20 ms·

Painfully obvious too. My little local Mexcian place will be closing down because of a lack of cooks. Talking to the owner, he was complaining about government

• toomuchtodo 5y ago
  Same with a bundle of Great Clips a friend manages for a franchisee. Can’t find staff, doesn’t believe staff are worth what the current effective minimum wage is. “Have you tried offering more?” “That’s too much for cosmetology work.” Getting slapped by the invisible hand of the market.
  • pope_meat 5y ago
    The owner class has gotten really used to having the upper hand in the negotiations, they're not coping well at all. And to that I say: welcome to the club.
    • FredPret 5y ago
      The small biz owners here described here aren’t the Masters-of-the-Universe “owner class” types. They don’t even really own businesses, they own lower management jobs.
      • Ericson2314 5y ago
        Sure. And slave overseers are not plantation owners. We have this bipartisan love affair with small business, and the fact is many of them are unproductive institutions abusing tons of poor immigrants to stay afloat. They also provide ideological cover for the more labor-intensive actual big corps. It's about time the rose-collard glasses came off.
        • jodrellblank 5y ago
          > "rose-collard glasses" glasses made of red cabbage? :) (Rose-coloured, looking through them makes everything look rosy (cheerful, promising, pleasant))
          • Ericson2314 5y ago
            Ooops, I guess my stomach was typing. Better go eat some veggies.
  • holler 5y ago
    The barber shop I went to for years used to charge $35 for a haircut pre-pandemic, which with a ~$10 tip ($45) already felt real high. Now a haircut is $50 and I no longer go, opting instead to cut my own hair w help from my girlfriend. Maybe people don’t want $50 haircuts.
    • toomuchtodo 5y ago
      The salons in question are still charging $18 for a haircut.
      • Larrikin 5y ago
        Is this a complaint about an extremely cheap haircut?
        • toomuchtodo 5y ago
          Not at all, it’s an observation of a business model breaking down.
    • birdyrooster 5y ago
      Maybe people never needed to pay for haircuts in the first place
    • Ericson2314 5y ago
      That's fine, then. We shouldn't assume a certain service or job is productive enough to exist because it used to be in the past. If barbershops need to go the way of horse liveries, that's OK.
      • pengaru 5y ago
        > We shouldn't assume a certain service or job is productive enough to exist because it used to be in the past. If barbershops need to go the way of horse liveries, that's OK Automobiles replaced horses, did I miss the memo on something replacing hair growth?
  • rvense 5y ago
    > “That’s too much for cosmetology work.” So it's not even an economic argument, "If I pay that I'll go out of business"? It's just a moral one, "They don't deserve that amount of money"? I can't say I'm surprised, TBH.
    • toomuchtodo 5y ago
      Yep, exactly.
    • lordnacho 5y ago
      The economic argument in this case would be sticky prices in reverse. But a reluctance to change prices at an existing business does not mean we won't get changed prices.
    • pengaru 5y ago
      > It's just a moral one, "They don't deserve that amount of money"? It's a denial/delayed acceptance of inflation/cost-of-living increases. These people are struggling to accept that money is worth sufficiently less than it was before to make the status quo untenable. Or if they have accepted it, they're determined to make the underlings eat the loss.
    • jzb 5y ago
      That's the crux of it in a lot of cases. People have come to view a certain class of work as "not worth" paying a living wage. What's worse, the jobs they view as "not worth" a living wage are the ones that do the work we need (or at least really really want) done. If all the cooks, servers, cosmetologists, janitors, lawn care / landscaping, delivery drivers, warehouse workers and so forth stopped doing their jobs... everything would suck real quickly. But somehow we're not willing to pay them a living wage.
      • mananaysiempre 5y ago
        > If all the cooks, servers, cosmetologists, janitors, lawn care / landscaping, delivery drivers, warehouse workers and so forth stopped doing their jobs... everything would suck real quickly. That’s the idea behind a general strike I believe, but coordination is hard (and figuring out a set of demands that is effective long term may be harder). /me once stayed in Athens during a garbage collectors’ strike; didn’t suck as much as you’d think, but was undeniably spectacular
  • mynameishere 5y ago
    The government paying people to not work has nothing to do with this oft-misunderstood "invisible hand" metaphor. I'm not sure why people think that a barber is somehow able to compete with the infinite resources of the government hellbent on idling labor capacity. Very few rational people will work for 25/hour if they can sit and watch TV for 20/hour. Saying "pay more" is not helpful in that situation. The labor pool is basically limited to those who have enough foresight to realize the gravy train might end.
    • ineedasername 5y ago
      Another way to put the same observation is that, given the choice, people will sacrifice a little bit of income in order to avoid working a crappy job.
  • Viliam1234 5y ago
    If bread costs more than I would like, it's not a shortage of bread, it's just the bread being more expensive than I would like it to be. Exactly the same thing about labor. There are many people looking for a new job, and if you make it known that you pay more than they have now, some of them will run to you. I have seen software companies making a similar mistake. Of course, the salaries there are way above the minimum wage, but still the same logic. They complain: "We wanted to start this new project, but we can't find developers; we have been posting job announcements online for five years already!" I look at the job announcement, it offers about 2/3 of the market salary. "Have you tried offering more?" Blank stares. I guess, how could that possibly be relevant? Maybe the problem is that the employers see employees as "the ones who obey", which is generally true... except for the job interviews. There, you cannot simply give orders and expect them to be obeyed. The candidate will only take the offer if they like the proposed deal. Also, for the ones who accept, you can gradually make the deal worse, by increasing the workload and keeping salary the same regardless of inflation... until the surprising moment when the employee decides to walk away, because they got a better deal somewhere else.
• prepend 5y ago
  It’s easy to understand. If your customers won’t buy Mexican food at a high enough price to pay $20/hour, it’s better to close than to stay open and lose money. Labor is the highest cost for a restaurant (higher than rent) so bumping wages from $15 to $20 may not be possible if you can’t also raise prices by 30%. This may be hard to understand for us rich programmers. But it’s quite simple for companies that have really stiff price competition.
  • varjag 5y ago
    The competition recruits from the same labor pool, I don't think we misunderstand anything.
    • mananaysiempre 5y ago
      The demand may just go elsewhere, like “screw it, I’ll just go to the supermarket”—not sure how plausible that is in a US context specifically, but surely there’s a possible world where the majority of people just stop eating Mexican or even most street food.
      • tarr11 5y ago
        We stopped eating out nearly as much during the pandemic and replaced it with higher quality groceries and prepared foods from delivery services.
        • mananaysiempre 5y ago
          I’m sure a lower-quality segment will emerge once the whole thing has time to equilibrize :) And in some places the social aspect is not insignificant. (In others you’re better off without it, true.)
  • pnutjam 5y ago
    Honestly, it's better for these shoddy underpaid and low value places to close. They just undercut the good guys and slowly burn money.
• MeinBlutIstBlau 5y ago
  Most restaurants operate on very slim margins. That's why many smaller financial institutions do not risk commercial loans on them unless they've been established for a while or it's guaranteed by an SBA loan which heavily minimizes the financials risk. Honestly I feel like most people would pay it. It seems to me that everybody just accepts you pay like 10x the price of what you could make something yourself as reasonable. I don't get it and it irks me that we even need to participate in this facade that we're all some sort of royalty class that are entitled this.
  • bluedino 5y ago
    It does seem like we're in a good bubble. People eat out probably 10x more a month than they did 30 years ago. Now with delivery on top of that...
  • mananaysiempre 5y ago
    Something inexpensive that enables people to pay for not going to the effort to cook relatively tasty food exists everywhere that’s large enough to support the overhead, since before the modern times. It doesn’t have to be particularly good or healthy, but it does exist. In some European cities supermarkets just sell packaged premade salads and pasta, for example. Personal service might be more expensive overall, but I’m not ready to immediately declare that obvious just because the people behind it are visible to the buyer.
• saas_sam 5y ago
  The only way to avoid shutting down would be to raise prices, right? What if the owner knew customers wouldn't pay higher prices because he has tried to raise prices many times before and knows that it turns customers away?
• chaostheory 5y ago
  The margins tend to already be razor thin. It is strange that they weren’t willing to try experimenting with higher wages and less employees. Maybe they’re already too overwhelmed from the pandemic to continue? The perception that not a lot of people are willing to pay for higher priced Chinese and Mexican foods factored into the decision?
• pnutjam 5y ago
  I heard a hotel guy being interviewed on NPR afew weeks ago and he basically said raising wages was not an option because other places will just raise their wages too and it won't let them stand out. So he'd rather encourage tipping from customers. Almost bent my steering wheel in rage....
• mananaysiempre 5y ago
  Prices can be very, very sticky? In my city it appears (to my uninvolved eye) that several levels of floor space sublessors need to run out of lessees by raising prices in order to pay (possibly their debt to) the higher levels, with a couple months’ latency for each, until retail can reasonably exist again.
  • hanniabu 5y ago
    If they start raising prices then CPI will start reflecting true inflation, and we can't be having that!
    • mananaysiempre 5y ago
      I doubt it’s that advanced, honestly, the commercial real estate market here is pretty thuggish. And everybody’s prices are sticky, it’s seemingly part of how we define fairness. (See the haircut comment two levels up for an example from the consumer side.) I’m certain economists have loads and loads of strong words to say to all of us about this behaviour.
    • gruez 5y ago
      Inflation would look bad for politicians, but I doubt small business owners are ruining their business just so BLS can put out slightly better inflation numbers.
• AnthonyMouse 5y ago
  > b) have a business so close to the brink of shutting down that an additional $20-50 an hour will shutter you. This is the default state of businesses in competitive markets. If you could do with less then you could charge less, and one of your competitors will start doing that to take your customers, so you have to do the same. Of course, the alternative is to pay more and then raise prices. Which you might not be able to do if the additional cost is imposed only on you, but when your competitors have to pay it too, you all raise prices without losing business to each other. But the overall industry would still lose some business to customers not being able to afford its products, and some of the suppliers still go out of business. Unless the labor costs increase generally instead of only for that industry. Because then your customers can afford the higher prices. If labor becomes a higher percentage of operating costs overall, they may even be able to afford more than before. This is why a UBI is good for businesses -- customers have more money in their pockets.
  • delusional 5y ago
    This is a purely economic argument which if fine, but misses the vital non-economic side-effects. More money could lower the stress of the employees (given they now no longer have to worry about paying their bills) which may lead to higher quality products. Increased wages may attracts better talent or more exploitation conscious consumers. Hell, it may even more the owner more likely to listen to his staff, given that they become a significant expense. That could increase efficiency. We should be careful not to make wage depression some sort of abstract "logical" natural state. Wages are low for a reason and active effort has to be expended to keep them as they are.
    • arcbyte 5y ago
      Cost reduction is not a "state", it's a process. And it is a natural process that will always occur. In any endeavor, humans will find ways to reduce the amount of inputs needed for outputs.
    • listless 5y ago
      The problem is that it IS a purely economic problem. It's just math - supply, demand and competition. Small business in particular is captured by these forces. It cannot increase prices because people will go to the competition. And it has no margin to absorb people's desire to earn enough to live a middle-class life doing a job that you can hire anyone to do. All of that said, what you could reasonably hope would happen is that all businesses raise their prices because of the labor shortage (already happening around me), but then you have another problem which is that the increased wages are offset by the increased prices. At the current click, all that's going to be left are the corporations with enough wiggle room to absorb the increase, but they will also pass on prices. I would just prefer not to live in that world. I think corporations increase inequity (Walmart could pay a living wage and full health care, but doesn't) and small business puts the power back with the individual.
• jdavis703 5y ago
  There are a lot of businesses on the brink. My regular Italian spot went out of business in the depths of the pandemic. They re-capitalized and opened again but with higher prices. Their clientele is upper middle class (i.e. relatively price insensitive). But they still wrote a long letter explaining why prices increased (more benefits, more salary) and asking that people support their increased overhead by becoming regular patrons. I think operators are really scared people will judge them on value if the price goes up.
  • lordnacho 5y ago
    Is it working for them? I get the feeling that it might, depending on the price level they were at previously. Perhaps the thing to do would have been to rebrand completely, make the place look a bit more fancy.
    • jdavis703 5y ago
      The place doesn’t seem quite as busy as before. But I’m not sure if that’s because of price changes or some general post-pandemic change (e.g. they also added outdoor dining, which might make the place feel less busy.)
  • 88913527 5y ago
    It's one approach. A bit carrot-and-stick, but what I have seen in restaurants in upper class neighborhoods is chastising changes to public policy. Each menu page has a footnote mentioning there's a X% charge (that isn't the tip) applied to each menu item due to a rise in minimum wage. Since they re-printed the menus anyways to add the footnote, they could have simply been more transparent and increased each menu item's cost. Most people regularly dining at fancy ocean-view restaurants (which I rarely frequent) can afford the higher cost.
• angelzen 5y ago
  The owner won't hire a couple of cooks at $20 an hour because he won't be able to pay off his mortgages anymore. The banker sits behind all this and collects his fat percentage cut while laughing at the plebs fighting with each other over scraps. We have a 3 tier system: minimum wage workers condemned to a perpetual state of precarity, middle class professional and small business types that toil away paying hefty mortgages one medical emergency from bankruptcy and capital owners that lend around money at extortionate rates and run to the nanny state to print money and save their skin whenever their bets go sour. Guess which strata gets most of the flak. Tip: it's not those at the top.
  • Ericson2314 5y ago
    > capital owners that lend around money at extortionate rates and run to the nanny state to print money and save their skin whenever their bets go sour. Guess which strata gets most of the flak. Your heart is in the right place, but you are doing the devil's work by accident. "extortionate rates" and "printing money" do not happen at once! We have low interest rates, which are good for debtors. The banks now will get very little interest on those mortgages, so that can't be the sole piece of they are making a killing. What also happens is low interest loans allow the value of land to go up, and land speculation works too well. Worse, there are laws and other things preventing density so the desire to have as many tenants as possible doesn't actually reduce the cost of floor area.
    • imtringued 5y ago
      It's actually quite interesting. Keynes figured out that government stimulus works but it only solves the money problem. When you solve the money problem people simply flee into a different asset that maintains its value. That asset is land. So the business cycle also results in a real estate cycle. "Solving" the dot com bubble encouraged land speculation and ultimately ended in 2008. The problem isn't the stimulus although there are alternative proposals to reduce the amount of government intervention. Land is simply unique in the fact that it is already there and private land ownership is merely the right to exclude people from the land. There simply isn't any good argument for why money earned off the land itself should go to a private individual. It should go to the government because it is protecting the land with its army and building infrastructure to maintain its value.
• smsm42 5y ago
  You're presenting it as he has an infinite money supply and just of pure stupidity and greed doesn't want to pay $20 or $50 per hour. Maybe his supply is not unlimited, and maybe nobody would buy a taco for $50 and he knows it, and he made the calculation and decided there's no way to pay all his costs, charge the price that people would be willing to pay, and make a profit. Now, if you know how to do it, there's a big opportunity for you just opened up. You could buy the place (probably for cheap), hire the cooks for $20 or for $50 (they would be ecstatic to work for you, I am sure, you're not that previous greedy owner and would pay them lavishly) and become the model of a businessman. People love good Mexican food. I know I do. I know many people that do. You can't lose, really - it's a mystery why there aren't more Mexican food billionaires... It's so simple, after all. Somehow most of such attempts I've heard of never turned a profit and shut down soon. Maybe those restaurant owners know something about their business that is not obvious to a random person only reading newspaper headlines...
  • belltaco 5y ago
    >Maybe his supply is not unlimited, and maybe nobody would buy a taco for $50 and he knows it Not true. >While Chipotle raised wages from $13 to $15 an hour, or 15.4%, menu prices, on the other hand, were hiked between 3.5% and 4%. Price increases are generally quite small relative to the increase in workers' wages. >he knows it, and he made the calculation and decided there's no way to pay all his costs, charge the price that people would be willing to pay, and make a profit. How does he know for certain? He never even tried raising prices.
    • smsm42 5y ago
      We're not talking about a multinational chain spanning continents with billions of dollars in revenue, tens of thosands of employees and a NYSE stock ticker - and not just any ticker but a part of S&P 500! Such a corporation has a lot of means to raise salaries a little without going under, they could borrow millions, they could issue stock, they could sell assets (which they have in millions), could restructure business, etc. etc. We were talking about a single shop owner which usually doesn't measure revenues in billions and runs everything out of his own pocket and bank loans usually backed by the same pocket. If you don't understand the difference, maybe giving advice to businesses shouldn't be your primary pastime. > How does he know for certain? He never even tried raising prices. Sure, such a thought would never come to his mind without your help. And surely, a business owner would never know a thing about his own business and his own pricing without you instructing him on it with such a sage advice as "just try it!". Maybe tons of people would line up for $50 tacos and only the stupidity of business owners - which, as one, for some reason, choose to ignore your advice to just try it, which would make them billionaires - prevent it from happening. Seriously. How much disdain one must have for people actually living the thing...
• maxlybbert 5y ago
  > I don't understand it, that you'd either > > a) be willing to drive your business into the ground serving a limited menu because you won't hire a couple cooks at $20 an hour, or > > b) have a business so close to the brink of shutting down that an additional $20-50 an hour will shutter you. Restaurants run on notoriously thin margins ( https://upserve.com/restaurant-insider/profit-margins/ https://upserve.com/restaurant-insider/profit-margins/ ). There's a reason restaurants often fail even in good economic times: even small miscalculations or mistakes can put a good restaurant out of business.
  • Ericson2314 5y ago
    Maybe we need buffet-style restaurants that serve nutritious perishable food without all the extra plating, waters, and other frivolities so people can bask in being served and pretend they are aristocracy. Everyone cooking is a massive inefficiency, and yet paying for conventional restaurants is also uneconomical. Eating shelf-stable food is cheaper than cooking for most people, but only until the bad health effects catch up. Just like global warming, the market can only optimize over small time horizons without politically pricing in externalities.
    • pooper 5y ago
      I tried to look into that. I think problem is two fold: 1. options 2. audience 1. options: I need to be able to serve two or three meal options tops depending on what is available / inexpensive. People really like having options but that drives costs up which will drive me up a wall. 2. audience: I need a captive audience such as prisoners in a prison or resident college students who pay for the whole semester at a cafeteria.
      • Ericson2314 5y ago
        Well, 1) I personally hate choosing things from menus as as I truly like all the food "that isn't bad" (for all dishes there exists a pareto equal or better dish which I like. Something like that?) That fact that a single dish du jour can get more attention an planning re seasonal ingredients and other inputs due diligence is a huge plus too. 2) I am also fine committing to eating at the same restaurant once, twice, maybe even 3 times a week, and do that anyways. Count me in!
• aynyc 5y ago
  You forgot option c) raise the price of the menu to cover the cost.
  • YLYvYkHeB2NRNT 5y ago
    As a health care service provider, this means I'm dropping your insurance plan and you pay my fees directly. Are you okay with that?
    • aynyc 5y ago
      If the choice is between no health care or pay a higher price? Then yes, I'm OK with that. That's what people do without health care.
• csomar 5y ago
  Restaurants, Fast-foods and bars are already quite expensive. That's why they are competitive: customers are very sensitive to price, and have limited budgets. It's like airlines. Raising the prices would not work. If it did, some of them would have already done it.
• ChrisMarshallNY 5y ago
  The thing about being a business owner, is that you are the last one on the payroll (if you are a good owner). All the bills get paid (including wages), then you get what's left over. If you had a good week, then you get a nice stack of Benjamins. If you had a bad week; maybe not so much. In fact, you may even need to chip in, to keep the lights on. I have seen, many, many SMB owners start living "high on the hog," as soon as they start doing well. They buy a 5-bedroom house in a marqée neighborhood, a C-class Merc., LV bags, etc. I know, for a fact, that most of them make far less than I ever did. Frequently, they get the company to pay for a lot of it (put one bullet in the chamber, and give it a spin). They have gotten used to living large, and it's damn difficult to downsize, after that. So that means they need to do everything they can, to make sure the last pile is as big as possible; regardless of how the corporation is performing. If they banked on hiring undocumented workers, or skilled artisans at rock-bottom prices, and that pool dries up, they are left with the choice of leasing a Subaru, and selling the Jag, or trying to make whoever has been loyal enough to stick around, fill in the gaps.
  • delusional 5y ago
    You might say the business owners feel entitled to live off other peoples work.
    • ChrisMarshallNY 5y ago
      Yeah, it's not really that simple. A business owner is the last one on the payroll, so they get the extra, if things go well, but they also assume pretty substantial risk. If things go badly, the buck stops at their front door; possibly on an eviction notice. I have also watched many of these same SMB owners, hit the skids, and they fall hard. Many wreck their credit for decades, destroy any retirement savings, and, worst of all, suffer terrible self-respect damage. I'm not being snarky, there. That demolished self-confidence can be bad. I have known folks that have become suicidal, after losing a business. Makes being smug, kinda hard. They may have been jerks, when they were doing well, but it's quite sobering, to see what happens, when things go pear-shaped. Doubly so, if they have a family.
    • 5y ago
• zthrowaway 5y ago
  Yeah because you clearly understand his entire financial situation and profit margin to justify that cost right? How are you so sure customers pay the higher food prices? People think small business owners are swimming in money, and that’s just not true.
• lordnacho 5y ago
  That rock-and-a-hard-place choice is often what happens when a business dies, right? You live between your costs and your income. This may just be the business version of the 9/11 falling man. It may well be that the market for food places in your area cannot support the current set of outlets, and some of them will have to die, and this is how they die. The way I think about it is there's a metastability in the economy that's not often discussed. Basically, unviable business models can survive small disturbances. One chef gets fed up, no problem. One customer think it's too expensive for what he gets, no problem. When there's a big shakeup, it all comes crashing down.
• matchagaucho 5y ago
  That same owner could be paying themselves $25 per hour. The average small restaurant owner makes ~$50K per year and has very little line of credit. So unfortunately it's a zero-sum game. Increasing cooks to $20hr means reducing their own comp to $20hr.
  • antisthenes 5y ago
    It could very well be worse than that. A cultural shift may mean that people collectively decided that they will, for example, spend 8% of their income on eating out rather than 12%. That represents an aggregate decrease in demand and would indicate a negative sum game (something most of HN seems incapable of comprehending)
    • imtringued 5y ago
      >That represents an aggregate decrease in demand and would indicate a negative sum game (something most of HN seems incapable of comprehending) No, it represents a positive sum game because the job being offered is unsustainable and therefore should be replaced by a more sustainable job.
  • kevinventullo 5y ago
    Does that $50k per year include the equity they are presumably building with that line of credit?
    • matchagaucho 5y ago
      There's no equity in the LOC. The bank is first in line to reclaim that in the event of a chapter event. The equity is almost always in the real estate. McDonalds basically just keeps the cash flowing while the land increases in value. Small restaurant owners are more likely to rent.
• notanzaiiswear 5y ago
  I am not in the Restaurant business, so I don't know how many meals they typically sell, or how much they charge. Let's say he pays his cooks 30$ more. How long are they open, how many people work in the kitchen? Two people, 12 hours? So that would be 720$ more per day. How much do they earn per meal? In my country in most restaurants charge around 10$ for a meal. Even assuming no costs for the food resources, that would mean 72 more meals to sell, per day. To me that sounds like quite a challenge.
• prirun 5y ago
  I've read that food margins have been extremely thin for many years - well before the pandemic. Maybe the owner is just tired of working his ass off for not much in return, and staffing problem is just the straw that broke the camel's back. Maybe the owner would be better off with unemployment!
• anonuser123456 5y ago
  Restaurant margins are very thin. The extra 20-50$/hr is literally the owners salary for running the business. Why do you think they will continue to run the business making 0$ ?
• effingwewt 5y ago
  Amazing is the cognitive dissonance on display. The business owners one and all took the PPP loans which were essentially grants, and that was OK, but when it's for the workers it's destroying their predatory businesses. And they would rather close than make less profit to pay a living wage. We already get no healthcare and no retirement. How much further down can we be pushed?
  • hungryforcodes 5y ago
    Only in the US. In Canada and Europe of course you get retirement and healthcare.
• jwommack 5y ago
  It’s not an additional $20-50 an hour it’s the doubling of their single biggest expense in a sector known for extremely thin margins at a time where all of their supplies are also shooting up drastically in price.
• throwawaysea 5y ago
  What makes it obvious that this is a worker’s rights or wage gap? Aren’t people able to demand higher than normal wages or simply not work because they are propped up by a host of COVID measures like stimulus payments and eviction moratoriums? That is skewing the market and being used to push for higher compensation. It’s not much different from cheap money supply at low interest rates increasing the price of assets.
• thatfrenchguy 5y ago
  When you’re used to pay little amounts of money for things, it takes time to rewire your mind. I remember being upset at chocolate or cheese prices when I moved to California for at least one or two years.
• robomartin 5y ago
  One has to have a rudimentary understanding of business in order to understand the realities of a forced high minimum wage. Restaurants and manufacturing operations can’t do not operate in a distortion field where external realities do not matter. In the case of the restaurant, what they are able to charge for their product is governed by myriad variables, some of which are: location, competitive landscape (how many, distance, kind, etc.), audience dynamics (breakfast and lunch crowd or spread across the day and evening), etc. Competition drives both prices and margins down. Once an area has reached price stability, it is very hard to raise prices. So, you are selling a burger for $10 and, if you are lucky, you make $2 to $3 on it. Depending on the nature of the organization, delivering burgers might require 5 to 10 people. Along come politicians pandering for votes and push for a 50% increase in minimum wage. This increase causes a chain reaction through the entire wage structure. The guy making $10/hr now makes $15. Someone making $15 makes $20, and so on. Most people don’t stop to do a bit of math and understand reality before accusing business people of being evil, greedy, or both. What ends up happening is that the thin margins and realities of the market can’t support the delta in cost structure. The business either controls costs or shuts down. How do you control costs? Less people doing more or less people and automation. A few more options, but that’s the basic idea. In other words, the politicians get the votes and continue on their sweet power ride. Those who voted for them lose their jobs. A bunch of the businesses who created jobs shutter. Fantastic deal, isn’t it? I am in the process of setting-up a manufacturing operation to produce up to 100K of our products per month. We want to manufacture in the US. The ONLY WAY this is even remotely possible is through automation. We are explicitly designing both the product and the manufacturing process for as close as we can get to lights-out manufacturing. We cannot afford hordes of people at $15/hr. The only alternative is to go to China, Taiwan, Mexico or other shores. That’s the reality we have created for ourselves through what I can only describe as ignorant voting decisions that only benefit politicians. Everything we use in manufacturing comes from China. We can either understand this reality and think of creative way not to lose even more job-generating industries or we can continue to be led by the nose by politicians with no skin in the game and one day wake up and think “What happened?” without realizing we did it to ourselves.