

[polgara]

Ok here it is/

The worker makes x based on y production.
The gov't forces the company to pay x+1, while y stays constant.

Thus, the " +1" is pay for for doing nothing.


You're welcome.

Greetings, KLATTU. :2wave:

For maybe 24 hours, they have a little more money in their wallet. This stops when they go to buy something with that money, and find that every business has increased the amount they charge! I can just hear some man yelling at his wife "WTH did you spend all my money on?" That's when she tells him in no uncertain terms that "it's your job from now on to buy the kids' clothing and do the grocery shopping, mister!" blah, blah, blah....

 

[ludin]

Raising the Minimum Wage Boosts Growth and Does Not Cause Unemployment
The evidence is clear: increasing the minimum wage doesn't cost jobs | Dave Oliver | Opinion | The Guardian
https://www.dol.gov/featured/minimum-wage/mythbuster

So you post a bunch of opinion pieces ok.

https://beta.finance.yahoo.com/news...ill-kill-6-6-million-jobs--aaf-152547994.html
Warren Buffett: Don't Raise Minimum Wage to $15 per Hour - Fortune I guess warren buffett thinks it is a bad idea as well.
http://www.washingtontimes.com/news/2013/mar/18/raising-minimum-wage-hurts-those-it-claims-to-help/

so I guess you ignored those. the question is why did you just ignore something that proves your argument incorrect or not
like you think it is?
And if those are too 'leftist' for you,...

This is mindless pap, plain and simple. Empty words, meaningless pap that conservatives like to say to each other but makes everyone else cringe at how adults can be convinced to parrot such blather.

talk about mindless pap. you can't even address the argument. the fact is that one of the liberals biggest argument is pandering to poor people and telling them
if you vote for me you will get more of their money. that is lost and doesn't even factor to people like me that work and don't depend on government assistance.

the basic aappeal to emotion fallacy that liberals spout is lost of working people who all they see is their taxes going up to pay for all this free stuff
that they get 0 benefit from.

 

[Grand Mal]

So you post a bunch of opinion pieces ok.

https://beta.finance.yahoo.com/news...ill-kill-6-6-million-jobs--aaf-152547994.html
Warren Buffett: Don't Raise Minimum Wage to $15 per Hour - Fortune I guess warren buffett thinks it is a bad idea as well.
SAUERBREY: Raising minimum wage hurts those it claims to help - Washington Times

so I guess you ignored those. the question is why did you just ignore something that proves your argument incorrect or not
like you think it is?
And if those are too 'leftist' for you,...



talk about mindless pap. you can't even address the argument. the fact is that one of the liberals biggest argument is pandering to poor people and telling them
if you vote for me you will get more of their money. that is lost and doesn't even factor to people like me that work and don't depend on government assistance.

the basic aappeal to emotion fallacy that liberals spout is lost of working people who all they see is their taxes going up to pay for all this free stuff
that they get 0 benefit from.

One of those 'opinion pieces' comes from the US government, another (the one you left out of your quote of my post) is from 'Investpedia', not exactly a liberal source.
As for the bolded part, I can barely understand that gibberish. There's no argument there, just a badly-written, nearly-indecipherable list of neocon lies. Actually, the same lie written three different ways.

 

[joG]

With the increased minimum wage, White Castle, the burger chain, is in a quandary. Their one of their biggest costs is the payroll for hourly workers. They have the choice of passing the cost on to the customer or cutting employees. They would have to increase the menu costs by 50% in order to make of the difference, and that would be a disaster, they think. They've seen big effects from even small increases in prices. People would just stop coming to eat there and would go to the grocery store instead. So much of the pain will be borne by lower level employees. More young people will be unable to find word, to take a step up to the first rug of the latter. White Castle promotes from within and there are many success stories about people who started out at the bottom, but there will be a lot less of that. White Castle has stayed in distressed neighborhoods where such jobs are really needed. Too bad. The 40% or more unemployment among young poor people will just get a little higher. Even worse is the danger that stores will have to close entirely if the new business model doesn't work.

The liberals who did this won't care because they won't see or realized the damage they did. I suspect that they are happier with more people dependent on the government. To paraphrase the chief financial officer of Venezuela, they don't want people earning their way into the middle class because those people are more likely to become Republicans.

New York Minimum Wage -- White Castle Adjusts, Entry-Level Workers Lose Out

To put it another way, the real minimum wage is always zero. That's what more people will be getting now.

Automate where ever possible.

 

[calamity]

With the increased minimum wage, White Castle, the burger chain, is in a quandary. Their one of their biggest costs is the payroll for hourly workers. They have the choice of passing the cost on to the customer or cutting employees. They would have to increase the menu costs by 50% in order to make of the difference, and that would be a disaster, they think. They've seen big effects from even small increases in prices. People would just stop coming to eat there and would go to the grocery store instead. So much of the pain will be borne by lower level employees. More young people will be unable to find word, to take a step up to the first rug of the latter. White Castle promotes from within and there are many success stories about people who started out at the bottom, but there will be a lot less of that. White Castle has stayed in distressed neighborhoods where such jobs are really needed. Too bad. The 40% or more unemployment among young poor people will just get a little higher. Even worse is the danger that stores will have to close entirely if the new business model doesn't work.

The liberals who did this won't care because they won't see or realized the damage they did. I suspect that they are happier with more people dependent on the government. To paraphrase the chief financial officer of Venezuela, they don't want people earning their way into the middle class because those people are more likely to become Republicans.

New York Minimum Wage -- White Castle Adjusts, Entry-Level Workers Lose Out

To put it another way, the real minimum wage is always zero. That's what more people will be getting now.

Robotics....not that anyone's arteries would miss White Castle.

 

[faithful_servant]

The negative impact on employment will be negligible because the increased spending power of the minimum wage employees will yield increased demand in the other businesses that are flexible enough to adjust in the new landscape.

Businesses will adjust their business models or they will die. Nothing new to see here.

Although I don't have access to White Castle here in Georgia, so in terms of your question, maybe they will expand into Krystal's territory (states without the 15$ minimum wage) in order to compensate the overall revenue while they eventually adjust their business model.

No job = no money
No money = no spending power

That isn't that hard to figure out, so why would you believe someone who is supposed to be an expert who misses that simple point???

 

[MrT]

No job = no money
No money = no spending power

That isn't that hard to figure out, so why would you believe someone who is supposed to be an expert who misses that simple point???

I suppose it would be because the experts are smart enough to realize that it isn't so simple.

 

[Hawkeye10]

Robotics....not that anyone's arteries would miss White Castle.

That plus a thinning of the number of stores. Increasingly people will go to supermarkets, gas stations and convenience stores for their ready to eat food, where they often will heat and prepare their food themselves, so minimal labor is needed. These places are not a huge threat to sit down restaurants but they will decimate fast food restaurants as the labor rates climb.

 

[faithful_servant]

I suppose it would be because the experts are smart enough to realize that it isn't so simple.

The basics of keeping a business running are simple - you have to make more money than you spend. If you have to spend more, then you only have two options, charge more or find ways to cut expenses. Since automation is a great way to cut expenses, it's now a much more viable option. You will start to see more kiosks popping up, more self-service check-outs, etc. Every one of them costs someone the opportunity to enter the workplace.

No jobs = no money
No money = no spending power

 

[tres borrachos]

Cuz the loss of thousands of jobs is so great?

I'm glad someone else caught that. WC has over 400 locations in a dozen or so states. I know 10 years ago they had over 17,000 employees. They probably have more today. Yeah, let's hope they go out of business so those people all end up on unemployment. Woohoo.

 

[tres borrachos]

With the increased minimum wage, White Castle, the burger chain, is in a quandary. Their one of their biggest costs is the payroll for hourly workers. They have the choice of passing the cost on to the customer or cutting employees. They would have to increase the menu costs by 50% in order to make of the difference, and that would be a disaster, they think. They've seen big effects from even small increases in prices. People would just stop coming to eat there and would go to the grocery store instead. So much of the pain will be borne by lower level employees. More young people will be unable to find word, to take a step up to the first rug of the latter. White Castle promotes from within and there are many success stories about people who started out at the bottom, but there will be a lot less of that. White Castle has stayed in distressed neighborhoods where such jobs are really needed. Too bad. The 40% or more unemployment among young poor people will just get a little higher. Even worse is the danger that stores will have to close entirely if the new business model doesn't work.

The liberals who did this won't care because they won't see or realized the damage they did. I suspect that they are happier with more people dependent on the government. To paraphrase the chief financial officer of Venezuela, they don't want people earning their way into the middle class because those people are more likely to become Republicans.

New York Minimum Wage -- White Castle Adjusts, Entry-Level Workers Lose Out

To put it another way, the real minimum wage is always zero. That's what more people will be getting now.

Interesting article, thanks for posting it. I'm no fan of White Castle, but my husband and kids love to stop there once every time we're in NJ or NY. It never ceases to amaze me how long the lines are when we stop at any of them.

 

[calamity]

That plus a thinning of the number of stores. Increasingly people will go to supermarkets, gas stations and convenience stores for their ready to eat food, where they often will heat and prepare their food themselves, so minimal labor is needed. These places are not a huge threat to sit down restaurants but they will decimate fast food restaurants as the labor rates climb.

We have White Castles in our rotary fridgie thingy. I think they are a $1 for two. Pop them in the micro and munch away.

 

[DA60]

They should just keep getting hit movies made with their name in the title and everything will be alright....

 

[Hawkeye10]

We have White Castles in our rotary fridgie thingy. I think they are a $1 for two. Pop them in the micro and munch away.

Imagine an automat that loads 100 different products upon command and payment into a convection/Steam/microwave oven with all the sensors installed to cook the food perfectly. All that is needed is a product loader and a cleaner. If people want personal interaction they will go to the expensive sit down places. But then again given how banks have been cutting the need for labor because people are only too happy to deal with machines if the automats food is good enough ( and seriously, how good does it need to be to keep the majority of Americans happy?) I doubt they see the need to pay twice as much to deal with humans and old style plates.