Minimum wage goes up, jobs go bye-bye.

AKA ,another liberal vote-pandering, soundgood, feelgood policy runs into unforgiving and immutable law of supply and demand.

http://townhall.com/tipsheet/cather...00-dc-restaurant-workers-out-of-work-n2210037

As always, the facts of life are conservative.

Don't click on the link. I did, and it brought up three different tabs all saying different things about how the page can't be opened, then it closed the DP tab. I don't know if it's an infected site, or just one that doesn't work very well.

KLATTU said:

AKA ,another liberal vote-pandering, soundgood, feelgood policy runs into unforgiving and immutable law of supply and demand.

Minimum Wage Increase Puts 1,400 D.C. Restaurant Employees Out of Work - Catherine Dunn

As always, the facts of life are conservative.

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As predicted. Too bad those pushing the $15 / hour didn't listen. Guess they just don't 'get' economics.

Minimum Wage Increase Puts 1,400 D.C. Restaurant Employees Out of Work - Catherine Dunn

It worked fine for me. Try mine.

The only thing you can do is raise prices or cut costs. The costs you can cut are in food and labor. You could lower your profits, but then the place gets run down, people stop coming in, and you wonder, "why bother. I'll go work for Chilies". You bust your ass to make money.

The only place you can legitimately go is to raise prices or cut staff.

chuckiechan said:

Minimum Wage Increase Puts 1,400 D.C. Restaurant Employees Out of Work - Catherine Dunn

It worked fine for me. Try mine.

The only thing you can do is raise prices or cut costs. The costs you can cut are in food and labor. You could lower your profits, but then the place gets run down, people stop coming in, and you wonder, "why bother. I'll go work for Chilies". You bust your ass to make money.

The only place you can legitimately go is to raise prices or cut staff.

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I think liberals expect businesses to just say "Oh well, minimum wage has gone up so I will just have to make less profit." That's not how it works. They will raise prices where they can and cut staff where they can. Where this will really be seen is in youth unemployment. Businesses will be less likely to overpay for the entry level kid with zero work history. If they have to pay someone $15 an hour, that someone will need to have some experience. Its the 16 year old that will become unemployable.

KLATTU said:

AKA ,another liberal vote-pandering, soundgood, feelgood policy runs into unforgiving and immutable law of supply and demand.

Minimum Wage Increase Puts 1,400 D.C. Restaurant Employees Out of Work - Catherine Dunn

As always, the facts of life are conservative.

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It is more the cases, where this seems not to happen, that one should start checking the studies. Because there must be something very odd going on, when the price of a factor is increased in a free market without negative impacts for the owner of the factor. What exactly the consequence will be is more complex. But it will inevitably reduce the usage of the factor.

KLATTU said:

AKA ,another liberal vote-pandering, soundgood, feelgood policy runs into unforgiving and immutable law of supply and demand.

http://townhall.com/tipsheet/cather...00-dc-restaurant-workers-out-of-work-n2210037

As always, the facts of life are conservative.

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Complete nonsense. Study after study after study has proven unequivocally that increasing the minimum wage does not in fact cost jobs. In fact in some instances it has been followed by an increase in employment. We have raised the federal minimum wage more than twenty times since 1938, and here we are today with with 4.9% employment. A number that is generally considered full employment by most economists. The population of Washington DC is over a half million people strong. A swing of 1,400 employed persons in a 6 month span is nothing and could be entirely explained by a whole host of reasons. In fact you could probably explain it largely by the fact that it is an election year. This has caused hundreds of thousands of resident to return to their respective districts to campaign. That will inevitably slow down the restaurant industry.

In fact just last year the #1 and #2 cities in America for small business job growth were Seattle and San Francisco. The two cities with the highest minimum wage in the entire country.

Now, one thing to keep in mind is that when you implement minimum wages on smaller scales the likelihood that a business might consider moving itself a short distance away increases. That is why it's so important for us to be raising the minimum wage at the state and federal level to make sure cities that make this choice are safe from that problem.This however is largely only a problem for manufacturing businesses and there are already next to zero of those in DC to begin with.

joG said:

It is more the cases, where this seems not to happen, that one should start checking the studies. Because there must be something very odd going on, when the price of a factor is increased in a free market without negative impacts for the owner of the factor. What exactly the consequence will be is more complex. But it will inevitably reduce the usage of the factor.

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False. Usage is determined almost entirely by the demand for the thing not the cost of the thing. If you have 100 customers an hour you need enough employees to serve them or you will get a line going out of your business and customers will get frustrated and leave.

MrWonka said:

False. Usage is determined almost entirely by the demand for the thing not the cost of the thing. If you have 100 customers an hour you need enough employees to serve them or you will get a line going out of your business and customers will get frustrated and leave.

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Think of it this way: How much additional help will you employ around the house and garden, when minimum wage is $15 instead of 50 Cents.

Most restaurant and fast food jobs are disappearing because of electronic ordering and payment processing. This was going to happen with or without a minimum wage increase....the downside of automation. Next step will be robots bringing your food to the table and or cleaning tables.

chuckiechan said:

Minimum Wage Increase Puts 1,400 D.C. Restaurant Employees Out of Work - Catherine Dunn

It worked fine for me. Try mine.

The only thing you can do is raise prices or cut costs. The costs you can cut are in food and labor. You could lower your profits, but then the place gets run down, people stop coming in, and you wonder, "why bother. I'll go work for Chilies". You bust your ass to make money.

The only place you can legitimately go is to raise prices or cut staff.

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There's a third possibility. Wages including minimum wage paid is not based on just being present at a job site for an hour, but rather on a cost/production unit. When labor costs are forcefully based on some random per hour unit, businesses need more production/hour. They accomplish this either by introducing greater efficiency by increased mechanization or by getting more production per hour from the staff. Or more often both.

My local Mickey D's has just introduced an automatic drink machine. The order is automatically fed into the machine and the cup is filled with the exact amount of product ordered, resulting in better results with two less employees.

joG said:

Think of it this way: How much additional help will you employ around the house and garden, when minimum wage is $15 instead of 50 Cents.

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As much as I need. The price of it would be largely irrelevant.

joG said:

Think of it this way: How much additional help will you employ around the house and garden, when minimum wage is $15 instead of 50 Cents.

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Furthermore a person helping me around the house does not generate revenue for me. It is only a cost not an investment. If the person helping me was generating $20/hour in revenue then I would happily pay them whether they charged me $15 or 50 cents. I might complain if they wanted to start charging more money for the same amount of work, and I might try and convince them it's a bad idea to ask for more money, but ultimately I'd pay them since they're still generating me profit.

MrWonka said:

Complete nonsense. Study after study after study has proven unequivocally that increasing the minimum wage does not in fact cost jobs. th.

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3 Hillary's .
If you had said ' some studies show that increasing minimum wage does not cost jobs' , you would have been on firmer ground. But there are plenty of studies that show the opposite, so that unequivocal qualifier puts you up in Hillary territory.
To say that study after study proves unequivocally that increasing the minimum wage does not in fact cost jobs is unequivocally false.
an even at that, there is little or no research on the effects of the kind of minimum wage hikes we are seeing now. For that you'll just have to use common sense.
Not a strong a point of liberals I know, but I'll help you out.( since I seem to blessed with it in abundance) You jack up that minimum wage by big amounts, it's gonna cost jobs. It's as certain as the laws of gravity.

KLATTU said:

If you had said ' some studies show that increasing minimum wage does not cost jobs' , you would have been on firmer ground. But there are plenty of studies that show the opposite, so that unequivocal qualifier puts you up in Hillary territory.
To say that study after study proves unequivocally that increasing the minimum wage does not in fact cost jobs is unequivocally false.

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And you are horribly horribly wrong. Let me explain how science works. You look at 20 or so studies that all try and determine the effects of the minimum wage. If 1/3 show small job losses, 1/3 show job gains, and 1/3 show no change at all. Based on that information you can determine that there is no consistent effect of a minimum wage hike. You can't even show a correlation between a wage hike and job losses let alone can you make the case that it is a cause. That is unequivocal proof.

KLATTU said:

You jack up that minimum wage by big amounts, it's gonna cost jobs. It's as certain as the laws of gravity.

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And yet even you are required to admit that at least some studies did not show a loss of jobs following a wage hike. We have raised the minimum wage more than 20 times since 1938, yet we still have 4.9% unemployment and that number is getting better and better every month. You do not have a leg to stand on here. When you drop a ball gravity will cause it to fall 100% of the time you will not get mixed results. It will not go up 1/3 of the time and down 1/3, and stay put the rest.

MrWonka said:

Complete nonsense. Study after study after study has proven unequivocally that increasing the minimum wage does not in fact cost jobs. In fact in some instances it has been followed by an increase in employment. We have raised the federal minimum wage more than twenty times since 1938, and here we are today with with 4.9% employment. A number that is generally considered full employment by most economists. The population of Washington DC is over a half million people strong. A swing of 1,400 employed persons in a 6 month span is nothing and could be entirely explained by a whole host of reasons. In fact you could probably explain it largely by the fact that it is an election year. This has caused hundreds of thousands of resident to return to their respective districts to campaign. That will inevitably slow down the restaurant industry.

In fact just last year the #1 and #2 cities in America for small business job growth were Seattle and San Francisco. The two cities with the highest minimum wage in the entire country.

Now, one thing to keep in mind is that when you implement minimum wages on smaller scales the likelihood that a business might consider moving itself a short distance away increases. That is why it's so important for us to be raising the minimum wage at the state and federal level to make sure cities that make this choice are safe from that problem.This however is largely only a problem for manufacturing businesses and there are already next to zero of those in DC to begin with.

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Most of the increases I remember we small and often came as a means to keep up with inflation. In many instances, the increase was simply keeping pace with what employers had already done. Mcdonalds for example, has offered above minimum in my area for a number of years. Plus, if as you say, an increase to $15 will have no impact, why is it being phased in slowly over a number of years? Why not do it overnight? Answer: that will cost jobs. Lots of them.

eohrnberger said:

As predicted. Too bad those pushing the $15 / hour didn't listen. Guess they just don't 'get' economics.

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And who suffers because of this?

I'll give you a hint... Take a look at the population demographics for Washington DC.

Fletch said:

Plus, if as you say, an increase to $15 will have no impact, why is it being phased in slowly over a number of years? Why not do it overnight? Answer: that will cost jobs. Lots of them.

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False. The reason is because going too high too quickly defeats the purpose. If you raise the minimum wage enough it will eventually require the price of goods to go up along with it. If that happens then it's self defeating. It doesn't do you a lot of good to make more money if everything costs more. If you do it slowly in small increments however the additional costs do not require price hikes, as most businesses can simply absorb those costs. If even some businesses choose to absorb the cost it forces their competition to do the same. The result is higher wages without higher priced good and it's the 1% who take the hit.

A perfect example is to take a business like Subway. The typical Subway restaurant chain makes about $2.25 of profit on every single footlong sandwich it sells. That's just the sandwich it's not even including a drink or a cheap ass bag of chips. The typical employ can make about 20 sandwiches in an hour for a total profit of $45 per hour for the owner who essentially does nothing at all. Increasing the minimum wage to $10 would only cut into his profit margins by about $2.50 leaving him with $42.50 per hour per employee which is still a nice chunk of change. He could try and raise the price of a sandwich by 10 cents or so to make up for it, but if he does, and the Jimmy Johns across the street doesn't he might lose customers to JJ's. However if we bumped the wages up too high too quickly to say $20/hour or something, that would suddenly cut into the owner's profits by a full $12 /hour. This increases the likelihood that he'll try and raise prices to make up the difference. If every business has to do that the raise becomes self defeating. You make more money, but things cost more too. The raise needs to be smaller in order to prevent things like that from happening.

MrWonka said:

False. The reason is because going too high too quickly defeats the purpose. If you raise the minimum wage enough it will eventually require the price of goods to go up along with it. If that happens then it's self defeating. It doesn't do you a lot of good to make more money if everything costs more. If you do it slowly in small increments however the additional costs do not require price hikes, as most businesses can simply absorb those costs. If even some businesses choose to absorb the cost it forces their competition to do the same. The result is higher wages without higher priced good and it's the 1% who take the hit.

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Its not 'false' since we are essentially saying the same thing with one exception--you refuse to admit that it would cost jobs as well as raise the cost of goods.

A perfect example is to take a business like Subway. The typical Subway restaurant chain makes about $2.25 of profit on every single footlong sandwich it sells. That's just the sandwich it's not even including a drink or a cheap ass bag of chips. The typical employ can make about 20 sandwiches in an hour for a total profit of $45 per hour for the owner who essentially does nothing at all. Increasing the minimum wage to $10 would only cut into his profit margins by about $2.50 leaving him with $42.50 per hour per employee which is still a nice chunk of change. He could try and raise the price of a sandwich by 10 cents or so to make up for it, but if he does, and the Jimmy Johns across the street doesn't he might lose customers to JJ's. However if we bumped the wages up too high too quickly to say $20/hour or something, that would suddenly cut into the owner's profits by a full $12 /hour. This increases the likelihood that he'll try and raise prices to make up the difference. If every business has to do that the raise becomes self defeating. You make more money, but things cost more too. The raise needs to be smaller in order to prevent things like that from happening.

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Except that JJ's across the street will be facing the same dynamic, so both will raise their prices to the extent the market will allow them and reduce hours to maintain their profitability. Plus, you seem to ignore the fact that the minimum increase will effect employees farther up the pay scale and have its most harmful impact upon those you seek to assist--the unskilled worker. Who is going to hire the 16 year old? If the minimum becomes $15, what happens to the people making $15 now? Artificially and arbitrarily raising wages will impact prices and employment. That's how it works.

KLATTU said:

AKA ,another liberal vote-pandering, soundgood, feelgood policy runs into unforgiving and immutable law of supply and demand.

Minimum Wage Increase Puts 1,400 D.C. Restaurant Employees Out of Work - Catherine Dunn

As always, the facts of life are conservative.

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lol... you sure you don't mean "conservatives are highly selective about the facts they pay attention to"?

Conservatives are right about some things, like free trade. This is not a good example.

When we look at BLS data, what do we see for DC?

June 2014 = 7.9% unemployment
June 2015 = 7.1% unemployment
June 2016 = 6.1% unemployment

Unemployment in the Washington Area by County – June 2016 : Mid–Atlantic Information Office : U.S. Bureau of Labor Statistics





The labor force in DC is estimated at around 400,000 people. Just FYI, 1400 jobs is 0.35% of the labor force.

The St Louis FRED data linked in the AEI article, unsurprisingly, does not quite say what the AEI claims it does. They mentioned that, even though seasonally adjusted, employment went up significantly in November and December, before dropping:



To put it mildly, looking exclusively at January 2016 through July 2016, while ignoring a big (and seasonally adjusted) run-up in jobs months after the first small wage hike, is rather... convenient.

We also see that there were similar bumps and plateaus over the past 6-10 years -- whatever time period you want to look at.

And again, we know that employment in DC during that time period actually went up. So those 1400 restaurant employees? Apparently most of them, and many more people, got jobs somewhere else.

Now, I do think that this type of focus can be useful for these types of comparison purposes. That said, it looks an awful lot like they are missing the forest for the trees.

Fletch said:

Its not 'false' since we are essentially saying the same thing with one exception--you refuse to admit that it would cost jobs as well as raise the cost of goods.

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Because it will not in fact cost jobs. It's been studied repeatedly. No evidence whatsoever.

Fletch said:

Except that JJ's across the street will be facing the same dynamic, so both will raise their prices to the extent the market will allow them

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Except the market won't allow them. They have no way of knowing if their competition will raise their prices therefore they can't do it with confidence either.

Fletch said:

and reduce hours to maintain their profitability.

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Get this through your thick skull. Businesses CANNOT reduce hours and maintain profitability. Workers generate profits. Every hour they aren't working you are losing money. If that were not the case you wouldn't hire them in the first place regardless of their wage.

Fletch said:

If the minimum becomes $15, what happens to the people making $15 now?

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They will get a raise as well.

MrWonka said:

Because it will not in fact cost jobs. It's been studied repeatedly. No evidence whatsoever.

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I wouldn't go quite that far. The data isn't absolute in any direction.

Get this through your thick skull. Businesses CANNOT reduce hours and maintain profitability. Workers generate profits. Every hour they aren't working you are losing money. If that were not the case you wouldn't hire them in the first place regardless of their wage.

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Yep.

The technical term for this is that the demand for certain types of labor is inelastic. E.g. if it takes a staff of 50 to run a restaurant properly, that staffing requirement does not change because the cost of labor went up by $1 per hour.

It is highly unlikely that any modern business, particularly one that relies heavily on minimum wage employees, has enough employees sitting around doing nothing productive that they can fire them, precisely in tandem with ages going up.

What is more likely is that the restaurant will need to raise prices slightly. (This is assuming there is nowhere else they can skimp, or the owner decides not to take the hit.)

The only other possibility is that a restaurant decides to shut its doors, rather than raise prices. While that is possible, that would be reflected in an excess of restaurant closures, which IIRC is not indicated in the data. That would also be very tough to figure out, as restaurants in particular fail at a fairly high rate (60% or more). While that might happen, I have to say it seems like an extreme reaction, and not an indicator of a strong business.

It is also ridiculous to imagine that minimum wage hikes are the only forms of price pressure on restaurants. To wit: If a restaurant could not handle a small increase in payroll, then how could they handle an increase in the price of gas, energy, food, alcohol, rent or liability insurance?

If any increase in costs capsizes your business, then you're doing something wrong.

Dittohead not! said:

Don't click on the link. I did, and it brought up three different tabs all saying different things about how the page can't be opened, then it closed the DP tab. I don't know if it's an infected site, or just one that doesn't work very well.

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It's not an infected site. It is TownHall and it works with no problems. I suspect the problem is in your own computer. You might want to do some maintenance on it...or pay someone if you don't know how.

MrWonka said:

Because it will not in fact cost jobs. It's been studied repeatedly. No evidence whatsoever.

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Does Mcdonalds hire more employees per store hour today or 30 years ago?

Except the market won't allow them. They have no way of knowing if their competition will raise their prices therefore they can't do it with confidence either.

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They can and they will. Prices rise all the time. If price increases are needed to retain profitability then they will raise prices. Again, every business will be in the same boat.

Get this through your thick skull. Businesses CANNOT reduce hours and maintain profitability.

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That is false. And stupid, frankly. I run a business and have run a restaurant in the past. You have not. So your head isn't as thick as it is empty.

Workers generate profits. Every hour they aren't working you are losing money.

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Not workers who cost more than they generate.

If that were not the case you wouldn't hire them in the first place regardless of their wage.

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Again, not true. I hire people because I need things done. We agree on a price for that labor. When you and your empty headed liberal numbskulls demand I pay this person more than it is profitiable to pay him, he will either lose his job, I will have to raise the price of my product to cover the increase in labor costs or I will go out of business--in which case all your liberal doogooderism has succeeded only in taking a job from someone who had one.

They will get a raise as well.

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LOL. Really. And where will the money to give that raise come from? You? Go start a business and meet payroll and your snobby, arrogant, know-nothing liberalism will meet reality.

Visbek said:

The technical term for this is that the demand for certain types of labor is inelastic. E.g. if it takes a staff of 50 to run a restaurant properly, that staffing requirement does not change because the cost of labor went up by $1 per hour.

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But we aren't talking about $1 per hour. We are talking going from $8 to $15. When the cost of labor is your biggest business expense, doubling that cost will have a major impact.

It is highly unlikely that any modern business, particularly one that relies heavily on minimum wage employees, has enough employees sitting around doing nothing productive that they can fire them, precisely in tandem with ages going up.

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Not true. Let me use Mcdonalds as an example. Years ago, most food was largely made to order. Pancakes were made fresh on site. You had several people on register, sometimes to people on grill, someone on the fryer, someone on buns, someone on prep, someone on dining room. It was actually crowded in the kitchen. Now, if you notice, most of the food is precooked and stored in warming bins. Order a $1 chicken sandwich. It comes out hot. The bun is hot, the lettuce is hot, the chicken is hot the mayo is hot. Why? Because it isn't fresh, its nuked. Order hotcakes. You think they are made fresh on the grill? Theyre not. They come frozen and are nuked. Mcdonalds has already cut staff and will likely do even more. And look at the prices. It aint cheap to eat there either. And that is with the minimum at $8. What do you think will happen if that wage rate essentially doubles?

It is also ridiculous to imagine that minimum wage hikes are the only forms of price pressure on restaurants. To wit: If a restaurant could not handle a small increase in payroll, then how could they handle an increase in the price of gas, energy, food, alcohol, rent or liability insurance?

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A small increase would be a minimum increase fro $8 to $8.50-$9.00. A $15 minimum is emphatically NOT a 'small increase in payroll.'

If any increase in costs capsizes your business, then you're doing something wrong.[/QUOTE]Says someone who has never run a business. Why don't you take this business acumen you think you have, start a business, pay your unskilled 16 year olds $15 an hour and show all us dummies how its done? You wont. Because it is much easier for you to put arbitrary, irrational demands on existing businesses than for you to go out there and live under your own insane rules.