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You are assuming that wages represent 100% of costs when its more apt to be 30%. You are assuming that all employees are full time when in fact the minority oft

You are assuming that wages represent 100% of costs when its more apt to be 30%. You are assuming that all employees are full time when in fact the minority often are. Lastly you are assuming that people will be paid 20% more for working 20% less. They would be making 25% more 5/4 not 4/5. For example 100 for working 5 hours is 20 100 for working 4 hours is 25. Those errors corrected lets blow through a hypothetical. A shop that employs 40% of its folks full time will have to hire a ~10% (25% not 20%) bigger workforce in order to provide an identical number of labor hours. However labor costs while they are substantial aren't 100% of costs. It would be more normal for employee labor to be closer to 30%. This means costs ought to increase more like 3% not 20%. Businesses can take the additional profits from rising prices in fact only partially attributable to rising prices of inputs and probably come out even. It ought to be noted that its also possible that many firms can't all hire 10% more labor making paying the overtime rate for some of its people the only feasible alternative to serving business. Paying 8 hours of overtime for a given employee is like paying for an extra 4 hours of pay or once again 10% of effected employees minus the additional cost of acquisition and management. This may end up being the desirable option.

pc86 5y ago
By focusing on the numbers specifically you're missing my entire point, which is that there are always businesses on the edge. This will put some businesses out, causing those employees to lose jobs and those owners to either try to open another business (expensive) or find work elsewhere (and most of the time if you own a business and it goes under you're not eligible for unemployment). Whether that's okay, or even good, is a separate discussion, but I don't see anyone arguing that not a single business will go under by having their payroll costs go up to cover the same number of hours every week. > Businesses can take the additional profits from rising prices If a business is increasing its prices, it's much more likely that it's doing so because its own COGS and other expenses are increasingly similarly.
- michaelmrose 5y ago
  People have a need say dinner. Many people will compete to provide dinner and those who are only marginally successful will fall off the game board under absolutely any set of ground rules to be replaced by others who are either better suited, better capitalized, or luckier. Any change in the ground rules that makes life more expensive be it implementing health inspects, fire codes, minimum wage, over time, child labor will boot someone from barely functional to defunct to be replaced by someone smarter and better. Such failures are disruptive but unemployment shields the employees to some degree from mischance and ultimately they don't long term care if bob's eatery goes out of business. Instead they care if there is someone they can cook serve or deliver dinner for. On average someone will be interested in serving that need and statistically the survivor will be a better business than bobs. It's unfortunate if Bob goes under but statistically Bob as the owner of a business with 500+ employees he is well inside of the 1% and his financial well being is the last thing we ought to optimize for.

pc86 5y ago

By focusing on the numbers specifically you're missing my entire point, which is that there are always businesses on the edge. This will put some businesses out, causing those employees to lose jobs and those owners to either try to open another business (expensive) or find work elsewhere (and most of the time if you own a business and it goes under you're not eligible for unemployment). Whether that's okay, or even good, is a separate discussion, but I don't see anyone arguing that not a single business will go under by having their payroll costs go up to cover the same number of hours every week. > Businesses can take the additional profits from rising prices If a business is increasing its prices, it's much more likely that it's doing so because its own COGS and other expenses are increasingly similarly.

michaelmrose 5y ago
People have a need say dinner. Many people will compete to provide dinner and those who are only marginally successful will fall off the game board under absolutely any set of ground rules to be replaced by others who are either better suited, better capitalized, or luckier. Any change in the ground rules that makes life more expensive be it implementing health inspects, fire codes, minimum wage, over time, child labor will boot someone from barely functional to defunct to be replaced by someone smarter and better. Such failures are disruptive but unemployment shields the employees to some degree from mischance and ultimately they don't long term care if bob's eatery goes out of business. Instead they care if there is someone they can cook serve or deliver dinner for. On average someone will be interested in serving that need and statistically the survivor will be a better business than bobs. It's unfortunate if Bob goes under but statistically Bob as the owner of a business with 500+ employees he is well inside of the 1% and his financial well being is the last thing we ought to optimize for.