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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.
If you can make the same # of units with less employees, you shouldn't have been employing that many people to begin with (in a quasi self-fiduciary responsibility sense, although the altruism would be nice)
The minimum wage is 80 years old and yet America continues to have a resilient and robust economy.
The problem is that the myths that conservatives convince themselves are real, like increasing the minimum wage will cause people to lose their jobs and it will drive out small businesses, are not real.
Minimum Wage Mythbusters - U.S. Department of Labor
The study was done by Nicholas Potter, now a researcher at Washington State University. He said some businesses in Santa Fe did close and some said it hurt their competitiveness. But workers were overwhelmingly positive about the pay hike. And the fear of massive restaurant closures didn’t happen, he said, though the cost of eating out did go up some.
“It seemed to have helped workers and not hurt business too much,” he said.
Potential price increases at restaurants was the biggest negative impact identified by the Berkeley researchers. The cost of eating out went up 2 to 3 percent when the minimum wage rose 25 percent. That means dining out in Seattle could go up as much as 7 percent if the city goes to $15 an hour.
But another Berkeley researcher said there isn’t an overwhelmingly negative impact on any type of business where the minimum wage has been raised.
So....what you're saying is, that without some form of MINIMAL amount being REQUIRED of employers to pay their help, they would gladly pay them less and less in order for themselves to make more???ludin;1064646584]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.
First, that was left out in order to dumb this down for some folks. Second, repair costs AREN'T an every year issue, unless they are taking proper care of their equipment. If you have to fix something EVERY YEAR...you're either using it wrong, or you need to get a new one/call in on the warranty.plus that margin that you talk of is being spent to fix or repair things in the restaurant.
Temporary. For, you see, those people getting paid more at the restaurant or going to SPEND more, and when they DO, OTHER people are going to make more. That's what happens in a consumer economy vs a production economy.you also fail to see that some people might not pay $12 dollars for his lunch.
So, the amount they made in profit PRIOR to a rate increase wasn't sufficient all along, and they just wanted an excuse to INCREASE their GM%? You're really not painting a very rosey picture of small business owners, lol.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.
Explain.you also forget that he now has increased taxes that he has to pay for. his tax bill just went up.
Well, yeah, it's a simplified scenario.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.
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.
Id bet anything that ABOLISHING the minimum wage would make wages raise faster than artificially raising the minimum wage for political reasons.
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 want higher wages create demand for more skilled workers. that means though that you have to get demand going.
by creating pro-business rules and regulations.
that is where this administration and people like it fail. it is the same reason that businesses are holding onto 1.5+ trillion dollars and not spending it.
So what you are saying is, you have people who are VITAL to your business, but who's value brought in to the company vary.
And this applies to minimum wage how?
You're the one that brought up walmart. Sam's club is a part of walmart, and it is a wholesale club, which is what Costco is.
If you didn't like how they stacked up, why did you reference it?
No idea what we're talking about?
LA County has just a shade over 10 million, not 18.55 million.
Los Angeles County QuickFacts from the US Census Bureau
Unemployment rates are not a reflection of the total population, as you have calculated with your 1.4 million figure from the bogus 18.55 million.
The average rent in the City of Los Angeles is indeed $2,043, as reported by Rent Jungle, but rents across the city vary across an extremely wide margin, which throws your calculations into the dumpster.
http://planning.lacity.org/MapGallery/Image/Citywide/CityBoundary.pdf
View attachment 67184610
Perhaps you should reacquaint yourself with the city boundary's, as well as some facts, before staking any intellectual high ground jet57.
grew up in Vista
pop was stationed at pendleton
love certain things about the state....hate others
the paradise of weather, and beauty has been ruined by the politics of the state
i originally was going to retire there....no more
Either Sante Fe, or El Paso.....just havent decided which
Google this: population los angeles and watch what you get.
Some of the politics suck that's for sure. But it's (Northern California) still one of the best paces in the world to live.
I don't understand how you can allow politics to spoil a good retirement.
Well, yeah, it's a simplified scenario.
By all means, come up with your own and present it.
I did. That's why I didn't question your city population number. Everything else missed the mark by a country mile. Best step down from the perch before another contrarian brings more fact to fiction.
Oh nonsense. You DID question my population number: a lot of times, people say Los Angeles and they mean - ya'know L.A. at large. Still 800,000 unemployed for that town isn't all that bad in today's market. And everything else was pretty much on target. Look $15 an hour is what's going to be. Pomona's retail space is only $16 a square foot, open up there and you can still pay only $9 an hour minimum which will protect your spread. Don't be ashamed. It's okay if you can't hack the big time.
LOL
Give it a rest jet57. You've been thoroughly debunked and exposed. You can't even calculate unemployment correctly. Have a nice weekend.eace
Sure if you're rich enough to own property and or buy a home.
Its "No Poor People Allowed "in places like Berkeley and San Fransisco and Palo Alto.
Well that's not right'' its "Middle Class Allowed ".
I mean really, who can retire in a place like Palo Alto?Not your average Middle Class American.
Yeah, I know what you mean. The housing market has been artificially inflated - again: there's no inventory, so when a house comes up there's a feeding frenzy and the place goes for way over asking price, ya'know, which is good if you're moving to Shrubbery Nebraska, but people aren't sellin out because - where ya gonna go? A friend just sold her condo, and bought a 4 bedroom place out in the central valley, to be near here kids (son and family). But why would a retiree buy a 4 bedroom home? So her kids can have it when she's gone.
So, by making it easier for businesses to operate, money will materialize in people's pockets to spend?
My Aunt and Uncle live in Berkeley and she teaches at Berkely SoCal.
They're huge Libs but I love them anyway.
Last time they came to Houston we were talking about the Housing situation in California.
I asked what my 2500 Sq Ft home (valued at around 190 k ) would go for in Berkeley. I don't even remember his answer. I was just shocked !!
Unbelievable. They have the best Weather and location in the Country but its so expensive to live there that only the we'll off can manage it.
I'm not sure how you come to that conclusion. If the $ is there right now in the form of transfer payments, it could be there instead in the form of wages.
Have you ever operated a business? Be honest.
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