How Will White Castle Respond to the Increased Minimum Wage?

[calamity]

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.

Sure. Look at how we get gas. I haven't dealt with a human at the gas station in years.

 

[Hawkeye10]

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.

Note: last week I went to Tom Douglas's new place in Seattle (The Carlile Room)....$16.50 for a dinner salad, mains run $20-60. Small portions. No. But that is what they think they need to do to make it on the new wage frontier.

 

[Hawkeye10]

Sure. Look at how we get gas. I haven't dealt with a human at the gas station in years.

What is striking though is how people will do the work themselves and take longer in order to avoid dealing with humans. I see it at the supermarket all the time, people going to self checkout when it takes longer, and this is at Winnco where we have to bag our stuff ourselves even at the human checkout. It is alarming what has happened to us, forget for a moment how many people cant hold down a conversation and cant manage empathy, that was bad enough, but we are becoming downright anti social, we would rather interact with machines than humans too many of us.

I see a big future for AI robotics. Then they probably kill us, did you ever see Westworld? Scary stuff.

 

[sangha]

The argument in the article is that right now White Castle food is cheap and convenient enough to counter the potential for their customer base going to the grocery store to buy and then cook their own food. They predict that if they are required to raise their price point to the level required to recoup the increase in costs from the higher minimum wage, then the cost of their product (even with convenience) would not deter their customer base from going to grocery stores and cooking their own food. Grocery stores are the competition they are concerned with, not McDonalds, or Jack in the Box, or Carl's Jr.

And if White Castle has to cut employees because their customers are going to grocery stores, the loss in WC's employment will be compensated by the increase in grocery store employment

 

[sangha]

What it all boils down to is the biggest response from most businesses will be to raise prices.

Because every right winger knows that businesses can charge more than they are currently charging and are not charging the most they can get out of the goodness of their heart

 

[Hawkeye10]

And if White Castle has to cut employees because their customers are going to grocery stores, the loss in WC's employment will be compensated by the increase in grocery store employment

Wrong, because the labor hours to output ratios are not at all the same. There will be an increase of supermarket/convenience store labor, but it will not be anything close to what was lost.

 

[Mithrae]

Wrong, because the labor hours to output ratios are not at all the same. There will be an increase of supermarket/convenience store labor, but it will not be anything close to what was lost.

What would you guess people are going to do with the money they save at supermarkets?

 

[sangha]

Wrong, because the labor hours to output ratios are not at all the same. There will be an increase of supermarket/convenience store labor, but it will not be anything close to what was lost.

I've seen no evidence that suggests you are right

 

[Mithrae]

e rate of $8.25 an hour, it may be worth my while to have two order-takers up front, with a surge order-taker doing something else. Shift to $15 an hour, and suddenly it's worth my while to purchase:

 

[Visbek]

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?

There is zero evidence to support this claim. None.

What usually happens is that when the minimum wage goes up, it usually pushes other lower wages up. That construction worker should expect a small wage boost as well.

It's why socialism and communism fail.

No, it isn't.

Communism and Socialism are not the same things. Communism is a specific system, and it fails because it concentrates too much economic and political power into too few people; it is not accountable; it is unable to efficiently produce, distribute and price goods; it tends towards police states and totalitarian rule.

Socialism is very broad term -- and often works fairly well. E.g. Social Security is a type of redistribution of income, from those currently working to those who are retired, and it has worked very well and is incredibly popular. (Much of the claims that "Social Security is going broke!" are nonsense, based on the fiction of segregating payroll taxes from other taxes, from the mistaken idea that it's a giant IRA, and due to demographic shifts.) Single-payer health care produces significantly cheaper outcomes than private systems. Public education is another type of redistribution. The list goes on.

Fixing prices is not "socialism." It's a small bandage on capitalism. Sometimes it works, sometimes it doesn't. Minimum wages seems to work fairly well.

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?

Are you going to yell at those darned kids to get off your lawn, too?

Some employers care about dress codes; some don't. That's the employer's choice. And no, that's not likely to change based on minimum wage increases.

Good job stupid liberal progressives.... Don't ya all feel so smart now..

Smarter than some people, yes.

 

[Visbek]

Automate where ever possible.

They're doing that anyway. It's not like paying someone an extra $1 an hour is going to provide an irresistible urge to automate.

Next?

 

[Hawkeye10]

I've seen no evidence that suggests you are right

Supermarkets dont do their numbers in such a way that it can be proven. I wish we had WaWa and Skeetz labor costs, that would likely prove the point. These guys are doing what is next in foodservice.

Gotta go for the day, a daughter's birthday, going to go eat at another overpriced Seattle restaurant (cause she loves it), though it is good.

 

[Moderate Right]

Because every right winger knows that businesses can charge more than they are currently charging and are not charging the most they can get out of the goodness of their heart

That's the trouble with the left. They think businesses should just sit there and get raped by liberal policies and they fail to comprehend that there are counter reactions to liberal policies that make the poor poorer. Let's not also forget that publicly traded companies have an obligation to their shareholders, many of whom are average Joes and Janes through retirement accounts of various types.

 

[Mr Person]

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.

Fast food chains in European countries with minimum wages on par with $15-23/hr in USD charge about a buck more per equivalent menu meals at most. Because I know that, I'm not even going to bother with this "National Review" - an extremely biased rightwing blog - article.

 

[Mr Person]

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.

This is another thing that amazes me.

Those in support of supply-sider tax and general government policies are focused on making sure rich people have more money. But rich people already invest wherever and whenever they deem likely to produce more money. Tax policy is irrelevant until you start getting into 70%+ brackets. (That's backed up historically).

They also oppose a higher minium wage. But a higher minimum wage is exactly - and ONLY - the kind of policy along those lines that might work. Whether it's cutting taxes on the poorest or raising the wage, the bottom line is that they're going to spend every last dollar because they HAVE to. And if they don't spend it all they save.

But if you don't raise the minimum wage, then you the taxpayer make up for what the employer doesn't pay in safety net dollars.



They response by ignoring the logic and focusing on the morality - oh, burger flipping is a no-skill job, so they don't "deserve" more. Well, I say to them, it's not bloody well about who deserves what. It's about what's pragmatically optimal!

 

[Mr Person]

Venezuela

There you go again.

That country's economy is irrelevant to America for so many reasons.

 

[sangha]

That's the trouble with the left. They think businesses should just sit there and get raped by liberal policies and they fail to comprehend that there are counter reactions to liberal policies that make the poor poorer. Let's not also forget that publicly traded companies have an obligation to their shareholders, many of whom are average Joes and Janes through retirement accounts of various types.

None of that explains your claim that companies can just raise their prices and not lose business. In fact, the article in the OP which, like you, argues that raising prices results in lost business. Yet, for some reason, you think businesses can just raise prices and make more money

You present no evidence to support your claims. Just the usual "lefties bad" hackish rhetoric

 

[Beaudreaux]

And if White Castle has to cut employees because their customers are going to grocery stores, the loss in WC's employment will be compensated by the increase in grocery store employment

Seriously? It takes no additional people to stock shelves at night that aren't already employed doing so. It takes no additional check-out clerks when more and more grocery stores are using self check-out lanes. You usually can do better than that.

 

[CanadaJohn]

What you might find is what McDonald's has started to do and that's automate and/or provide more self-serve options to customers to cut down on the number of employees needed to staff the operation. My local McDonald's now has automated order stations where you use a touch screen to select what you want, pay electronically, and go to the counter to pick up your order. They also provide self-serve stations for beverages, etc.

In the same way that unions priced the manufacturing sector out of good paying jobs here in North America, minimum wage increases that are unsustainable will price teenage and senior jobs out of the market and make it harder for the young and old to find such work.

 

[VanceMack]

Still laughing at people that think a minimum wage is supposed to be a career. Though to be honest...considering some of the people that clamor for that $15 an hour livable wage, I can certainly understand why that is their career path.

 

[Helix]

they could pipe their bathrooms into biogas power stations, generating the electricity for each location, and then sell the rest back into the grid. the energy savings should cover the increased wages and then some.

 

[What if...?]

What you might find is what McDonald's has started to do and that's automate and/or provide more self-serve options to customers to cut down on the number of employees needed to staff the operation. My local McDonald's now has automated order stations where you use a touch screen to select what you want, pay electronically, and go to the counter to pick up your order. They also provide self-serve stations for beverages, etc.

In the same way that unions priced the manufacturing sector out of good paying jobs here in North America, minimum wage increases that are unsustainable will price teenage and senior jobs out of the market and make it harder for the young and old to find such work.

The unions wouldn't put up with $2/12 hour day?

Greedy bastards!

 

[Moderate Right]

None of that explains your claim that companies can just raise their prices and not lose business. In fact, the article in the OP which, like you, argues that raising prices results in lost business. Yet, for some reason, you think businesses can just raise prices and make more money

You present no evidence to support your claims. Just the usual "lefties bad" hackish rhetoric

The OP is, for the most part, wrong because your competitors will also be forced to raise their prices along with you so they will not, for the most part again, lose business. I'm a business owner myself. Most businesses are small businesses and they can't absorb higher wages without raising prices. White Castle is competing in the fast food market, not Kroger. They won't lose any business to Kroger and they won't lose any business to McDonalds either because McDonalds will raise their prices too, as will Kroger. One thing that could happen though is that mom and pop retail stores already have a tough time competing with Walmart. Walmart would probably love a huge increase in minimum wage because they can more easily absorb the wage increases and would not have to raise their prices up as much as those mom and pop stores would have to. The end result of that would be Walmart running these little guys out of businesses and getting a bigger piece of the pie themselves, making the Waltons even richer, the exact opposite of what the left would want to accomplish. As I said, the middle class will disappear into the poorer class, the poor would get poorer, and the rich would get richer. The left never really figures these things out ahead of time because they make all of their decisions based on emotion instead of common sense.

 

[Mithrae]

What you might find is what McDonald's has started to do and that's automate and/or provide more self-serve options to customers to cut down on the number of employees needed to staff the operation. My local McDonald's now has automated order stations where you use a touch screen to select what you want, pay electronically, and go to the counter to pick up your order. They also provide self-serve stations for beverages, etc.

In the same way that unions priced the manufacturing sector out of good paying jobs here in North America, minimum wage increases that are unsustainable will price teenage and senior jobs out of the market and make it harder for the young and old to find such work.

Same question I asked CPwill; that should always be the obvious question here: What alternative would you propose? Automation is replacing jobs anyway. Reducing wages might delay the trend by a couple of years, but in the long run horses and humans can never compete with machines and computers for strength, speed, accuracy, durability and intelligence.

If no alternative will change that trend, merely pointing out the inevitable is not an argument.

On the other hand, one possible part of the answer to automation - reducing standard working hours, so that a shrinking human workload still employs similar numbers - is equivalent in effect to higher wages: Higher labour costs for employers so that more money is kept in circulation.

 

[Captain America]

I don't know if anybody brought this up or not, but has anyone considered that raising the minimum wage to 15.00 might attract workers that can actually read, write, use proper grammar, groomed appropriately, with a strong work ethic and attitude, and be job motivated?

Where will all the crooked hat wearing, pant sagging, earlobe stretched people with Tyrone and Thug-life tattooed on their neck's, school drop-outs and 16 year old unwed mothers gonna work?

I know, I know. Go ahead. Throw it at me. I deserve it.