Comment by xt00 | Hacker News Reader

Comment by xt00 | Hacker News Reader

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Yea these articles with zero evidence are basically pointless. The unemployment rate being low in most places that are desirable to live such as Seattle generally are short term problems. So give it a couple of years and there will be enough workers. Many people are moving to Seattle now from many other places. The high minimum wage generally won't end up being a huge deal except it just becomes a higher tax on everybody. Basically $7 sandwiches become $8 sandwiches and so on. Also most places that have 2 workers like an espresso stand the manager will see if he can get away with only 1 worker. So you waste more time buying a latte. So the more useful article would be something like, "restaurant owner sees 10% business increase and after surveying his customers finds that nearly all of the new people at the restaurant make minimum wage of $15, also his costs are now higher so his net result in profits is about 5% improvement year over year.. This situation has been anecdotally confirmed by about 15 other restaurants in the area.. All the while the population in that particular area only increased by 2%." I guess journalists are not economists or engineers.. :-/

The purpose of high minimal wage is to decrease inequality. It cannot become equal tax on everybody, unless you inject money into the system. The ones who are at very bottom would gain a lot, a lot more than increase in the cost of a latte. For example, for an apartment to become less affordable for a software developer, it has to become more affordable to a janitor. I am not even talking about the goods from Targets and Walmarts, which cost exactly same across the country.

So what I'm not clear on, and I wish people would provide some real example would be this issue of how businesses that currently employ people working at minimum wage actually are affected -- do they pass on the cost increase to their customers, hire less people, accept less profits, or are the increases in cost offset by more sales. I personally don't like the idea of a minimum wage being set by random politicians. So if $15 is good and it helps the economy, then why now $25/hour? I mean sure let's raise it or whatever so their is some base level of the ability for people to live, but where is the point of diminishing returns, I would actually like to know rather than just be like, $15/hr, yay!! Then 3 years later, "based upon the great success of $15/hr, lets go to $18/hr!!" its like uh ok what is the background reason for stating that the economy can absorb it other than saying "I dunno, I want my boss to pay me $18/hr, so lets vote yes!" Of course if he hires less people because of that (and I'm not fearmongering, I'm just saying lets say that actually happens), then that's not good right?

Oakland passed a new minimum wage ordinance last year (the year before maybe?) and a lot of the small local businesses around me raised their prices. They also put cards on their menus explaining the increases. It's possible they stopped hiring. It's possible the let go of staff. But most of them definitely raised their prices a bit.

But the thing is, these places aren't the places that people living on minimum wage frequent. They are yuppie/hipster magnets with overpriced lattes and fancy salads and fancy burgers, etc.

The corner store didn't raise prices. The grocery store didn't raise prices. The gas station didn't raise prices. Landlords didn't raise prices.

My impression is that the direct financial impact of raising the minimum wage in the form of increased prices only impacts people who have more disposable income.

Now, there are other impacts (like lost jobs, lower hiring, etc) but the consensus from economic studies seems to be that those effects aren't statistically significant.

So, minimum wage earners have more to spend on necessities and those of us fortunate enough to have more disposable income have to spend $2-$3 more for a meal or $0.50 more for a coffee.

> Yea these articles with zero evidence are basically pointless.

> Basically $7 sandwiches become $8 sandwiches and so on

Do you have non-zero evidence for this prediction?

> This situation has been anecdotally confirmed by about 15 other restaurants in the area

I guess you have anecdotal evidence for this situation. Is it somewhere we can access it?

Actually maybe it didn't come across clearly, but I was saying it would be ideal if the article actually gave some kind of useful information such as the fake example that I provided. You are actually asking me the exact question I wish to ask of the person who wrote the original article.. basically can they please provide a real example versus the whole "the unemployment rate is low and the minimum wage is high!" and no mention of the obvious correlation vs. causation argument.

There's actually a great way to track that - look at the cost of a Chipotle burrito in different cities. The price for a burrito in San Francisco went up with perfect correlation when the wage increased in San Francisco. The reason it's particularly useful for Chipotle is because they are entirely corporate owned, which means there are no franchise owners distorting the data (or rather, franchises are independently owned and many are not well run, and restaurants with lower prices would be used as data points to justify the wage increase when that restaurant may in fact be failing).

Not too long ago it was part of my job to analyze the minimum wage hike and how it will effect fast food restaurants. Like most things in the real world, the nitty gritty details are complicated. The gist of it is that fast food restaurants in the United States are going to become even less profitable as the minimum wage increases. And in an industry where it's considered great if your margins are 5%, that can be pretty bad.

Interesting! I like this method.

Edit: Can we see the results of your analysis anywhere? That would be super interesting.

Don't minimum wage people purchase slot of fast food? Wouldn't a minimum wage hike lead to increased sales to offset the hike?

I repair alot of I. T. At many major chains so I visit them regulary. They seem pretty efficient and an extra $20 an hour of labor costs doesn't seem like a game changer. Especially if it reduces turn over or improves employee moral. Would definitely hurt something like a stake n shake.. 24/7 operation and tons of kids.

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