$15 minimum wage didn’t hurt NYC restaurants
marketwatch.com
marketwatch.com
From my personal experience in nyc, and from talking to neighbors who own restaurants, small and family owned businesses are absolutely hurting. They’ve reduced staff, and owners are making up lost hours themselves. Delivery has been mostly outsourced. The price of everything on the menu has gone up. A number of lower-cost restaurants have closed completely. Whatever reported numbers the author based this upon do not tell a complete story.
I feel like that is more of a side effect of delivery apps getting popular.
But in my opinion if your restaurant cant afford to pay $15 an hour, which still isn't really a livable wage in NYC, then maybe it shouldn't be operating.
It has already gone up to compensate. I still go out and eat for a few dollars more and people get paid better.
Go explore some rent prices in NYC and you will understand why it is necessary.
Remember, making food at home in a nice kitchen is a luxury.
I'm lucky that I'm in a place now where I can make nice food from relatively raw ingredients and much of that stems from my (relative) wealth.
I am from Europe and I always find it confusing to deal with prices in the US. First the prices don't contain the taxes, and then I have to add tipping. The price of a meal shows up on the menu as 9.95 and I end up paying around 15.
At some point, it morphed into passing part of the service staff wage to the customer and pretending this was somehow a good thing. It's so entrenched in culture now people just assume even for crap service you tip. At the end of the day, it really gives management an easy out by putting the customer against the service staff for labor rates while the restaurant decides fixed meal costs.
I almost always tip 20%. I even tip 15% for poor service--I figure that there are likely things going on in the kitchen or with other service staff that I'm not aware of, and that tips are often split between everyone so the my tip for poor service is help the other employees busing tables too. My wife often tips 25% or more.
Why can't restaurants charge us more, pay their staff better, and then the staff could treat us like we were customers of the restaurant and not expecting us to directly compensate them. For the answer, see my last paragraph.
Even for pick up service, say when I place a to-go order for cup of coffee with my Starbucks app and then pick it up from a bin on the counter myself, the app prompts for a tip. At other server-less restaurants, I'm forced to make the choice of tip when I place the order.
So why the culture around tipping here in the US. I believe that it's related to why movie theaters can charge so much for popcorn. From Stanford.edu:
"The findings empirically answer the age-old question of whether it's better to charge more for a primary product (in this case, the movie ticket) or a secondary product (the popcorn). Putting the premium on the "frill" items, it turns out, indeed opens up the possibility for price-sensitive people to see films. That means more customers coming to theaters in general, and a nice profit from those who are willing to fork it over for the Gummy Bears." [1]
In the case of tipping in restaurants, the restaurants are naturally willing to charge more to customers like myself and my wife for the wine+food+service while still making a profit from price sensitive customers that pay less by tipping less for the same wine+food+service.
[1] https://www.gsb.stanford.edu/insights/why-does-movie-popcorn...
Restaurants have long been subsidized by workers stuck in a position where they will work for _any_ wage. As that changes, which is demonstrably a good thing, so will prices rise to match costs.
It’s similar to the way Uber/Lyft prices will need to rise when their subsidies change terms.
Having some one else prepare and serve you food is a luxury, they deserve to be paid for their work.
If you disagree then do the work yourself no one is stopping you.
That seems to indicate that worker pay isn’t really the issue here.
And it’s well known the reason restaurants are closing shop is almost because of outrageous rents.
Quote: "During this period, New York City has seen a strong economic expansion of the restaurant industry, outpacing national growth in employment, annual wages, and the number of both limited- and full-service restaurant establishments."
Perhaps the disagreement you see is because this study focuses on the workers, instead of the business owners. Food service worker wages and employment rates are up relative to overall growth. This article is dispelling the notion that increasing worker wages will lead to worse outcomes for those workers, which is a common objection to increasing the minimum wage.
The minimum wage hike occurred in late 2018.
> Roughly 77 percent of NYC restaurants have slashed employee hours. Thirty-six percent said they had to layoff employees and 90 percent had to increase prices following the minimum wage hike, according to a NYC Hospitality Alliance survey taken just one month after the bill took effect.
> Only about 4 percent of survey respondents indicated that none of the above changes took place in their restaurants.
https://nationalinterest.org/blog/buzz/new-york-city’s-15-mi...
Typically, in a restaurant in Philly or places with similarly lower-than-minimum service wages (which still has the $2.75 or whatever minimum for service workers), you'll be scheduled excessively for hours when the restaurant definitely isn't going to have any business. For example, coming in at 330/4 to start prep for the dinner shift.
When labor costs basically nothing, there's no reason not to overschedule them.
This reduced the amount of time I could spend outside of work learning to program (for example... since it's what I did hah) or others could spend improving their skills for basically no money. It's a huge detriment to the employees. You'd stand around cleaning for some nitpicky manager making 0/hour effectively, doing untipped cleaning and prep work. Your paychecks will be $0 if you get even a modest amount of tips for the night (it's all taxed).
Now restaurants will be more particular about how they schedule employees, and the untipped work actually costs money to have done (if a janitor would have to be paid minimum+ to do it, why should a server do it for $2.75/hr)?
It’s so rare in the $2 an hour states. I worked at Chili’s during the worst parts of the recession and never made a paycheck. Once the economy picked up I went to greener pastures.
I worked in some of the largest (non fast food) groups to single owner restaurants.
The survey you cite seems low quality anecdata compared to actual industry numbers shown in the study being discussed.
As to your first point, no, "the minimum wage hike" did not occur in late 2018. The final increase ($13.50 to $15.00) did indeed take place near the end of this study period, but the overall increase from 2013 to 2018 (from $7.25 in 2013 to $13.50 by late 2018 to $15.00 by end of 2018) reflects a more than doubling of the minimum wage over the study period, so I think it is still a valid reflection of the impact of such a dramatic increase.
[1] https://thenycalliance.org/assets/documents/informationitems...
http://www.centernyc.org/new-york-citys-15-minimum-wage
actual report:
https://static1.squarespace.com/static/53ee4f0be4b015b9c3690...
At least talking about restaurants with tipped employees, the $15/hr includes a $5/hr tip wage! If a server makes enough in tips, the min wage the restaurant pays is only $10/hr. See appendix figure 1, page 22 of the pdf.
Why should I trust the data?
There have been too many times of selective definitions, selective measurements, selective polling, selective measurements... all for reaching an agreed upon conclusion. For example, the CDC used a specific definition of rape (excluding forced penetration, counting it as general sexual assault instead) that excluded the majority of male victims of domestic rape, and then used the now biased results to give high level summary data that was greatly misleading.
If I can't trust the CDC's reporting on an issues as serious as domestic sexual violence, then how can I trust anyone's data? Maybe peer reviewed science in the hard sciences, but social science (including economics) has a similar issue of selective measurements, ignored replication, and biased publishing.
So I guess to start with, what peer review has this undergone? To what extent has it been replicated? What criticisms does it have (and none is a very bad sign)? What is the biases of the group(s) that did the work involved? What is the biases of the group(s) that provided funding?
Yes, it is odd I'm at the point where anecdotes seem to have as much weight as data because anecdotes are understood to be inherently biased whereas data is treated as pure, reliable, and free of bias when it isn't.
Also, please note that someone has already posted a criticism of this data.
The problem is that there is not much verification going on.
The minimum wage might well have led to a worse outcome for those workers that is being masked by some other effect. In theory a minimum wage rise will have no impact (good or bad) if the equilibrium wage is high enough.
It strains credulity to think that New York's restaurant scene is thriving because of the minimum wage. There is clearly something else going on.
And the explanation is easy, trivial even: people who eat at restaurants have more money to do so.
US's overall economic picture is so heavily tilted in favor of the wealthy that literally anything that puts money in the hands of the poor is going to cause an economic boost.
^_~ You might not have researched that. There are studies that suggest net-positive impact, but there are also studies that suggest change for the worse.
> And the explanation is easy, trivial even: people who eat at restaurants have more money to do so.
Minimum wage earners aren't going to be investing in increased production capacity. Best case scenario, something that was going to be consumed by the rich gets consumed by a minimum wage earner instead. Middling case scenario, something that was going to be consumed by the middle class isn't produced. Worst case scenario, less investment and we have a little bit less to go around in 10/20 years.
None of those 3 is catastrophic, but it is very unlikely that minimum wage rises are a big-picture win. The idea that even with a minimum wage increase a poor person could out-compete a member of the middle class for any good or service is optimistic.
There aren't. The literature is surprisingly uniform. I mean, I'm sure you can find something funded by a libertarian thinktank that says otherwise, but nothing by credible researchers doing honest research. Universally and without exception, areas that increase the minimum wage experience economic boosts compared to similar areas that don't.
> Minimum wage earners aren't going to be investing in increased production capacity.
Nobody said they would, or would have to. Restaurant owners do the investing; wage earners do the consuming. Investment follows demand, obviously.
> very unlikely that minimum wage rises are a big-picture win.
Oddly, the literature says the exact opposite.
You seem to think that there's a fixed supply of restaurant meals - only 100 meals, no more, and if Sue wants to eat then Larry doesn't get to. This is... not the case.
Why not look at the actual data and try to address that? It would be a much stronger argument.
This is true in just about every market in the US, including all the ones without minimum wage increases.
> The price of everything on the menu has gone up
You could say this most years about any restaurant and most years you'd be right. The other years, you'd see smaller servings.
> A number of lower-cost restaurants have closed completely
The average person eats at fewer restaurants in their entire life than the number of restaurants that close in NYC in any given year. Anecdotes aren't a data point.
Nonsense means without logic or sense. I made an argument, amounting to that the source has a conflict of interest. You might disagree with it, and it might even not be the case, but it's perfectly logical. Hardly "nonsense". In fact, I find it irrefutable (There is a conflict of interest between the host of study and showing negative results from the smoking bank on businesses. Whether it affected the work is another matter).
It seems that for some reason you expect me to bother debunking it tp provide "deeper criticism", but I have no such intention and have better uses of my time. For me, as I wrote, it is enough of a filter to avoid sources with conflicts of interest. YMMV.
Do you really believe one cannot (or shouldn't) point to a potential conflict of interest, if they don't at the same time give "deeper criticism"?
Note that I didn't even claim that the report is wrong. I literally only wrote who hosts it, and argued that it's "hardly the best source" regarding pro-smoking business interests.
Is that controversial?
Seems to me that a reasonable, limited, and (I'd argue) true, point, was met with hostility and unrelated demands, not to mention the rude "nonsense". Maybe you ought to think about it?
likely because profit = revenue - expenses and expenses (in the form of wages) have gone up more than revenue.
Raising the minimum wage has always been bad for margins. That's why those restaurants (and economists indirectly on their payroll) try to convince us that it's bad for workers too.
Well, if they were hurt with such a raise, perhaps they were not viable businesses and are better closed.
The employees might lose a crappy near-subsistence job, but both the employees and owners can then concentrate their efforts into something better...
Somehow Europe manages to have viable restaurants despite decent minimum wage and not tips-oriented compensation...
Also, not all countries in Europe have a minimum wage - there's no official minimum wage in Norway (although the de facto minimum wage is a lot higher than in the US).
Really? Really? You think the unemployment in Spain and France is because of the minimum wage? They had the minimum wage decades before they had high unemployment (and inversely for the US).
Not to mention unemployment rate doesn't say much, since in the US it includes all kinds of subsistence semi-jobs that would qualify more like colonial deals in other countries -- among other manipulations:
"The answer lies in the measurement of unemployment. If you have not looked for a job in the last four weeks, you are not counted as being unemployed, because you are not counted as being part of the work force. When there are no jobs to be found, job seekers become discouraged and cease looking for jobs. In other words, the 4.1 percent unemployment rate does not count discouraged workers who cannot find jobs. (...) The US Bureau of Labor Statistics has a second measure of unemployment that includes workers who have been discouraged and out of the labor force for less than one year. This rate of unemployment is 8.2 percent, double the 4.1 percent reported rate. (...) The US government no longer tracks unemployment among discouraged workers who have been out of the work force for more than one year. However, John Williams of shadowstats.com continues to estimate this rate and places it at 22 or 23 percent, a far cry from 4.1 percent. In other words, the 4.1 percent unemployment rate does not count the unemployed who do show up in the declining labor force participation rate." [1]
In any case, even with the given "unemployment rate" as the metric, the US is well below Cambodia, Laos, Thailand, Vietnam, Guatemala, and other places, the same way it is, itself, ahead of France. Does that tell you much?
[1] https://www.foreignpolicyjournal.com/2018/03/08/make-believe...
The relatively high unemployment rate in Spain is not related to the minimum wage, but has been linked to their economy being driven mainly by tourism and construction. In fact, the minimum wage in Spain is neither very high nor very low compared to other European countries.
Are you blaming the higher unemployment ratios in those countries on the minimum wage?
The minimum wages per hour in the UK are:
* Apprentices: £3.90
* Under 18: £4.35
* 18 to 20: £6.15
* 21 to 24: £7.70
* 25 and over: £8.21
This isn't exactly the same type of minimum wage most other countries use. This would probably be considered age discrimination in some countries.
In which case you should take a long hard look at what's wrong with it instead of using semi-employment under horrible wages as a band aid...
Back home I went to an equivalent size burger joint that had 6 people on staff that I could see.
With good design and prep a curry restaurant was able to serve the same amount of food with 1/3 the staff. They could double the wage of the staff and still have money left over with better prep and design.
They have a social safety net for all the people who aren't employable at that high wage. That's the difference. You can't massively increase minimum wage without a social safety net to go with it. And if your goal is both you need to start with the safety net, not the minimum wage increase.
My experience in both the UK and Germany was the service is utterly terrible. Some people believe this is a worthy trade-off. I disagree ,and I reject the notion that the only acceptable answer is higher guaranteed wages.
Before the hike, both the employee and owners could do that... yet they didn't. Is the existence of a lower paid job make it harder to create something better? That seems really backward, because there will always be lower paying job.
> Somehow Europe manages to have viable restaurants despite decent minimum wage and not tips-oriented compensation...
Where does Europe has an higher minimum wage than $15 USD? That's excluding tipping which can bring that wage MUCH higher.
You can't really compare viability when the wage is actually lower....
[0] https://en.wikipedia.org/wiki/List_of_European_countries_by_... [1] https://stats.oecd.org/Index.aspx?DataSetCode=RMW
https://nypost.com/2019/09/29/15-minimum-wage-hike-is-hittin...
> Gabriela’s isn’t alone. In a survey of 324 full-service restaurants, the New York City Hospitality Alliance found that 76.5 percent of respondents cut staff hours and 36.3 percent eliminated jobs, including whole layers of middle management, in response to mandated wage increases.
> To cope, restaurateurs like the Milners are moving from large-scale restaurants to small spaces. The Milners have Gabriela’s Taqueria at West 44th Street and Eighth Avenue.
It seems unlikely the original article is telling the full story.
I would say that from my experience with the restaurant industry here, it definitely puts pressure on restauranteurs with marginal businesses. If you have a labor-intensive restaurant with thin margins, it hurts you. However, the restaurants with strong businesses, it's not really affecting.
A far greater impact on the typical restaurant is delivery, which is an increasing percentage of their business with a lower margin for many traditional restaurants, given the cut that Grubhub/Seamless/etc. take.
* "massive layoffs in the restaurant industry are unlikely," but the survey indicated that a large number of restaurants have eliminated jobs or cut hours
* "...because owners need a certain number of staff to operate a full-service kitchen," but at least in the anecdotes from the interview in the NYPost article, restaurant owners are moving to smaller venues that require less staff or moving to "common space" layouts.
Then I moved to Seattle and noticed something entirely different. Same sort of friends - mostly service industry. And this was before the increase to $15/hr, when it was $12/hr. What was starkly different was that our new friends could actually afford to do things. Nice dinners, bars around town where we didn't know the bartenders, movies, trips to Portland and Vancouver. Same jobs, but with money to spend.
And then there's the side that was close to home. My wife was, for the first 2/3 of our relationship, a bartender. In NYC she had her good weeks, pulling in over $2k and her bad weeks, making somewhere around $100 for the week. Hard to say what was "normal" and impossible to predict. It was impossible to plan around her income so I basically just asked her to give me half and it would essentially even out. Then we moved to Seattle, again at $12/hr minimum (she was making $17-$20 I think) and our whole situation was different. We were already doing fine because I make a good living but now I could finally count on her contribution. We were able to save, plan trips, etc in ways we couldn't before because now we had a baseline amount that she would always make. The tips we're just a cherry on top.
And then we moved to Chicago with a shitty mimimum wage for servers and my wife left the industry entirely. She had gotten used to some stability in her income and now with a low minimum wage for servers, there is none. Even at a nice theater gig, she was making less than any job she had in Seattle and again relying upon the whims of her customers rather than the stability of the industry.
There are two ways to raise the minimum market wage. First is minimum wage laws. Second is to increase labor demand or shorten labor supply.
There's clearly a surplus of no-skilled labor in the US, yet we're still importing more of it. Businesses are capitalizing on the market conditions and exploiting the labor surplus, that's why we're seeing the proliferation of so many chain restaurants and and other little-to-no-value businesses.
And yet they are. Should people suffer degradation for it?
Then they work retail jobs for little money. It's their own doing.
For the rest, I'd recommend you spend a half year working in the service industry for half minimum wage plus tips before throwing around phrases like "zero-skill".
There are plenty of zero-skill jobs (or maybe we should say zero-value-skill), and they're going to pay zero-skill job wages. You're free to pretend that's not the case, reality proves otherwise.
Says who ? Why is your tech job supposed to be a bread winner job ?
I'm always bemused by the arguments against minimum wages, they almost always boil down to "My business can't survive unless my employees are living in poverty." which, in reality for a lot of businesses, is "I won't be as profitable if I have to pay a living wage".
If people really believed this, there would be staged minimum wages: Walmart pays $25 minimum while small, struggling restaurants pay $15.
If labor was plentiful and cost $1/hr, we probably wouldn't see nearly as many automated checkout stations or ordering kiosks. If low-skilled labor costs $100/hr, you can bet there's going to be a lot more automation in place.
It seems like most people can grasp the general slope of this demand curve, but seem to be unable (and I think in a lot of cases it's rather unwilling) to reason about whether the curve has a fundamentally different slope/shape in the $8-20/hr range.
The curve that's actually interesting is the expected value to an individual worker of the minimum wage, i.e., the wage multiplied by "how likely am I to be employed fully" (approximately 100% at $1/hour, quite a bit less at $100/hour). Obviously, that curve starts at zero, goes up linearly for a bit, then heads back towards zero in the limit. The question is where "a bit" is and what the argmax is.
No, it isn't. But neither is $0/hour because you don't have a job, and society doesn't get the product that the $1/hour job produces.
Ideally, the system would pay the workers the marginal value of their input for the work done, and the government would "top up" the wages to whatever the living wage is. Everyone wins. Of course, this is hard to measure and apply.
For the vast majority of the world, outside of ultra-expensive first world metropolises, $15 an hour is beyond a comfortable living wage.
That's largely because the basic necessities of living (housing, clothing, food, transportation) are needed in roughly the same amount by all people, and don't scale with class/income/wealth. I live in a 1-bedroom apartment and eat about three meals a day and wear jeans that cost about $50. I have friends who make an order of magnitude more and less than I do. They don't live in a 10-bedroom or 0.1-bedroom place, respectively. They don't eat 30 or 0.3 meals a day, respectively, and their meal themselves don't cost ten times more or less - maybe there's a factor of two or three. The ones who make ten times more than I do might occasionally buy $500 jeans, but even they won't wear it for everyday use, and the ones who make ten times less generally don't buy $5 jeans either.
So, demand is roughly the same from everyone / doesn't scale very much, and the rich can afford to pay quite a bit more. So a market that has rich people in it will have a higher cost of living.
If you want to stop this, the obvious solution is to prevent income inequality (in all its forms - Paul Graham points out, correctly, that this would require us to rethink the very idea of for-profit unicorns - see https://twitter.com/paulg/status/886953410356011008 and https://twitter.com/paulg/status/645343476662427648). Useful tools include extremely high wealth and income taxes. (And, as someone who by any objective standard makes a lot of money, this is why I'm personally in favor of my own marginal tax bracket being 90% or higher - because it means that people who make even more money than I do can't as trivially outbid me for housing, etc.)
This is some real galaxy-brain level thinking. Enforcing a minimum wage is a more efficient market.
I strongly agree with this, but this requires altruistic employers, or unions to accomplish. And this results in jealousy and hostility towards workers in high-margin industries. Workers in general have no idea what their value-add to the company really is.
Some portion of that marginal value must be retained by the business to pay fixed costs of the business and likely financing costs as well.
You just showed us a counter example. The structure of the market changes toward automation or away from it but the businesses are still being started as usual.
Whether this is possible will depend on the cost of capital and state of technology.
So when you push the value of labor to a leave where people cannot afford to live, folks in the US either end up on social services, social security disability, or are incarcerated.
Whenever there are changes to minimum wage, the parade of chamber of commerce types bemoan the horrors that will befall them. Yet somehow burgers get flipped and shelves get stocked.
Some jobs that certain humans perform are not worth very much money to an employer. If the state tells the employer they can’t pay someone that meager a sum, then they simply won’t hire a person to perform just that job. They will hire someone for more money to do that job plus something additional to make it worth hiring the person, or they will find a way to automate out or contract out that portion of the work.
Yes, if a business is not successful in managing around a government wage minimum then they will lose money. Companies are mismanaged all the time. But the general economic theory is based on rational actors, and at the macro level that is the effect that has been observed.
(none intended)
Also, I thought intended servitude was abolished quite a while ago.
There is a reason they don't exist anymore. They were the quickiest to build but did not survive a downturn most closed up shop after the mine was closed.
Towns built with various piblic/private spaces/businesses can survive one part of the economy doing poorly.
Don't pine for a made in China solution until you could actually live one. If you were in that situation (the average Chinese factory worker) now you wouldn't be on the internet writing this you would be working your 7 day 16 hour shift.
Minimum wage is elastic in (your) theory but in practice it appears the majority of companies opt to take the hit in profits rather than fire people.
I saw in my grocery store how, even when they had all available staff working the registers, the longest line would tend to the self checkout. This past summer they doubled the self-serve area.
The interesting thing is even though all full-service registers were in use, the deepest queue in any of them was two waiters. That means shoppers' perception of too long a line has shifted because of self-serve. They were choosing self-serve based on the belief it would be quicker, even if it means standing in the longest line. And that was mostly born out, mostly because the choice also depended on how many items were being purchased. People buying many things went to full-serve, which makes waiting in the longer, which drives people with hand baskets or half-full buggies to the self-serve.
The upshot being stores are installing more self-service checkouts because customers want them. It's not like adding those self-service lanes comes at no cost to the business. In the above grocery store, they had to remove part of the floor they previously used to display products. If they didn't think it was necessary they wouldn't have done away with that selling space.
Also, the lanes they added were in addition to the ~12 basket self checkouts. The new lanes are setup for people pushing carts.
There are some jobs that don't create $15/hour in value. Why is that hard to imagine? Minimum wage dictates that those jobs and the products they provide will not exist. Whether you think that's a net benefit to society is another question.
If the inflation keeps low, total amount of money in the economy is relative constant, thus the cake is not getting much bigger, increasing minimum wage is going to reduce the number of jobs in the sector that is paying previous the minimum wage.
Because those jobs don't disappear when that minimum wage is raised. This has been tested by comparing the job differences across state borders where the minimum wage has been raised on one side but not the other (Dube/Lester/Reich and Card/Krueger).
>Minimum wage dictates that those jobs and the products they provide will not exist
The reality is that that it tends to dictate whether cashflow is funneled into profit margins or wages.
Yeah, input costs have no effect on whether a business can operate at the margin...
>This has been tested...
If we suddenly care about what the economic research says, you should do a search for papers that don't confirm your biases.
How the fact that raising labour costs will reduce the demand for labour is controversial is beyond belief, truly. We have social programs here in Canada that do exactly this: subsidize wages of employees in certain industries because the value that the labour of some people doesn't cover the costs. But hey, what do we know up here...
I guess this mentality comes from the new wave of socialism or comes from people who have never run a business in their lives.
They can but that's obviously a rather different question.
>If we suddenly care about what the economic research says, you should do a search for papers that don't confirm your biases.
I have.
>How the fact that raising labour costs will reduce the demand for labour is controversial is beyond belief
Why is it so hard to believe that demand for minimum waged labor is very inelastic?
How is this a "different question"? It's the question. If there are businesses that can be economically profitable paying $14/hour, but minimum wage rises to $15/hour, those businesses are no longer viable.
We can argue about how many of those businesses there are, but it's merely a fact that they exist at the margin. If you've ever run a small business yourself, you'll understand how small changes in the cost of labour can be painful. I'm not talking about about McDonald's or Walmart here.
Again, we have social programs in my country to alleviate these issues. And they work.
>Why is it so hard to believe that demand for minimum waged labor is very inelastic?
So businesses optimize for the number of people employed, regardless of prevailing wages? I don't buy that, sorry.
Because most businesses make profits so it's perfectly possible to raise input prices without them closing.
>We can argue about how many of those businesses there are
That's what we were doing. The answer was "not a statistically significant amount".
>If you've ever run a small business yourself, you'll understand how small changes in the cost of labour can be painful.
I understand all too well the kind of caterwauling that happens when you do something that could threaten the profits of any business.
>Again, we have social programs in my country to alleviate these issues.
And a historically high % of profit to GDP, so maybe we can give some of those programs a break and take the money from a sector of the economy that is actually flush with cash.
>So businesses optimize for the number of people employed, regardless of prevailing wages?
Absolutely they do, yes!
Another way of looking at this would be: a job in McDonalds is not supposed to be a means of supporting the family of four. It's a side gig for teenagers, not a "full-scale" job.
And wasn't a high school education good enough 50 years ago for most positions? Companies have been able to force the burden of debt for gaining the skills required for a job onto the individual, through exorbitant college fees and unpaid internships, now you're advocating the government should take on the specialization that the private industries require?
As a college student one is barely able to figure out their interests - there's so much push to start planning well in advance, I have no idea how we can expect a tween to commit to a career path.
Nothing, then import twenty million more of them?
The writing of the time speaks of minimum wage as a worker health and safety issue. The first minimum wage laws in the U.S. only applied to women and children. As part of the labor movement, it was often described as a type of collective bargaining. Where it was seen as providing a living wage was not directly at the minimum wage but because of the inflation effect it would have on more skilled wages. That by raising the wage floor, the industries in which a head of household would be employed in would have to raise their pay accordingly to that of a living wage.
So there's truth that minimum wages weren't introduced to be living wages themselves. At the same time that was 100 years ago and we shouldn't be writing laws for today based on the assumptions of the 1900's.
Supposed by whom? McDonalds will suggest it's best their jobs be seen as side gigs for teenagers because that's the explanation that best supports their profit margins. The reality is that families of four will have to be supported by McDonalds wages if no other jobs are available for the individual in question.
Another way of looking at it is: what percentage of citizens do you think society should artificially inhibit from being able to support children? Is it 5%? 20%?
It would make sense if the minimum wage for "teenagers" jobs had kept up with the cost of college tuition, or even the increases in costs of a used car or insurance over the last 10 years.
Some teenagers in impoverished areas are helping their parents make ends meet too; others are emancipated and need a living wage.
- What is the average age of a McDonald's employee?
- The average age of an 'hourly-paid' employee is 20. You might like to know that we employ 120,000 people of all ages, from school leaving age to people in their 80s. We're also one of the biggest providers of first-time jobs in the U.K.
https://www.mcdonalds.com/gb/en-gb/help/faq/18338-what-is-th...
Secondly, why should teenagers have to work in the first place, instead of studying?
Then make the minimum wage for <18s $8/hr, and the minimum wage for >18s (or maybe >22s) $15/hr.
I really like the way Nick Hanauer puts this particular topic. It has a certain logic to it, and appears to be supported by some historic data and trends.
I won't do it justice, but in effect the message is that if my employees can afford my product, it's better for the economy and business. Using restaurants as an example, if all service workers can afford to eat at a restaurant, then restaurants as an industry do better, and the economy grows, and individual businesses do better.
My take on it is, without public policy, such as a minimum wage, it's hard for a business to be an outlier. If one business pays a living wage, but non of the competitors do, that business doesn't necessarily have enough of an advantage to stay ahead of lower priced alternatives. It's only when we create rules through policy, do we create a level field for competitors to operate in, with effects such as increasing the customer base by increasing the purchasing power of a class of citizens.
This of course doesn't mean the rich should be eliminated, or everything should be equal of course, but the attitude that "I won't be as profitable if I have to pay a living wage" isn't necessarily correct, and it's possible for businesses to thrive once the shocks of rapid changes work themselves out. It also depends a great deal on other elements of policy, such as international trade, but those are other topics for other days.
But, the middle-class problem doesn't hold in practice. Raising minimum wage has the effect of bumping other salaries up as employers have to compete with the new minimum.
The corollary being "You're actually worth LESS to me and my business, but the state won't allow it"
Automate whatever can be
https://www.forbes.com/sites/edrensi/2018/07/11/mcdonalds-sa...
Raise the price of goods and services
Outsource to other countries (if cost is cheaper)
For those that aren't aware typical rent in NYC on a corner lot for a restaurant is about 18k per month.
(My point being, it'd be a lot more interesting if you listed some specific reasons you think minimum wage is bad regulation, rather than just protesting it in general terms)
Honest question, if you're still profitable (and I read this as implying you are), why do you need to offset it, or offset it aggressively? Sure, if it becomes extremely tight to not-profitable, that isn't good and would need rectified, but again, your comment doesn't come off like that.
Being profitable is not the same as leading a decent business, and decent quality of life.
Why should we protect employers from this reality while their employees are left to struggle?
I would hope that the business owner is making more than the workers, that is the person taking the risk on the business, and most likely putting in a lot more time/effort to keep it profitable.
If you have costs that you can't offset...
Your workers are your responsibility, they feed their families with the pay check they are provided. (Speaking from a holistic view) If you can't offset costs, that means you possibly can't provide them the same pay check or bonus they've been getting. Essentially, this ends up being one of those good of the many outweighs the good of the few.
It is also unclear to me why we expect an unskilled worker at McDonald's putting fries into a basket to make a "living wage". These jobs are largely for students, retirees and other temporary workers. A high minimum wage isn't the way to end poverty, no taxes under $60K, needs based UBI and other tax incentives are much better options.
The issue is that business that employ unskilled labor will tend to raise prices but rich people don't shop at WalMart; poor people do. So great, they make more but their buying power may have actually gone down. This is the conundrum. Everyone wants $40/hour unskilled manufacturing jobs making throwaway products that they can buy at the dollar store. You can't have it both ways. People really want buying power, not necessarily higher wages.
This is utter nonsense and insulting. Go talk to people who actually work those jobs. These people are adults, just like you are, and they deserve to be treated with dignity. If you don't pay them a living wage, then the government will have to make up the gap. Is that your goal?
I agree that everyone _does_ deserve to live a dignified life and afford all their basic needs, no matter where they work. I'm not sure that the solution is to force employers to pay more than what they get out of you. I don't think I've ever heard of a solution that's entirely convinced me (it seems to me to be a very hard problem), but I'm leaning towards an UBI.
Their customers get to decide that.
The only kind of risk is a capital risk.
Capitalism as religion
I think time is more valuable than money. The whole point of money is to give me the resources to do better things with my time.
The idea that the person who invests money is the only one making an investment (aka taking a risk) is the owner is Capitalism as religion
Given that your competitors are facing the same cost increase you should be able to take this option without losing business.
The reason the rent is so high is because market conditions are allowing money that should be going towards labor to go towards rent. If there aren't 1000k small restaurants paying minimum wage, demand for space goes down, rent goes down, possibly to the point that being a landlord is no longer profitable.
^ This seems to me to be the most brain-dead obvious response to trickle-down economics, and income inequality. Like, More people getting money, means more money flowing. We should tax the rich for this reason alone. Otherwise money stagnates, and doesn't do anything. It's functionally useless. Jeff Bezos has admitted as much saying something to the effect of "I don't know what to do with all of my money".
There are reasonable responses to the above but nothing about these discussions appear brain-dead obvious to me.
If raising the minimum wage has had nothing but positive effects, why not raise it to $20/hr - or some other number calculated for maximum benefit - who knows what that would be?
These are arbitrary numbers, when thinking on an economy-wide scale, because $15/hr does a LOT more for someone in a small town than a big city. The point is to pick something reasonably high, a non-starvation wage, that is also easy to market to the masses.
I don't think economists are huge fans of $15/hr across the board, so $20/hr would probably be abhorrent to them. But economists can be totally wrong and still keep their jobs and respect due to the political use of economics these days.
Of course, we'll have to raise tariffs to keep all the jobs from shifting overseas, but things would level out eventually.
It could be that every single one of these points to the minimum wage hike having small to non-existent effects but the article reads like a brief, not an analysis.
Compared to the Seattle minimum wage study. They had an objective study set up and when they didn’t like the results they got some political hacks to re-analyze the data and release their results beforehand.
http://www.seattleweekly.com/news/seattle-is-getting-an-obje...
> Two weeks. Two studies on minimum wage. Two very different results.
> Last week, a report out of the University of California—Berkeley found “Seattle’s minimum wage ordinance has raised wages for low-paid workers, without negatively affecting employment,” in the words of the Mayor’s Office. That report, produced by the Center on Wage and Employment Dynamics at Berkeley, was picked up far and wide as proof that the doomsday scenarios predicted by skeptics of the plan were failing to materialize.
> And while another study that came out Monday from researchers at the University of Washington doesn’t exactly spell doomsday either, it wasn’t exactly rosy. “UW study finds Seattle’s minimum wage is costing jobs,” read the Seattle Times headline Monday morning. The study found that while wages for low-earners rose by 3 percent since the law went into effect, hours for those workers dropped by 9 percent. The average worker making less than $19 an hour in Seattle has seen a total loss of $125 a month since the law went into effect.
Edit: RickJWagner points out
https://news.ycombinator.com/item?id=21386070
> business owners ... say the extra money comes with an unforeseen cost: higher good prices, fewer working hours and layoffs.
> “Many people working in the restaurant industry wanted to work overtime hours, but due to the increase, many restaurants have cut back or totally eliminated any overtime work,” Andrew Riggie, executive director of the New York City Hospitality Alliance, told Fox News. “There’s only so much consumers are willing to pay for a burger or a bowl of pasta.”
> Roughly 77 percent of NYC restaurants have slashed employee hours. Thirty-six percent said they had to layoff employees and 90 percent had to increase prices following the minimum wage hike, according to a NYC Hospitality Alliance survey taken just one month after the bill took effect.
https://nationalinterest.org/blog/buzz/new-york-city’s-15-mi...
Why is it on the business? This seems like such an old-school, patronizing view of the relationship between a business and its employees. It's a business transaction between two parties - nothing more. If we as a society believe that people shouldn't be earning so little money, then fine - we can tax richer people and give the money to people making less. But that's on everyone in the society, not just the specific business owners that just happen to employ these specific workers.
You technically have to be compensated up to regular minimum wage if tips don't make it but that's a great way to get your hours reduced due to "scheduling changes"
I get good service in restaurants because it's their job, but I can tip 0-10% if the service is beyond what I expect.
The important thing isn't that the pay is guaranteed for staff that doesn't provide good service, what's important is that their pay is guaranteed even if there are no customers. Bringing in customers isn't the job of waiting staff (apart from providing good service) - so their pay should never depend on it.
That is not true. https://en.wikipedia.org/wiki/Gratuity
All else being equal you will get better service from a person that is directly rewarded by offering that better service. Should it work that way? No. Does it? Obviously. And yes we can all think of outliers and yes some culturing differences play into this (Japan has a no tipping culture and on average has excellent service) but I live in Amsterdam and the service on average is absolutely less customer focused here than what I experience in the US. It's worth pointing out I also prefer it that way (not a huge fan of constantly being asked if I need anything and less than genuine niceties but that's a subjective thing)
I don't mean this in a bad way, but are you american? It does seem a very US viewpoint that goodwill etc. don't really exist (or matter? something else?), and that people need concrete incentives to treat others decently.
Sure money's an motivator but perhaps a bigger one is to have a client treat you with decency. Sure money helps but to have a client just make you feel OK instead of crap, that would matter a lot more to most people. A big tip wouldn't negate bad attitude, even if it got staff to pretend to give a damn about you.
Happened to read this yesterday, not tasteful but relevant <https://theoatmeal.com/comics/tipping_tooting>
Edit: To be clear, in my experience I don’t find the service of an average U.S. waiter/waitress better than that of an average waiter/waitress in a country without a tipping culture.
Ah yes, now that you bring it up, I’m definitely not a fan of that either.
Another way tipping can add toxicity is when a guest isn’t aware of the tipping culture / not sure how much to tip, ends up not tipping or undertipping, and in those cases sometimes you’d notice nasty looks or other forms of visible grumpiness. (Checks don’t always include recommended tip amounts.)
They do this because they were instructed by their manager to do this. And the reason that managers want it done, is because they want the customers to finish their food and quickly vacate the table, freeing it up for the next customers. Of course they won’t tell you outright to leave, but they think they can psychologically obtain the same effect just by bugging you and making it hard for you and your fellow diner(s) to have a peaceful, leisurely conversation.
This can happen in Europe, too. At a couple of cafes in my town, as soon as you drink the last drop in your glass, the waitress will rush over and ask if you would like to order anything else. Owners do not like customers who occupy a table for a long time on just one single purchase.
That said, I flipped on this recently. The above utopian perspective simply doesn't align with reality anymore. Higher tips simply do result in on average better service (be it genuine or otherwise) and do incentivise waiters to work for the customer rather than their employer. The latter has value too. Which waiter do you want in a case where the owner of a dodgy establishment is asking their waiters to push the fish that's about to go bad? A waiter living off of tips from (return) customers or the one that just gets wage from that employer?
If you have to tell your employer to cough up the remainder, you're going to suddenly find yourself getting scheduled only an hour or two a week, if at all.
"Zero-hours contracts are NOT permitted in: Austria, Belgium, Czech Republic, Denmark, France, Germany, Hungary, Italy, Poland and Spain. There is an uncertainty as to their validity in Sweden. Generally they are not permitted under Swedish law but may be agreed by collective bargaining." https://www.igloballaw.com/zero-hours-contracts/
Not sure what "Europe" you're talking about, but in my part of Europe, they aren't...
Austria Belgium Czech Rep Estonia France Lithuania Luxemburg
Since 2016, it has been banned in: Hungary Ireland
Zero-hour employment contracts are heavily regulated in: Germany Italy Netherlands Slovakia
So yeah, it is not banned everywhere (or allowed in certain professions only), but in 70% of the EU.
[1]: https://fullfact.org/law/zero-hours-contracts-uk-europe
Further complicating the issue, at 30 hours, many employees become eligible for benefits, so there's a disincentive to increasing an employee past 29 hours/week.
Then, in the restaurant industry, there is a separate, lower minimum wage which assumes the employee makes up the difference in tips. If they don't make up the difference, they can request the employer cover the gap, but the employer will just cut their hours or fire them for being a poor employee.
Hah, good one, but not if you're marginalized. The majority of the states in the US are "right-to-work," which means you can be fired at any time for almost any reason. For the other states, there are varying levels of protection. I can't really speak to what is stipulated in their contracts, but I can tell you the following: if you're working two+ jobs, commuting 2hrs + because you can't afford to live in the city, and have to cook and clean your apartment on top of that, you don't have time to inform the Department of Labor (that's likely not even the right place to call--better spend some more time finding out what is) that you're being exploited.
> Zero-hour contracts are explicitly illegal, even for the self-employed.
By referring to getting scheduled at all, I was indicating you would likely just be outright fired the next time you dropped a glass, were 1 minute late, or any other minor, human-prone error happened.
> but the employer would still have to cough that 15 bucks if they didn't make enough in tips.
This gets you fired. You'll get your requested increased compensation in your next check, and the following week you're reduced to about 5 hours of work total. The following week after that you're let go for poor performance because if you're the only employee asking for tip compensation you're basically admitting you don't get tipped as well as other employees.
Not that I agree earning low tips is synonymous with poor performance, but try convincing a stereotypical crappy manager that.
It's also one of those situations where the people getting screwed over don't really have the means to defend themselves. If $400 in missing wages is a big deal (as it should be), one isn't really able to hire a lawyer to take care of the case for them.
Also people lie. I worked at Burger King as a teen and the manager would lie to everyone, saying if he found out they were applying for other jobs they would be fired. Super illegal, and he has no way of even knowing outside of reference calls. But pretty much every older employee believed him and didn't want to risk homelessness because they tried switching jobs. I remember telling him something along the lines of "Fuck off, I'm 16 and live with my parents"(he thought I was older), but it didn't hit me until years later that he was basically keeping the other employees his prisoners.
Or does the law only give $15 if there aren’t tips?
- An hour of labor would buy ~4.7 gallons of gasoline. If minimum wage had kept pace, it would be $12.32.
- Average home could be bought with ~15k hours of minimum-wage labor (around 8 years). Had minimum wage kept pace, it would be $14.96.
- Average car price was $2,822. Using this as the sole deflator would put an equivalent minimum wage at $20.89 today.
- The average public university tuition + room & board cost $1,143, which could be earned in 714 hours at minimum wage (this could be physically accomplished in a summer of hard work). If minimum wage had kept pace with these fees, it would be $27.28 per hour. (There are not enough clock hours in a summer break, assuming no sleep, to earn enough at minimum wage to pay for a year of the average public university.)
I think that's a common problem when discussing things with one's parents. "You make twice the amount I did at that age!", "Yes, but tuition is twenty times as high!".
Health spending was $355 per person in 1970 ($1,797 if you adjust to 2017 dollars). In 2017 it was $10,735.
The median price of a home in 1970 was $23,600, and last april it was $339,000.
We have less than half the number of pensions in the US than we did then. Contributions to retirement plans have grown by more than 10x and we have a lot less financial security now despite this.
1,000% is a fantasy. We're well above that on many aspects.
I wonder if employment falls as a result of the wage being raised.
I have family that runs a maid service business in San Jose. The minumum wage is much lower than $15 and they are already talking about closing up their business. I assume that if the wage is raised to $15 that the business will surely close. Which is sad because the maid service business is already the only source of employment for the women who work there. They aren't choosing to work there against other options. Its the only flexible hour work they can get, and they are allowed to keep their kids with them when they work ... which other employers don't allow.
I'm sure if given the choice between no work and the maid service work, they'd probably choose the maid service work. But that choice wouldn't be up to them and the employer.
The EITC/UBI is also a way to guarantee a minimum standard of living, and we collectively pay for that through progressive taxes, the burden for which disproportionately falls on the rich.
Employees provide services not goods, so the cost of services goes up, but the cost of goods such as food stays the same.
The rich disproportionately use services over the poor who cant afford to pay some one else and just do the work themselves.
Example:
The rich go to restaurants while the poor cook at home.
You’re right that a lot of employees provide services, but a lot of them work at factories or stores that produce/sell goods also (retail).
Poor people purchase from this value chain, too.
Markets are remarkably good at minimizing the input required to produce a unit output. The reason why labor costs have fallen so dramatically is because markets have minimized the input cost of labor. This is good for ALL consumers. However at the end of the day, labor’s gotta eat. This is where welfare comes in.
True but most products are not produced in America, the products that are made in America, are made by robots, the cost of labor on goods in America is just not significant.
In contrast to services which are all done in America by American people this is huge.
> This is good for ALL consumers. However at the end of the day, labor’s gotta eat. This is where welfare comes in.
You got your classes mixed up the working class are the consumers not the rich. A rise in wages for workers means consumers have more money to spend which is good for consumers and business.
> In contrast to services which are all done in America by American people this is huge.
This is becoming less true, as we speak. As standards of living in developing countries increase, the cost of labor also increases, until it more or less matches minimum wage in developed countries[1][2].
> You got your classes mixed up the working class are the consumers not the rich. A rise in wages for workers means consumers have more money to spend which is good for consumers and business.
A rise in CASH for workers means consumers have more money to spend. The disagreement here is in how we deliver that cash to the worker. It's definitely beneficial for workers to have more money, but forcing businesses to pay them inflated wages (i.e. greater than their market worth) simply causes the cost of that business's output to be inflated by a commensurate amount. You're correct that it gives workers more spending power, but it also distorts the market downstream by increasing the price of their output for people that buy the good/service that the worker in question uses their labor to produce.
In contrast, providing workers with some minimum cash (let's say, whatever the desired minimum wage is multiplied by 8 hours of work minus their existing daily wage), will provide workers with the same amount of cash on hand as a minimum wage, which as you say is "good for consumers and business", while still keeping the cost of their own output low, and therefore, accessible to consumers (rich, middle class, and poor).
Today, using minimum wage as a way to ensure workers enjoy a minimum standard of living just so happens to distort the market that impacts the rich in America slightly more than the poor, but that's only temporary. In the long run, it has the same effect of increasing prices across the board. Using welfare/UBI/EITC (paid for by the rich) in lieu of minimum wage achieves the same goal, while avoding the market distortion caused by inflated wage prices, while ensuring that goods/services are cheap for the middle class and the poor, regardless of the state of the labor market in developing/developed countries.
[1] https://tradingeconomics.com/china/wages-in-manufacturing
[2] https://www.cnbc.com/2017/02/27/chinese-wages-rise-made-in-c...
Many have stated they regretted working with food delivery businesses and would have preferred just serving customers in house.
Restaurants are notoriously low margin and owner-operator endeavors. So more often than not, the first person that doesn't get paid is the owner, who sinks hour after hour into the place to try and keep the doors open. But eventually the owner has to pay their own mortgage, car payment, etc.
So while profit may not be the ultimate objective of every human activity, it is essential if you want to stay in business. And if you don't? Your workers find out the hard way that the real minimum wage is $0.
e.g. 7.25 -> 8.25 -> 10.25 -> 13.25
Over a few years to allow businesses to adjust their margins gradually. Increasing the income at the bottom will increase spending, which should be good for businesses like these that are employing low skill/pay workers.
On the other hand, an extra $1.20 on a $3.50 burger might dissuade large numbers of customers from dining out. A $12.00 burger is pretty high end in most parts of the country.
That's the whole point of the article. The experiment has been performed and they are analyzing the results. The results are that people accept a 10% increase and/or that the buying power of increased wages at the bottom expanded the market enough to make up for your hypothetical lost income.
1- You can immediately tell who has experience running a non-trivial business. Let's define that as a business that actually makes physical products (not private labeling something someone else makes) and has, say, more than ten employees. People who are not exposed to business mathematics say things that cause any business owner to immediately go for a forehead slap and jaw drop.
2- Nobody ever fires-up Excel to do some math before opening their mouths.
3- The intense effects of an educational system that has indoctrinated people with the most ridiculous of ideas. These include such things as "corporate greed" and business owners wanting to build a business on top of people "not earning a living wage". There's more. Lots of truly ridiculous ideas.
If I haven't lost you, read-on, you might just learn something.
I was going to put together a quick spreadsheet in an attempt to educate those who might be interested in actually thinking through the problem and, as part of the process, learning something. However, I fear the effort will have few takers. It's easier for people to stay with comfortable preconceived notions than to be exposed to mathematical facts that destroy what they've been told. Most people are not interested in learning they are wrong.
Instead I found this [0]. It's a decent article which exposes the numbers for starting and running a basic restaurant. Anyone with non-trivial business experience has gone through this kind of math many times. After a while you understand the business equation viscerally and know what such things as government-forced costs --be it wages, regulatory or other costs-- can do to a business.
Most businesses do not run with huge lavish profit margins. This is certainly true of most restaurants. Competition is such that profits tend to find equilibrium somewhere above zero but certainly not very high above zero, in most cases likely not double-digits. Which means most businesses operate at a very delicate balance on the very edge of financial insolvency if they are not run carefully.
Anyhow, if you care to learn and not say things that truly make absolutely no sense whatsoever in the context of the reality, versus the fantasy, of running a business, please read this article, do the math and then do a little more research.
As an exercise, take this article and increase your labor costs in steps between 25% and 50%. In this exercise, please explain how you are going to stay in business, what changes you would implement and how these will affect your product, ability to compete with others, ability to survive economic downturns or additional competition (you don't get the entire market to yourself) and long term viability of your business.
Forced, artificially high minimum wage causes damage to the very people who actually support politicians who push for these populist measures in order to get their votes. It's a very destructive force that actually hurts a lot of people rather than help them. The politicians, ironically, actually benefit from pushing for these populist ideas because voters will never do the math and understand they are slitting their own throats. The politician wins elections and continues to make millions atop a very well protected hill while truly doing nothing, or worse, causing harm, to the people they are supposed to help.
Don't believe me? OK, do the same exercise suggested above and DOUBLE labor costs. If a high minimum wage is so good, well, why not go to $30 per hour then?
Another important point: Forcing a hike in minimum wage shifts the entire cost of labor upwards. Why? The person who was making $15 per hour when minimum wage was $10 will demand a raise when the $10 worker starts making $15. So, the $15 worker moves up to $20, the $20 to $25 and so on. It's a chain reaction up the labor cost scale with pernicious effect.
For a deeper dive into restaurant labor costs, read [1]. You'll be surprised to learn how tight the range of labor costs is for different types of operations in order for a restaurant to remain viable.
https://www.padmapper.com/apartments/new-york-ny/l-38104265/...
If increases wages increases revenue, why have all of these restaurant owners been damaging their business by paying lower wages?
Because they want that money for them selves?
Ask a dumb question get a dumb answer.
Even when it doesn't noticeably hurt, a minimum wage doesn't actually make anything better. It doesn't improve poverty rates. It doesn't improve employment rates. It doesn't lift anybody out of poverty. It has no beneficial, measurable side-effect. And there is plenty of economic research that shows it hurts more than it helps. Just like rent control, it is popular with progressives because it 'feels' right.
>In fact, some people — including those from the Economic Policy Institute — have posited that a minimum-wage increase will actually lead to an increase in employment because of the effects of giving low-wage workers a raise. Other advantages to restaurants may include lower turnover rates and better job performance.
Why are we still speculating about this??? We've been studying the impact of minimum wage laws for decades. This is just hopeful thinking by progressives activists.
Meanwhile there are entire diners in America that make $30/hr. They do just fine because they pay $200/mo in rent. A minimum wage of $15/hr would be silly.
"Roughly 77 percent of NYC restaurants have slashed employee hours. Thirty-six percent said they had to layoff employees and 90 percent had to increase prices following the minimum wage hike"
https://nationalinterest.org/blog/buzz/new-york-city%E2%80%9...
A few years ago at my old job I finally got a big raise from $14 to $24/hour. Then almost immediately reduced to part-time from full-time but the same duties. I toughed it out hoping for a reversal but one day I was abruptly laid off without notice. Then three people were hired to do my job.
It seems business have no realistic view of employees. You're merely an "FT" or "PT" in manager parlance.
Working minimum wage is more difficult than it was years ago due to it being stuck at a specific rate for decades. But hours worked is just as important and the trend to cut everyone to part-time was an even bigger disaster.
Even the Fight for Fifteen group has been fighting for $15 for many years. They should be adjusting the rate for inflation, by now it should probably be $17.
This means the same job could have been performed in less amount of time? If so, why not employers are incentivised to increase the efficiency and raise the pay at the same time?
This place was notorious for reducing employee benefits to nothing. Employee reviews but the employee is at max pay rate so no bonus but still reviewed. No holiday parties. Overtime change from over 8 hours to only over 40. And on and on.
It was just a terribly run organization and I'm glad I'm out of it. There was a big exodus of long term staff in a short period of time just after I was laid off.
https://en.wikipedia.org/wiki/The_National_Interest
I totally forgot about this scandal/conspiracy against the US until looking up the source. The leadership is also almost entirely famous neocons you've seen on trial.
Besides that, there are plenty of problems with the isolated statistics presented in the article, as they are worded to be deceptive.