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Min Wage Increase Doesn't Impact Employement


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1 hour ago, Incredulity said:

jesus fucking christ

Fortunately in America, at least so far, there is the free market.

Any Tom, Dick or Harry can start up a burger joint and bust up the lock step cartel like pricing and, "obscene corporate profits" of Big Burger.  

But I think the operational efficiencies discussed, that could be used to drive down costs, only work at scale. So you opening a boutique burger joint is a pipe dream myth of being able to undercut Wendy's 4 for $4.

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15 minutes ago, BeardIP said:

But I think the operational efficiencies discussed, that could be used to drive down costs, only work at scale. So you opening a boutique burger joint is a pipe dream myth of being able to undercut Wendy's 4 for $4.

Which is it?

Gigantic operational efficiencies so effective no one can compete

or

Cartel price gougers with monopolistic control of the market

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54 minutes ago, Incredulity said:

Which is it?

Gigantic operational efficiencies so effective no one can compete

or

Cartel price gougers with monopolistic control of the market

I don't think you are taking my point, which is probably my fault for not being comprehensive.

What I'm saying is that a minimum wage increase for fast food workers will impact the end cost to the consumer, because the operator will try and pass the maximum they can to the consumer up to the limit of not driving away revenue. It would be foolish for an operator not to try and pass the costs on where they could up to the point of negatively affecting their maximal output of revenue. That's an academic sounding sentence because it's theory and easy to look back at with math once you've got sufficient data to analyze, but in the real time, it will be messier.

Specific to food (as opposed to a minimum wage worker in retail), I think an added dynamic is the scarcity and necessity of fast foods which I characterized earlier as being in the "food desert" as minimum wage fast food is the anchor of the diet for a lot of the poor populations in America. In these areas and instances, I don't believe these legacy operators, most of which are corporations with scale (e.g. the McDonald's & Family Dollar of the world) will explicitly collude and price fix. But I do think that if they act in, more or less, unison to raise prices in the service of what I described in this first paragraph, you will see the behavior of a cartel that inhibits supply and demand, by which I mean higher prices at X means lower demand for X and increased demand at Y whose prices remained the same by absorbing the extra costs rather than passing them through at the optimal rate. 

To the argument of, "well any Tom, Dick and/or Harry can open up a boutique burger joint, price their food at or just above costs, and funnel the demand and make money on the volume", I think that's TBD.

Whether it's $7 an hour or $15 an hour, you nor I know the true costs to start, regulate, own and operate a burger joint and what price points are needed to maintain an acceptable margin and profits.

It's a possibility that undercutting the large, scaled operators of the world (aforementioned McDonald's & Family Dollar as examples), would not be financially feasible. This is because there are gigantic operational efficiencies at scale, from raw material costs to process optimization to financial engineering, that can allow a business to run on slimmer margins and yet still hit an overall profit target and earnings per share that Jim Bob's Juicy Burger's & More can't compete with.

So to your question of "which is it? This or That?" Maybe a little of both. Definitely a swath of other considerations as well.

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11 minutes ago, BeardIP said:

Whether it's $7 an hour or $15 an hour, you nor I know the true costs to start, regulate, own and operate a burger joint and what price points are needed to maintain an acceptable margin and profits.

Sure we do.  Fast food businesses are one of the most studied and known business models in the US.  Plus there are dozens of franchisors trying to find business operators to run their fast food "better mouse trap".  Its pretty much all quantified and known.

Nothing stopping an entrepreneurial person from raising capital and competing very successfully with the mega-chains or regionals.  Nothing except money, time, guts, vision, execution, luck.....

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  • 4 weeks later...
Quote

When Gov. Gavin Newsom signed a law that set a first-in-the-nation minimum wage for healthcare workers, three words in a bill analysis foretold potential concerns about its cost: “Fiscal impact unknown.”

Now, three weeks after Newsom signed SB 525 into law — giving medical employees at least $25 an hour, including support staff such as cleaners and security guards — his administration has an estimated price tag: $4 billion in the 2024-25 fiscal year alone.

Half of that will come directly from the state’s general fund, while the other half will be paid for by federal funds designated for providers of Medi-Cal, California’s Medicaid program, according to Newsom’s Department of Finance.

SB 525 is one of the most expensive laws California has seen in years and comes as the state faces a $14-billion budget deficit that could grow larger if revenue projections continue to fall short. ...

https://www.latimes.com/california/story/2023-11-04/healthcare-minimum-wage-expected-to-cost-4-billion-in-first-year-as-california-budget-deficit-looms#_=_

California is going all in on the river.  Time will tell what they have in the hole.

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  • 3 weeks later...
6 minutes ago, Incredulity said:

Not remotely related to what I said.

"Unringing that bell" means no longer subsidizing their underpayment of workers, which was artificially propping up many firms business model and ability to price out competitors to set up a profit taking maneuver. Which would ultimately mean slimmer profit margins and losing the guaranteed "line go up"

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10 minutes ago, Captainant said:

 losing the guaranteed "line go up"

Business is dynamic.  The line doesn’t always go up.  Businesses, even the large corporations, fail all the time.  
 

The policy of the Federal Government is a market condition all companies have to react to.  Sam Walton didn’t bribe LBJ to implement Great Society social programs.  

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29 minutes ago, DixonHur said:

No employee should earn more than X times the lowest paid FTE.

Smash cut to the rise of contractors as the primary workforce. Amazon's entire delivery system is all 3rd party providers. That work exclusively for them and use their equipment and follow their marching orders.

Totally not FTEs though 

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5 hours ago, DixonHur said:

Fuck minimum wage.  It's time to implement a maximum wage.

No employee should earn more than X times the lowest paid FTE.

This is actually going to be close to a reality but it's not a good thing. With AI, you are going to be able to have billion and multibillion dollar companies with 1/100th of the FTE headcount. The $1m/per employee companies are going to proliferate to the norm, potentially, which is going to suck for 80% of us who are average to above average in skillsets.

Edited by BeardIP
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On 11/26/2023 at 7:00 PM, Captainant said:

Smash cut to the rise of contractors as the primary workforce. Amazon's entire delivery system is all 3rd party providers. That work exclusively for them and use their equipment and follow their marching orders.

Totally not FTEs though 

There should be tax disadvantages to having contractors vs FTEs with benefits.  Maybe something like if more than X% of your workforce is contractors, you can't write off those costs as business expenses.

 

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  • 4 weeks later...

Crossposting from the daily Biden thread as there may be more focused conversation.

Almost 10 million workers in 22 states will get raises on January 1. See where wages are rising.

https://www.cbsnews.com/amp/news/minimum-wage-increase-january-1-2024-see-the-states/

  • Alaska: $11.73
  • Arizona: $14.35
  • California: $16
  • Colorado: $14.42
  • Connecticut: $15.69
  • Delaware: $13.25
  • Hawaii: $14
  • Illinois: $14
  • Maine: $14.15
  • Maryland: $15
  • Michigan: $10.33
  • Minnesota: $10.85
  • Missouri: $12.30
  • Montana: $10.30
  • Nebraska: $12
  • New Jersey: $15.13
  • New York: $16
  • Ohio: $10.45
  • Rhode Island: $14
  • South Dakota: $11.20
  • Vermont: $13.67
  • Washington: $16.28 

Denver will have a minimum wage in the $18 range and lots of California cities will be above $16

 

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Quote

Pizza Hut is laying off more than 1,200 delivery drivers in California.

The layoffs, which will take place through the end of February, come as California's minimum wage is about to go up by $4. Fast-food workers in the state are set to get a pay bump of close to 30% in April as the minimum wages rises from $16 to $20 an hour.
...

https://finance.yahoo.com/news/california-pizza-huts-lay-off-234021911.html

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10 hours ago, StassneyHorn said:

Crossposting from the daily Biden thread as there may be more focused conversation.

Almost 10 million workers in 22 states will get raises on January 1. See where wages are rising.

https://www.cbsnews.com/amp/news/minimum-wage-increase-january-1-2024-see-the-states/

  • Alaska: $11.73
  • Arizona: $14.35
  • California: $16
  • Colorado: $14.42
  • Connecticut: $15.69
  • Delaware: $13.25
  • Hawaii: $14
  • Illinois: $14
  • Maine: $14.15
  • Maryland: $15
  • Michigan: $10.33
  • Minnesota: $10.85
  • Missouri: $12.30
  • Montana: $10.30
  • Nebraska: $12
  • New Jersey: $15.13
  • New York: $16
  • Ohio: $10.45
  • Rhode Island: $14
  • South Dakota: $11.20
  • Vermont: $13.67
  • Washington: $16.28 

Denver will have a minimum wage in the $18 range and lots of California cities will be above $16

 

Who was the idiot (Sack?) who argued how capitalism worked best without minimum wages. Something about that if you can find a moron who will work for $2/hr, then you're doing your fiduciary best for the owners/shareholders. Doesn't he run a church now?

Also, isn't Texas still at $7.25? I assume that we're on a list somewhere with MS and AL.

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51 minutes ago, StassneyHorn said:

Shifting delivery responsibilities to Door Dash, Grubhub, and Uber Eats. I think with Prop 22, the drivers would end up making more money due to the gig worker laws. 

Yep.  And then YUM brands can continue their record profits.  Cut "costs" to improve performance.

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1 hour ago, StassneyHorn said:

Shifting delivery responsibilities to Door Dash, Grubhub, and Uber Eats. I think with Prop 22, the drivers would end up making more money due to the gig worker laws. 

Not only that, but their newest brick & mortar outlets have drive-thrus. Just order ahead from the app and drive up to the window. I guess they found customers' willingness to pick up from curbside was successful but too labor intensive during the pandemic.

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Since the FLSA figures use minimum wage rates to determine the threshold for exempt jobs, the bump in minimum wage in Washington is having an unexpected impact in higher education. 

Now coaches and a lot of student development staff who (by nature) work long or irregular hours are being pushed to hourly status (particularly at smaller institutions where 'just raising their salary' isn't an option). 

Coupled with a number of state laws and DoE requirements, it's also turning a lot of these positions into ones that are primarily administrative (since there are other penalties if you don't follow the regulations) rather than the educational/developmental/mentoring/counseling work that's been their focus. This is unfortunately coinciding with the rise in student emotional health issues and interpersonal immaturity that we're seeing post pandemic.

Good times. 

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