[1] https://www.upjohn.org/research-highlights/does-increasing-m...
Let's just use raw analysis.
If a restaurant's current labor budget is 30% of revenue, and the restaurant's profit margin is 3% and the cost of labor increases by 10%, how much profit is the restaurant making now? If the restaurant owner wanted to maintain a 3% profit margin in such a scenario, how could they do it?
And his salary is only $1.2M, the rest is performance incentives and so forth.
num_staff = 15
curr_staff_pay = 7
curr_staff_costs = num_staff*curr_staff_pay
curr_labour_budget_pc_revenue = .3
curr_staff_costs = num_staff*curr_staff_pay
print(f"Current Staff Costs: {curr_staff_costs}")
curr_revenue = (curr_staff_costs/curr_labour_budget_pc_revenue)
prof_pc = .03
curr_profit = round(((curr_revenue/100)*prof_pc), 2)
print(f"Current Revenue: {curr_revenue}")
print(f"Current Profit ({prof_pc}%): {curr_profit}")
other_costs = curr_revenue - (curr_staff_costs+curr_profit)
print(f"Other Costs: {other_costs}")
#%%
increase = .1
new_staff_pay = curr_staff_pay+(curr_staff_pay*increase)
new_staff_costs = num_staff*new_staff_pay
print(f"New Staff pay is: {new_staff_pay}")
print(f"New Staff Costs are: {new_staff_costs}")
new_total_costs = other_costs+new_staff_costs
print(f"New_total_costs: {new_total_costs}")
increase = new_total_costs-curr_revenue
print(f"% increase = {(increase/curr_revenue)*100}")