2 ms·
> Like raising the minimum wage it is a very profit hostile policy though Does it really reduce profits, or does it increase prices? In general the economy bal
by Jensson 2y ago
> Like raising the minimum wage it is a very profit hostile policy though
Does it really reduce profits, or does it increase prices? In general the economy balances out so ROI is the same everywhere so profits only decrease temporarily, so all costs comes from other sources long term, like reduces development or increased prices.
If rent control only resulted in minimally less construction, then it just resulted in minimally less profits as the two are linked in the private sector.
- pydry 2y agoIncreasing the minimum wage primarily reduces profits: https://warwick.ac.uk/fac/soc/economics/staff/mdraca/minwage_profits.pdf https://warwick.ac.uk/fac/soc/economics/staff/mdraca/minwage... >In general the economy balances out so ROI is the same everywhere so profits only decrease temporarily The only industry where is is "true" is small restaurants, where profit margin get hit short term but stay steady at 10% over the long term. This is because real restaurant profits are mostly consumed by their landlords, and it's their landlords who suck up the difference long term. This doesn't apply to big corporate restaurants like McDonalds because they have pricing power and often are their own landlords. Even so the SME restaurant industry hates the idea of raising the minimum wage more than most because it tends to lead to a wave of restaurant bankruptcies until rents adjust.