Posted on 09/15/2017 4:47:51 PM PDT by Sub-Driver
“If he makes $15/hr and still produces 20 hamburger/hr the labor cost is now $0.75 per burger. So the price goes up $0.25 per burger.”
Taxes and other crap double the cost of labor to an employer. Labor cost goes up from $20 to $30, from $0.50 to $1.00 per burger, and that’s before other complications.
Don’t fret it. central_va has it all figured out on paper, he just has no clue how it really works in the real world.
Well, I had a senior moment and screwed up the arithmetic anyway.
Of course, this depends on the type of restaurant. Fast food, especially franchises have an advantage in that they typically have the volume to support spreading out the increased cost. Then again, they have the hurdle of the franchising fees, but their model also supports the ability for more automation.
For smaller, niche restaurants, there is less volume because that's not the business model; which also increases the challenges even more dramatically in trying to nail down the shrinkage, product mix, etc.
But regardless of the industry, anyone making an edict that $15 should now be the livable wage, clearly doesn't costing, or how prices are determined. Raise the cost for goods and services and prices will go up, thereby diminishing purchasing power. But the liberals just expect people to suck it up, and put it on their charge card to support the zombie economy.
The prices EVERYWHERE of businesses supported by minimum wage workers will go up. EVERYWHERE. Every market, retail outlet, gas, Home Depot, clothing store. EVERYTHING. Then tell me what your $15 wage gets you, except maybe cut hours or joblessness when your employer can't afford you anymore.
What you are saying is raising the minimum wage is inflationary. This is the proper argument to make. I would argue the small amount of wage inflation caused by this MW increase would be welcome since wages in the USA have been flat for 40 years.
Talking about ridiculous $30.00 hamburgers is crazy and makes Free Republic look like idiots.
Gosh Mario how did you with your liberal pea brain deduce this?
Absolutely not If there is a market for a certain product at and there are people willing to pay for it then someone will likely step in to fill the void. Plenty of examples of people buying overpriced goods: cell phones, computers, etc. But that's just opinion on what is or isn't a reasonable price. There are firearms in my opinion that are ridiculously overpriced but if someone can afford it, and wants it, more power to them. It's the consumer that dictates "value", just as how costs are passed onto consumers.
The problem is trying have the government mandate what amounts to a private transaction, between the employer and employee, on the grounds that the government either knows best, or is trying to right some wrong.
But it is not a private transaction. The Chamber of Commerce has bribed the US government to flood the market with cheap imported labor. Big business and the CoC hate borders. The whole system is corrupt. The minimum wage is a symptom and not the disease.
Your authoritarian streak is so strong, one would consider it...progressive.
No, what we are doing now will lead to authoritarian socialist government. Half of America makes less than $30K/yr and has no prospect for improvement. America is a poor country on the road to socialism. Wage inflation would perhaps move the pendulum in the right direction.
Show me, please, the restaurant model which involves one employee per location.
I'll wait...
Eisenstein I was using one employee as to not confuse your apparently ossified mind. Productivity of 5 employees could be measured and is the same as measured fractionally by the productivity of one. If 5 employees produce 100 meals per hour it is the same productivity model as one employee making 20 meals per hours. What a maroon.
Authoritarian is authoritarian.
Socialism is socialism.
Here's some reality. Labor costs run 28-35% based upon the business model. Let's use 30%. For a restaurant that turns $75k/month that works out to $22.5k labor per month.
You propose to increase costs by anywhere from $7.5k to $11.25k per month, or based upon sales...10% to 15%.
Successful operators have located the "sweet spot" on pricing, that which maximizes profits. Your little adjustment took their profit margin and then some. As you increase prices volume decreases. You've entered a death spiral.
Now why don't you tell me more about that 25 cent increase on burgers?
EVERY OTHER RESTAURANT HAS TO PAY THE SAME WAGE. THEY ALL FACE THE SAME CALCULUS. THEY WILL ALL RAISE THEIR MENU PRICE.
To be specific for the example you give the enterprise makes $75K/month. Costs goes up $7.5 month which will cause a 10% increase in menu price. So the $10.00 menu meal goes to $11.00. Again not earth shattering.
Contrary to the logic of static analysis, raising the price WILL decrease the customer count. Clients will change their behavior. The restaurant example will (hopefully) find a new equilibrium for markup and volume. For some that equilibrium will involve closing the doors.
I have to say it's repulsive, this authoritarian streak you're displaying. People's lives and investments are not yours to play with like chess pieces.
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