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Minimum wage hikes are typically a pretty direct transfer from profits to wages, with a minor increase in prices: https://www.researchgate.net/publication/3052

Minimum wage hikes are typically a pretty direct transfer from profits to wages, with a minor increase in prices: https://www.researchgate.net/publication/30522170_The_Impact_of_the_National_Minimum_Wage_on_Profits_and_Prices_Report_for_Low_Pay_Commission https://www.researchgate.net/publication/30522170_The_Impact... As "minimum wages across state borders using contiguous counties" (Dube, Lester, Reich) demonstrates (confirmed by Seattle's recent experience), it doesn't cut employment: https://escholarship.org/uc/item/86w5m90m https://escholarship.org/uc/item/86w5m90m In spite of this, an association of restaurant owners in California spent a lot of their own money on these billboards to express touching concern for the employment prospects of their employees: http://kron4.com/2014/07/18/new-sf-billboard-says-workers-will-be-replaced-by-tech-if-15-minimum-wage-is-approved/ http://kron4.com/2014/07/18/new-sf-billboard-says-workers-wi... It's now 4 years later and sadly, their predictions were startlingly accurate. Nearly every restaurant server in San Francisco and Seattle is now an app.

skookumchuck 9y ago
Labor costs are typically consume 30% of a restaurant's revenue. Increasing those costs by 50% and not expecting major consequences is a unrealistic.
- crdoconnor 9y ago
  Which parts of the studies above did you disagree with? What major consequences did you think Seattle suffered from?
  - skookumchuck 9y ago
    Major consequences to the restaurants. As for the city as a whole, I'd expect to see no new businesses such as light manufacturing locating there unless they have to be there. And Amazon announced they were locating a second headquarters elsewhere. You could argue that has nothing to do with minimum wage, and probably not since Amazon doesn't have their minimum wage operations in Seattle. But Seattle has done things like passing an unconstitutional income tax targeted at Amazon (now winding its way through the courts) that likely factor in to such decisions. Along with other heavy tax increases, like sales taxes, property taxes, and a proposed "head tax" that appears to be targeted at Amazon.
- moorhosj 9y ago
  What are you suggesting those consequences would be?
  - skookumchuck 9y ago
    Higher prices, fewer customers, more automation, fewer restaurants, less willingness to take a chance on marginal employees. More mom&pop restaurants with no employees. More off the books and illegal employees. Personally, I don't go out to eat in Seattle anymore. Too expensive.
    - moorhosj 9y ago
      Meanwhile, Seattle Food Services and Drinking employment is at an all-time high. April 1, 2015 - 135,100 employed December 2017 - 149,600 employed https://fred.stlouisfed.org/series/SMU53426607072200001SA https://fred.stlouisfed.org/series/SMU53426607072200001SA
      - skookumchuck 9y ago
        The trouble with most such statistics is context. How much has Seattle's population grown in the same time period? Are there more or less restaurant employees as a percent of the population? Does Amazon's huge hiring surge of highly paid employees skew the results? Nothing is ever static in economics, it's very hard to do A-B experiments.
        moorhosj 9y ago
        Oddly, I didn’t find any of that nuance or context in your original comment. You presented absolutes and the data proved you wrong. Maybe the population has grown by more than 10% in 2.5 years like food service employment. At the same time, the overall unemployment rate has fallen since the wage hikes started.
        skookumchuck 9y ago
        > You presented absolutes and the data proved you wrong. I could say an absolute statement that throwing more wood on the fire would make it hotter. If it also happens to drop into the lake, that doesn't prove me wrong. In any such statements, there's an implicit assumption that other effects stay the same, that I am not dropping the fire in the lake. Seattle has undergone enormous change in the last 5 years due to Amazon. Ignoring that in any cause/effect analysis of the overall city invalidates the analysis.
wombatpm 9y ago
>Minimum wage hikes are typically a pretty direct transfer from profits to wages, with a minor increase in prices: This sentiment has always bothered me. It assume that whatever "profit" exists, must continue to exist, nay increase, and that it is a zero-sum game. One could argue that paying your workers more make them eligible to purchase your products ala Henry Ford and the Model T.
- crdoconnor 9y ago
  That wasn't sentiment it was just fact. Henry Ford raised wages because his staff turnover was killing productivity and because he fell out with his shareholders and decided to spite them. The man wasn't an angel. He was an anti Semite and a Nazi sympathiser ffs.

skookumchuck 9y ago

Labor costs are typically consume 30% of a restaurant's revenue. Increasing those costs by 50% and not expecting major consequences is a unrealistic.

crdoconnor 9y ago
Which parts of the studies above did you disagree with? What major consequences did you think Seattle suffered from?
- skookumchuck 9y ago
  Major consequences to the restaurants. As for the city as a whole, I'd expect to see no new businesses such as light manufacturing locating there unless they have to be there. And Amazon announced they were locating a second headquarters elsewhere. You could argue that has nothing to do with minimum wage, and probably not since Amazon doesn't have their minimum wage operations in Seattle. But Seattle has done things like passing an unconstitutional income tax targeted at Amazon (now winding its way through the courts) that likely factor in to such decisions. Along with other heavy tax increases, like sales taxes, property taxes, and a proposed "head tax" that appears to be targeted at Amazon.
moorhosj 9y ago
What are you suggesting those consequences would be?
- skookumchuck 9y ago
  Higher prices, fewer customers, more automation, fewer restaurants, less willingness to take a chance on marginal employees. More mom&pop restaurants with no employees. More off the books and illegal employees. Personally, I don't go out to eat in Seattle anymore. Too expensive.
  - moorhosj 9y ago
    Meanwhile, Seattle Food Services and Drinking employment is at an all-time high. April 1, 2015 - 135,100 employed December 2017 - 149,600 employed https://fred.stlouisfed.org/series/SMU53426607072200001SA https://fred.stlouisfed.org/series/SMU53426607072200001SA
    - skookumchuck 9y ago
      The trouble with most such statistics is context. How much has Seattle's population grown in the same time period? Are there more or less restaurant employees as a percent of the population? Does Amazon's huge hiring surge of highly paid employees skew the results? Nothing is ever static in economics, it's very hard to do A-B experiments.
      - moorhosj 9y ago
        Oddly, I didn’t find any of that nuance or context in your original comment. You presented absolutes and the data proved you wrong. Maybe the population has grown by more than 10% in 2.5 years like food service employment. At the same time, the overall unemployment rate has fallen since the wage hikes started.
        skookumchuck 9y ago
        > You presented absolutes and the data proved you wrong. I could say an absolute statement that throwing more wood on the fire would make it hotter. If it also happens to drop into the lake, that doesn't prove me wrong. In any such statements, there's an implicit assumption that other effects stay the same, that I am not dropping the fire in the lake. Seattle has undergone enormous change in the last 5 years due to Amazon. Ignoring that in any cause/effect analysis of the overall city invalidates the analysis.

wombatpm 9y ago

>Minimum wage hikes are typically a pretty direct transfer from profits to wages, with a minor increase in prices: This sentiment has always bothered me. It assume that whatever "profit" exists, must continue to exist, nay increase, and that it is a zero-sum game. One could argue that paying your workers more make them eligible to purchase your products ala Henry Ford and the Model T.

crdoconnor 9y ago
That wasn't sentiment it was just fact. Henry Ford raised wages because his staff turnover was killing productivity and because he fell out with his shareholders and decided to spite them. The man wasn't an angel. He was an anti Semite and a Nazi sympathiser ffs.