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I think what you're going to see with any minimum wage hike is that businesses who have thin margins, namely restaurants and small stores, will be forced to go
by danielrhodes 11y ago
I think what you're going to see with any minimum wage hike is that businesses who have thin margins, namely restaurants and small stores, will be forced to go out of business or be forced to degrade their quality of service. Labor costs are for any business the biggest line-item expense. Spending on "robo waiters" or what have you is a big upfront capital expenditure, and I doubt many restaurants will be able to finance it. But it's not just small establishments: even Walmart is very exposed to these wage hikes. While it appears like they have lots of money, a lot of how they do what they do is based on cheap labor.
In SF, after they boosted the minimum wage, I observed a few stores go out of business. I'm all for people being paid more, but I doubt people losing their jobs altogether was the intended consequence.
Another thing I observed was the price of eating out in SF rose considerably. I remember feeling shocked that for a simple lunch (certainly not a luxury), I paid over $30. Things like that hurt people on the lower end of the economic spectrum, especially since poorer people are very sensitive to food prices.
The sad thing is: after taxes, if somebody is working the maximum hours they can without being a full-time employee (which very few minimum wage earners are), this would only net them an extra $450/mo. at most, which doesn't seem like it would be enough to have a big impact on somebody's life.
Perhaps I am cynical, but I don't see these wage hikes as having a net positive impact. What drives up wages is a shortage in the labor supply and businesses that need more skilled employees who they are willing to train and keep for awhile. A minimum wage hike just gives businesses more reasons not to hire people.
- pm24601 11y ago> this would only net them an extra $450/mo. at most, which doesn't seem like it would be enough to have a big impact on somebody's life. It absolutely would have a big impact. You are talking food for a money, a monthly bus pass and cell phone cost.
- danielrhodes 11y agoYeah admittedly that judgement largely depends on where you live and the cost base. In my opinion, that wouldn't buy you much in SF or NY. For somebody located outside of a city, it could have a much bigger impact.
- pessimizer 11y ago3% of the country live in SF or NYC.
- danielrhodes 11y ago80% of the country lives in urban areas and this number is increasing.
- unprepare 11y agoSo you are assuming that all urban areas have a similar cost of living to san francisco?
- danielrhodes 11y agoNo. Is that what you want me to be saying so that you can tell me I have no idea what I'm talking about? :-P Let me make a few assertions: - The greatest benefits from a rise in minimum wage will go to those with the lowest cost of living. - Living in an urban area (dollar for dollar) is more expensive than living in a non-urban area. - Most minimum wage jobs exist in cities (according to Pew Research): http://www.pewresearch.org/files/2014/09/FT_14.09.08_MinimumWage_table.png http://www.pewresearch.org/files/2014/09/FT_14.09.08_Minimum... - To work in a city, it has become increasingly beneficial to live in close proximity or inside a city. Therefore, an increase in minimum wage, while certainly helpful, is going to have less of an impact than one would hope, simply because those who work minimum wage jobs have a higher cost of living by needing to be close to cities in order to work those same jobs.