6 ms·

Brutal. Imagine the effect raising the minimum wage could have on top of that.

by aswanson 8y ago

Waterluvian 8y ago
I think the minimum wage laws apply to all restaurants. So prices just go up.
- sokoloff 8y ago
  No diversion of consumption to home-cooked meals (single or multi family)? No marginal restaurants fail? No reduction in tipping? No reduction in add-ons to meals? (apps, drinks, deserts) No reduction in staffing count, hours, or benefits? It would seem unusual if “prices just [went] up” without any other changes to the overall system.
markdown 8y ago
Not much, because (1) the effect would be felt by all restaurants at the same time and (2) your customers would have more money to spend.
- pc86 8y ago
  #1 is definitely true but #2 is only true if most of your customers make the minimum wage. Since we're talking about less than 4% of hourly workers[0] (so excluding everyone making a salaried wage which is going to be almost everyone reading this and everyone they interact with professionally), it's extremely unlikely that a majority of your customers make the minimum wage even if we're talking about a fast food franchise. [0] https://www.bls.gov/opub/reports/minimum-wage/archive/characteristics-of-minimum-wage-workers-2014.pdf https://www.bls.gov/opub/reports/minimum-wage/archive/charac...
glibgil 8y ago
Ok, I imagined it. What I saw was a lot of restaurants closing and new restaurants with better models opening in their place
ClassyJacket 8y ago
I don't have to imagine - Australia has a much higher minimum wage than America and we still have plenty of restaurants. Maybe their margins are just better. Maybe that one particular restaurant would go out of business and others would continue, maybe they'd raise their prices along with their competitors.
- strken 8y ago
  Speaking as an Australian living in the US, it's a little bit different. Australians are used to the higher price of food, have been trained not to expect table service, have a rigorous set of laws around underpaying trainees and teens, have endemic "under the counter" wage fraud to avoid taxes and the minimum wage, and don't feel morally obliged to tip their expensive waiters and waitresses. Maybe if America slowly increased the minimum wage at inflation + 10% each year, it would end up in the same place as Australia. Right now, US social rules and expectations are set up around a low minimum wage, and doubling that minimum wage overnight might rock the boat a lot.
  - taneq 8y ago
    > Australians are used to the higher price of food, have been trained not to expect table service, have a rigorous set of laws around underpaying trainees and teens, have endemic "under the counter" wage fraud to avoid taxes and the minimum wage, and don't feel morally obliged to tip their expensive waiters and waitresses. Woah. One of these things is not like the other ones. (As an Aussie, though, the tipping thing just seems weird. It's nice to tip a little for really good waitstaff, but if doing so means they get a pay cut on their hourly wage then that's bogus. Paying your staff poverty rates because you expect them to live off tips is like paying your police force poverty rates because you expect them to live off bribes.)
    - rdlecler1 8y ago
      That’s a false equivalency.
      - 8y ago
tjr225 8y ago
Everyone deserves a livable wage.
- winston_smith 8y ago
  That doesn't tell us much without knowing what standard of living you think everyone deserves, and for what level of effort. And if I'm more kindhearted than you and think that everyone deserves a standard of living twice as high for half as many hours, what then?
  - tjr225 8y ago
    I don't have answers to those questions but it doesn't mean I'm wrong.
deleted 8y ago
[deleted]
ThrowMeDown01 8y ago
There is an article on the German satiric website "Der Postillon": "Study: Wages cause billions of damage for German companies" https://www.der-postillon.com/2014/08/studie-lohnzahlungen-verursachen.html https://www.der-postillon.com/2014/08/studie-lohnzahlungen-v...
pc86 8y ago
Minimal effect on the business directly because the costs just get included in the formula to determine how much they're going to charge for the meal. As it's a statutory change, everyone's costs go up so everyone's prices go up. There's ancillary effects of course but not in the way you're suggesting.

Brutal. Imagine the effect raising the minimum wage could have on top of that.

Waterluvian 8y ago

I think the minimum wage laws apply to all restaurants. So prices just go up.

sokoloff 8y ago
No diversion of consumption to home-cooked meals (single or multi family)? No marginal restaurants fail? No reduction in tipping? No reduction in add-ons to meals? (apps, drinks, deserts) No reduction in staffing count, hours, or benefits? It would seem unusual if “prices just [went] up” without any other changes to the overall system.

markdown 8y ago

Not much, because (1) the effect would be felt by all restaurants at the same time and (2) your customers would have more money to spend.

pc86 8y ago
#1 is definitely true but #2 is only true if most of your customers make the minimum wage. Since we're talking about less than 4% of hourly workers[0] (so excluding everyone making a salaried wage which is going to be almost everyone reading this and everyone they interact with professionally), it's extremely unlikely that a majority of your customers make the minimum wage even if we're talking about a fast food franchise. [0] https://www.bls.gov/opub/reports/minimum-wage/archive/characteristics-of-minimum-wage-workers-2014.pdf https://www.bls.gov/opub/reports/minimum-wage/archive/charac...

glibgil 8y ago

Ok, I imagined it. What I saw was a lot of restaurants closing and new restaurants with better models opening in their place

ClassyJacket 8y ago

I don't have to imagine - Australia has a much higher minimum wage than America and we still have plenty of restaurants. Maybe their margins are just better. Maybe that one particular restaurant would go out of business and others would continue, maybe they'd raise their prices along with their competitors.

strken 8y ago
Speaking as an Australian living in the US, it's a little bit different. Australians are used to the higher price of food, have been trained not to expect table service, have a rigorous set of laws around underpaying trainees and teens, have endemic "under the counter" wage fraud to avoid taxes and the minimum wage, and don't feel morally obliged to tip their expensive waiters and waitresses. Maybe if America slowly increased the minimum wage at inflation + 10% each year, it would end up in the same place as Australia. Right now, US social rules and expectations are set up around a low minimum wage, and doubling that minimum wage overnight might rock the boat a lot.
- taneq 8y ago
  > Australians are used to the higher price of food, have been trained not to expect table service, have a rigorous set of laws around underpaying trainees and teens, have endemic "under the counter" wage fraud to avoid taxes and the minimum wage, and don't feel morally obliged to tip their expensive waiters and waitresses. Woah. One of these things is not like the other ones. (As an Aussie, though, the tipping thing just seems weird. It's nice to tip a little for really good waitstaff, but if doing so means they get a pay cut on their hourly wage then that's bogus. Paying your staff poverty rates because you expect them to live off tips is like paying your police force poverty rates because you expect them to live off bribes.)
  - rdlecler1 8y ago
    That’s a false equivalency.
    - 8y ago

tjr225 8y ago

Everyone deserves a livable wage.

winston_smith 8y ago
That doesn't tell us much without knowing what standard of living you think everyone deserves, and for what level of effort. And if I'm more kindhearted than you and think that everyone deserves a standard of living twice as high for half as many hours, what then?
- tjr225 8y ago
  I don't have answers to those questions but it doesn't mean I'm wrong.

deleted 8y ago

[deleted]

ThrowMeDown01 8y ago

There is an article on the German satiric website "Der Postillon": "Study: Wages cause billions of damage for German companies" https://www.der-postillon.com/2014/08/studie-lohnzahlungen-verursachen.html https://www.der-postillon.com/2014/08/studie-lohnzahlungen-v...

pc86 8y ago

Minimal effect on the business directly because the costs just get included in the formula to determine how much they're going to charge for the meal. As it's a statutory change, everyone's costs go up so everyone's prices go up. There's ancillary effects of course but not in the way you're suggesting.