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Comment by hsod | Hacker News Reader

A beloved cafe closed in Seattle recently for the same reason (no crowdfunding campaign was forthcoming).

I still support raising the minimum wage, but we shouldn't expect to have our cake and eat it too. Making labor more expensive will make goods and services more expensive, and it will make some businesses non-viable.

Now that I'm thinking about it, is the minimum wage a regressive tax in disguise? In low margin businesses, one would expect the additional labor costs to be passed along to the consumer in the form of higher prices.

Therefore, the extent to which a minimum wage raises your "tax" burden is proportional to the % of your income spent on low-margin consumer goods and services.

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One of the issues Borderlands talked about when they first started the sponsorship program was that each book they sold had the price printed on the book cover (printed by the publisher), so they were unable to raise prices when wages increased. I suppose you could just put a new pricetag over the old one but it's so easy for someone to open up amazon's app and check prices online that it wouldn't make much difference.

Amazon already sells books for below the cover price (often, at least) so it's already the case that people buy from brick and mortar because of something other than price.

This is one of the major issues with selling books, I hear. There's very little profit margin on the books themselves, so most stores have to make up the difference with higher-margin items like a coffee shop, swag, etc.

On the bright side, there's little risk involved, since you're generally allowed to ship back any unsold books (or just their covers) for a full refund.

It's more of an example of bracket creep isn't it?

And I would say increasing minimum wage having a large impact on businesses is more of an example of unmanageable wealth distribution. Minimum wage should be a safety net to make sure people are paid at least enough to survive. If everyone is already lying in that net then yeah, it gets a lot harder to raise it.

I would think that when most of the wealth increase over the last 20 years has been for the very rich, then spending is down and margins get thinner for the (growing) very poor.

So not only do you have a large proportion of minimum wage earners, you also have less disposable income. Raising the minimum wage is sort of a mini-stimulus package for people, but also increases the burden on struggling businesses. I guess they don't balance out as easy in some businesses.

"is the minimum wage a regressive tax in disguise"

Anything that increases prices could be seen as that, but I don't think it is that bad if you cut down to the necessities and you end up having a job at the higher minimum. This is just my intuition though.

Worst case: prices go up and you are unemployed.

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