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If I open a business and my business is successful because I have labor that's expected to make less than what's required to provide basic subsistence living th
by knightofmars 7y ago
If I open a business and my business is successful because I have labor that's expected to make less than what's required to provide basic subsistence living then my business model is broken. Why? Because the government will end up picking up the tab by providing healthcare, rent assistance, and food assistance to my employees. Which means that my business model is being subsidized by the government and is effectively a welfare business by the transitive property. We can either say, "That's fine the government should subsidize these businesses." or we can say, "The market should handle this, local government should push minimum wage to the point where government subsidies aren't required and then allow businesses that can't make it fail." In the first case if we want the government to subsidize business of this nature then we should raise taxes on businesses because they're the ones who want subsidized labor. In the latter, the ones that will get hit first are restaurants that have low prices and serve food to people in the price tier of the bottom half of the middle class. Which also highlights a cultural shift that may need to occur, the reality that the amount we eat out at restaurants and have others providing food preparation for us is economically broken and that a large portion of the population that currently enjoys this benefit by eating at these restaurants in reality can't actually afford it, at its non-subsidized price, as frequently as it's currently enjoyed.
- rightbyte 7y ago"others providing food preparation for us is economically broken". Shouldn't it be more efficient with mass production of meals? If economic efficiency is the goal, people would eat in neighbourhood rotating menu restaurants. Like a Soviet kolkhoz or any army camp.
- knightofmars 7y ago> Shouldn't it be more efficient with mass production of meals? It already is: McDonald's, Burger King, Taco Bell, etc. The difference being that in the examples given the means of production are also controlled by the business. With fast food, and McDonald's as the example, they control their own supply chain[1]. It's the reason that everything tastes the same no matter which McDonald's you go to. Many fast food businesses emulate this process because it has been so successful for McDonald's. With your example of a Soviet kolkhoz, the state owned the agriculture and determined the prices because they had control over the whole supply chain.[2] I would also argue that this is what people are buying when they buy pre-packaged frozen meals. People seem to forget that home refrigeration wasn't a thing until it became really accessible starting in the 1930s. Then with the invention of the frozen dinner in 1950s changed how a large set of people looked at meals. You suddenly didn't have to cook and didn't have to pay someone else to cook you a meal on demand. For a price comparison, a frozen dinner in the 60s was around a dollar[3] or less [4]. Whereas a restaurant would have cost approximately an extra 100%, 200%, or more[5] "1964 A one-plate turkey dinner at Howard Johnson’s $1.49" (specifically the standard fare, not fine dining). [1] https://boxaroundtheworld.com/mcdonalds-supply-chain-management/ https://boxaroundtheworld.com/mcdonalds-supply-chain-managem... [2] https://en.wikipedia.org/wiki/Kolkhoz https://en.wikipedia.org/wiki/Kolkhoz [3] https://www.encyclopedia.com/sports-and-everyday-life/food-and-drink/food-and-cooking/frozen-foods-industry https://www.encyclopedia.com/sports-and-everyday-life/food-a... [4] http://www.thepeoplehistory.com/60sfood.html http://www.thepeoplehistory.com/60sfood.html [5] https://restaurant-ingthroughhistory.com/restaurant-prices/ https://restaurant-ingthroughhistory.com/restaurant-prices/