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> If a coffeeshop wants to pay their employees more they will have to raise prices This does not follow purely from the facts presented. Consider: "If a coffe

> If a coffeeshop wants to pay their employees more they will have to raise prices This does not follow purely from the facts presented. Consider: "If a coffee shop wanted to pay their employees more, the coffee shop itself might take a smaller cut and keep prices the same."

zeroonetwothree 4y ago
In practice coffee shops have tiny margins so they can’t afford to do that.
- hailwren 4y ago
  I also hate tipping everywhere, but coffee shops might also like to adjust their prices slightly for customers that don’t mind paying a bit more for well paid staff and for those customers to whom price is a major concern when choosing where to purchase their coffee. Dynamic pricing makes some sense in the concept of trying to capture maximum demand, it just feels horrible as a customer.
  - Raed667 4y ago
    we are not machines, if i'm paying more (or even less) than the person in front of me at the line: 1- I'll make a scene 2- I'll never come back 3- It is probably a discrimination lawsuit waiting to happen
    - hailwren 4y ago
      I mean, this is what is happening with the dynamic tipping system and none of these things appear to be happening.
      - freedomben 4y ago
        There's a critical difference between dynamic pricing and tipping: one is optional, the other is not. That makes a huge difference in the psychology.
        hailwren 4y ago
        Ok, you can replace dynamic pricing with dynamic tipping in my original comment if that makes it more comprehensible for you.
      - Raed667 4y ago
        Because it is thinly veiled as a customer-choice. Again, not saying the outcome is different, but socially it won't be accepted, as it removes that veil.
- pwdisswordfish9 4y ago
  I'll reiterate: the resolution is an answer to a question of whether it is true that "if a coffeeshop wants to pay their employees more they will have to raise prices". If you have a defense (or a response where the phrase "in practice" appears anywhere, really), then that's a separate matter, but it does not follow strictly from the matters presented that the coffee shop "will have to raise prices" in order to pay their employees more. That's, in fact, a stronger claim than the factorable defense that the author (and others who make the same argument) is depending on. In other words, both "have to" and "can't" are doing a lot of heavy lifting.
- loco5niner 4y ago
  I refuse to believe that bean water has tiny margins.
  - snowwrestler 4y ago
    The bean water has huge margins but is only a tiny part of the expenses.
- bluedino 4y ago
  They also have $6 cups of coffee.
Mikeb85 4y ago
Lol foodservice margins are already miniscule. No, you'll pay more.
- asdff 4y ago
  I can see that for restaurants, the price of a good portion of meat at home isn't all that cheaper, but for coffee shops? That $6 lattee probably cost them thirty cents of milk sugar and beans and less than a dollar in labor to put in front of you.
  - Mikeb85 4y ago
    If I were to facepalm any harder I'd knock myself out... This is legit among the worst takes I've ever heard. Edit - especially puzzling to hear since software has little to no marginal costs and is almost all capital costs and labour. First of all, typical rent for a coffee shop sized space in a major city is around $8-10k per month. So factor that in. Second, baristas don't get paid on demand... They get paid hourly times how many hours they work. In a tight labour market, assume $20 per hour times 8 hours per day for EACH barista. 2 baristas, that's $360 per day in labour costs alone. So you need to sell around 70 lattes per day just to break even on labour, nevermind rent or recovering capital costs. So capital costs. A typical commercial espresso machine is $20k. But let's talk about the whole buildout. Coffee shops don't need a full commercial kitchen but there's still coffee machines, oven or panini, plumbing, electrical, decor, refrigeration, etc... So let's say $200 per square foot (versus $400 for a typical restaurant). Times let's say 2000 square feet. That's $400k. That needs to be recovered over the course of the lease just to BREAK EVEN. Nevermind to actually make the business worthwhile. When you go for a latte or go out to eat you're not paying only the marginal cost of your product, you're paying for everything that went into making it possible to produce that product. Honestly people don't deserve restaurants. Just make your coffee at home. Edit - this is like thinking when you buy an iPhone you pay only for the raw materials, not all the investment into factories/equipment and engineers to make it work...
    - asdff 4y ago
      Anywhere you read suggests margins are a lot higher on cafes than restaurants so my point stands I think. I've also been seeing figures like 80 cents thrown around for the true cost of a latte with $7lb beans and $3gal milk, cup included, not rent though. All businesses bear overhead costs, but at least you can sell your used espresso machine for the price you paid for it when your cafe tanks and can get away with staffing one or two people for most of your working hours. 70 orders a day would be easy to hit I would think for a cafe; from my cursory research independent cafes average 250-300 cups a day while your starbucks or places as busy as them might be pushing 600 cups a day.

zeroonetwothree 4y ago

In practice coffee shops have tiny margins so they can’t afford to do that.

hailwren 4y ago
I also hate tipping everywhere, but coffee shops might also like to adjust their prices slightly for customers that don’t mind paying a bit more for well paid staff and for those customers to whom price is a major concern when choosing where to purchase their coffee. Dynamic pricing makes some sense in the concept of trying to capture maximum demand, it just feels horrible as a customer.
- Raed667 4y ago
  we are not machines, if i'm paying more (or even less) than the person in front of me at the line: 1- I'll make a scene 2- I'll never come back 3- It is probably a discrimination lawsuit waiting to happen
  - hailwren 4y ago
    I mean, this is what is happening with the dynamic tipping system and none of these things appear to be happening.
    - freedomben 4y ago
      There's a critical difference between dynamic pricing and tipping: one is optional, the other is not. That makes a huge difference in the psychology.
      - hailwren 4y ago
        Ok, you can replace dynamic pricing with dynamic tipping in my original comment if that makes it more comprehensible for you.
    - Raed667 4y ago
      Because it is thinly veiled as a customer-choice. Again, not saying the outcome is different, but socially it won't be accepted, as it removes that veil.
pwdisswordfish9 4y ago
I'll reiterate: the resolution is an answer to a question of whether it is true that "if a coffeeshop wants to pay their employees more they will have to raise prices". If you have a defense (or a response where the phrase "in practice" appears anywhere, really), then that's a separate matter, but it does not follow strictly from the matters presented that the coffee shop "will have to raise prices" in order to pay their employees more. That's, in fact, a stronger claim than the factorable defense that the author (and others who make the same argument) is depending on. In other words, both "have to" and "can't" are doing a lot of heavy lifting.
loco5niner 4y ago
I refuse to believe that bean water has tiny margins.
- snowwrestler 4y ago
  The bean water has huge margins but is only a tiny part of the expenses.
bluedino 4y ago
They also have $6 cups of coffee.

Mikeb85 4y ago

Lol foodservice margins are already miniscule. No, you'll pay more.

asdff 4y ago
I can see that for restaurants, the price of a good portion of meat at home isn't all that cheaper, but for coffee shops? That $6 lattee probably cost them thirty cents of milk sugar and beans and less than a dollar in labor to put in front of you.
- Mikeb85 4y ago
  If I were to facepalm any harder I'd knock myself out... This is legit among the worst takes I've ever heard. Edit - especially puzzling to hear since software has little to no marginal costs and is almost all capital costs and labour. First of all, typical rent for a coffee shop sized space in a major city is around $8-10k per month. So factor that in. Second, baristas don't get paid on demand... They get paid hourly times how many hours they work. In a tight labour market, assume $20 per hour times 8 hours per day for EACH barista. 2 baristas, that's $360 per day in labour costs alone. So you need to sell around 70 lattes per day just to break even on labour, nevermind rent or recovering capital costs. So capital costs. A typical commercial espresso machine is $20k. But let's talk about the whole buildout. Coffee shops don't need a full commercial kitchen but there's still coffee machines, oven or panini, plumbing, electrical, decor, refrigeration, etc... So let's say $200 per square foot (versus $400 for a typical restaurant). Times let's say 2000 square feet. That's $400k. That needs to be recovered over the course of the lease just to BREAK EVEN. Nevermind to actually make the business worthwhile. When you go for a latte or go out to eat you're not paying only the marginal cost of your product, you're paying for everything that went into making it possible to produce that product. Honestly people don't deserve restaurants. Just make your coffee at home. Edit - this is like thinking when you buy an iPhone you pay only for the raw materials, not all the investment into factories/equipment and engineers to make it work...
  - asdff 4y ago
    Anywhere you read suggests margins are a lot higher on cafes than restaurants so my point stands I think. I've also been seeing figures like 80 cents thrown around for the true cost of a latte with $7lb beans and $3gal milk, cup included, not rent though. All businesses bear overhead costs, but at least you can sell your used espresso machine for the price you paid for it when your cafe tanks and can get away with staffing one or two people for most of your working hours. 70 orders a day would be easy to hit I would think for a cafe; from my cursory research independent cafes average 250-300 cups a day while your starbucks or places as busy as them might be pushing 600 cups a day.