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So the owner who has operated a cut throat, extremely demanding, razor thin margin for years folds because they don’t understand basic labor supply and demand?

So the owner who has operated a cut throat, extremely demanding, razor thin margin for years folds because they don’t understand basic labor supply and demand? Keep in mind this person has mostly likely done in depth analysis on how to make their most popular item at the same quality but for 2% less of some expensive ingredient. I know one phenomenal restaurant owner who spent an entire year to get the cost of their paper products from 2% of COGS to 1%. Bonuses to managers, trash audits, the whole thing. You really think people like that couldn’t figure out raise salaries and prices? Do you know whats going to happen here? Panera, Qdoba, and 5 Guys. Just a monoculture of terrible bland food. Only the big players with economies of scale can charge less and pay the same as smaller restaurants.

dannyw 5y ago
I think your anecdote isn't necessarily reflective of all restaurant owners: (1) not everyone leases, some family businesses own the land and has significantly better margins at the trade-off of opportunity cost on the real estate, (2) some businesses are explicitly there to fulfil visa or immigration obligations, so profitability isn't a priority, (3) in less dense areas, the general laws of competition don't apply as much pressure as SF or NYC. Don't forget lifestyle businesses. I actually know multiple high-income people (lawyers, doctors) who just let their partners run businesses for the sake of doing something during the day; they lose money every year which offsets the joint income, and is better than having their partner sit around at home and spending money on something else.
amyjess 5y ago
If you can't stay open while paying people a living wage, you deserve to go out of business. I would rather have nothing but chain restaurants owned by megacorps than have people working for less than a living wage.
- grapehut 5y ago
  That's fair, but would you also rather people unemployed than working for less than a living wage as well?
  - fergie 5y ago
    The answer is yes. In a functioning modern capitalist economy, workers must be able to choose if and where they work. A good way to think about this is to frame the question on yourself: should I be forced to work for less than a living wage? Should the state subsidise my employer in order for her to underpay me?
    - kortilla 5y ago
      > workers must be able to choose if and where they work. Then why do you want to take that away from them?
    - feoren 5y ago
      Hint to the downvoters: he's talking about Universal Basic Income. Please re-evaluate your downvote based on that.
  - AngryData 5y ago
    Most definitely, slaving away at a dead end job not earning anything is sucking up tons of those employee's opportunities by keeping them unavailable.
- AKSucks 5y ago
  > I would rather have nothing but chain restaurants owned by megacorps than have people working for less than a living wage. Those megacorps do everything they can to pay as little taxes as possible and get as much money out of the country as they can in the form of off-shore corporations that hold the trademarks for said corp, the US subsidiary of which pays it massive 'licensing' fees. They're also the worst at keeping money within a local economy. They use other large corporations as much as possible for 'efficiency', but it has the side effect of meaning that said business doesn't spend money for services anywhere in the local economy. Joe Drain Buster doesn't get business from Five Guys having a grease clog; some nation-wide plumbing services company does. Maybe they contract out Joe Drain Buster, but not before taking their cut. It gets worse. The larger the employer the easier it is for that employer to grift the local, county, state, and federal government for freebies, tax breaks, eminent domain gimmes, friendly legislation and regulations, etc. Witness: Amazon and Walmart. Companies that generated a handful of people with unimaginable wealth who fight tooth and nail to treat their employees like shit. Jeff Bezos has a net worth of $200BN as of a month ago. The average network for a resident of Mississippi is slightly over $17,000. That means it would take roughly 11.5M Mississippi residents to equal his net worth. Mississippi has 3M residents.
- pcmoney 5y ago
  What do you think will happen when the chains beat out the smaller restaurants due to economies of scale? They will raise prices because there are no competitors and lower wages because there are no alternatives. They will collude. They will extract the maximum economic value out of every community that they are in. Enjoy your nothing
PaulDavisThe1st 5y ago
> Panera, Qdoba, and 5 Guys. Just a monoculture of terrible bland food. Compare with the food in the US say, 40 years ago. Whatever you feel about Panera & Qdoba, they are not bland by comparison with food the way it was within my lifetime. I don't like 5 Guys much, because I'm not much of a burger eater, but they too are generally of significantly higher quantity than most burger outlets from 40 years ago.
intended 5y ago
This is a loaded question, you presuppose that people are operating on demanding, tight, and competitive margins for years. Not everyone is, and yes - many of them will fold because their viability was predicated on an unfeasible wage. Sometimes an ecosystem is well past its expiry date and it reduces to a less vibrant interplay of species. It’s tragic, but if it took one single thing to destroy it, then it is safe to presume that there were huge issues eroding its underlying harmony.
rswail 5y ago
Any other advanced economy (eg EU, AU, NZ etc) proves that "Do you know whats going to happen here? Panera, Qdoba, and 5 Guys. Just a monoculture of terrible bland food. Only the big players with economies of scale can charge less and pay the same as smaller restaurants." is just not true.

dannyw 5y ago

I think your anecdote isn't necessarily reflective of all restaurant owners: (1) not everyone leases, some family businesses own the land and has significantly better margins at the trade-off of opportunity cost on the real estate, (2) some businesses are explicitly there to fulfil visa or immigration obligations, so profitability isn't a priority, (3) in less dense areas, the general laws of competition don't apply as much pressure as SF or NYC. Don't forget lifestyle businesses. I actually know multiple high-income people (lawyers, doctors) who just let their partners run businesses for the sake of doing something during the day; they lose money every year which offsets the joint income, and is better than having their partner sit around at home and spending money on something else.

amyjess 5y ago

If you can't stay open while paying people a living wage, you deserve to go out of business. I would rather have nothing but chain restaurants owned by megacorps than have people working for less than a living wage.

grapehut 5y ago
That's fair, but would you also rather people unemployed than working for less than a living wage as well?
- fergie 5y ago
  The answer is yes. In a functioning modern capitalist economy, workers must be able to choose if and where they work. A good way to think about this is to frame the question on yourself: should I be forced to work for less than a living wage? Should the state subsidise my employer in order for her to underpay me?
  - kortilla 5y ago
    > workers must be able to choose if and where they work. Then why do you want to take that away from them?
  - feoren 5y ago
    Hint to the downvoters: he's talking about Universal Basic Income. Please re-evaluate your downvote based on that.
- AngryData 5y ago
  Most definitely, slaving away at a dead end job not earning anything is sucking up tons of those employee's opportunities by keeping them unavailable.
AKSucks 5y ago
> I would rather have nothing but chain restaurants owned by megacorps than have people working for less than a living wage. Those megacorps do everything they can to pay as little taxes as possible and get as much money out of the country as they can in the form of off-shore corporations that hold the trademarks for said corp, the US subsidiary of which pays it massive 'licensing' fees. They're also the worst at keeping money within a local economy. They use other large corporations as much as possible for 'efficiency', but it has the side effect of meaning that said business doesn't spend money for services anywhere in the local economy. Joe Drain Buster doesn't get business from Five Guys having a grease clog; some nation-wide plumbing services company does. Maybe they contract out Joe Drain Buster, but not before taking their cut. It gets worse. The larger the employer the easier it is for that employer to grift the local, county, state, and federal government for freebies, tax breaks, eminent domain gimmes, friendly legislation and regulations, etc. Witness: Amazon and Walmart. Companies that generated a handful of people with unimaginable wealth who fight tooth and nail to treat their employees like shit. Jeff Bezos has a net worth of $200BN as of a month ago. The average network for a resident of Mississippi is slightly over $17,000. That means it would take roughly 11.5M Mississippi residents to equal his net worth. Mississippi has 3M residents.
pcmoney 5y ago
What do you think will happen when the chains beat out the smaller restaurants due to economies of scale? They will raise prices because there are no competitors and lower wages because there are no alternatives. They will collude. They will extract the maximum economic value out of every community that they are in. Enjoy your nothing

PaulDavisThe1st 5y ago

> Panera, Qdoba, and 5 Guys. Just a monoculture of terrible bland food. Compare with the food in the US say, 40 years ago. Whatever you feel about Panera & Qdoba, they are not bland by comparison with food the way it was within my lifetime. I don't like 5 Guys much, because I'm not much of a burger eater, but they too are generally of significantly higher quantity than most burger outlets from 40 years ago.

intended 5y ago

This is a loaded question, you presuppose that people are operating on demanding, tight, and competitive margins for years. Not everyone is, and yes - many of them will fold because their viability was predicated on an unfeasible wage. Sometimes an ecosystem is well past its expiry date and it reduces to a less vibrant interplay of species. It’s tragic, but if it took one single thing to destroy it, then it is safe to presume that there were huge issues eroding its underlying harmony.

rswail 5y ago

Any other advanced economy (eg EU, AU, NZ etc) proves that "Do you know whats going to happen here? Panera, Qdoba, and 5 Guys. Just a monoculture of terrible bland food. Only the big players with economies of scale can charge less and pay the same as smaller restaurants." is just not true.