4 ms·

A seller's market created by a law in which if the buyer pays too low of a price, very bad things happen to them.

by fridif 5y ago

rendall 5y ago
One would expect in that case lots of laborers with wages at the minimum, and many more looking for work. What we're seeing in the description is not that.
- fridif 5y ago
  I reckon the jobs are not on offer because the restaurants only want to pay a small amount (they have razor thin margins and an employee costs more than just salary [workers comp, insurance, equipment, liability etc]). Previously people accepted the small amount, but now they aren't because they're (currently still) being paid to stay home in most cases.
  - rendall 5y ago
    I do agree with you that a minimum wage potentially has unintended negative consequences for those looking to work but do not have valuable skills to offer. An employer may make do without rather than hire a day laborer for instance at an expensive rate. We might disagree on whether negative consequences are inevitable. By your assessment, though, it seems the seller's market is not caused by the minimum wage, but by COVID relief packages? Also, I'm sorry you're getting downvoted. I only downvote if someone goes against community guidelines, and not if I simply disagree with them
    - fridif 5y ago
      No problem, I'm used to the downvoting :) I think it is important to distinguish a couple of things. If there are businesses out there, like maybe McDonalds or Walmart, who are easily able to pay $20 per hour instead of $7.50, and are choosing not to do so because of a desire for even larger profits, then yes, this is evidence of a mild seller's market for labor and also a lack of market savvy on behalf of McDonalds/Walmart. If those corps are already offering $20 an hour and benefits and still people are not showing up to work, then it is a roaring seller's market for labor, and must in theory be caused by some other external source that is causing laborers to feel $20 is too low. Where are they going, what are they doing? Are they taking the opportunity to pursue a degree? Are they staying at home playing video games? Have they all found a job making $42 an hour talking on the phone at home? We would need the data to answer these questions. But in the exact case of restaurants, I genuinely think most of them do not have the money. I haven't ever in my life met a restaurant owner who has a stable financial situation with a paid off mortgage, nice car, and 3 kids put through college already having become cardiologists or something like that. But I've met a lot of other people who have done all that. And I've met a lot of restaurant owners too. I think that all they can afford is $7.50-$12.50 an hour in most cases, with no benefits. And now that city centers have seen a good portion of their residents with lots of disposable income move away, I suspect that most restaurants have lost the financial base that used to support them. I saw a video of a restaurant owner during the pandemic in NYC who cut his staff from 45 to 3 and was just barely able to pull it together and survive. Was he paying his people more than $15 an hour? Don't know.
      - rendall 5y ago
        That makes sense

A seller's market created by a law in which if the buyer pays too low of a price, very bad things happen to them.

by fridif 5y ago

A seller's market created by a law in which if the buyer pays too low of a price, very bad things happen to them.

One would expect in that case lots of laborers with wages at the minimum, and many more looking for work. What we're seeing in the description is not that.

fridif 5y ago
I reckon the jobs are not on offer because the restaurants only want to pay a small amount (they have razor thin margins and an employee costs more than just salary [workers comp, insurance, equipment, liability etc]). Previously people accepted the small amount, but now they aren't because they're (currently still) being paid to stay home in most cases.
- rendall 5y ago
  I do agree with you that a minimum wage potentially has unintended negative consequences for those looking to work but do not have valuable skills to offer. An employer may make do without rather than hire a day laborer for instance at an expensive rate. We might disagree on whether negative consequences are inevitable. By your assessment, though, it seems the seller's market is not caused by the minimum wage, but by COVID relief packages? Also, I'm sorry you're getting downvoted. I only downvote if someone goes against community guidelines, and not if I simply disagree with them
  - fridif 5y ago
    No problem, I'm used to the downvoting :) I think it is important to distinguish a couple of things. If there are businesses out there, like maybe McDonalds or Walmart, who are easily able to pay $20 per hour instead of $7.50, and are choosing not to do so because of a desire for even larger profits, then yes, this is evidence of a mild seller's market for labor and also a lack of market savvy on behalf of McDonalds/Walmart. If those corps are already offering $20 an hour and benefits and still people are not showing up to work, then it is a roaring seller's market for labor, and must in theory be caused by some other external source that is causing laborers to feel $20 is too low. Where are they going, what are they doing? Are they taking the opportunity to pursue a degree? Are they staying at home playing video games? Have they all found a job making $42 an hour talking on the phone at home? We would need the data to answer these questions. But in the exact case of restaurants, I genuinely think most of them do not have the money. I haven't ever in my life met a restaurant owner who has a stable financial situation with a paid off mortgage, nice car, and 3 kids put through college already having become cardiologists or something like that. But I've met a lot of other people who have done all that. And I've met a lot of restaurant owners too. I think that all they can afford is $7.50-$12.50 an hour in most cases, with no benefits. And now that city centers have seen a good portion of their residents with lots of disposable income move away, I suspect that most restaurants have lost the financial base that used to support them. I saw a video of a restaurant owner during the pandemic in NYC who cut his staff from 45 to 3 and was just barely able to pull it together and survive. Was he paying his people more than $15 an hour? Don't know.
    - rendall 5y ago
      That makes sense