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"Well-positioned" means that the industry structure (knowledge-oriented economy reliant to a larger extent on skilled workers than many other local economies), educated populace (57% with a bachelors degree or higher), prevailing wages (some three quarters of workers already earn above the $15 per hour figure), etc., will result in a smaller economic shock than what one will likely see in a city such as Los Angeles where more than a quarter of the population lacks a high school diploma.
Of course, there will be some labor market dislocations, but those could be relatively modest based on the characteristics of Seattle's economy and workforce. Of course, we'll have to wait for the data to become available to better assess the impact. By the beginning of 2017, large firms (500 or more employees) will have been required to have raised their wage to $15 per hour, so a body of data will be available.
yep your right and those rules are fluid with market changes.
one of those rules is as you raise the floor so do the several things.
it raises the cost to do business.
which means businesses have to increase revenue. there are only 3 ways they can do this.
1. let it eat their profit. (not going to happen)
2. Increase prices (can only increase it so much before people won't buy it)
3. Replace staff with more automation or fire people and work less hours.
well there is a 4th option.
hire more people working 20 hours a week which is about the same they would make working 40 hours now.
the next problem you have is called scale in pay.
if the cashier is making 15 an hour then the supervisor who is making a few dollars more is going to want a raise.
the IT guys is going to want a raise everyone is going to want a raise above what the lowest guy on the pole got.
it is called economy of scale. so now you have caused massive inflation as prices have to go up in order to pay for it all.
you also have priced some people out of a job.
I no longer hire no skilled workers. the training costs are just to much to bare.
basically you eliminate jobs for people that need them the most.
you lessen the ability for them to enter the job market.
let me see if i can get what you are saying:
raise the wage to $15.....allow people who are not Citizens, to work legally by work visa........
so according to you every person would be a legal working person in america........and because everyone in america is legal, the businesses of america are only going to hire american citizens?..is that correct?
note to you: if the u.s. gave a work visas to any person who wanted one, people around the world would see a potential of making $15 an hour in america, the u.s. would be overwhelmed with applications for work visas from foreigners who would give up everything to get here, and once here if they did not get hired what would they do?
remember that most of the people coming here would not speak the language, know the laws, have little to no money, no body is going to hire someone who looks and smells like they slept in a dumpster.
they would have to resort to crime or the system would have to care for them, making the tax payer pay the bill.
you have not thought into the details of your idea at all.
And there are non CEOs that can place an order with a food distributor.
Pulling someone to wash the dishes means by definition that that person is no longer doing some other job they were originally slated to do. What you are failing to address is the simple fact that, truly, the dishwasher is more important to the daily operation of a restaurant than an owner, or a CEO, unless part of that person's job description IS to wash dishes, in a pinch, lol.
Ultimately, the JOB of dish washing, when not done, results in a closed restaurant MUCH faster than the JOB of a CEO not done does.
Guy, stores close every year...and restaurants close more than any other. You posted showing how a store was closing and I posted in return showing how it had less to do with minimum wage than with good ol' competition - in other words, I know Seattle better than you do.
unless the boats sink because the water goes over them. tell that to the business owners having to shut down and lose their business that it isn't so destructive.And when it comes to CA, you'll find as time goes on that a rising tide lifts all boats - which is why raising the minimum wage is not nearly so destructive as you seem to think.
Tell you what - why don't you go visit some nations where there's little or no minimum wage and the unions are weak or nonexistent...and after you spend some time there, get back to us and tell us how wonderfully strong their economies are.
ONE store owner does not speak for all store owners...as you would know if you'd actually READ the articles which included statements from several other store owners.
Like I said in the other reply, why don't you go visit some nations where there's little or no minimum wage, where the unions are weak or nonexistent, and after you spend some time there, come back to us and tell us how wonderfully strong their economies are.
I live in a state where the minimum wage is barely half the $15 minimum proposed here, and self-bag & automated check-outs are now prevalent (& growing).
It appears your logic may be flawed as to this specific example, at least.
You seem to be all about concern for business expense an not at all for business income... which also goes up when the floor is raised as customers have more to spend.
But the 'economic shock' is just a euphemism for the harmful economic effect on businesses and labor. As such it has nothing to do with how educated the work force is - all other things being equal assuming that 25 percent of the workforce in LA or Seattle is getting a raise, then some will retain their jobs and some won't. The only difference is that in Seattle the average education of the unhired/laid off will be higher.
The only variables that mitigate impact on a work force is the gap between the minimum and market wage, and the percent of folks in the workforce that earn below the new minimum wage. I don't know what the 'gap' will be in LA, nor the percentage of the LA workforce who earns below that wage, but if they are statistically similar, then the impact on LA will be similar.
In any event, 25 percent of the workforce is a huge number to be affected by a new minimum wage. In 2013 the number of workers affected by the new federal minimum wage was about 2 million. Among those paid by the hour, 1.6 million earned exactly the prevailing federal minimum wage of $7.25 per hour. About 2.0 million had wages below the federal minimum. Together, these 3.6 million workers with wages at or below the federal minimum made up 4.7 percent of all hourly paid workers. THAT is modest.
But it is implausible that a major 50 percent wage increase (from 9.50 to 15 an hour, for example) could be characterized as having "modest impact", especially on the businesses and employees of that "25 percent". One would expect it to have an impact significantly greater than that historically experienced.
We don't need to wait for 'data'; economic factor theory, minimum wage experience, and common sense already tells us what will happen - disemployment, redistribution of jobs shutting out the unskilled, young, etc., reduced schooling-training, and lower job creation for this group. And we know that wage costs tend to redefine the kind of businesses that survive (or thrive). For example, fast food outlets may tend to gain business as less labor efficient diners and small resteraunts tend to be more severely impacted.
You seem to be all about concern for business expense an not at all for business income... which also goes up when the floor is raised as customers have more to spend.
I'd like to see something supporting cause & effect here.not at all. they are not in all places. they are becoming more prevalent as states pass these obscene minimum wage laws.
I don't need waitresses anymore. I just need a few people to run food out and refill drinks.
I don't need cashiers or bag boys. you bag your own stuff.
I'd like to see something supporting cause & effect here.
You seem to be all about concern for business expense an not at all for business income... which also goes up when the floor is raised as customers have more to spend.
...there is also no evidence that they will spend it in that business.
Wow, LA by proclamation has suspended a law of economics! Amazing. I can't wait till they issue another proclamation that sellers must sell below cost because they can always make it up in volume. Venezuelan economic decrees in America, can't wait!
This is a key point. Assuming a business seeks to pass its increased costs to customers by raising its prices, its supply curve shifts to the left (by the amount it has increased its prices). If demand for its products/services remains unchanged, fewer units are sold. Even with the increased price, some loss in revenue occurs.
Increased wages, though, can lead to the demand curve's shifting to the right. As a result, some of the revenue loss is mitigated. However, unless those receiving the wage increase are the firm's only customers and they spend all of their wage increase on that company's products/services, there is some revenue loss.
In actual market conditions, that assumption about customer base and customer spending does not hold. There are additional customers, not all of whom receive wage increases, so the demand curve does not shift sufficiently to the right to fully cover the cost increase. At the same time, there are substitute products/services and those competitors may not necessarily raise their prices. That would allow them to capture market share, further precluding a change in demand for the company's own products/services.
In the case of restaurants, some existing customers may opt to dine elsewhere or eat at home a little more frequently to deal with a price hike. At the same time, some workers who receive higher wages may opt for other leisure activities, meaning that other firms may experience an increase in demand rather than the restaurant. The result is that the restaurant would likely experience some loss in revenue from its price increase unless its competitors matched or exceeded its price increases, the price of substitutes also rose, and customer preferences remained unchanged.
Marginal businesses (those having low profit margins) would face much greater challenges than those with more competitive cost structures (e.g., through economies of scale) or larger profit margins resulting from differentiation. Those businesses would be in a financial position to absorb some share of the cost increases e.g., much less need to raise prices. In doing so, they could experience market share gains, with the increased sales more than offsetting the increased costs associated with wage hikes. As a result, some industry consolidation typically results with marginal businesses closing and the stronger businesses expanding. Such an outcome, of course, does not assure that all those who lose jobs would be hired by the stronger businesses, as the business models of those stronger businesses may not be as labor-intensive as those of the marginal ones.
The end result is that there is at least some economic dislocation from minimum wage increases, and that point shows up in the empirical literature. The magnitude varies from location to location, business-to-business, and industry-to-industry, and there are "winners" and "losers" so to speak.
San Francisco has had a $12 minimum wage for some time now and everything's fine.
https://www.aei.org/publication/the...rovide-a-forecast-of-what-seattle-can-expect/
only if you ignore what is happening.
San Francisco has had a $12 minimum wage for some time now and everything's fine.
The sky is not falling. I can tell you from direct experience that both Oakland AND San Francisco are doing just fine. In fact, I'll turn it around on you; if you can't afford to do business in either city, then go elsewhere. Isn't that what conservatives say about lower wages and the cost of housing? Restaurant prices are still the same, museums and everything else. Housing is going through the roof though, only because that's the market! so apartments and houses have more and more people in them. Nope sorry, if business won't take care of business, then people have to.
Not quite. It's been 12.25 since the first of this month, it was 11.05 at the first of the year, and will reach 15.00 July of 2018. The effects of this increase are still an unknown.
City and County of San Francisco : Minimum Wage Ordinance (MWO)
Well, there are others with direct experience in the areas you mention who have discovered a different reality.
“San Francisco is about to raise minimum wage to the nation’s highest at $15/hour over the next three years – a 43% hike. While we at Comix Experience absolutely support a living wage, this unprecedented increase will put a huge pressure on small businesses like ours. To put it into raw numbers, given our current staffing (and we run very tight), we will soon have to generate an additional $80,000 a year in sales just to meet the rise.”
But that may not last. Hibbs says that the $15-an-hour minimum wage will require a staggering $80,000 in extra revenue annually. “I was appalled!” he says. “My jaw dropped. Eighty-thousand a year! I didn’t know that. I thought we were talking a small amount of money, something I could absorb.”
When Minimum-Wage Hikes Hit a San Francisco Comic-Book Store | National Review Online
How about you're paying to much in lease rates... ever thought about that?
Not all but most yes. The average education of an American citizen faaaaarr outstrips the average education of the Mexican and Central American immigrant that is moving here. And if an employer has to choose an employee where subverting the wage isn't a bonus for that employer... then they'll go for the more educated one more often than not.
People around the world wouldn't come here because they couldn't get hired.
Exactly. So they won't come here because no one will hire them. You are making my point here.
If they don't have a job, they don't get a work visa. If they have no work visa they can't come here or stay here.
Clearly I have. You are spinning in circles trying to fabricate excuses and you are doing nothing but making my point for me and you can't even see it.
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