Posted on 07/01/2017 8:56:22 PM PDT by Olog-hai
More than half a million Angelenos stand to get a raise this weekend, making the city the latest testing ground in the drive to boost incomes of bottom-rung workers.
Some businesses, facing a labor crunch, didn’t even wait for the new, $12 minimum wage to officially kick in. Josh Loeb started doling out pay bumps among the 400 employees of his six mostly upscale restaurants about a month ago. He paid for it by inching up prices at those Santa Monica haunts, adding a dollar to an organic chicken, and 50 cents to a sandwich or salad. “It’s got to come from somewhere,” said Loeb.
When the minimum wage in Los Angeles climbed from $10.50 to $12 an hour for large businesses on July 1, it marked the fourth such increase in three years, and the single largest year-over-year jump in the city’s scheduled climb to $15 for all employees by 2021.
The increase affects companies with 26 or more employees; smaller businesses follow suit in January. Santa Monica, Pasadena and unincorporated parts of Los Angeles County also went to $12 on Saturday. The state is also headed to $15, but on a slower schedule.
The city’s pay raise will add more than a billion dollars to local payrolls, according to estimates by the Economic Roundtable, a Los Angeles research group. …
(Excerpt) Read more at latimes.com ...
Labor is probably only 15-20% of the total expenses, so all things being equal, you’d probably need revenues to rise by 7.5%-10% to cover the increase (15% * 50% increases to 20% * 50% increase). Of course, other things will go up in cost too at a slower rate, so revenue will obviously have to rise faster than 10% to cover the increased expense.
That is not how taxes work, unless you go up so much you lose tax credits or other freebies. If you go into the next bracket, only the marginal income is taxed at a higher bracket. So if you are in the 10% bracket today and have $2k left in this bracket and get a $5k pay raise, all things being equal (ignoring 401k and the like), you'd pay $650 in federal taxes on the $5k pay raise ($2k * 10% + $3k * 15%) plus FICA and any state/local.
“Will de Leon keep the illegals in the Garment district working for 123 dollars a day?”
It wouldn’t be deLeon, it would be that Capo Garcetti.
No, Big Macs will simply NOT be sold in L.A. County for a while. Low price restaurants will simply close down, until full automation can be rolled out. (Simply because some LA politician will see the trend, and make it illegal to lay off an employee if they will be replaced by automation. Shell companies will buy franchises for the conversion. . . .)
In the meantime, if you want a fast food fix, it’ll be down the 5 to Orange County. . .
99% of union political contributions go to democrats.
“As it says in “The Naked Communist””
W. Cleon Skousen was right way back in 1958! And nothing about communist “doctrine” has changed since then.
Well, you want “Made in the USA” clothing, that’s the only possible way to get it - thanks to the ongoing socialist war on manufacturing. The Armenian/Jewish mafia that controls the industry in L.A. will either have to come up with the $123.00 or only hire people with active deportation orders that they can keep hidden in the garages where the work is done. But hey - Buy American. :)
If that were true what happens to all the unspent money? Do people stop eating?
“and many businesses have simply elected to move out of Seattle proper to avoid all of it.”
We’re not seeing a lot of them in Tacoma. The businesses closing are at this point the small businesses that were borderline in paying their local taxes in this area. But I feel a few of the larger ones like the box stores are on the edge of leaving based upon my observation of their lack of advertising and employee levels. And they will leave the state rather than relocate into the brutal taxing the state does here.
rwood
You are correct in talking about state income taxes. I made a generalized use of the word bracket meaning the state will take the increase in low wage pay to continue to raise the taxes in other areas like the mismanaged high gas tax, the dishonestly applied property taxes, sales tax, and the amount of withholding taxes they are going to demand.
So, if the increase in pay doesn’t cover the increase of local axes, ground is lost. But you are right, there is no tax bracket in Washington State because the state hasn’t figured out a way to justify state income tax yet while saying the high taxes on other things are needed to balance the budget.
rwood
You are correct in talking about state income taxes. I made a generalized use of the word bracket meaning the state will take the increase in low wage pay to continue to raise the taxes in other areas like the mismanaged high gas tax, the dishonestly applied property taxes, sales tax, and the amount of withholding taxes they are going to demand.
So, if the increase in pay doesn’t cover the increase of local axes, ground is lost. But you are right, there is no tax bracket in Washington State because the state hasn’t figured out a way to justify state income tax yet while saying the high taxes on other things are needed to balance the budget.
rwood
You are correct in talking about state income taxes. I made a generalized use of the word bracket meaning the state will take the increase in low wage pay to continue to raise the taxes in other areas like the mismanaged high gas tax, the dishonestly applied property taxes, sales tax, and the amount of withholding taxes they are going to demand.
So, if the increase in pay doesn’t cover the increase of local axes, ground is lost. But you are right, there is no tax bracket in Washington State because the state hasn’t figured out a way to justify state income tax yet while saying the high taxes on other things are needed to balance the budget.
rwood
We need to pull our culture back from the brink...
How about Costco? I thought Kirkland, WA was their HQ?
Marginal tax rates and calculated taxes owed works exactly the same for federal and stat taxes.
During the 19th century we had a truly free market economy that was had fast-growing and dynamic.
Once the communists tacked on minimum wages, the Federal Reserve, unemployment payments, legal unionization, etc., things start to go haywire. The Fed learned that it could start a recession or depression whenever it wanted (hence, the Great Depression) and high wages put the brakes on high growth.
And, once we had high wages, then the government felt it had the right to decide what food is safe, what constitutes “adequate” housing and “safe” working conditions, and impose its idea of “education” on our children. Not only that, professions like medicine and law became subject to government licensing and training in government-approved schools. Don’t even get me started on the corrosive effects of Social Security, Medicaid, Medicare and the numerous other “social programs” that came later. During the 20th century, freedom was lost. We need to reclaim it by throwing off Big Government and its rules.
Look at Hong Kong. It’s not perfect, either. But it’s an example of what we should strive for here.
Most low-end workers in L.A. are illegals getting paid cash... since they pay no tax they probably won't complain if they don't get the $12/hr raise.
That’s an almost obscure author, especially on the subject, that I’m wondering if most are unfamiliar with his writings or history. I think most would be hard pressed to have heard of him without the internet. Perhaps it might even categorize one who has read his books? ~(Smile)
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