We Are Seeing The Effects Of The Minimum Wage Rise In San Francisco

[Namviet]

As we keep trying to point out to people there really isn’t anything even remotely resembling a free lunch when it comes to the discussion of wages and labor. Meaning that just because well meaning liberals wave their magic wand and decree that wages will rise there will indeed be countervailing effects. And in San Francisco, where the minimum wage was recently raised we did indeed see that comic book shop insisting that it just couldn’t survive. And now we’ve another tale, this time from Chipotle. Beef prices have been rising around the country so they’ve raised the prices, around the country, of their beef products. Wages in San Francisco have been rising strongly so they’ve raised the prices of all their products in San Francisco strongly. There really is no free lunch. A rise in wages will come out of either less labor being employed, lower profit margins (and fast food doesn’t have those wide enough to take the strain) or price increases to consumers.

It's basic math folks. Been saying this for sometime but somehow it never penetrates the elitist utopians minds. Another utopian job killer. One thing minimum waged does is destroy competition for labor. Those that want to work but are less capable will be overlooked for those more capable (at least on paper). Those less capable but ambitious cannot compete for wages since they won't have a chance to begin with. What say you?

Read More :   http://www.forbes.com/sites/timworst...rtner=yahootix

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[redandblack]

It is true that trying to benefit workers through minimum wage increases is theoretically not the most economically optimal thing to do. Ideally the best thing would be if there was an excess demand for labor relative to labor supply, but that simply cannot happen if we get stuck in a situation where there are too many unemployed people. So minimum wage, despite its non-ideal side effects, may be the next best thing.

The problem in the U.S. is they chose to let too much immigration in before they started considering a drastic increase in the minimum wage. Now it's too late. They will not be able to raise the minimum wage without creating substantial unemployment problems. There are too many people working in low level jobs, and there is barely enough demand for all these workers the way things are already, as evidenced by the fact that many of the unemployed are finding it challenging to even obtain entry level work. It's a bad situation.

[abasin]

That doesn't make any sense though. So let's say Chipotle has to increase the costs of its food. Now there's a demand for a way to produce cheaper meat. This in turn spurs the economy, after all someone has to create the product, manufacture it and sell it. More jobs have been created by this. Or think of it like this, the costs of meat have gone up, so people will buy less of it, but other food sources will be able to sell more products. In the end, there are plenty of jobs created. It's the manner of jobs being created that is the argument. This is stimulating the economy on the backs of businesses. This goes to a fundamental question about what businesses should be for. Are they for making a profit, or do they owe their employees?

[Namviet]

That doesn't make any sense though. So let's say Chipotle has to increase the costs of its food. Now there's a demand for a way to produce cheaper meat. This in turn spurs the economy, after all someone has to create the product, manufacture it and sell it. More jobs have been created by this. Or think of it like this, the costs of meat have gone up, so people will buy less of it, but other food sources will be able to sell more products. In the end, there are plenty of jobs created. It's the manner of jobs being created that is the argument. This is stimulating the economy on the backs of businesses. This goes to a fundamental question about what businesses should be for. Are they for making a profit, or do they owe their employees?

For a restaurant like Chipotle about 30% are for product, 30% for labor and the rest for overhead with about a 5% profit, which is pretty low. Product (meat) prices have gone up.
For Chipotle, those not in San Fran raised their prices by 4%, San Fran had to raise theirs by 10% due to the new labor laws.

[godlyitems]

It's basic math folks. Been saying this for sometime but somehow it never penetrates the elitist utopians minds. Another utopian job killer. One thing minimum waged does is destroy competition for labor. Those that want to work but are less capable will be overlooked for those more capable (at least on paper). Those less capable but ambitious cannot compete for wages since they won't have a chance to begin with. What say you?

Read More :   http://www.forbes.com/sites/timworst...rtner=yahootix

Hasn't worker wages gone up ever since the beginning of this country? The cost of things go up...the prices go up...the workers wage goes up. It seems like this is the normal routine for this type of economy. Not sure if this is a good trend, but it's certainly nothing new. Businesses that cannot keep up with this go under, and new ones emerge. This has always been the way. It doesn't seem right to suggest that if a business can't pay their workers the standard pay of the times, that the workers should work for less.

People losing jobs is nothing new in this economy. Businesses do not shed tears when they lay workers off, they do this primarily for cost-effectiveness. That's why they can pack up and outsource to Mexicans/Chinese/East-Indians/whatever...- because they'd rather pay half to someone else than keep Dave and Tim's family eating on a fair wage.

[bitcoinmasterlord]

You might consider that businesses that can't pay enough to pay their workers might have been a wrong business model from the start. I mean you could pay workers like the inmates in a prison but this only can survive with certain circumstances. That is, no choice to work different things.

At the end... state has to make sure that the citizens can eat and live. And it's unecononomical when employees has to get money from the state on top only so that they can survive. That would be supporting unhealthy businessforms. And every taxpayer has to pay for it.

Surely that won't work.

At the end a minimum wage is something good in an environment where there are less jobs than workers. The power is simply not balanced so that the workers can be exploited. I mean people having to do three jobs and it's still not enough? Nothing justifies that. The state, so in fact every citizen, should take care about all other citizens too. Otherwise the state has to pay for it with monetary bonuses or costs for sick people and so on.

[needFREElunch]

So the cost goes up ,the prices goes up and the labor wage increases. The increase in minimum wages is nothing new though. But then best thing a country can do to its labors is actually provide them employment according to their capabilities. In a way , minimum wage destroys a sense of competition.

[odolvlobo]

Minimum-wage laws make it illegal for low-skilled people to work.

[greBit]

So the cost goes up ,the prices goes up and the labor wage increases. The increase in minimum wages is nothing new though. But then best thing a country can do to its labors is actually provide them employment according to their capabilities. In a way , minimum wage destroys a sense of competition.

Dude, but I'd rather not give a fuck about the competition just to make sure the not so skilled, not so talented are also able to enjoy a good, comfortable lifestyle with the minimum wage. Surely award those who are talented, I would love to see the skilled progress ahead but please do not leave the poor, not so educated and not so talented people behind. As a team, lets progress together

[peterson33]

That doesn't make any sense though. So let's say Chipotle has to increase the costs of its food. Now there's a demand for a way to produce cheaper meat. This in turn spurs the economy, after all someone has to create the product, manufacture it and sell it. More jobs have been created by this. Or think of it like this, the costs of meat have gone up, so people will buy less of it, but other food sources will be able to sell more products. In the end, there are plenty of jobs created. It's the manner of jobs being created that is the argument. This is stimulating the economy on the backs of businesses. This goes to a fundamental question about what businesses should be for. Are they for making a profit, or do they owe their employees?

I can explain. All the increase in cost goes to paying more for labor. So nothing else changes except customers have to pay more so that workers can get paid more. This however reduces quantity of business, since prices have gone up. How much business is lost depends on several factors and the specific situation. This can however indirectly lead to more business in the long-term. If there are more people earning more money, there could be more consumers. That is one of the main reasons higher wages tend to be associated with less inequality.

It really depends on the specifics of the situation though, how much hidden pent-up demand there is. Because if you went into a Third World country and tried to institute a minimum wage several times higher than what the average people in that country are paid, it would simply lead to mass unemployment and make things even worse for most of those people. Raising the minimum wage works best during times when the labor force is close to full employment. And yet paradoxically it is times when unemployment is high that tends to drive down wages, when workers are struggling the most.

[adzino]

This is classic redistribution. Theiddle class patrons of Chipotle can afford to pay higher prices to help redistribute wealth to the minimum wage employees. Nothing like some forced market distortion!

[Namviet]

I can explain. All the increase in cost goes to paying more for labor. So nothing else changes except customers have to pay more so that workers can get paid more. This however reduces quantity of business, since prices have gone up. How much business is lost depends on several factors and the specific situation. This can however indirectly lead to more business in the long-term. If there are more people earning more money, there could be more consumers. That is one of the main reasons higher wages tend to be associated with less inequality.

It really depends on the specifics of the situation though, how much hidden pent-up demand there is. Because if you went into a Third World country and tried to institute a minimum wage several times higher than what the average people in that country are paid, it would simply lead to mass unemployment and make things even worse for most of those people. Raising the minimum wage works best during times when the labor force is close to full employment. And yet paradoxically it is times when unemployment is high that tends to drive down wages, when workers are struggling the most.

Well, unemployment is a number. The number of workers out of the workforce entirely and not counted in that number is the highest ever. When labor is close to full employment, there is no need for minimum wage as wages will rise based on supply and demand, just like we saw during the dot com bubble when unemployment hovered around 4% and starting wages rose above minimum wage. When more are unemployed like today, raising minimum wage will just end up putting more people off the working list.

[Possum577]

It's too soon to see real effects yet. SF has only had higher minimum wages for about year, right? How are things going with the Seattle/Washington State market?

[bitcoinmasterlord]

Minimum-wage laws make it illegal for low-skilled people to work.

It makes it only illegal to not pay low-skilled people enough. So when they need to get paid more then either these businesses die, then they were not strong enough from the start, or they charge higher prices for their services. If the business is needed then in fact they will survive. And the workers can buy their food.

Doesn't sound like the worst thing to me.

[oblivi]

It's normal that people want raises. If you are going to be a wage slave, at least get a decent salary. What we'll see in china is the "competition through shitty salaries" bubble exploding, it's going to be fun.

[Hazir]

Rising Minimum Wage is a topic shrouded with large amount of controversy in the United States. Some argue that raising it is vital to US recovery and will stop poverty, while others say that the real route to prosperity lies in lowering or even eliminating it. I am here to say that both are wrong. Our current woes have nothing to do with wages, per se. The latter are symptomatic of the deeper problem but are not, by themselves, key.

Rising Wages is not the problem, our current economic system is the problem. More info in this article: http://www.forbes.com/sites/johntharvey/2014/07/06/raising-minimum-wage-not-the-answer/

[yayayo]

The whole concept of Minimum Wage is flawed, because it stems from centrally-planned resource allocation. It doesn't solve any problem but only creates new ones. Competition can't be eliminated via decree, it will always find ways of circumvention.

The truth is that in future low-skilled workers will have a very hard time to get any job. Minimum Wage will make the problem only worse, because workers will be more expensive, so their replacement by machines will be accelerated.

ya.ya.yo!

[odolvlobo]

Minimum-wage laws make it illegal for low-skilled people to work.

It makes it only illegal to not pay low-skilled people enough. So when they need to get paid more then either these businesses die, then they were not strong enough from the start, or they charge higher prices for their services. If the business is needed then in fact they will survive. And the workers can buy their food.

Doesn't sound like the worst thing to me.

Regardless of what is "enough" or how much they "need", a business will not pay a person more than they are worth. If a person is not worth the wage dictated by minimum wage, then they will not work. The minimum wage laws make it illegal to pay some people what they are worth, and thus prevents them from working.

Your argument that people should be paid "enough" or what they "need" is really just an argument that low skilled people should be subsidized. In that case, a basic income guarantee is more appropriate than a minimum wage.

[bitcoinmasterlord]

Minimum-wage laws make it illegal for low-skilled people to work.

It makes it only illegal to not pay low-skilled people enough. So when they need to get paid more then either these businesses die, then they were not strong enough from the start, or they charge higher prices for their services. If the business is needed then in fact they will survive. And the workers can buy their food.

Doesn't sound like the worst thing to me.

Regardless of what is "enough" or how much they "need", a business will not pay a person more than they are worth. If a person is not worth the wage dictated by minimum wage, then they will not work. The minimum wage laws make it illegal to pay some people what they are worth, and thus prevents them from working.

Your argument that people should be paid "enough" or what they "need" is really just an argument that low skilled people should be subsidized. In that case, a basic income guarantee is more appropriate than a minimum wage.

Yes, a basic income is a good idea to let people live and decide more free. Even the most liberal parties already thought about that idea.

Though paying the low educated people what they are worth is simply not correct. You only need to look at the countries that go "liberalizing" former regulated markets. For example if the bus drivers have a fixed amount of money then they get paid less and that's it. Ticket prices don't drop, they only get paid less. You say their worth is less worth then? The same people use the busses, nothing changed, only they get less money.

At the end they have so few that they can't nurture their family and they go and need money from the government on top. Which is... our tax payers money. At the end the busdrivers have less money, the government has less money, and the taxpayer has to pay for it, while some buscompanies CEO gets a reward for raising the company profits.

Doesn't sound like "the" clever plan.

[freeyourmind]

The whole concept of Minimum Wage is flawed, because it stems from centrally-planned resource allocation. It doesn't solve any problem but only creates new ones. Competition can't be eliminated via decree, it will always find ways of circumvention.

The truth is that in future low-skilled workers will have a very hard time to get any job. Minimum Wage will make the problem only worse, because workers will be more expensive, so their replacement by machines will be accelerated.

ya.ya.yo!

Employment for low-skilled folks would be much higher without a minimum wage.  It definitely doesn't benefit the employer or the customer.  It artificially benefits those that have minimum wage jobs, at the cost of having others unemployed altogether.

Low-skilled/minimum wage jobs should be a steppingstone for people entering the workforce or making ends meet.  People need to better understand that it's not a place to have a life long career.