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Thread: Los Angeles Raises Minimum Wage to $15 an Hour

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    Re: Los Angeles Raises Minimum Wage to $15 an Hour

    Quote Originally Posted by MTAtech View Post
    Thank you for reading your bumper sticker. That doesn't make it so and insulting hard-working Americans by calling them "losers" doesn't help your case. The reality is low earning workers are constrained at what they can purchase. If they earned more, they could consume more. Remember, their earnings are your income. If they have more income, you get more sales, which means you earn more.

    Moreover, when minimum wage workers get raises, their pay bumps up against supervisory workers, who then demand higher wages.

    Contrarily, a pay raise for minimum wage Americans is a pay raise for everyone else.
    If you are making a minimum wage job your career then you are not hard working.

    Name one time raising the minimum wage resulted in a raise for the people who actually did work hard for their salary? Ill go watch paint dry while you desperately search for that unicorn.

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    Re: Los Angeles Raises Minimum Wage to $15 an Hour

    Quote Originally Posted by jmotivator View Post
    No, that would be on top of the typical amount of inflation.



    Ice cream sales are declining so I wouldn't be so sure that the copnsumer is adapting to the increase in prices the way you think they are.
    Nowhere did I say it wasn't on top of the otherwise inflation. I just said restaurants regularly manage those size of "difficulties".

    Your link mentions health concerns, fragmentation in the sector, and lack of innovation as drivers of the decline, not price.

    Got something that actually supports your claim?

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    Re: Los Angeles Raises Minimum Wage to $15 an Hour

    Quote Originally Posted by jmotivator View Post
    No, that would be on top of the typical amount of inflation.



    Ice cream sales are declining so I wouldn't be so sure that the copnsumer is adapting to the increase in prices the way you think they are.
    we don't buy ice cream anymore unless it is on sale or a buy one get one type of deal. why? to expensive.

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    Re: Los Angeles Raises Minimum Wage to $15 an Hour

    Quote Originally Posted by WSUwarrior View Post
    If you are making a minimum wage job your career then you are not hard working.

    Name one time raising the minimum wage resulted in a raise for the people who actually did work hard for their salary? Ill go watch paint dry while you desperately search for that unicorn.
    for all the minimum wage increases I never got a raise above my normal one. my job was devalued and I lost money due to price increase as people adjusted their amounts upward.

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    Re: Los Angeles Raises Minimum Wage to $15 an Hour

    Quote Originally Posted by ludin View Post
    yea well what you forgot was that that 52k is maybe what the owner takes. he has to make a pay check and I doubt he will make 52k a year. he will want a bit more.
    plus that margin that you talk of is being spent to fix or repair things in the restaurant.

    you also fail to see that some people might not pay $12 dollars for his lunch.
    so they will lose some customers. also no business person raises prices to break even. they raise prices above the break even.
    so his price would go from 10 to 15 dollars.

    you also forget that he now has increased taxes that he has to pay for. his tax bill just went up.
    you leave a lot of factors out of your stacked hypothetical.

    SMH.
    The owner's salary is included in the total labor costs.

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    Re: Los Angeles Raises Minimum Wage to $15 an Hour

    Quote Originally Posted by tech30528 View Post
    Yeah, except I don't produce "units", I fix cars, and not all mechanics or technicians are created equal. I have a guy who makes $12 who is great for brakes, suspension work and simple maintenance, and I have a top guy who can diagnose complex issues who makes twice that. I have someone who works in the office who also makes $12 an hour, her production is more difficult to calculate since she doesn't actually produce labor hours but is necessary to make the rest of our operations more efficient. This isn't theoretical, it is reality.
    You can intentionally misrepresent my point all you want, but you just destroyed your own argument.

    You said an option is to let some of them go. Pick one, two, three.... Now maintain the same # (variety) of services you offered before.

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    Re: Los Angeles Raises Minimum Wage to $15 an Hour

    Quote Originally Posted by SlevinKelevra View Post
    Standard restaurant model: total labor costs (MW workers, subMW workers, Managers, etc) = 25-30% of total costs, and operate at ~5% margin
    So , let's use some easy #s,

    Total Costs = 1,000,000
    Revenues= 1,052,600
    Margin = 52,600
    LaborCost_LOW=250,000
    LaborCost_HIGH=300,000


    Assume MW = 1/2 of total LaborCosts
    In LaborCost_LOW that would be 125,000
    In LaborCost_HIGH that would be 150,000

    Let's assume that you now need to double this (to make the math easier....)

    NEW:
    LaborCost_LOW: 375,000
    LaborCost_HIGH: 450,000
    TotalCost_LOW: 1,125,000
    TotalCost_HIGH: 1,150,000
    To maintain a ~5% margin, ceteris paribus
    Revenue_LOW = 1,184,000
    Revenue_HIGH = 1,211,000

    So Revenue needs to increase by ~
    Either 132,000 or ~158,000

    Since this place is running on ~1.05M in revenue, let's assume a ticket averages $10
    They are moving then 105,000 tickets a year.

    To recoup 132,000 or ~158,000 they would have to increase ticket price by
    1.25$ or $1.50 (~12-15%) --- in other words, the typical amount of inflation that
    restaurants face in a 5-6 year window anyways.


    Now before you go bat guano crazy, consider in the last decade, ice cream has gone up in price (at least here) by about $1 (~20%) while decreasing the volume by ~25% in the container. Hence a net change per unit volume of ~47%----- Consumers weather gradual price increases far more robustly than you give them credit for if the good/service is worth "it" or is unique.
    It would appear you have assumed the labor cost of non-minimum wage employees would remain constant. Is it not reasonable to assume a current employee who has received merit increases would expect a pay increase as well? Do you think such an employee would be satisfied that a new unskilled, employee would be making as much as they were?
    President Donald J Trump, 45th President of the United States of America. A victory born in the hearts and minds of Everyday Americans

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    Re: Los Angeles Raises Minimum Wage to $15 an Hour

    Quote Originally Posted by SlevinKelevra View Post
    Standard restaurant model: total labor costs (MW workers, subMW workers, Managers, etc) = 25-30% of total costs, and operate at ~5% margin
    So , let's use some easy #s,

    Total Costs = 1,000,000
    Revenues= 1,052,600
    Margin = 52,600
    LaborCost_LOW=250,000
    LaborCost_HIGH=300,000


    Assume MW = 1/2 of total LaborCosts
    In LaborCost_LOW that would be 125,000
    In LaborCost_HIGH that would be 150,000

    Let's assume that you now need to double this (to make the math easier....)

    NEW:
    LaborCost_LOW: 375,000
    LaborCost_HIGH: 450,000
    TotalCost_LOW: 1,125,000
    TotalCost_HIGH: 1,150,000
    To maintain a ~5% margin, ceteris paribus
    Revenue_LOW = 1,184,000
    Revenue_HIGH = 1,211,000

    So Revenue needs to increase by ~
    Either 132,000 or ~158,000

    Since this place is running on ~1.05M in revenue, let's assume a ticket averages $10
    They are moving then 105,000 tickets a year.

    To recoup 132,000 or ~158,000 they would have to increase ticket price by
    1.25$ or $1.50 (~12-15%) --- in other words, the typical amount of inflation that
    restaurants face in a 5-6 year window anyways.


    Now before you go bat guano crazy, consider in the last decade, ice cream has gone up in price (at least here) by about $1 (~20%) while decreasing the volume by ~25% in the container. Hence a net change per unit volume of ~47%----- Consumers weather gradual price increases far more robustly than you give them credit for if the good/service is worth "it" or is unique.

    your math, and your assumptions are actually quite reasonable here....up to a point

    so 12% inflation on food prices.....but you forgot about a few things

    lets also assume they lose just a few customers because of price increase

    now....you only addressed the minimum wage workers

    what about the rest of the staff?

    is the guy who has been there for eight years, never missed a shift, and now a shift supervisor staying at his 15.50 rate?

    what about the rest.....if the newbies, or no skills are coming in at $ 15, what do you now pay those who have been there with you for awhile, and earned their place?

    what kinds of raises do they all get? or do they....and if not, what happens to morale in your shop?

    we can get back to that.....

    if your prices are going up 12%, what do you think the rest of the businesses are having to do?

    what will that do to total prices you are paying for everything else?

    will your suppliers keep their same prices?

    so, lets say overall prices increase 6-8% city wide.....again an assumption

    so who has benefitted?

    a. the city has.....you earn more, you pay taxes on more
    b. the state has....same reasoning
    c. the feds have....same reasoning
    d. the unions have....most of their contracts are based off of minimum wage numbers

    have the MW workers really benefitted?

    who has been hurt?

    the fixed income people....the seniors on social security who have to wait for their raises in their checks AFTER the inflation has already occurred

    so is it worth it?

    you tell me
    “Most of the shadows of this life are caused by standing in one's own sunshine.”

    Ralph Waldo Emerson

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    Re: Los Angeles Raises Minimum Wage to $15 an Hour

    Quote Originally Posted by ocean515 View Post
    It would appear you have assumed the labor cost of non-minimum wage employees would remain constant. Is it not reasonable to assume a current employee who has received merit increases would expect a pay increase as well? Do you think such an employee would be satisfied that a new unskilled, employee would be making as much as they were?
    his percentages are also wrong. it is 30-35% of total costs not 25-30% he is aiming on the low side.
    he leaves out a ton of factors.

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    Re: Los Angeles Raises Minimum Wage to $15 an Hour

    Quote Originally Posted by ocean515 View Post
    It would appear you have assumed the labor cost of non-minimum wage employees would remain constant. Is it not reasonable to assume a current employee who has received merit increases would expect a pay increase as well? Do you think such an employee would be satisfied that a new unskilled, employee would be making as much as they were?
    Other than the owner (well paid), manager (pretty well paid), do you think many employees in a restaurant are outside of the MW and the subMW (tipped) pay range?

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