RATS aren't smart enough to understand the business model of a lemonade stand...
Posted on 06/27/2017 7:43:26 AM PDT by SeekAndFind
Yesterday, Ed Morrissey looked at the “controversial” (not really) figures coming out of Seattle showing the downward pressure on employment and wages experienced there since the minimum wage suddenly spiked upward. This is unwelcome news in the Fight For 15 community and they’re pushing back on it as hard as possible. But the figures don’t lie and this result was entirely predictable in a free market economy.
Seattle, however, isn’t the only place this effect is being seen. The minimum wage has been jumping upward in New York City also and similar effects are being felt. Nowhere is this more true than in the restaurant business, traditionally a market segment where people with minimal education and experience can get an entry level job. But now that’s beginning to change. (NY Post)
The New York restaurant industry is slowing down, adding fewer jobs and shedding eateries amidst recent hikes in the minimum wage.
The Empire State lost 1,000 restaurants last year and the number of jobs as cooks, servers and dishwashers grew by an anemic 1.4 percent. That’s a far cry from the 4.4 percent annual growth the state’s eateries enjoyed from 2010 to 2015, according to the Employment Policies Institute, a nonprofit research group.
The Big Apple accounts for the lion’s share of the state’s growth — and the slowdowns in the city are more dramatic.
Employment growth at fast-food restaurants in the city — which are required to pay $12 an hour, or $1 more than other employers — shriveled to 3.4 percent last year compared with 7 percent growth from 2010 to 2015. The spiral has continued into 2017, which has generated just 2 percent growth through May.
This is simply too much to lay off on coincidence, even if an in-depth study into all the nooks and crannies similar to the one done in Seattle hasn’t been completed. We’re supposedly in the midst of an economic recovery that’s been well underway since last year and accelerating in 2017. Unemployment is approaching historic lows for the modern era. The restaurant industry is one which rises and falls with the tides of the economy. When people are out of work they can’t afford to go out for fancy dinners as often so business slows. When everyone is employed, the eateries do much better. So how else do you explain this?
The full service restaurants (which employ the most people) are showing only an anemic 1.3% growth as compared to the average 6.5% growth they experienced over the past five years. Michael Saltsman, managing director of the Employment Policies Institute, is quoted in the Post article as saying that this drop-off in growth is something, “that didn’t even show up during the great recession.”
Restaurant owners are reporting that, in order to remain profitable they’ve had to cut their staffing by up to 10% and reduce hours for the workers. They’ve also raised their prices to accommodate the surge in labor costs. This means fewer customers, particularly in an area where they have so many options.
Remind me again who the Fight For 15 was supposed to help? Because it certainly doesn’t sound like it’s doing the lower skill workers any favors.
There isn’t a thinking person on the planet with even a rudamentary knowledge of economics who couldn’t have predicted this. When I find one of these idiots who thinks a $15/hr minimum is a good idea, I ask:
Me: Why is the $15/hr minimum a good idea?
Idiot: Because it gives us a living wage.
Me: Would $16/hr be better?
Idiot: Damn right!
Me: Well, let’s do it up right then. Let’s go for $500/hr.
Idiot: That probably won’t work.
Me: So, what is the precise wage where it will work?
Idiot: F$#% you!
I may as well try to reason with a brick.
A local restaurant I used to frequent with my family, dinner for four, cost me $90 the last time we went.
This same meal set would cost me about $65 before the min wage hike.
Won’t be going back.
It’d nuts what stuff costs now.
I avoid most of the chain places and go to a great mom/pop place or two and some Chinese food.
There is one revealing thing about this.
The study itself shows the destruction that is being done to low wage jobs, as they are decreasing.
But since employment itself is increasing, as per ADP reports, the jobs that are being created must be higher paying jobs.
Thus, in time, the only non-retirement aged adults working at these “low paid” jobs will be those unskilled or unwilling to work higher paying jobs.
At some point, I’d see employers preferring high school kids and retirees.
If the active work force achieves previous levels and unemployment numbers are truly low, that would mean that many of the prime aged work force that is relegated to the lower paying jobs, would be unskilled/unwilling to work a more responsible job.
Why would an employer hire a prime aged worker who views their job as an entitlement vs opportunity?
Chinese food is a terrible value.
You eat it, and 1 hour later you're hungry again.
Meanwhile, something like Gyro's are GREAT values.
You eat them once, and taste them the rest of the day.
So where do you go now? All restaurants are in the same boat and have raised their prices.
Do you eat at home more?
Was it 2015 where inflation was over 18% when counted in the pre-Reagan manner?
Food in general has been getting more expensive at a high rate.
Once I had sex with a Chinese girl and an hour later I was horny again. :)
we have started eating at home more..
$90 (including tip) for a family of four....that’s three adult meals and one kids meal. My preteen son eats like an adult. No alcohol. This was a local owner establishment not a chain.
I was shocked...with the $7.50 cash wage + $2.90 tip credit = $10.40 and going up next year to $8.57 + $4.15 = $12.50 for tipped employees for an establishment of 11 or more I am no longer tipping 20% and have reduced that to 10% now.
We just don’t need to eat out at those prices.
when kiosks are installed at McD’s Cal will tax them.
I stay fairly filled on what Chinese I care for which isn’t much.
The only thing I actually like is Crab Rangoon. I get a side of fries usually.
Pretty much everything is too high.
RATS aren't smart enough to understand the business model of a lemonade stand...
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