I don't think a 25% increase in prices is a small impact - all he's suggesting is doubling wages doesn't mean doubling prices, which is what asianballa claimed would happen. If we doubled our wages at the coffee shop, I think that's a reasonable estimate of what we'd need to do with prices to breakeven, assuming eveything else stays the same (which, of course, it wouldn't). But it's far closer to being correct than asianballa's post.
Certain fast food restaurants can achieve labor cost as low as 25 percent, while table service restaurants are more likely to see labor in the 30 percent to 35 percent range. Food costs (including beverages) for the restaurant industry run typically from the 25 percent to 38 percent range, depending upon the style of restaurant and the mix of sales. http://smallbusiness.chron.com/common-food-labor-cost-percentages-14700.html So the working poor can make a lot more money and they can spread it around to their families and friends and they can eat off the $1.25 menu instead of the dollar menu. Their kids can have a greater chance at the American dream. The theology of market fundamentalism be damned.
They probably could; but less so on the assumption that restaurants are more profitable and less risky than conventional wisdom would indicate. The real selling point is that the additional labor costs will be spread out over the entire restaurant industry. Unless consumer dining tastes and options based on demographics and local urban development change overnight for the first time in a half century; the large, repetitive volume of payroll and cost data will display trends and patterns that competent managers can predict and manage.
If you alone doubled your crew's wage, then it's not really a big deal. What happens to your cost of goods when other companies that you do business with also double their crew's wages? suppliers, bean pickers, grocers, cell, land line, internet, utilities, sanitation, office supply, computer supply, gas station, mowers, shipper, Walmart, McD, etc...
Interesting question, but there is no logical or real world economic reason to think that doubling minimum wages means all other wages in society would be doubled. In Europe or Austrailia engineers, doctors, etc. don't have double the wages here. CEO's for instance make less. Another failed argument for inequality. Makes me wonder why some argue so fiercely on the necessity to keep minimum wage workers in misery. My main theories. 1) Can't enjoy a good meal unless others are hungry. i.e, makes one feel better about their own condition if others are worse off. $25'hr might provide pretty good creature comforts but if it was only $10/hr above minimum wage would not provide as much psychic satiafaction. 2) A near religious belief in market fundamentalism which is immune from real world facts and naively susceptible for any sort of spin employing basic high school econ terminology. 3) All economic life is viewed from the perspective of a mom and pop small business with marginal prospects in which mom and pop gross so little that a few bucks an hour more for their employee or perhaps even another employee or two would upset the apple cart to the point at which mom and pop would have to go get a job themselves.
Let's say that increasing minimum wages to $15/hr would slightly decrease minimum wage employment. (Pls no spin or crazy fear tactics that it would half it or something stupid). Nonetheless the new minimum wage would be much better off. Here are some of the reasons. 1) Many minimum wage workers have to have more than one job to survive. Even McDonald's has publicly acknowledged this. Even if they just hang on to their other part-time job they will be in about the same position. 2) Essentially all current minimum workers live with others. Often time the others whether family or friends work at minimum wage, too. They share their resources. So if you have three in the household who make minimum and two of three are still working they are better off. 3) When they actually work they may be able to save a few hundred bucks or God forbid a few thousand for the first time in their lives and this along with unemployment insurance (sorry market fundies) will help them and their friends and families cope with occasional periods of unemployment.
The median hourly wage in the US in 2012 is $16.71. If you raise the minimum wage to $15/hr w/o raising the median wage, you are basically telling all the people that were making roughly double the minimum wage that they are now newly minimum wage workers. These are people with education, certifications, training, responcibility, etc...
if I was a lifer at $7.35 at McD's.. no way I'm ever leaving if I'm making $15. Doubling pay is like hitting the jackpot. This will keep a lot more people in food service jobs. (nothing against food service but there are better careers)
Just for a little perspective...Apparently under the post-bailout UAW contracts, new auto workers average $14-$15/hour. http://cgbg.tuck.dartmouth.edu/news...es-report-lehman-lessons-creative-destruction Putting aside the bailout politics, UAW cynicism, etc, it's a bit of a wake-up call to realize that the guys who make cars are earning around the same amount people want to pay fast food workers. And yes, I know they are not directly comparable because of benefits, but it is still instructive on how much labor is worth in our economy.
From memories of high school econ? or "Libertarianism" 101? Now let's say you have a mom and pop convenient store. Most conservative/libertarian views of the whole economy from this perspective or perhaps small lawn service. Amazingly such small businesses are frequently cited when talking about the horror of returning to the pre-Bush tax rates on incomes over $250k. At the convenience store you have old dad sweeping the floors and stocking; mom does the books and runs the cash register. One employee works doing almost everything except the books on weekends and nights to give mom and pop some sort of life. When required to pay more for the one employee, mom and pop don't just lay him off as the extra couple hundred a week doesn't bankrupt them. They take home a bit less or cut a few hrs of operation etc. If an increase in minimum wage would cause the layoff they were probably going out of business anyway. BTW the American Constitution does not guarantee the freedom to run an unprofitable or very marginally profitable business with near slave wages. It was probably time for mom and pop to go get a job. ********** The business community, not surprisingly, opposes the hike as a “job-killer,” which is their Pavlovian response to anything that would increase wages. Yet the Los Angeles Times reported in a recent editorial that studies show the “job killing” argument doesn’t pan out. The best available research, however, shows that previous increases in the minimum wage haven’t decreased or increased hours or jobs in any statistically significant manner. Employers have adapted in a variety of ways, including boosting productivity and trimming raises for other workers. And a higher minimum wage tends to keep workers on the job longer, reducing the costs associated with training new employees. One other way employers have responded is to pass at least part of the increase on to consumers. In a sense, though, employers in minimum-wage industries are already passing on part of their costs to taxpayers, who pick up the tab when workers earn so little that they qualify for Medicaid and food stamps. A recent congressional study estimated that low-wage workers at one Wal-Mart superstore receive about $5,800 worth of safety-net benefits each annually. By raising the minimum wage, shoppers will pay some of those costs at the cash register, not on their tax bills. http://www.truthdig.com/eartotheground/item/california_to_give_the_working_poor_a_raise/
It's hilarious how the middle class has been trained to believe that helping those at the bottom is going to hurt the middle. It's just the opposite. For what it's worth, talking about minimum wage is so 1970s. We're beyond that now. The real discussion is whether every American citizen should have a guaranteed income.
If minimum wage can solve every problem, why not just make minimum wage $50/hour? Then we would all be doing great right? I have a feeling that's not going to work like that. I can see incremental increase to minimum wage, but doubling it seems extreme.
1) NOBODY SAID RAISING THE MINIMUM WAGE WOULD SOLVE ALL PROBLEMS. A very ridiculous weak straw man Why not $50/hr? Studies don't show that this can be done and not affect employment greatly. Not realistic. Now studies show that $10 or $15/hr does not have a very great negative affect on employment. The difference is based on EMPIRICAL FACTS. not just hysterical spin fed to libertarians and the econ 101 true believers.
Slowly but surely, they are winning. http://www.huffingtonpost.com/entry/new-york-minimum-wage-fast-food_55afeadce4b0a9b94853676e?
