America's greatness is its working classes not "wealth" creators

[EconChick]

Me calm down? I was enjoying this back and forth till you showed up to condescend to everyone on this thread telling people to stop considering political aspects.

You still haven't answered why you would do something so stupid in a political thread.

So why??????????????

I know this is going to sound crazy, but here goes: Not everyone is a partisan ideologue. Many of us choose to think for ourselves. That doesn't mean that we don't want to solve problems, quite the contrary. Unfortunately, it's the partisan ideologues who are hurting us by polluting political discourse. You're creating most of the noise but nothing is improving.

If you really think you're moving us toward solutions with your behavior, there's nothing I can do about it. But you and other partisan ideologues don't own the conversation, you don't own political message boards.

The ignore function here works quite well if my posts are causing you some kind of trauma.

.

I don't use the ignore function, I'm not a coward like you.

You've not said one thing in this tread that brings an ounce of clarity to this discussion other than we're being political. And news flash, it's a political thread, not Econ Forum.

Is the President a political person or not? You act like politics has nothing to do with the person who directs econ policy.

And every time I've made these points before you've run off.

We still don't know whether you lean toward Capitalist solutions, Socialist solutions, or Communist solutions.

If you're too stupid to know the distinctions between them, then no wonder.

I've seen a lot of people post a lot of stupid shit on this board, but I really don't see what you are gettng onto Mac for here.

Raising the minimum wage should NOT be a political agenda. It shouldn't be Republicans lined up against Democrats screaming at each other that they are wrong when half (at minimum) of the posters screaming don't have a fucking clue what they are screaming about other than "I hate those _______"

Hell , look at you in this thread. You went from "EVERY STUDY SHOWS THAT RAISING THE MINIMUM WAGE CAUSES UNEMPLOYMENT" to "oh well studes can be made to say whatever you want them to say, and there is a lot more to UE than the minimum wage" the moment I showed you actual hard proof that were wrong , minimum wage increases do NOT increase UE.

Every study I've looked at in the past has. But then I know how to question underlying numbers and assumptions. I've been doing it for 20 years. I

I also know every place that provides stats has political bias.

 

[Darkwind]

Of course I don't have control to determine which is why your interpretation makes no sense to me. It means I personally think it's silly to go to a farming thread and tell people they shouldn't talk about farming.

All it is is a diversion. See how much time has been spent NOT talking about solutions or actual economic points? You do see that don't you?

There is no, and never will be any, solutions that come from this forum.

At best, those who really have a desire to exchange ideas and philosophy will simply ignore those they see as derailing a discussion, or move to a more private discussion.

Solutions and change occur through actions and discussions that take place in venues and with people who have the power to make actual policy change.

The best you can hope for here is that the message will resonate enough to migrate out of this place and begin to alter other people's perceptions of how the economy works.

The fact that Jake was actually arguing management techniques of a business and claiming they were sound economic policy is just proof that this place is nothing more than a means to cement your own thoughts and beliefs.

I have been reading your posts and they are very informative and I think reflect an accurate picture of how much of an economy work. However, anger detracts from your message.

Now, since you think that if people don't reply immediately to posts, they are cowards, I'll let you know that I have other things to do right now and I'll check back in later. Or not. I haven't decided yet.

 

[hadit]

With all due respect my friend, and I do like how you post, there are so many variables that affect the unemployment rate that for you to draw cause and effect between just min wage and unemploy is completely incorrect.

You'd have to look at a lot more variables than you have.

Just for one of hundreds of variables, the timing impact of min wage doesn't even show up immediately as you've suggested in your numbers.

But basically you've not looked at the long list of other variables.

Correct, that is what I'm saying, there is NO evidence that raising the minimum wage increases unemployment. NONE.

I mean I CLEARLY showed you a year that if one were so inclined they could say "aha see the raise in the minimum wage DECREASED unemployment" but we both know that it isn't that simple.

I have seen many graphs and stats over the years that show it does. But as you and I agree, it's not that simple.

What is simple is at the anecdotal level.

When someone who owns a Wendy's who has 500,000 dollars allotted in the budget to salaries. Let's say they employ 10 people with that. When min wage goes up, they can only pay 9 people with that 500,000 budget now.

Typically those people have small profit margins, which means they don't make that much money to put in their pockets. So when someone like you says, "well pull it from somewhere else" the other money is allotted to costs they have to pay like building, insurance, supplies, food, etc. etc. etc. And to pull it from low profits pushes some of them to actually go out of business so that now all 10 are unemployed.

This is overly simplistic but this is the counterintuitive nature of raising the min wage.

But that isn't the way labor is figured and you know it.

Let's use McD instead of Wendy's b/c I have insight into their business model.

McD wants labor @ 20% of sales on average. Now they use varying formulas throughout the day to vary that labor percentage hour to hour but at the end of every day they want to see 20%

So, they don't budget $X for labor, they budget 20% of sales for labor.

Now food costs are roughly 1/3 and all other overhead is 1/3 (again roughly) Leaving the franchise owner 10% as profit.

Now, the AVERAGE McD does $2M a year in sales, meaning the owner pays out $400K in wages , pays the rest of his expenses and pockets $200K. Again this is on average.

Let's say his wage costs went up to 22% (which would more than cover an increase to $10/Hr) now , there is nothing he could do about food costs, or other costs (though franchise owners are raising hell with McD corporate about how much they take, but that is for a different thread) so there's only place that 2% can really come from. The franchise owner's pocket. So now the people who work for him share an extra $40K a year and he makes $40K a year less, or does he? Because studies have shown that people are willing to pay on average a dollar more per meal from McD if the minimum wage goes up to $10/Hr, so let's be generous and say the owner would be out $20K a year to get ALL of his employees to $10/hr.

They can afford $20K a year to get their employees off welfare.

Interesting that you think a family breadwinner can or should easily take a 10% pay cut.

There's a different answer: The owner invests a few hundred K to automate. McD's food prep can easily be done without human intervention, and self service kiosks can replace the human behind the counter. That means the entire store can be run by a mere handful of teenagers trained to push a few buttons and call tech support if anything goes wrong. Now the owner has replaced years of labor costs with a capital expenditure that can be depreciated. Everybody wins, right? The workers get $10/hr and the owner keeps his profit margin. Of course, the rest of the labor force that got laid off might be mad, but that's what happens when you force a business owner to increase cost and try to prevent him from passing it on to the consumer.

 

[EconChick]

I've seen a lot of people post a lot of stupid shit on this board, but I really don't see what you are gettng onto Mac for here.

She's angry that I pointed out how partisan ideologues are part of the problem, not part of the solution.

After that, it's pretty much just meltdown.

.

I'm annoyed that you've eaten up time and still haven't offered anything toward the substance.

 

[EconChick]

Of course I don't have control to determine which is why your interpretation makes no sense to me. It means I personally think it's silly to go to a farming thread and tell people they shouldn't talk about farming.

All it is is a diversion. See how much time has been spent NOT talking about solutions or actual economic points? You do see that don't you?

There is no, and never will be any, solutions that come from this forum.

At best, those who really have a desire to exchange ideas and philosophy will simply ignore those they see as derailing a discussion, or move to a more private discussion.

Solutions and change occur through actions and discussions that take place in venues and with people who have the power to make actual policy change.

The best you can hope for here is that the message will resonate enough to migrate out of this place and begin to alter other people's perceptions of how the economy works.

The fact that Jake was actually arguing management techniques of a business and claiming they were sound economic policy is just proof that this place is nothing more than a means to cement your own thoughts and beliefs.

I have been reading your posts and they are very informative and I think reflect an accurate picture of how much of an economy work. However, anger detracts from your message.

Now, since you think that if people don't reply immediately to posts, they are cowards, I'll let you know that I have other things to do right now and I'll check back in later. Or not. I haven't decided yet.

I disagree with your implication that discussion on the internet doesn't matter. It also doesn't matter if anger turns people off, they still remember it later whether they want to or not.

 

[SmarterThanTheAverageBear]

With all due respect my friend, and I do like how you post, there are so many variables that affect the unemployment rate that for you to draw cause and effect between just min wage and unemploy is completely incorrect.

You'd have to look at a lot more variables than you have.

Just for one of hundreds of variables, the timing impact of min wage doesn't even show up immediately as you've suggested in your numbers.

But basically you've not looked at the long list of other variables.

Correct, that is what I'm saying, there is NO evidence that raising the minimum wage increases unemployment. NONE.

I mean I CLEARLY showed you a year that if one were so inclined they could say "aha see the raise in the minimum wage DECREASED unemployment" but we both know that it isn't that simple.

I have seen many graphs and stats over the years that show it does. But as you and I agree, it's not that simple.

What is simple is at the anecdotal level.

When someone who owns a Wendy's who has 500,000 dollars allotted in the budget to salaries. Let's say they employ 10 people with that. When min wage goes up, they can only pay 9 people with that 500,000 budget now.

Typically those people have small profit margins, which means they don't make that much money to put in their pockets. So when someone like you says, "well pull it from somewhere else" the other money is allotted to costs they have to pay like building, insurance, supplies, food, etc. etc. etc. And to pull it from low profits pushes some of them to actually go out of business so that now all 10 are unemployed.

This is overly simplistic but this is the counterintuitive nature of raising the min wage.

But that isn't the way labor is figured and you know it.

Let's use McD instead of Wendy's b/c I have insight into their business model.

McD wants labor @ 20% of sales on average. Now they use varying formulas throughout the day to vary that labor percentage hour to hour but at the end of every day they want to see 20%

So, they don't budget $X for labor, they budget 20% of sales for labor.

Now food costs are roughly 1/3 and all other overhead is 1/3 (again roughly) Leaving the franchise owner 10% as profit.

Now, the AVERAGE McD does $2M a year in sales, meaning the owner pays out $400K in wages , pays the rest of his expenses and pockets $200K. Again this is on average.

Let's say his wage costs went up to 22% (which would more than cover an increase to $10/Hr) now , there is nothing he could do about food costs, or other costs (though franchise owners are raising hell with McD corporate about how much they take, but that is for a different thread) so there's only place that 2% can really come from. The franchise owner's pocket. So now the people who work for him share an extra $40K a year and he makes $40K a year less, or does he? Because studies have shown that people are willing to pay on average a dollar more per meal from McD if the minimum wage goes up to $10/Hr, so let's be generous and say the owner would be out $20K a year to get ALL of his employees to $10/hr.

They can afford $20K a year to get their employees off welfare.

Interesting that you think a family breadwinner can or should easily take a 10% pay cut.

There's a different answer: The owner invests a few hundred K to automate. McD's food prep can easily be done without human intervention, and self service kiosks can replace the human behind the counter. That means the entire store can be run by a mere handful of teenagers trained to push a few buttons and call tech support if anything goes wrong. Now the owner has replaced years of labor costs with a capital expenditure that can be depreciated. Everybody wins, right? The workers get $10/hr and the owner keeps his profit margin. Of course, the rest of the labor force that got laid off might be mad, but that's what happens when you force a business owner to increase cost and try to prevent him from passing it on to the consumer.

Interesting that you believe that the owner of McD won't automate as many jobs as he can when the automation is up to the task regardless of the minimum wage.

 

[EconChick]

With all due respect my friend, and I do like how you post, there are so many variables that affect the unemployment rate that for you to draw cause and effect between just min wage and unemploy is completely incorrect.

You'd have to look at a lot more variables than you have.

Just for one of hundreds of variables, the timing impact of min wage doesn't even show up immediately as you've suggested in your numbers.

But basically you've not looked at the long list of other variables.

Correct, that is what I'm saying, there is NO evidence that raising the minimum wage increases unemployment. NONE.

I mean I CLEARLY showed you a year that if one were so inclined they could say "aha see the raise in the minimum wage DECREASED unemployment" but we both know that it isn't that simple.

I have seen many graphs and stats over the years that show it does. But as you and I agree, it's not that simple.

What is simple is at the anecdotal level.

When someone who owns a Wendy's who has 500,000 dollars allotted in the budget to salaries. Let's say they employ 10 people with that. When min wage goes up, they can only pay 9 people with that 500,000 budget now.

Typically those people have small profit margins, which means they don't make that much money to put in their pockets. So when someone like you says, "well pull it from somewhere else" the other money is allotted to costs they have to pay like building, insurance, supplies, food, etc. etc. etc. And to pull it from low profits pushes some of them to actually go out of business so that now all 10 are unemployed.

This is overly simplistic but this is the counterintuitive nature of raising the min wage.

But that isn't the way labor is figured and you know it.

Let's use McD instead of Wendy's b/c I have insight into their business model.

McD wants labor @ 20% of sales on average. Now they use varying formulas throughout the day to vary that labor percentage hour to hour but at the end of every day they want to see 20%

So, they don't budget $X for labor, they budget 20% of sales for labor.

Now food costs are roughly 1/3 and all other overhead is 1/3 (again roughly) Leaving the franchise owner 10% as profit.

Now, the AVERAGE McD does $2M a year in sales, meaning the owner pays out $400K in wages , pays the rest of his expenses and pockets $200K. Again this is on average.

Let's say his wage costs went up to 22% (which would more than cover an increase to $10/Hr) now , there is nothing he could do about food costs, or other costs (though franchise owners are raising hell with McD corporate about how much they take, but that is for a different thread) so there's only place that 2% can really come from. The franchise owner's pocket. So now the people who work for him share an extra $40K a year and he makes $40K a year less, or does he? Because studies have shown that people are willing to pay on average a dollar more per meal from McD if the minimum wage goes up to $10/Hr, so let's be generous and say the owner would be out $20K a year to get ALL of his employees to $10/hr.

They can afford $20K a year to get their employees off welfare.

I specifically didn't use McD because they are a big muliti billion company. I was referring to small mom and pop and should have not used Wendy's either. That was more for a visual.

(wait, I have to reboot)

 

[hadit]

Interesting that you believe that the owner of McD won't automate as many jobs as he can when the automation is up to the task regardless of the minimum wage.

Oh, I certainly believe they would automate when the technology matures and is cheap enough. There are only three things preventing every McD's owner from automating everything right now:

1. It's still cheaper to pay minimum wage than to invest in automation.
2. The automation hasn't reached the level of stability, reliability, and cost effectiveness that it has, for example, in the automotive industry. If labor costs rise too high, expect that to change.
3. Some owners still want the "human touch".

Heck, they could replace the humans behind the counter tomorrow with self service kiosks, just like in the grocery store.

 

[SmarterThanTheAverageBear]

With all due respect my friend, and I do like how you post, there are so many variables that affect the unemployment rate that for you to draw cause and effect between just min wage and unemploy is completely incorrect.

You'd have to look at a lot more variables than you have.

Just for one of hundreds of variables, the timing impact of min wage doesn't even show up immediately as you've suggested in your numbers.

But basically you've not looked at the long list of other variables.

Correct, that is what I'm saying, there is NO evidence that raising the minimum wage increases unemployment. NONE.

I mean I CLEARLY showed you a year that if one were so inclined they could say "aha see the raise in the minimum wage DECREASED unemployment" but we both know that it isn't that simple.

I have seen many graphs and stats over the years that show it does. But as you and I agree, it's not that simple.

What is simple is at the anecdotal level.

When someone who owns a Wendy's who has 500,000 dollars allotted in the budget to salaries. Let's say they employ 10 people with that. When min wage goes up, they can only pay 9 people with that 500,000 budget now.

Typically those people have small profit margins, which means they don't make that much money to put in their pockets. So when someone like you says, "well pull it from somewhere else" the other money is allotted to costs they have to pay like building, insurance, supplies, food, etc. etc. etc. And to pull it from low profits pushes some of them to actually go out of business so that now all 10 are unemployed.

This is overly simplistic but this is the counterintuitive nature of raising the min wage.

But that isn't the way labor is figured and you know it.

Let's use McD instead of Wendy's b/c I have insight into their business model.

McD wants labor @ 20% of sales on average. Now they use varying formulas throughout the day to vary that labor percentage hour to hour but at the end of every day they want to see 20%

So, they don't budget $X for labor, they budget 20% of sales for labor.

Now food costs are roughly 1/3 and all other overhead is 1/3 (again roughly) Leaving the franchise owner 10% as profit.

Now, the AVERAGE McD does $2M a year in sales, meaning the owner pays out $400K in wages , pays the rest of his expenses and pockets $200K. Again this is on average.

Let's say his wage costs went up to 22% (which would more than cover an increase to $10/Hr) now , there is nothing he could do about food costs, or other costs (though franchise owners are raising hell with McD corporate about how much they take, but that is for a different thread) so there's only place that 2% can really come from. The franchise owner's pocket. So now the people who work for him share an extra $40K a year and he makes $40K a year less, or does he? Because studies have shown that people are willing to pay on average a dollar more per meal from McD if the minimum wage goes up to $10/Hr, so let's be generous and say the owner would be out $20K a year to get ALL of his employees to $10/hr.

They can afford $20K a year to get their employees off welfare.

I specifically didn't use McD because they are a big muliti billion company. I was referring to small mom and pop and should have not used Wendy's either. That was more for a visual.

(wait, I have to reboot)

Frankly , any mom and pop that can't afford $10/Hr for help should rethink even having help. Especially in the food industry this is why so many places go out of business. They hire help they can't afford.

Ever watch Food Network? They advise mom and pops all the time, and they advise using the a similar formula to mcdondals. 1/3 for labor 1/3 for for food costs, 1/3 for overhead 10% for profit.

So if you own a restaurant (and PS I DO own a restaurant or at least am a part owner with family members) you should be tracking your sales and labor rate and not be having people work when your sales don't support it. Doesn't matter if the min wage is $1 an hour or $20 you either adjust your labor accordingly or you die.

 

[Erand7899]

Jake Starkey wrote:
The wealth creators are not the CEOS etc.
The wealth creators are the inventors, the producers, the manufactures and their employees, and the consumer classes that buy their products.
We have a group of far right folks here who want to redefine terminology and rewrite history without being called out.
The far right revisionists are not going to succeed. Not only do their own peers correct them, the millennials will force them out
___________________________________________________

Minerals in the ground are wealth, and have value because others desire to have those minerals. Their value is limited because being in the ground makes them unuable. When one takes the ore out of the ground, they have created wealth by adding value to the minerals. This added value is distributed amongst the people who have made the effort to remove the ore from the ground. When they spend the money they got from creating wealth, they are not creating more wealth, they are just redistributing the wealth they created. Mining creates wealth, selling bread to the miners does not. Making the bread does create wealth because the bakers are adding value to the individual ingredients that make bread.

Not a difficult concept, but understanding it, is essential to understanding practical economics. The next step is realization that money is nothing more than another product that has value in the marketplace. Then you are on your way to the riches you desire.

 

[hadit]

Anyone who participates in a capitalistic economy is a "wealth creator". Some just create more wealth than others.

 

[Misty]

Reagan's tax cuts were one of the greatest moments in America.

There is nothing wrong with wanting to make money and to keep more of the money you make.

It is not wrong to make more than the people you employ. The boss or owner is the one who takes all the big shit on their shoulders and most if not all work harder than any of their employees.

Start with #5, and see if you can figure out what Reaganist tax rates and policies have done...

 

[EconChick]

With all due respect my friend, and I do like how you post, there are so many variables that affect the unemployment rate that for you to draw cause and effect between just min wage and unemploy is completely incorrect.

You'd have to look at a lot more variables than you have.

Just for one of hundreds of variables, the timing impact of min wage doesn't even show up immediately as you've suggested in your numbers.

But basically you've not looked at the long list of other variables.

Correct, that is what I'm saying, there is NO evidence that raising the minimum wage increases unemployment. NONE.

I mean I CLEARLY showed you a year that if one were so inclined they could say "aha see the raise in the minimum wage DECREASED unemployment" but we both know that it isn't that simple.

I have seen many graphs and stats over the years that show it does. But as you and I agree, it's not that simple.

What is simple is at the anecdotal level.

When someone who owns a Wendy's who has 500,000 dollars allotted in the budget to salaries. Let's say they employ 10 people with that. When min wage goes up, they can only pay 9 people with that 500,000 budget now.

Typically those people have small profit margins, which means they don't make that much money to put in their pockets. So when someone like you says, "well pull it from somewhere else" the other money is allotted to costs they have to pay like building, insurance, supplies, food, etc. etc. etc. And to pull it from low profits pushes some of them to actually go out of business so that now all 10 are unemployed.

This is overly simplistic but this is the counterintuitive nature of raising the min wage.

But that isn't the way labor is figured and you know it.

Let's use McD instead of Wendy's b/c I have insight into their business model.

McD wants labor @ 20% of sales on average. Now they use varying formulas throughout the day to vary that labor percentage hour to hour but at the end of every day they want to see 20%

So, they don't budget $X for labor, they budget 20% of sales for labor.

Now food costs are roughly 1/3 and all other overhead is 1/3 (again roughly) Leaving the franchise owner 10% as profit.

Now, the AVERAGE McD does $2M a year in sales, meaning the owner pays out $400K in wages , pays the rest of his expenses and pockets $200K. Again this is on average.

Let's say his wage costs went up to 22% (which would more than cover an increase to $10/Hr) now , there is nothing he could do about food costs, or other costs (though franchise owners are raising hell with McD corporate about how much they take, but that is for a different thread) so there's only place that 2% can really come from. The franchise owner's pocket. So now the people who work for him share an extra $40K a year and he makes $40K a year less, or does he? Because studies have shown that people are willing to pay on average a dollar more per meal from McD if the minimum wage goes up to $10/Hr, so let's be generous and say the owner would be out $20K a year to get ALL of his employees to $10/hr.

They can afford $20K a year to get their employees off welfare.

I specifically didn't use McD because they are a big muliti billion company. I was referring to small mom and pop and should have not used Wendy's either. That was more for a visual.

(wait, I have to reboot)

Frankly , any mom and pop that can't afford $10/Hr for help should rethink even having help. Especially in the food industry this is why so many places go out of business. They hire help they can't afford.

Ever watch Food Network? They advise mom and pops all the time, and they advise using the a similar formula to mcdondals. 1/3 for labor 1/3 for for food costs, 1/3 for overhead 10% for profit.

So if you own a restaurant (and PS I DO own a restaurant or at least am a part owner with family members) you should be tracking your sales and labor rate and not be having people work when your sales don't support it. Doesn't matter if the min wage is $1 an hour or $20 you either adjust your labor accordingly or you die.

You just made my case, Bear (my short name for you.)

Do you know how many small companies out there in America are actually in this position, or close to it, but are employing people?

That's why it doesn't take a lot to push them from being employers of 10, 20, 30 people to employing no one. Then multiply that many many times. These are exactly the companies we're worried about. As you know most employment comes from small companies....roughly 65%. They deal in the margins....not like McD or other billion dollar companies.

You actually made my case without realizing it.

 

[SmarterThanTheAverageBear]

With all due respect my friend, and I do like how you post, there are so many variables that affect the unemployment rate that for you to draw cause and effect between just min wage and unemploy is completely incorrect.

You'd have to look at a lot more variables than you have.

Just for one of hundreds of variables, the timing impact of min wage doesn't even show up immediately as you've suggested in your numbers.

But basically you've not looked at the long list of other variables.

Correct, that is what I'm saying, there is NO evidence that raising the minimum wage increases unemployment. NONE.

I mean I CLEARLY showed you a year that if one were so inclined they could say "aha see the raise in the minimum wage DECREASED unemployment" but we both know that it isn't that simple.

I have seen many graphs and stats over the years that show it does. But as you and I agree, it's not that simple.

What is simple is at the anecdotal level.

When someone who owns a Wendy's who has 500,000 dollars allotted in the budget to salaries. Let's say they employ 10 people with that. When min wage goes up, they can only pay 9 people with that 500,000 budget now.

Typically those people have small profit margins, which means they don't make that much money to put in their pockets. So when someone like you says, "well pull it from somewhere else" the other money is allotted to costs they have to pay like building, insurance, supplies, food, etc. etc. etc. And to pull it from low profits pushes some of them to actually go out of business so that now all 10 are unemployed.

This is overly simplistic but this is the counterintuitive nature of raising the min wage.

But that isn't the way labor is figured and you know it.

Let's use McD instead of Wendy's b/c I have insight into their business model.

McD wants labor @ 20% of sales on average. Now they use varying formulas throughout the day to vary that labor percentage hour to hour but at the end of every day they want to see 20%

So, they don't budget $X for labor, they budget 20% of sales for labor.

Now food costs are roughly 1/3 and all other overhead is 1/3 (again roughly) Leaving the franchise owner 10% as profit.

Now, the AVERAGE McD does $2M a year in sales, meaning the owner pays out $400K in wages , pays the rest of his expenses and pockets $200K. Again this is on average.

Let's say his wage costs went up to 22% (which would more than cover an increase to $10/Hr) now , there is nothing he could do about food costs, or other costs (though franchise owners are raising hell with McD corporate about how much they take, but that is for a different thread) so there's only place that 2% can really come from. The franchise owner's pocket. So now the people who work for him share an extra $40K a year and he makes $40K a year less, or does he? Because studies have shown that people are willing to pay on average a dollar more per meal from McD if the minimum wage goes up to $10/Hr, so let's be generous and say the owner would be out $20K a year to get ALL of his employees to $10/hr.

They can afford $20K a year to get their employees off welfare.

I specifically didn't use McD because they are a big muliti billion company. I was referring to small mom and pop and should have not used Wendy's either. That was more for a visual.

(wait, I have to reboot)

Frankly , any mom and pop that can't afford $10/Hr for help should rethink even having help. Especially in the food industry this is why so many places go out of business. They hire help they can't afford.

Ever watch Food Network? They advise mom and pops all the time, and they advise using the a similar formula to mcdondals. 1/3 for labor 1/3 for for food costs, 1/3 for overhead 10% for profit.

So if you own a restaurant (and PS I DO own a restaurant or at least am a part owner with family members) you should be tracking your sales and labor rate and not be having people work when your sales don't support it. Doesn't matter if the min wage is $1 an hour or $20 you either adjust your labor accordingly or you die.

You just made my case, Bear (my short name for you.)

Do you know how many small companies out there in America are actually in this position, or close to it, but are employing people?

That's why it doesn't take a lot to push them from being employers of 10, 20, 30 people to employing no one. Then multiply that many many times. These are exactly the companies we're worried about. As you know most employment comes from small companies....roughly 65%. They deal in the margins....not like McD or other billion dollar companies.

You actually made my case without realizing it.

I didn't make ANYTHING for you.

I own a small restaurant ( a stake in it anyway) we pay nowhere near the minimum wage. Even wait staff makes more than $7.25 an hour. Now perhaps we have fewer employees than other restaurants of our size, but I would argue that other restaurants are OVER staffed. That is PRIMARILY the reason they fail.They have TOO many employees. If they got professional help , they would be told that they need less employees regardless of what they are paying them.

I've been in so many restaurants where 3 people are doing what 1 does in ours. So those extraneous people need to go for the good of the company regardless of what the min wage is, many companies just either don't realize it or don't want to hurt anyone's feelings by letting them go.

 

[EconChick]

With all due respect my friend, and I do like how you post, there are so many variables that affect the unemployment rate that for you to draw cause and effect between just min wage and unemploy is completely incorrect.

You'd have to look at a lot more variables than you have.

Just for one of hundreds of variables, the timing impact of min wage doesn't even show up immediately as you've suggested in your numbers.

But basically you've not looked at the long list of other variables.

Correct, that is what I'm saying, there is NO evidence that raising the minimum wage increases unemployment. NONE.

I mean I CLEARLY showed you a year that if one were so inclined they could say "aha see the raise in the minimum wage DECREASED unemployment" but we both know that it isn't that simple.

I have seen many graphs and stats over the years that show it does. But as you and I agree, it's not that simple.

What is simple is at the anecdotal level.

When someone who owns a Wendy's who has 500,000 dollars allotted in the budget to salaries. Let's say they employ 10 people with that. When min wage goes up, they can only pay 9 people with that 500,000 budget now.

Typically those people have small profit margins, which means they don't make that much money to put in their pockets. So when someone like you says, "well pull it from somewhere else" the other money is allotted to costs they have to pay like building, insurance, supplies, food, etc. etc. etc. And to pull it from low profits pushes some of them to actually go out of business so that now all 10 are unemployed.

This is overly simplistic but this is the counterintuitive nature of raising the min wage.

But that isn't the way labor is figured and you know it.

Let's use McD instead of Wendy's b/c I have insight into their business model.

McD wants labor @ 20% of sales on average. Now they use varying formulas throughout the day to vary that labor percentage hour to hour but at the end of every day they want to see 20%

So, they don't budget $X for labor, they budget 20% of sales for labor.

Now food costs are roughly 1/3 and all other overhead is 1/3 (again roughly) Leaving the franchise owner 10% as profit.

Now, the AVERAGE McD does $2M a year in sales, meaning the owner pays out $400K in wages , pays the rest of his expenses and pockets $200K. Again this is on average.

Let's say his wage costs went up to 22% (which would more than cover an increase to $10/Hr) now , there is nothing he could do about food costs, or other costs (though franchise owners are raising hell with McD corporate about how much they take, but that is for a different thread) so there's only place that 2% can really come from. The franchise owner's pocket. So now the people who work for him share an extra $40K a year and he makes $40K a year less, or does he? Because studies have shown that people are willing to pay on average a dollar more per meal from McD if the minimum wage goes up to $10/Hr, so let's be generous and say the owner would be out $20K a year to get ALL of his employees to $10/hr.

They can afford $20K a year to get their employees off welfare.

I specifically didn't use McD because they are a big muliti billion company. I was referring to small mom and pop and should have not used Wendy's either. That was more for a visual.

(wait, I have to reboot)

Frankly , any mom and pop that can't afford $10/Hr for help should rethink even having help. Especially in the food industry this is why so many places go out of business. They hire help they can't afford.

Ever watch Food Network? They advise mom and pops all the time, and they advise using the a similar formula to mcdondals. 1/3 for labor 1/3 for for food costs, 1/3 for overhead 10% for profit.

So if you own a restaurant (and PS I DO own a restaurant or at least am a part owner with family members) you should be tracking your sales and labor rate and not be having people work when your sales don't support it. Doesn't matter if the min wage is $1 an hour or $20 you either adjust your labor accordingly or you die.

You just made my case, Bear (my short name for you.)

Do you know how many small companies out there in America are actually in this position, or close to it, but are employing people?

That's why it doesn't take a lot to push them from being employers of 10, 20, 30 people to employing no one. Then multiply that many many times. These are exactly the companies we're worried about. As you know most employment comes from small companies....roughly 65%. They deal in the margins....not like McD or other billion dollar companies.

You actually made my case without realizing it.

I didn't make ANYTHING for you.

I own a small restaurant ( a stake in it anyway) we pay nowhere near the minimum wage. Even wait staff makes more than $7.25 an hour. Now perhaps we have fewer employees than other restaurants of our size, but I would argue that other restaurants are OVER staffed. That is PRIMARILY the reason they fail.They have TOO many employees. If they got professional help , they would be told that they need less employees regardless of what they are paying them.

I've been in so many restaurants where 3 people are doing what 1 does in ours. So those extraneous people need to go for the good of the company regardless of what the min wage is, many companies just either don't realize it or don't want to hurt anyone's feelings by letting them go.

Do you realize you just pushed for laying people off in a thread where we're talking about min wage hikes doing just that? ...and where Fakey is whining about Capitalists doing things that are efficient like that?

 

[EconChick]

With all due respect my friend, and I do like how you post, there are so many variables that affect the unemployment rate that for you to draw cause and effect between just min wage and unemploy is completely incorrect.

You'd have to look at a lot more variables than you have.

Just for one of hundreds of variables, the timing impact of min wage doesn't even show up immediately as you've suggested in your numbers.

But basically you've not looked at the long list of other variables.

Correct, that is what I'm saying, there is NO evidence that raising the minimum wage increases unemployment. NONE.

I mean I CLEARLY showed you a year that if one were so inclined they could say "aha see the raise in the minimum wage DECREASED unemployment" but we both know that it isn't that simple.

I have seen many graphs and stats over the years that show it does. But as you and I agree, it's not that simple.

What is simple is at the anecdotal level.

When someone who owns a Wendy's who has 500,000 dollars allotted in the budget to salaries. Let's say they employ 10 people with that. When min wage goes up, they can only pay 9 people with that 500,000 budget now.

Typically those people have small profit margins, which means they don't make that much money to put in their pockets. So when someone like you says, "well pull it from somewhere else" the other money is allotted to costs they have to pay like building, insurance, supplies, food, etc. etc. etc. And to pull it from low profits pushes some of them to actually go out of business so that now all 10 are unemployed.

This is overly simplistic but this is the counterintuitive nature of raising the min wage.

But that isn't the way labor is figured and you know it.

Let's use McD instead of Wendy's b/c I have insight into their business model.

McD wants labor @ 20% of sales on average. Now they use varying formulas throughout the day to vary that labor percentage hour to hour but at the end of every day they want to see 20%

So, they don't budget $X for labor, they budget 20% of sales for labor.

Now food costs are roughly 1/3 and all other overhead is 1/3 (again roughly) Leaving the franchise owner 10% as profit.

Now, the AVERAGE McD does $2M a year in sales, meaning the owner pays out $400K in wages , pays the rest of his expenses and pockets $200K. Again this is on average.

Let's say his wage costs went up to 22% (which would more than cover an increase to $10/Hr) now , there is nothing he could do about food costs, or other costs (though franchise owners are raising hell with McD corporate about how much they take, but that is for a different thread) so there's only place that 2% can really come from. The franchise owner's pocket. So now the people who work for him share an extra $40K a year and he makes $40K a year less, or does he? Because studies have shown that people are willing to pay on average a dollar more per meal from McD if the minimum wage goes up to $10/Hr, so let's be generous and say the owner would be out $20K a year to get ALL of his employees to $10/hr.

They can afford $20K a year to get their employees off welfare.

I specifically didn't use McD because they are a big muliti billion company. I was referring to small mom and pop and should have not used Wendy's either. That was more for a visual.

(wait, I have to reboot)

Frankly , any mom and pop that can't afford $10/Hr for help should rethink even having help. Especially in the food industry this is why so many places go out of business. They hire help they can't afford.

Ever watch Food Network? They advise mom and pops all the time, and they advise using the a similar formula to mcdondals. 1/3 for labor 1/3 for for food costs, 1/3 for overhead 10% for profit.

So if you own a restaurant (and PS I DO own a restaurant or at least am a part owner with family members) you should be tracking your sales and labor rate and not be having people work when your sales don't support it. Doesn't matter if the min wage is $1 an hour or $20 you either adjust your labor accordingly or you die.

You just made my case, Bear (my short name for you.)

Do you know how many small companies out there in America are actually in this position, or close to it, but are employing people?

That's why it doesn't take a lot to push them from being employers of 10, 20, 30 people to employing no one. Then multiply that many many times. These are exactly the companies we're worried about. As you know most employment comes from small companies....roughly 65%. They deal in the margins....not like McD or other billion dollar companies.

You actually made my case without realizing it.

I didn't make ANYTHING for you.

.

Oh, and yes you did make my case.

It just hasn't hit you yet.

 

[SmarterThanTheAverageBear]

Do you realize you just pushed for laying people off in a thread where we're talking about min wage hikes doing just that? ...and where Fakey is whining about Capitalists doing things that are efficient like that?

Yah, I'm funny like that, iI expect my employees to work efficient if they expect to be paid accordingly

 

[CrusaderFrank]

America, apparently the only nation on the planet with a working class

 

[Erand7899]

hadit wrote:
Anyone who participates in a capitalistic economy is a "wealth creator". Some just create more wealth than others.
_______________________________________________

Absolutely untrue. Unless wealth is created by adding value to a marketable product, wealth is just redistributed. Products are traded between buyers and sellers. No new wealth, just moving it around.

If I buy 10 loaves of bread, for a $1 a loaf, and sell those loaves for $1.20 a loaf, I have increased my wealth by $2.00. However, I have decreased the buyers' wealth by exactly the same amount. No change in overall wealth, just a different person owning that $2.00.

Now, it is probably worth the loss of $0.20 to each buyer of a loaf to have that bread available to be purchased at their convenience, and that is the free enterprise system, but no wealth has been created through those transactions.

 

[SmarterThanTheAverageBear]

hadit wrote:
Anyone who participates in a capitalistic economy is a "wealth creator". Some just create more wealth than others.
_______________________________________________

Absolutely untrue. Unless wealth is created by adding value to a marketable product, wealth is just redistributed. Products are traded between buyers and sellers. No new wealth, just moving it around.

If I buy 10 loaves of bread, for a $1 a loaf, and sell those loaves for $1.20 a loaf, I have increased my wealth by $2.00. However, I have decreased the buyers' wealth by exactly the same amount. No change in overall wealth, just a different person owning that $2.00.

Now, it is probably worth the loss of $0.20 to each buyer of a loaf to have that bread available to be purchased at their convenience, and that is the free enterprise system, but no wealth has been created through those transactions.

Incorrect, you have increased your buyer's wealth by 10 loaves of bread.

Now of course that value will decline over time for a variety of reasons; but very few people spend money on something that is of NO value.