Costs of raising the minimum wage to $15

[imprimis]

Many Seattle restaurants closing and jobs being lost due to mandatory $15/hr minimum going into effect on April Fools Day.

http://www.aei.org/publication/seattles-new-minimum-wage-law-takes-effect-april-1-but-is-already-leading-to-restaurant-closings-and-job-losses/

 

[NeekReevers]

I'm not for the law but a couple of questions....

1. How can a law that hasn't even gone into effect yet causes businesses to close?

2. The first increase is only $1.50 an hour, not all the way to $15, and only that much for those making minimum wage. Is that amount really gonna do much more than cause restaurants to raise their prices 5% and go about their business?

I think there are a lot of problems with a law like this but this article seems like a bunch of bs.

 

[hollywood]

The article has already been debunked.

First off the $15 minimum doesn't kick in for 6+ years, the raise will be about $1.60 on April 1.

Of the cited restaurant closures:

1. One closed, yet an adjoining restaurant is taking over that space, and the owner who sold? Is opening two new restaurants in the city in the near future (he already owns five other restaurants in Seattle.)

2. One was a satellite operation of a popular Asian restaurant, which the two owners decided took too much away from their time and families and they are cutting back to their original location, while they focus more on their thriving sauce business.

3. Three of those cited as scheduled to close, didn't close - they just announced that their chef/owner had resigned to move to Spain.

4. One was an Indian restaurants and nightclub and they decided they were in the wrong neighborhood.

Seattle has the third highest concentration of restaurants in the country, only behind NYC and L.A. Anyone in the restaurant business knows that restaurants open and close all the time. The place I bartended in DC, was doing great but the chef opened two or three additional restaurants and got spread too thin. Had to close the cash cow to pay the bills for the other 2 before he could sell them off. He already has opened another restaurant and four of his former kitchen staff have opened 7 restaurants between them in the last 5-6 yrs.

In fact, if you actually read the article - you would discover that it identifies more new restaurants opening than it does any that are actually closing.

 

[squeak]

This goes against what I typically believe but if people got paid a living wage we wouldn't need all this gov't help. Plus, I feel guilty about yelling at a fast food person for screwing up my order. If they got paid a reasonable wage, I would feel fine telling them to eat sh!t when they don't provide good service.
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[Marshal Jim Duncan]

They aren't going to scale back government assistance because of an increase in the minimum wageA general increase in wages will inevitably lead to a general increase in the price of goods. As the price of any good (in this case labor) increases, ceteris paribus, the demand for that good will decreaseBefore many of them decided to be political hack editorialists, a vast, vast majority of economists agreed the optimum minimum wage was $0.

 

[squeak]

If that extra $$$ came out of the pockets of the wealthy it would be a zero sum game and the cost of goods would not go up.
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[JimmyBob]

Originally posted by squeak:
This goes against what I typically believe but if people got paid a living wage we wouldn't need all this gov't help. Plus, I feel guilty about yelling at a fast food person for screwing up my order. If they got paid a reasonable wage, I would feel fine telling them to eat sh!t when they don't provide good service.

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Bullshit! A living wage won't do jack when you have an administration committed to expanding the welfare base in order to buy votes for the status quo. Get 'em on the tit and give 'em more.

 

[squeak]

True
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[inspoke]

If you are getting paid minimum wage now in Seattle, 1 of 2 things, or a combination of both, is going to happen as the min wage rises:

1. You will be asked to work harder
2. Prices will go up

It is unlikely that a minimum wage worker is going to increase their output enough to compensate for their increased
wage so prices will have to go up. You will also see a shift to more automation. A small business owner will not be able
to absorb the cost increases without increasing his/her prices. The end result will be less employees and/or higher prices.

The part I don't understand is the people you see interviewed on tv who have worked at McDonald's for 3 years and still make minimum wage. These people must be the worst employees in the US.

 

[JimmyBob]

Originally posted by inspoke:

If you are getting paid minimum wage now in Seattle, 1 of 2 things, or a combination of both, is going to happen as the min wage rises:

1. You will be asked to work harder
2. Prices will go up

It is unlikely that a minimum wage worker is going to increase their output enough to compensate for their increased
wage so prices will have to go up. You will also see a shift to more automation. A small business owner will not be able
to absorb the cost increases without increasing his/her prices. The end result will be less employees and/or higher prices.

The part I don't understand is the people you see interviewed on tv who have worked at McDonald's for 3 years and still make minimum wage. These people must be the worst employees in the US.



Three years and making minimum wage isn't a result of being a "worst employee"; it's a function of not having the qualifications to ever advance.

 

[davidallen]

Originally posted by Marshal Jim Duncan:
...Before many of them decided to be political hack editorialists, a vast, vast majority of economists agreed the optimum minimum wage was $0.

Kenneth Arrow, Peter Diamond, Eric Maskin, Thomas Schelling, Robert Solow, A. Michael Spence, and Joseph Stiglitz disagree with you. Part of the 600 or so economists supporting an increase in minimum wage.

I tend to agree with Bill Gates - within a reasonable band increasing minimum wage is fine. But too much and you encourage jurisdictional labor substitution and fuel automation of menial labor. In a macro sense these aren't bad things - but for the US economy you have to be careful about how much is too much.

Seattle did a good job of getting the headlines on a bold move, but putting a reasonable phase in plan in place...

Minimum Wage Statement

 

[MegaPoke]

It forces illegal immigrants to become even more imbedded into the foundation of the labor force.

Businesses will be forced to hire more and more undocumented workers and take more risks which will ultimately make private enterprise essentially beholden to government policies to assimilate them (illegal aliens) into the system.

We are expanding the poverty class and retarding economic development. Minimum wage is supposed to be a starting point, not a sustaining income.

I say that as someone who is definitely not out of touch with what it means to be broke ass poor.
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[Headhunter]

If Democrats wanted to help low wage workers they would make full time work 40hrs a week instead of 30.

They would also cut off the flow of outsourced jobs to H1B workers flooding into the USA due to the Obama Administration's issuing work visas as fast as they can issue them.

 

[anon_xl72qcu5isp39]

Where would conservative economic thought be without alarmism and lies? Remember all the hysteria about how obamacare would ruin the economy? Now they're closing restaurants so they can avoid minimum wage..... right.

 

[anon_xl72qcu5isp39]

My favorite line:

Kounpungchart and Frank said in an email. "We do not know what our colleagues are doing to prepare themselves for the onset of the new law, but pre-emptively closing a restaurant seven years before the full effect of the law takes place seems preposterous to us. Frank went so far as to send a note to the author of the Washington Policy Center post saying: "Our business model is conducive to the changing times and we would appreciate it if you did not make assumptions about our business to promote your political values."

So... yeah. Just so long as it supports a worldview, the truthfulness of the story doesn't really matter, huh Imp?




Do they even TRY to be honest?!?!?

 

[TPOKE]

Democrats don't give two chits about how much money people make, all they care about is the extra taxes they'll get by raising it and kissing union butt because their wages are tied to how much the minimum wage is.

Also, let's say we have a 4 man framing crew from a laborer at $13, an experienced guy at $15, a lead man at $17 and a foreman at $19. Johnny hamburger flipper goes from $7.25 to $15 over time. Do you not think the skilled people building real stuff instead of hamburgers aren't going to want the same raise proportionately? Now it doesn't take a phd in economics to see the many outcomes.