“First you get facts, then you discuss what appropriate policy should be.”
That, my friend, is a perfect definition of Soviet planning.
In my view, first you decide how anyone gets to be Soviet planning Commissar for everyone else.
You don’t think it’s reasonable to analyze facts before making decisions? What do you think decisions should be based on? Emotional reactions?
Don’t you think it is reasonable to calculate what actual impact on businesses will be for this proposal, which really isn’t that hard to do?
Here, I’ll lay it out for you.
Let’s assume a business has a cost of labor that is 25% of sales. Let’s assume its labor cost increases by 50% due to an increase in minimum wage.
That business will have to, if all other things were held equal, which of course they never are, increase its prices by 12.5%. Then if unit sales stay the same, which they won’t, at least initially, the business will break even. The total profit will remain the same, although profit percentage will go down slightly. If you wanted to keep profit as a percentage of sales the same, prices would need to be raise somewhere between 1 and 2% more.
I suspect, in this hypothetical situation, prices would actually have to go up by somewhere around 15% to keep profits the same, assuming customers don’t go elsewhere. But since every other restaurant around is faced with the same situation, they don’t have the option of switching to a lower-priced restaurant. They have the option of packing a lunch, of course, but I suspect most people would get tired of that quickly and adjust to the 15% increase.
See, that wasn’t so difficult!