"When fascism comes to America, it will be wrapped in the flag and carrying a cross." - Sinclair Lewis
The 10 Commandments of Logic - (Courtesy of Abbazorkzog Blog)
aaah....
you see income which may or may not appear
conservatives, by nature, take things as they happen, and plan for the worst, while hoping for the best
you say more people will shop.....and buy our product.....there is no guarantee of that.....at all
so expenses are the one thing we KNOW we need to control.....getting customers in the door, and having them buy our products is not totally in our control
one more way progressives and conservatives differ on business.....
i'll let you decide which way is the most prudent
“Most of the shadows of this life are caused by standing in one's own sunshine.”
Ralph Waldo Emerson
This is a key point. Assuming a business seeks to pass its increased costs to customers by raising its prices, its supply curve shifts to the left (by the amount it has increased its prices). If demand for its products/services remains unchanged, fewer units are sold. Even with the increased price, some loss in revenue occurs.
Increased wages, though, can lead to the demand curve's shifting to the right. As a result, some of the revenue loss is mitigated. However, unless those receiving the wage increase are the firm's only customers and they spend all of their wage increase on that company's products/services, there is some revenue loss.
In actual market conditions, that assumption about customer base and customer spending does not hold. There are additional customers, not all of whom receive wage increases, so the demand curve does not shift sufficiently to the right to fully cover the cost increase. At the same time, there are substitute products/services and those competitors may not necessarily raise their prices. That would allow them to capture market share, further precluding a change in demand for the company's own products/services.
In the case of restaurants, some existing customers may opt to dine elsewhere or eat at home a little more frequently to deal with a price hike. At the same time, some workers who receive higher wages may opt for other leisure activities, meaning that other firms may experience an increase in demand rather than the restaurant. The result is that the restaurant would likely experience some loss in revenue from its price increase unless its competitors matched or exceeded its price increases, the price of substitutes also rose, and customer preferences remained unchanged.
Marginal businesses (those having low profit margins) would face much greater challenges than those with more competitive cost structures (e.g., through economies of scale) or larger profit margins resulting from differentiation. Those businesses would be in a financial position to absorb some share of the cost increases e.g., much less need to raise prices. In doing so, they could experience market share gains, with the increased sales more than offsetting the increased costs associated with wage hikes. As a result, some industry consolidation typically results with marginal businesses closing and the stronger businesses expanding. Such an outcome, of course, does not assure that all those who lose jobs would be hired by the stronger businesses, as the business models of those stronger businesses may not be as labor-intensive as those of the marginal ones.
The end result is that there is at least some economic dislocation from minimum wage increases, and that point shows up in the empirical literature. The magnitude varies from location to location, business-to-business, and industry-to-industry, and there are "winners" and "losers" so to speak.
If you raise minimum wage to $100 per hour, but state taxes and cost of living increase by 1000 percent, you're still way behind the eight ball.
It takes $15 an hour in California to be commensurate with $8 an hour in Texas. You can build a 6,000 square-foot home on an acre for $1 million most anywhere in Texas. That won't buy you crap in San Francisco.
Why don't liberals understand basic economics and mathematics?
There is loss of revenue while someone might be willing to pay 10 dollars for my burger they won't be willing to pay 15.
this is nothing more than an assumption. there is no guarantee that just because wages go up I will sell more burgers.Increased wages, though, can lead to the demand curve's shifting to the right. As a result, some of the revenue loss is mitigated. However, unless those receiving the wage increase are the firm's only customers and they spend all of their wage increase on that company's products/services, there is some revenue loss.
they will raise their prices they always do. just look a the Mcdonalds 99 menu. most of the items are not 99 cents anymore.In actual market conditions, that assumption about customer base and customer spending does not hold. There are additional customers, not all of whom receive wage increases, so the demand curve does not shift sufficiently to the right to fully cover the cost increase. At the same time, there are substitute products/services and those competitors may not necessarily raise their prices. That would allow them to capture market share, further precluding a change in demand for the company's own products/services.
more assumptions. even if the prices at competitors rose it means less people will eat out.In the case of restaurants, some existing customers may opt to dine elsewhere or eat at home a little more frequently to deal with a price hike. At the same time, some workers who receive higher wages may opt for other leisure activities, meaning that other firms may experience an increase in demand rather than the restaurant. The result is that the restaurant would likely experience some loss in revenue from its price increase unless its competitors matched or exceeded its price increases, the price of substitutes also rose, and customer preferences remained unchanged.
You forget that the manager that was making 15 dollars isn't going to work for minimum wage. he is going to want a pay increase as well.Marginal businesses (those having low profit margins) would face much greater challenges than those with more competitive cost structures (e.g., through economies of scale) or larger profit margins resulting from differentiation. Those businesses would be in a financial position to absorb some share of the cost increases e.g., much less need to raise prices. In doing so, they could experience market share gains, with the increased sales more than offsetting the increased costs associated with wage hikes. As a result, some industry consolidation typically results with marginal businesses closing and the stronger businesses expanding. Such an outcome, of course, does not assure that all those who lose jobs would be hired by the stronger businesses, as the business models of those stronger businesses may not be as labor-intensive as those of the marginal ones.
the tech guy that was making 15 dollar is going to want more than minimum wage as well.
you are not talking about driving wages up for just minimum wage workers but for everyone. that means a whole new set of costs that businesses have to face.
that or they don't increase other peoples pay and you devalue your other employee's which isn't a very good thing to do.
government shouldn't be picking winners and losers that sets a very dangerous course for the economy.The end result is that there is at least some economic dislocation from minimum wage increases, and that point shows up in the empirical literature. The magnitude varies from location to location, business-to-business, and industry-to-industry, and there are "winners" and "losers" so to speak.
https://www.aei.org/publication/the-...le-can-expect/
only if you ignore what is happening.
The sky is not falling. I can tell you from direct experience that both Oakland AND San Francisco are doing just fine. In fact, I'll turn it around on you; if you can't afford to do business in either city, then go elsewhere. Isn't that what conservatives say about lower wages and the cost of housing? Restaurant prices are still the same, museums and everything else. Housing is going through the roof though, only because that's the market! so apartments and houses have more and more people in them. Nope sorry, if business won't take care of business, then people have to.
“The people do not want virtue; but they are the dupes of pretended patriots” : Elbridge Gerry of Mass; Constitutional Convention 1787
Not quite. It's been 12.25 since the first of this month, it was 11.05 at the first of the year, and will reach 15.00 July of 2018. The effects of this increase are still an unknown.
City and County of San Francisco : Minimum Wage Ordinance (MWO)
People.....Not a fan.