12 ms·

Well, assuming the small coffee shops are well-managed, then we still have to ask ourselves which is more important, the cheap good coffee or a living wage for

Well, assuming the small coffee shops are well-managed, then we still have to ask ourselves which is more important, the cheap good coffee or a living wage for the workers?

lj3 9y ago
Losing your job because your employer couldn't afford to stay in business is better?
- TillE 9y ago
  Low minimum wage = not enough to survive on, so you're typically working multiple jobs, which is insane. A high minimum wage is one key element of a strategy to ensure that nobody has to do that. Anyway, there's extremely little hard evidence of minimum wage raises leading to higher unemployment. Studies generally show no effect. There's no shortage of dubious anecdotes from people with a political ax to grind, though.
  - andrewguenther 9y ago
    I see this cited a lot, my problem is that these studies (from what I've seen, happy to accept more data) are done on a state or nation scale where most every business is then on a somewhat equal playing field. My problem with what SF and Seattle are doing is that it is easy for large companies to compensate in other markets. I'd be really interested to see a study done somewhere comparable to that dynamic. Also, how many people transitioned from a job at a small business to a larger one? Unemployment could remain unchanged, but competition could drop drastically. As I've said elsewhere, I'm in support of paying a living wage, but I don't think it can work on a city scale and these experiments only hurt the cause by producing bad data.
    - tehwebguy 9y ago
      Just do the easy math first: 2000 hours (40 hours x 50 weeks) per year. Multiply by $10.00 per hour. Annual salary of $20k.
- Declanomous 9y ago
  I think the assumption is that the demand for coffee stays relatively similar, and so the coffee shops that have been displaced by rising costs will be replaced by Starbucks. If that is the theory, total employment would stay the same.
andrewguenther 9y ago
The customer cares about good cheap coffee, and regionalized regulation like this ensures that local businesses can never compete. I'm not against a minimum wage increase, but the country is watching places like SF and Seattle to see how a higher minimum wage plays out. The big players can always recoup loses in other markets, but the small businesses are unable to compete. Small businesses close, people lose jobs, and the wage hike is declared a failure. To me, if you really want to support a living wage, then don't support experiments that are doomed to fail.
- eridius 9y ago
  > The big players can always recoup loses in other markets If it's unprofitable for Starbucks to continue operating in SF, why would they do so? Big businesses can recoup short-term losses, sure, but if a given market is going to be unprofitable for the foreseeable future, there's not much reason to keep operating in that market. That said, companies like Starbucks may see this as an opportunity to reduce competition, by operating at a loss until the smaller businesses close, and then raising prices to make the market profitable again. But if they actually do that, once they raise prices, small businesses can start competing again.
  - aidenn0 9y ago
    I doubt it Starbucks will see any significant loss. They typically have both higher volume and lower material costs than a typical coffee shop, so they can absorb cost increases better. If they are even close to breaking even, then it's probably worth it to stay open in the area for marketing value.
- nitwit005 9y ago
  Experiment? It's not like this is the first time this sort of thing has happened. There's piles of data and research on this, and it's not hard to make an estimate of the impact yourself. Just make an Excel spreadsheet with past minimum wage increases and the change in unemployment X years later. Or you can just look at news articles from the past. There is long history of people predicting dire employment impacts that never materialize.

Well, assuming the small coffee shops are well-managed, then we still have to ask ourselves which is more important, the cheap good coffee or a living wage for the workers?

lj3 9y ago

Losing your job because your employer couldn't afford to stay in business is better?

TillE 9y ago
Low minimum wage = not enough to survive on, so you're typically working multiple jobs, which is insane. A high minimum wage is one key element of a strategy to ensure that nobody has to do that. Anyway, there's extremely little hard evidence of minimum wage raises leading to higher unemployment. Studies generally show no effect. There's no shortage of dubious anecdotes from people with a political ax to grind, though.
- andrewguenther 9y ago
  I see this cited a lot, my problem is that these studies (from what I've seen, happy to accept more data) are done on a state or nation scale where most every business is then on a somewhat equal playing field. My problem with what SF and Seattle are doing is that it is easy for large companies to compensate in other markets. I'd be really interested to see a study done somewhere comparable to that dynamic. Also, how many people transitioned from a job at a small business to a larger one? Unemployment could remain unchanged, but competition could drop drastically. As I've said elsewhere, I'm in support of paying a living wage, but I don't think it can work on a city scale and these experiments only hurt the cause by producing bad data.
  - tehwebguy 9y ago
    Just do the easy math first: 2000 hours (40 hours x 50 weeks) per year. Multiply by $10.00 per hour. Annual salary of $20k.
Declanomous 9y ago
I think the assumption is that the demand for coffee stays relatively similar, and so the coffee shops that have been displaced by rising costs will be replaced by Starbucks. If that is the theory, total employment would stay the same.

andrewguenther 9y ago

The customer cares about good cheap coffee, and regionalized regulation like this ensures that local businesses can never compete. I'm not against a minimum wage increase, but the country is watching places like SF and Seattle to see how a higher minimum wage plays out. The big players can always recoup loses in other markets, but the small businesses are unable to compete. Small businesses close, people lose jobs, and the wage hike is declared a failure. To me, if you really want to support a living wage, then don't support experiments that are doomed to fail.

eridius 9y ago
> The big players can always recoup loses in other markets If it's unprofitable for Starbucks to continue operating in SF, why would they do so? Big businesses can recoup short-term losses, sure, but if a given market is going to be unprofitable for the foreseeable future, there's not much reason to keep operating in that market. That said, companies like Starbucks may see this as an opportunity to reduce competition, by operating at a loss until the smaller businesses close, and then raising prices to make the market profitable again. But if they actually do that, once they raise prices, small businesses can start competing again.
- aidenn0 9y ago
  I doubt it Starbucks will see any significant loss. They typically have both higher volume and lower material costs than a typical coffee shop, so they can absorb cost increases better. If they are even close to breaking even, then it's probably worth it to stay open in the area for marketing value.
nitwit005 9y ago
Experiment? It's not like this is the first time this sort of thing has happened. There's piles of data and research on this, and it's not hard to make an estimate of the impact yourself. Just make an Excel spreadsheet with past minimum wage increases and the change in unemployment X years later. Or you can just look at news articles from the past. There is long history of people predicting dire employment impacts that never materialize.