In Econ 101, I seem to recall a notion of the price elasticity of demand.
Prices can only be raised to the extent people continue to purchase. If prices exceed that point, demand falls off, sometimes dramatically.
At that point, a few businesses may survive by selling high quality and high service to the very affluent. But all the rest of the businesses go under.
Your analysis seems to me to involve the same fallacy that drives liberals to raise taxes ever higher and higher. In the tax area, what they ignore is referred to as the Laffer Curve. At a certain level, people stop paying higher taxes. That’s why DemocRat budget projections are never correct.
No, business doesn’t work that way either. If it did, we could raise the minimum wage to $100 per hour, and we would all live happily ever after, eating rainbow stew and drinking free bubble up.
You will note that the Laffer Curve is a curve. The degree of effect is determined by location on the curve.
I’ve never said that there won’t be some effect. But from what I’ve read, most who calculate the actual price increases needed to cover the increase in labor cost for a fast-food place come out in the vicinity of 5%.
IOW, the $8 combo meal at McDonalds will now cost $8.40. Seems to me this is a good deal less than the national increase in prices for their burgers over the last couple of years due to beef prices, but I don’t have any numbers on that.
If you have alternative calculations on how much the price will increase, I’d be interested to see them.
The issue is not whether higher wages will cause an increase in prices and therefore a drop in demand. It’s entirely a question of degree. Which means calculations, not hyperbole.
Did some looking around. Difficult to find articles attempting to analyze the effects of an increase. Most seem to be trying to make a case pro or con rather than lay out the facts.
It really shouldn’t be all that difficult to determine how much a restaurant would have to raise prices to break even on a given labor cost increase. But not too many seem interested in making those calculations.
First you get facts, then you discuss what appropriate policy should be.
I’ve seem claims of 5% (seems low) to 20% (seems high) to cover a raise of minimum wage to $15. But almost nobody lays out their calculations, which shouldn’t be all that difficult.