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Comment by egypturnash | Hacker News Reader

So I’m just saying, over here in the other Washington, Seattle has raised the minimum wage. And after a bunch of whining about how it was going to ruin their margins, restaurants have raised their prices, and everything continues the same as before. Maybe DC restaurants could, I dunno, raise their prices a little and pay their staff enough to get by? Nah. It’ll never work.

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Did they raise the price enough so I don't have to guess what amount they are underpaying and adding it to that line that says "tip" on the bill?

WA employers cannot count tips as wages [1] so regardless of tip amount service workers will make the minimum wage.

[1] https://www.lni.wa.gov/WorkplaceRights/Wages/Minimum/

How do you think the folks for whom dining represents a significant expense feel about these raised prices?

Everyone talks about the minimum wage’s effects (or not) on employment, but I’d be way more concerned with its (potentially very regressive) effects on prices.

We talk a lot on HN about how easy it is to fool yourself into thinking that you have a real business. You might have the coolest product ever but if people aren't willing to pay your cost to produce then it doesn't matter - you don't have a business.

Restaurants are exactly the same. You might make the best food in the world but if no one is willing to pay the price it costs then it doesn't matter - you don't have a real business.

Minimum wage is an attempt to force the externalities of a business underpaying its employees back on to the business. The whole point is to push prices up so that the business is responsible for itself - otherwise it's easy to pay people a very low wage and let society make up the gap so that you don't have people living in abject poverty (this is what Walmart is accused of for example).

Minimum wage is an attempt to force the externalities of a business underpaying its employees back on to the business.

I hear this argument a lot but it doesn't make any sense to me. Costco and Walmart both move into town. Walmart hires 100 formerly unemployed residents at $10/hour. Costco runs a less labor-intensive operation and hires 20 at $20/hour. For the sake of argument, they both sell the same amount of goods. Why is Walmart being "subsidized" but Costco is not? Walmart's paying 2.5X the wages to folks who were previously relying 100% on the taxpayer.

It's not the case that people employed by Walmart were previously relying 100% on the taxpayer. Many of them may have been working for smaller retail outfits which treated their workers decently and went out of business because they couldn't compete on price with Walmart.

The point of my example (which has some mapping to the real world) is that Costco does successfully compete with Walmart and pays “decent” wages, but to a lot fewer people. Costco has put smaller retail outlets out of business, too.

Costco doesn't compete with Walmart. It is much more selective about where it places stores (each store needs to serve many more people) and it stocks a smaller number of mostly higher revenue items.

The claim is that employees working for the wages Walmart pays still collect government benefits.

Whether to impute those benefits to the store is a fair question, but the idea is that Walmart employees are literally collecting more government payments than the Costco employees.

I think they can learn how to cook. 2 people can eat pretty darn well for $100 spent on groceries in a week most anywhere in the US. That covers, what, 2 or 3 dinners out at a sit down place? Maybe 5 at a fast casual place? And the people eating out still need breakfast and lunch.

Dining out is not a necessity. Unless you're one of the rare people without a kitchen that somebody will inevitably protest about. In which case you'd better be paying a lot less than market rate for housing with a kitchen to cover the totally foreseeable expense of eating out all the time.

>I think they can learn how to cook

And all the people that used to eat out learn how to cook and stop eating out. The restaurants go out of business and the workers with higher minimum wage are fired.

Good thinking

Per the article, demand (i.e. restaurant customers) is on the verge of exceeding supply (food cooked by restaurant workers) now because there aren't enough restaurant workers.

At the risk of stating the obvious, not all customers are equally price-sensitive. The goal would be to hit a happy equilibrium by removing enough of the most price-sensitive customers that supply and demand end up at a happy equilibrium.

> And all the people that used to eat out learn how to cook and stop eating out. The restaurants go out of business and the workers with higher minimum wage are fired.

You're arguing that people should not bother learning how to prepare food for themselves in order to sustain the restaurant industry.

I'm arguing that specialization benefits everyone and that your misguided attempt at helping these workers will actually hurt them.

Reverting dining out into a luxury for the poor is the definition of regressive policymaking.

And without a $15 minimum wage, restaurants cheaper than $10 sandwich “fast casual” places are much more viable.

Finally, I’d expect the poor disproportionately depend on services provided by minimum wage workers across a range of sectors.

By the way, this is one of the arguments for Universal Basic Income. If everyone starts with a base of having enough money to live a simple but dignified life then you can do things like eliminate the minimum wage. You eliminate that race to the bottom because you put the power back in the hands of the workers and remove the distortion of "people need basic food & shelter" from the labor market. Now you've got to pay someone enough to make them want to work at McDonald's (or improve working conditions or whatever).

I would expect that the price of cheap fast food would go up a lot because now you're going to have to pay someone enough to want to do that job (versus now where you can take advantage of the fact that for many people it's a either a McJob or living on the streets). I would expect the prices of more luxury goods, where workers are already paid a good wage and have good working conditions, to be less affected, as those jobs are already subject to fewer distortions in the labor market.

It's almost as if dinning out has somehow been subsidized by the struggle of minimum wage workers.

I mean eating out is a luxury, right? Better to be paid a decent wage and have the option to avoid the luxury than not to have the money in the first place.

I live in Seattle. Prices for food have indeed gone up a lot. There are clearly still a lot of people here who can afford it, based on how very busy the (good) restaurants still are.

Falls Church, Virginia, has one of the highest median household incomes in the United States:

https://www.washingtonpost.com/blogs/govbeat/wp/2013/12/12/t... https://wtop.com/loudoun-county/2017/07/loudoun-dubbed-riche...

Hopefully they feel like they should be cooking at home more often instead of eating out.

> How do you think the folks for whom dining represents a significant expense feel about these raised prices?

I'm sure they are suffering horribly. Maybe you can start a Kickstarter or gofundme for them.

But without raising it, the people making minimum wage are struggling to afford the costs of living as is.

Most people who make minimum wage are members of multi-income households (like teenagers or spouses working part-time), and don't have any problem with costs of living.

And for those who are not members of multi-income households? Cause from what I can see, only about half of the people making minimum wage (according to BLS statistics) are teenagers. That still leaves a lot of people who do rely on the minimum wage, and are thus not able to afford the rising costs of living.

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