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Here's what I don't understand. I the example the author gives, a sandwich is $11, and at let's say 9% profit margin the restaurant makes $1 on it. Why not make

Here's what I don't understand. I the example the author gives, a sandwich is $11, and at let's say 9% profit margin the restaurant makes $1 on it. Why not make the sandwich $12 and double your profit? Sure it doesn't make a huge difference for the customers.

bell-cot 5y ago
The profit margins are not that different all sorts of consumer goods - restaurant meals, groceries, gasoline, etc. And there are zillions of restaurants, grocery stores, gas stations, etc. Maybe a few of 'em tried that strategy, and found that it usually didn't work out so well.
- acdha 5y ago
  > Maybe a few of 'em tried that strategy, and found that it usually didn't work out so well. We know that's not the case because if there was even a shred of data driving this decision they would have been crowing about it. This happens every time someone proposes that businesses be better members of their communities — some reactionary will say that they'll be unable to create all of those jobs, but they're never asked why they're less wrong than everyone who very confidently said the same thing on the previous iteration. You can copy-and-paste that for so many issues — wages, benefits like sick leave or health insurance, pollution, banning indoor smoking or serving drinks to obviously intoxicated people, etc. The flip side of this is that it only looks at a single part of a complex system: for example, how much does staff turnover cost the average business? You'll never, ever hear someone whining about the prospect of paying a living wage acknowledge the businesses who've found that treating their workers better saved them money because they saved money from not having to constantly be hiring and people were more productive.
callmeal 5y ago
But that would mean he would have to pay his workers more. How will he keep his employees in their place when they don't have to kowtow to him for shifts and payments?
jwagenet 5y ago
It depends on if X% of customers decide the sandwich isn't worth more than $11 and the reduced demand reduces the overall profit. Whether they can afford it or not, many consumers have a psychological value they place on a sandwich.
soul_grafitti 5y ago
Restaurants to not net 9% profit. Seriously - doesn't happen. Bars maybe, food? No.

bell-cot 5y ago

The profit margins are not that different all sorts of consumer goods - restaurant meals, groceries, gasoline, etc. And there are zillions of restaurants, grocery stores, gas stations, etc. Maybe a few of 'em tried that strategy, and found that it usually didn't work out so well.

acdha 5y ago
> Maybe a few of 'em tried that strategy, and found that it usually didn't work out so well. We know that's not the case because if there was even a shred of data driving this decision they would have been crowing about it. This happens every time someone proposes that businesses be better members of their communities — some reactionary will say that they'll be unable to create all of those jobs, but they're never asked why they're less wrong than everyone who very confidently said the same thing on the previous iteration. You can copy-and-paste that for so many issues — wages, benefits like sick leave or health insurance, pollution, banning indoor smoking or serving drinks to obviously intoxicated people, etc. The flip side of this is that it only looks at a single part of a complex system: for example, how much does staff turnover cost the average business? You'll never, ever hear someone whining about the prospect of paying a living wage acknowledge the businesses who've found that treating their workers better saved them money because they saved money from not having to constantly be hiring and people were more productive.

callmeal 5y ago

But that would mean he would have to pay his workers more. How will he keep his employees in their place when they don't have to kowtow to him for shifts and payments?

jwagenet 5y ago

It depends on if X% of customers decide the sandwich isn't worth more than $11 and the reduced demand reduces the overall profit. Whether they can afford it or not, many consumers have a psychological value they place on a sandwich.

soul_grafitti 5y ago

Restaurants to not net 9% profit. Seriously - doesn't happen. Bars maybe, food? No.