WSUwarrior
Well-known member
- Joined
- May 1, 2015
- Messages
- 1,864
- Reaction score
- 493
- Gender
- Undisclosed
- Political Leaning
- Very Liberal
Thank you for reading your bumper sticker. That doesn't make it so and insulting hard-working Americans by calling them "losers" doesn't help your case. The reality is low earning workers are constrained at what they can purchase. If they earned more, they could consume more. Remember, their earnings are your income. If they have more income, you get more sales, which means you earn more.
Moreover, when minimum wage workers get raises, their pay bumps up against supervisory workers, who then demand higher wages.
Contrarily, a pay raise for minimum wage Americans is a pay raise for everyone else.
No, that would be on top of the typical amount of inflation.
Ice cream sales are declining so I wouldn't be so sure that the copnsumer is adapting to the increase in prices the way you think they are.
No, that would be on top of the typical amount of inflation.
Ice cream sales are declining so I wouldn't be so sure that the copnsumer is adapting to the increase in prices the way you think they are.
If you are making a minimum wage job your career then you are not hard working.
Name one time raising the minimum wage resulted in a raise for the people who actually did work hard for their salary? Ill go watch paint dry while you desperately search for that unicorn.
yea well what you forgot was that that 52k is maybe what the owner takes. he has to make a pay check and I doubt he will make 52k a year. he will want a bit more.
plus that margin that you talk of is being spent to fix or repair things in the restaurant.
you also fail to see that some people might not pay $12 dollars for his lunch.
so they will lose some customers. also no business person raises prices to break even. they raise prices above the break even.
so his price would go from 10 to 15 dollars.
you also forget that he now has increased taxes that he has to pay for. his tax bill just went up.
you leave a lot of factors out of your stacked hypothetical.
Yeah, except I don't produce "units", I fix cars, and not all mechanics or technicians are created equal. I have a guy who makes $12 who is great for brakes, suspension work and simple maintenance, and I have a top guy who can diagnose complex issues who makes twice that. I have someone who works in the office who also makes $12 an hour, her production is more difficult to calculate since she doesn't actually produce labor hours but is necessary to make the rest of our operations more efficient. This isn't theoretical, it is reality.
Standard restaurant model: total labor costs (MW workers, subMW workers, Managers, etc) = 25-30% of total costs, and operate at ~5% margin
So , let's use some easy #s,
Total Costs = 1,000,000
Revenues= 1,052,600
Margin = 52,600
LaborCost_LOW=250,000
LaborCost_HIGH=300,000
Assume MW = 1/2 of total LaborCosts
In LaborCost_LOW that would be 125,000
In LaborCost_HIGH that would be 150,000
Let's assume that you now need to double this (to make the math easier....)
NEW:
LaborCost_LOW: 375,000
LaborCost_HIGH: 450,000
TotalCost_LOW: 1,125,000
TotalCost_HIGH: 1,150,000
To maintain a ~5% margin, ceteris paribus
Revenue_LOW = 1,184,000
Revenue_HIGH = 1,211,000
So Revenue needs to increase by ~
Either 132,000 or ~158,000
Since this place is running on ~1.05M in revenue, let's assume a ticket averages $10
They are moving then 105,000 tickets a year.
To recoup 132,000 or ~158,000 they would have to increase ticket price by
1.25$ or $1.50 (~12-15%) --- in other words, the typical amount of inflation that
restaurants face in a 5-6 year window anyways.
Now before you go bat guano crazy, consider in the last decade, ice cream has gone up in price (at least here) by about $1 (~20%) while decreasing the volume by ~25% in the container. Hence a net change per unit volume of ~47%----- Consumers weather gradual price increases far more robustly than you give them credit for if the good/service is worth "it" or is unique.
Standard restaurant model: total labor costs (MW workers, subMW workers, Managers, etc) = 25-30% of total costs, and operate at ~5% margin
So , let's use some easy #s,
Total Costs = 1,000,000
Revenues= 1,052,600
Margin = 52,600
LaborCost_LOW=250,000
LaborCost_HIGH=300,000
Assume MW = 1/2 of total LaborCosts
In LaborCost_LOW that would be 125,000
In LaborCost_HIGH that would be 150,000
Let's assume that you now need to double this (to make the math easier....)
NEW:
LaborCost_LOW: 375,000
LaborCost_HIGH: 450,000
TotalCost_LOW: 1,125,000
TotalCost_HIGH: 1,150,000
To maintain a ~5% margin, ceteris paribus
Revenue_LOW = 1,184,000
Revenue_HIGH = 1,211,000
So Revenue needs to increase by ~
Either 132,000 or ~158,000
Since this place is running on ~1.05M in revenue, let's assume a ticket averages $10
They are moving then 105,000 tickets a year.
To recoup 132,000 or ~158,000 they would have to increase ticket price by
1.25$ or $1.50 (~12-15%) --- in other words, the typical amount of inflation that
restaurants face in a 5-6 year window anyways.
Now before you go bat guano crazy, consider in the last decade, ice cream has gone up in price (at least here) by about $1 (~20%) while decreasing the volume by ~25% in the container. Hence a net change per unit volume of ~47%----- Consumers weather gradual price increases far more robustly than you give them credit for if the good/service is worth "it" or is unique.
It would appear you have assumed the labor cost of non-minimum wage employees would remain constant. Is it not reasonable to assume a current employee who has received merit increases would expect a pay increase as well? Do you think such an employee would be satisfied that a new unskilled, employee would be making as much as they were?
It would appear you have assumed the labor cost of non-minimum wage employees would remain constant. Is it not reasonable to assume a current employee who has received merit increases would expect a pay increase as well? Do you think such an employee would be satisfied that a new unskilled, employee would be making as much as they were?
his percentages are also wrong. it is 30-35% of total costs not 25-30% he is aiming on the low side.
he leaves out a ton of factors.
his percentages are also wrong. it is 30-35% of total costs not 25-30% he is aiming on the low side.
he leaves out a ton of factors.
Nowhere did I say it wasn't on top of the otherwise inflation. I just said restaurants regularly manage those size of "difficulties".
Your link mentions health concerns, fragmentation in the sector, and lack of innovation as drivers of the decline, not price.
Got something that actually supports your claim?
SMH.
The owner's salary is included in the total labor costs.
his percentages are also wrong. it is 30-35% of total costs not 25-30% he is aiming on the low side.
he leaves out a ton of factors.
Common Food & Labor Cost Percentages | Chron.com
Fast food (where a lot of these MW are... or rather, an operation which relies MORE proportionally on MW workers as a fraction of the business personnel) it is not 30-35%, it is 25-30% .
curious you ignored the part about owner salary.
Other than the owner (well paid), manager (pretty well paid), do you think many employees in a restaurant are outside of the MW and the subMW (tipped) pay range?
Well, shouldn't be surprising that the ubber Liberal/Progressive Secretary of Labor, Thomas Perez, would put his stamp of approval on such propaganda. Spend enough time reviewing their messaging campaign, and it's quite obvious the methodology is the same, no matter where it's presented.
Headlines, and claims, with very little meat. Exactly what the target audience has been trained to swallow.
"If 600 economists, seven of them Nobel Prize winners in economics, have said no problemo to increases in minimum wage, deeeang it all, must be A-OK. Count me in".
Except, most economists have put a cap on those increases where big negatives kick in. Any discussion in Perez marketing piece about his good friends in the labor Unions pushing for $15/hr? Hmmm. Nothing. Just a big goober laden kiss on how awesome an increase in the minimum wage would be, and how any concerns are just myths.
Greetings, ocean515. :2wave:
We're in a race to the bottom, and it's working, because the ripple effect of this has not been considered. They are concentrating on the minimum wage jobs, because it's easy to manipulate those people into believing they have been taken advantage of, IMO. What's going to happen when those people discover that things they buy elsewhere suddenly cost 50 percent more than they used to? What will they have gained?
Mark Forbes had an interesting op-ed in the NY Times on minimum wage dated April 3, 2014. It showed that only the government would benefit, since more people would now be paying taxes to both Federal and State coffers, plus other benefits would be reduced or eliminated, like subsidies for health care and so forth. This is just a new tax on employees and customers, because businesses will have to charge more to offset higher wages - OR eliminate jobs, or probably both! It won't be limited to just McDonalds, either!
You can intentionally misrepresent my point all you want, but you just destroyed your own argument.
You said an option is to let some of them go. Pick one, two, three.... Now maintain the same # (variety) of services you offered before.
Well, shouldn't be surprising that the ubber Liberal/Progressive Secretary of Labor, Thomas Perez, would put his stamp of approval on such propaganda. Spend enough time reviewing their messaging campaign, and it's quite obvious the methodology is the same, no matter where it's presented.
Headlines, and claims, with very little meat. Exactly what the target audience has been trained to swallow.
"If 600 economists, seven of them Nobel Prize winners in economics, have said no problemo to increases in minimum wage, deeeang it all, must be A-OK. Count me in".
Except, most economists have put a cap on those increases where big negatives kick in. Any discussion in Perez marketing piece about his good friends in the labor Unions pushing for $15/hr? Hmmm. Nothing. Just a big goober laden kiss on how awesome an increase in the minimum wage would be, and how any concerns are just myths.
Yeah, except I don't produce "units", I fix cars, and not all mechanics or technicians are created equal. I have a guy who makes $12 who is great for brakes, suspension work and simple maintenance, and I have a top guy who can diagnose complex issues who makes twice that. I have someone who works in the office who also makes $12 an hour, her production is more difficult to calculate since she doesn't actually produce labor hours but is necessary to make the rest of our operations more efficient. This isn't theoretical, it is reality.
First, MTAtech (a self-described liberal), provided a prior link for his "evidence" that said as much, the article quoted even MW supporter economists such as Reich (or Potter) said that at 15 dollars an hour, the assurances of "no worries" no longer longer apply. In other words, the 'libs' on this issue are even ignoring the experts on their own side.
Second, 600 economists on a letter (most of them not labor economists) is a pretty small sample - there are at least 15,000 (or more) US economists. However, depending on which poll you use, it should be mentioned that somewhere between a third to one half support some kind of minimum wage. But even they don't do so because they use 'economic reasoning' or are even familiar with labor market modeling (as my friend, a full-time economist, reminds me).
Third, letters like this represent political (not economic) choices - they reflect the political "feelings" and gut moralisms. They typical "justifications" of minimum wage by such supporters are as banal and subjectively driven as that as that of a brick layer or truck driver (probably more so).
In Marginal Revolution there was a short article that underscored that reality. It described Dan Kein's work on the sociology of the economics profession, noting just how little economic reasoning actually informs the opinions of those economists of stature who favor minimum wages. Reading the simplistic and clichéd justifications of these Ph.D.'s made one cringe, as if he/she had interviewed a representative sample of MD's and then discovered in spite of their training, it did not change their belief that we ought to ignore medical care.
Their non-economic 'reasons' stand out as exceedingly cliched political moralisms ...among them:
"regardless of its (bad) effect on efficiency, minimum wage is necessary to support the 'mores' of our society, just like our 'mores' don't permit child labor"
"it provides greater equality of income and respect, which is associated with better democracy - this is a near consensus in our society"
"it reduces poverty and inequality" (by the way, it does not).
"its just fair and society has the power to determine outcomes to make it fair"
"it provides economic justice"
"people should have pride, they should not feel like losers"
"without it our sense of community is undermined, which undermines social norms and the social behavior of those on the bottom".
"reducing wage inequality increases the quality of democratic institutions".
"less likely to become dependent on public programs, more incentive for work, more at stake in the system".
What struck me as interesting is that in spite of a graduate education is a social science, and of accomplishment and stature in their field, those interviewed don't seem especially knowledgeable or skilled in analyzing normative questions - they don't "think" about political theory, philosophy, or normative/moral questions above the level of the usual 'liberal' clique.
The just "feel" what is right.
Sad...very sad.
Well stated. And yes, sad indeed.
As you have so well summarized, the approach this Administration, and it's supporters and followers take, is adversarial. Instead of creating a unified strategy that is inclusive and well thought out, it is a manipulative effort full of clichés and claims, with "enemies" to be vanquished, and victors to share in the spoils.
And left in the dust in this case, are the very people who risk everything to employ the majority of the working people in this country.
As you so well concluded, the foundation is not based in a solid understanding, but in what "feels" right - A well identified "emotional" response to issues and challenges the left is hard pressed to deny.
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?