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Los Angeles Raises Minimum Wage to $15 an Hour

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.

why do you think companies are abandoning CA in general? their are simply better places out there to do business in.
no restaurant prices have gone up more so your local places more than your chains. however I have noticed that even chain prices have gone up as well.

businesses pay what the position is worth and being a bus boy or a dishwasher or a cashier doesn't entitle you to 15 bucks an hour
 
Nothing happened when it jumped form (I think) $8.75 to $11.05, and nothing's going to happen now. Businesses charge what the market will bear, and in S.F. it's always been high, so I don't feel sorry for them at all.


I just showed that it did and you were proven wrong and I am sure that there were more that were not reported.

businesses cannot justify paying low skill no skill workers 15 dollars
 
you posted it is already happening it will just become more prevalent.
why?

you can't justify paying a cashier 15 dollars an hour.
you can't justify paying a bag boy 15 dollars an hour
and the list goes on and on.

nothing they do justifies 15 dollars an hour.
Yes, it (technological efficiency) is already happening - as I stated, it's occuring in my area with a MUCH LOWER minimum wage than that proposed, where it is prevalent & growing.

You've done nothing to show the causal relationship regarding technological adaption as implied in your original reply to me, where you posted:

yep and we will see how many businesses stay in business and how many low skill workers lose their jobs. it will be great as automated ordering machines will pick up in business.
ol wait they don't have the skills to do that job.

no more bag boys go bag your own groceries.
more automated checkouts.


here I thought liberals weren't against poor people so why would you price them out of a job?
 
San Francisco has had a $12 minimum wage for some time now and everything's fine.

As is the case with Seattle, San Francisco has a highly-educated workforce (52.4% with bachelor's degrees or above vs. the national average of 28.8%). The end result is very low unemployment (4.2% rate vs. 5.6% national rate in March), high productivity (per capita income of $48,486 vs. the national average of $28,155) and high incomes (median household income of $75,604 vs. the national average of $53,046). Of course, even there, there will be some economic dislocation.

Los Angeles is in a worse position. A large share of Los Angeles' population is under-educated (25.5% have no high school diploma vs. the national average of 14.0%). As the unemployment rate is directly correlated with educational attainment and job security is also greater with higher educational attainment, it isn't surprising that Los Angeles currently has a 6.6% unemployment rate (vs. 5.6% in the U.S. in March), along with lower productivity ($27,829 per capita income) and lower median household income ($49,497) than San Francisco (or Seattle) and a poverty rate more than 50% above the national average. Lower-skilled jobs often come with a lack of benefits and 28.3% of Los Angeles residents under the age of 65 lacked health coverage (vs. 15.3% nationwide). Los Angeles' economy is in a much weaker position than San Francisco's or Seattle's to cope with a $15 per hour minimum wage.
 
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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....

Extending your points:

1) Labor is an input cost. If labor wages are set higher than market then the cost of production per unit of output rises.
2) Labor has more to spend, the Business/owner has less to spend and invest. Demand (spending power) is redistributed, not increased nor decreased.
3) The ability of an individual business to raise price is highly constrained by the market price. But if all businesses in a sector are affected by the labor cost increase, prices will rise AND demand for the product will fall.
4) The 9 dollar burger will now be 12 dollar burger. With decreased demand, some suppliers will cease business. "Dining" business will flow to a business that provide alternative, substitute products and services (e.g. business goes from an independent table service diner to a McDonald's franchise). In the process, consumer preference suffers a loss.

In sum, minimum wage is:

-Good for retained employees still working full hours (in the short run).
-Bad for the most affected business owners
-Bad for unhired/laid off/ or reduced hour employee.
-Bad for customers and customer preference.
-Bad for job expansion.

There is no free lunch.
 
4) The 9 dollar burger will now be 12 dollar burger. With decreased demand, some suppliers will cease business. "Dining" business will flow to a business that provide alternative, substitute products and services (e.g. business goes from an independent table service diner to a McDonald's franchise). In the process, consumer preference suffers a loss.

In sum, minimum wage is:

-Good for retained employees still working full hours (in the short run).
-Bad for the most affected business owners
-Bad for unhired/laid off/ or reduced hour employee.
-Bad for customers and customer preference.
-Bad for job expansion.

There is no free lunch.
I'd be interested in seeing some supporting evidence regarding your figures showing a 33% increase in the selling price of a hamburger.

I've typically seen figures showing very minimal increases of pennies or several percent on the price of a sandwich (often referenced to a 'Big Mac').

Your macro analysis strikes me as reasonably accurate in an academic sense, but I believe you are inaccurate as to matter-of-degree - I suspect the negative effects you describe will be generally minor & negligible; also, costs to the average employer will be somewhat ameliorated by the savings due to employee retention in these traditionally high turn-over jobs.

In short - I believe you've got it right in theory, but are in error as to matter-of-degree in real-world application.
 
Thread synopsis: California's economy is compared unfavorably to republican controlled states, notably Texas. Predictions of it crumbling into the sea amid cheers are high.

Arizona Bay would certainly be an improvement n
 
I'd be interested in seeing some supporting evidence regarding your figures showing a 33% increase in the selling price of a hamburger.

I've typically seen figures showing very minimal increases of pennies or several percent on the price of a sandwich (often referenced to a 'Big Mac').

Your macro analysis strikes me as reasonably accurate in an academic sense, but I believe you are inaccurate as to matter-of-degree - I suspect the negative effects you describe will be generally minor & negligible; also, costs to the average employer will be somewhat ameliorated by the savings due to employee retention in these traditionally high turn-over jobs.

In short - I believe you've got it right in theory, but are in error as to matter-of-degree in real-world application.

First, to correct a misimpression - my example was a thought experiment, an illustration of the economic forces in play. Whether there is a 3 cent difference or a 3 dollar difference in burgers, the effects are the same in kind (but, obviously, not in degree). The "burger" prices are illustrative, not empirically known.

Second, if one wants to speculate on burgers I suggest you use the old restaurant rule 1/3rd of the selling price of a dish goes to labor. For example, if labor costs went up 50 percent, then the dish needs to be increased by (.5 x .33) = 16.5 percent and/or the business needs to cut costs (e.g. fire the water boy and reduce some employee work hours or benefits).

Finally, there seems to be two kinds reactions to criticism of minimum wage law; either a poster (e.g. Jet57) is motivated by candid hostility to shop proprietors ("I don't feel sorry for...") OR, more commonly, the assertion that the overall effect is not that bad or important on a 'macro' level. I think that those who focus on the latter are missing the point this is NOT an issue over changes in a City's general employment rates or general economy; its an issue over those that are affected by minimum wage legislation.

For the affected group, small increases have small effects, large increases have large effects (for both employers and employees). Previous increases in minimum wage have been rather temperate - but a jump of 50 percent is not.
 
there is no evidence of this at all as any increase in money is offset by the increase in prices. not to mention increased taxes on that money.
it also has no effect when you work 24 hours a week if that and make the same amount of money.

there is also no evidence that they will spend it in that business.

no when the floor is raised business costs go up and so do prices and reduced staff to offset costs.

No evidence huh?


So why doesn’t Wal-Mart just improve its public image by raising its wages? Those same Berkeley researchers estimated that the company could boost its pay to a minimum of $12 per hour and cover the additional expense by a one-time price hike of just 1.1%, costing the average Wal-Mart shopper only an extra $12.50 per year

Raising The Minimum Wage Would Be Good For Wal-Mart, And America - Forbes

$12.50 a year is hardly supportive of your claim.

Your turn to back up your claim.
 
First, to correct a misimpression - my example was a thought experiment, an illustration of the economic forces in play. Whether there is a 3 cent difference or a 3 dollar difference in burgers, the effects are the same in kind (but, obviously, not in degree). The "burger" prices are illustrative, not empirically known.

Second, if one wants to speculate on burgers I suggest you use the old restaurant rule 1/3rd of the selling price of a dish goes to labor. For example, if labor costs went up 50 percent, then the dish needs to be increased by (.5 x .33) = 16.5 percent and/or the business needs to cut costs (e.g. fire the water boy and reduce some employee work hours or benefits).

Finally, there seems to be two kinds reactions to criticism of minimum wage law; either a poster (e.g. Jet57) is motivated by candid hostility to shop proprietors ("I don't feel sorry for...") OR, more commonly, the assertion that the overall effect is not that bad or important on a 'macro' level. I think that those who focus on the latter are missing the point this is NOT an issue over changes in a City's general employment rates or general economy; its an issue over those that are affected by minimum wage legislation.

For the affected group, small increases have small effects, large increases have large effects (for both employers and employees). Previous increases in minimum wage have been rather temperate - but a jump of 50 percent is not.

Well stated. Let's not also forget the aggregate impact of entry level pay increasing to $15.00/hr. Does not ALL payroll have to be reviewed to re-establish merit among those who have seen their effort rewarded by increases in compensation? Should the $14.50/hr worker now be increased to $18/hr.

How about a delivery truck driver, or the warehouse worker supplying the goods to the restaurant? This isn't a one industry increase. This is across the board in the City of Los Angeles.

Few people understand what it takes to cover $1 in increased costs to the bottom line. Trust me, it's been illustrated on these boards many times.
 
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

You are the third person in as many posts who does this liberals and conservatives thing in their posts as a condescending tone of debate. I find the similarities of such a superiority attitude between multiple posters interesting.

As far as differing pragmatism between progressives and conservatives in business, I guess you can take that up with that failing liberal business Costco who pays their employees closer to $20 an hour.
 
no your plan will not work because people already come to america for the reasons you say they will not in your plan.

They come be a use they can find the jobs. Start jailing employers and that all goes away.
 
$15 = $5 = $500 = $5000, depending on what the market dictates.

Why don't people understand that flooding the market with money doesn't change the inherent value of the product or service? It only decreases the value of the money itself.
 
You are the third person in as many posts who does this liberals and conservatives thing in their posts as a condescending tone of debate. I find the similarities of such a superiority attitude between multiple posters interesting.

As far as differing pragmatism between progressives and conservatives in business, I guess you can take that up with that failing liberal business Costco who pays their employees closer to $20 an hour.


this isnt making the change at one place, with a great business model

it is making the change at EVERY place across the board....

places running well....places barely staying afloat

will some companies do okay....sure

will others go under....you bet

the only question i will ask you

overall, will the economy of the LA basin be better or worse two years after implementation?

neither of us can guarantee an answer either way

but lets just use local unemployment

will that go up or down based on this change?

and are you willing to put a wager on that?
 
Well stated. Let's not also forget the aggregate impact of entry level pay increasing to $15.00/hr. Does not ALL payroll have to be reviewed to re-establish merit among those who have seen their effort rewarded by increases in compensation? Should the $14.50/hr worker now be increased to $18/hr.

How about a delivery truck driver, or the warehouse worker supplying the goods to the restaurant? This isn't a one industry increase. This is across the board in the City of Los Angeles.

Few people understand what it takes to cover $1 in increased costs to the bottom line. Trust me, it's been illustrated on these boards many times.

You bring up some valid points. Should the rate of pay for all jobs be increased? Why is a MW worker suddenly worth more?
I have been thinking that this "redistribution" will also have a negative impact on merit raises.
Many small business owners will resent having been forced to pay the new rates. They may feel that $15.00 is excorbitant and delay any merit raises until
they believe that the employee is worth more than the MW. I suppose the employee CAN go to another MW job and start over at $15.00.
 
You are the third person in as many posts who does this liberals and conservatives thing in their posts as a condescending tone of debate. I find the similarities of such a superiority attitude between multiple posters interesting.

As far as differing pragmatism between progressives and conservatives in business, I guess you can take that up with that failing liberal business Costco who pays their employees closer to $20 an hour.

You want to compare a membership warehouse store with limited SKU's to Walmart or some other kind of business? LOL
 
You bring up some valid points. Should the rate of pay for all jobs be increased? Why is a MW worker suddenly worth more?
I have been thinking that this "redistribution" will also have a negative impact on merit raises.
Many small business owners will resent having been forced to pay the new rates. They may feel that $15.00 is excorbitant and delay any merit raises until
they believe that the employee is worth more than the MW. I suppose the employee CAN go to another MW job and start over at $15.00.

Merit pay has typically been used for exactly that, to compensate someone for effort, experience, etc.. What now? Is the employee who has paid their dues no longer worth a premium in pay over others? What would keep such a person motivated if they were suddenly on par with someone who just started out?

And how do suppliers deal with this sudden increase? Don't they raise their costs in turn?

When one considers how few people actually are paid at minimum wage, this entire effort begins to be seen for what it actually is.
 
are you calling her a liar? please prove she is lieing? ol yea you can't.

THAT, sir, is why I linked to someone who did know the business, and who could speak about the level of competition in the area - establishments just like hers who are NOT going out of business. AND I included links showing that ONE business failure - in an industry with the highest rate of failure even in the best of times - is not a big deal at all.

But of course since these FACTS don't fit your narrative, you decide that they are of no consequence.

unless the boats sink because the water goes over them. tell that to the business owners having to shut down and lose their business that it isn't so destructive.

And we're doing just fine here in the Seattle area even with that minimum wage hike. But of course our economic success is something you must ignore since that doesn't fit your narrative.

and here is the strawman. go figure on that one.

Not a strawman - a challenge. Go live in a nation that doesn't have a significant minimum wage or strong unionization, stay there for a while, then get back to us and tell us how wonderful the economy there is.
 
No evidence huh?


So why doesn’t Wal-Mart just improve its public image by raising its wages? Those same Berkeley researchers estimated that the company could boost its pay to a minimum of $12 per hour and cover the additional expense by a one-time price hike of just 1.1%, costing the average Wal-Mart shopper only an extra $12.50 per year

Raising The Minimum Wage Would Be Good For Wal-Mart, And America - Forbes

$12.50 a year is hardly supportive of your claim.

Your turn to back up your claim.

And if the entire world of retail and services were run by Wallmart, you might have a point. But as the company only represents 1 percent of the affected workforce, using a big box discounter as 'representative' is 'hardly supportive' of your prior claims. In fact, we can deduce the effects of minimum wage.

First, the trend for the last two or three decades has been the demise of the working class mom and pop outlets and historic department stores (e.g. those downtown working class shoe stores, book stores, hardware, and department stores) and the rise of BIG outlets and warehouses, as well as cookie cutter franchises. Wal-Mart and Costco are both examples of those trends. While many have complained about the absence of help and service, and the inconvenience of using the giant stores, the price discounts have proven (for many) to be worth it.

Second, the primary advantage of 'big box' outlets is a higher output to labor ratio. Imposing a large minimum wage increase on all business actually DECREASES the ability of less labor efficient proprietorship retailers to survive - it actually fosters and encourages their demise and replacement of small business by Wallmart and Costco (or cookie cutter franchises) - the very thing that many minimum wage supporting Wallmart haters say they oppose. (Ironically, "liberal" and rich Malibu might be all for wage increases, but also ban big box outlets in their community...hence they supported those "new jobs" before they indirectly opposed them - LOL).

Finally, while I find the claim of minor 1.1 percent increase in prices (for a roughly 40 percent increase in wages) to be highly dubious wishful thinking, it is also irrelevant. We know that even modest increases of 10 or 20 percent do, and one can extrapolate what it will do when its 50 percent.
 
THAT, sir, is why I linked to someone who did know the business, and who could speak about the level of competition in the area - establishments just like hers who are NOT going out of business. AND I included links showing that ONE business failure - in an industry with the highest rate of failure even in the best of times - is not a big deal at all.

But of course since these FACTS don't fit your narrative, you decide that they are of no consequence.



And we're doing just fine here in the Seattle area even with that minimum wage hike. But of course our economic success is something you must ignore since that doesn't fit your narrative.



Not a strawman - a challenge. Go live in a nation that doesn't have a significant minimum wage or strong unionization, stay there for a while, then get back to us and tell us how wonderful the economy there is.


Seattle just started on the MW hikes

most havent taken yet

Seattle has a much higher average wage in the area

Seattle has a much more educated population

Can Seattle handle the $ 15 hr MW.....maybe

Comparing Seattle to Los Angeles makes no sense though.....the cities are in no ways alike

Los Angeles will have a much rougher time acclimating to the new wage than Seattle....and it is still questionable if Seattle can deal with it
 
...But of course since these FACTS don't fit your narrative, you decide that they are of no consequence.

And we're doing just fine here in the Seattle area even with that minimum wage hike. But of course our economic success is something you must ignore since that doesn't fit your narrative.

Not a strawman - a challenge. Go live in a nation that doesn't have a significant minimum wage or strong unionization, stay there for a while, then get back to us and tell us how wonderful the economy there is.

Speaking of facts not fitting someone's narrative, are you aware that the States that have the weakest unionization tend to have the strongest employment and least inequality?
 
THAT, sir, is why I linked to someone who did know the business, and who could speak about the level of competition in the area - establishments just like hers who are NOT going out of business. AND I included links showing that ONE business failure - in an industry with the highest rate of failure even in the best of times - is not a big deal at all.

But of course since these FACTS don't fit your narrative, you decide that they are of no consequence.

that person that supposedly knew the business is not the owner. therefore it is simply their opinion not proof that the owner is lying you need to learn the difference.
no your fact don't fit anyone's narrative.


And we're doing just fine here in the Seattle area even with that minimum wage hike. But of course our economic success is something you must ignore since that doesn't fit your narrative.

seeing how the majority of people there work above minimum wage then it isn't that big of a deal. however they will be wanting raises to offset the cost increases from minimum wage people making 15 an hour. their is a huge possibility that they won't get it.


Not a strawman - a challenge. Go live in a nation that doesn't have a significant minimum wage or strong unionization, stay there for a while, then get back to us and tell us how wonderful the economy there is.

how about this you open a business and pay no skill low skill labor 15 an hour.
 
Hey! There ya go! ;)

Or replace it more rapidly with capital, putting those workers out of a job, but now in an environment where they can't be rehired.

Yeah, except that, as shown with the dishwasher, a LOT of these minimum wage jobs are completely necessary. As in, they MUST be done, by person or machine. To claim that hire minimum wages increases the rate by which employers automate is basically saying that minimum wages drive innovation, so....great?
 
You want to compare a membership warehouse store with limited SKU's to Walmart or some other kind of business? LOL

You mean like Sam's Club.

Good call. You should compare those.
 
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