Poll: Solid majority (71%) of Americans support Obama’s increase of the minimum wage

[Oldstyle]

I note that you now understand that my staff isn't getting food stamps or that my food costs seem to be believable...so let's work on the rest of your doubt...shall we?

I said my restaurant has 10 employees making minimum wage...not 10 employees total.

I typically have one busser, and two dishwashers on no matter what time of year it is...I cut back on prep cooks from two to one during off season. We close for three weeks at the end of August and the first week of September.

Yes, we have a very seasonal business here. It's Florida. Summer is slow...winter is super busy. Paying bonuses for employees who stay through an entire season is done quite often in seasonal settings such as ours. I did the same thing when I ran restaurants in Aspen.

So now that you've cleared up all of those areas, yes, your numbers make sense, but you're not going to like what I say next at all.

Based on the figures you previously provided, I estimated that your gross sales for the year were in the neighbourhood of $600,000, and I said that raising the minimum wage would increase your prices by 4% in total. In other words, those currently paying $100 for a meal in your restaurant, would now pay $104 for the same meal, which isn't a big change in your pricing structure.

But if you have 10 minimum wage employees, as well as cooks, bartenders and waiters all making well over minimum wage, your total annual sales would have to be well in excess of $1 million per year, and therefore the cost of increasing the minimum wage $2 an hour wouldn't increase your costs by anywhere close to 4%. At $1million in sales, the $20K increase would be 2% of gross, meaning you would have to raise your $100 meal price to $102 to pay those kids $9 an hour.

No matter how you slice it, you're getting a wage subidy on those making minimum wage because of "earned tax credits". Those kids aren't paying income tax, and they're receiving earned tax credits, so yes, you're still getting a government subsidy on their wages.

Where did you pull those numbers from, Dragonlady? $100 for a meal? Let's try and be a bit, realistic...shall we?

 

[Dragonlady]

Where did you pull those numbers from, Dragonlady? $100 for a meal? Let's try and be a bit, realistic...shall we?

It's a round number easy to add a fixed percentage to, and the numbers are easily understandable for people.

$100 for dinner for two in a fine dining restaurant, including cocktails, salad, entree, and dessert, with wine, would easily be $100. We paid that much for a fine meal in Aspen when I was there in the late 1970's, and the dinner was so good, we went back a second time.

 

[Oldstyle]

Now that's a coincidence...I worked in Aspen as a restaurant manager for 10 years...at Bentley's at the Wheeler Opera House and at Planet Hollywood.

And if you paid that much for dinner back in the 70's I dearly hope you had an expensive bottle of wine because if not then...ouch...you got taken to the cleaners.

 

[Dragonlady]

Now that's a coincidence...I worked in Aspen as a restaurant manager for 10 years...at Bentley's at the Wheeler Opera House and at Planet Hollywood.

And if you paid that much for dinner back in the 70's I dearly hope you had an expensive bottle of wine because if not then...ouch...you got taken to the cleaners.

I remember you saying you were in Aspen.

That was at La Reserve in Snowmass. Yes, we had a nice bottle of wine with dinner, and cherries jubilee for dessert. The fact that I remember what I ate in a restaurant nearly 40 years ago should tell you that the food was beyond excellent. Best meal I have ever eaten.

And I hasten to add, I have family members who trained at the Cordon Bleu in Paris, so I have had some really excellent meals in my time.

 

[Oldstyle]

Now that's a coincidence...I worked in Aspen as a restaurant manager for 10 years...at Bentley's at the Wheeler Opera House and at Planet Hollywood.

And if you paid that much for dinner back in the 70's I dearly hope you had an expensive bottle of wine because if not then...ouch...you got taken to the cleaners.

I remember you saying you were in Aspen.

That was at La Reserve in Snowmass. Yes, we had a nice bottle of wine with dinner, and cherries jubilee for dessert. The fact that I remember what I ate in a restaurant nearly 40 years ago should tell you that the food was beyond excellent. Best meal I have ever eaten.

And I hasten to add, I have family members who trained at the Cordon Bleu in Paris, so I have had some really excellent meals in my time.

Sadly I don't believe La Reserve was still there when I was...but then again half of the places I knew when I was there fifteen years ago are no longer there either. Let's see...from my day it was The Little Nell, Cache Cache, Mezzaluna, Krabloonik, Pinons, Syzyergy, The Weinerstube, Little Annie's, and there was a little place right on Main Street in an old Victorian that I can't remember the name of but it was great for romantic special occaisions. I took my girlfriend there for her birthday and we ended up the night having cocktails with Mick Fleetwood at the bar. Gotta love Aspen!

 

[Dragonlady]

Sadly I don't believe La Reserve was still there when I was...but then again half of the places I knew when I was there fifteen years ago are no longer there either. Let's see...from my day it was The Little Nell, Cache Cache, Mezzaluna, Krabloonik, Pinons, Syzyergy, The Weinerstube, Little Annie's, and there was a little place right on Main Street in an old Victorian that I can't remember the name of but it was great for romantic special occaisions. I took my girlfriend there for her birthday and we ended up the night having cocktails with Mick Fleetwood at the bar. Gotta love Aspen!

I was there in 1978 and 1979. Little Nell's was huge then. Mezzaluna was there, and Little Annie's. Not sure about the others. I went to dinner with a group of 7 people - in a nearby town, and dinner came to over $900 before tip. But these people were wine connoisseurs. We drank a bottle of Chateau Margaux 1957 with dinner. I still remember the taste of it. I tried to buy some when I got home but they wanted $250 a bottle for it. That was almost a week's salary for me back in 1979.

Good times!

 

[hunarcy]

How about this: The Carpenter has to hire 3 more workers, 3+3 = 6 x$11 =$66 per hour. He raises his prices to cover the increased cost, which makes it more difficult to find customers who can afford his services. 1 year later, he lays off all 3 workers and you now have 1 carpenter and 3 people receiving unemployment and government services.

Why would the carpenter raise his prices. To be competitive he keeps the prices the same.
the output of his company, generated by demand, is almost more than he and his 6 helpers can handle ... He is making money, not losing it. As long as the buying power of his patrons remains strong and inflation is controlled, he would have no need to increase his prices. Still, he has the flexibility of laying people off when the boom goes bust. The extra hires that are laid off would be receiving government servicesbut the original crew would still be on the job!

Why would he raise his prices? Because when you raised his costs, he had to pass the increased costs to his customers. You betray your lack of understanding of how business works.

 

[Oldstyle]

Sadly I don't believe La Reserve was still there when I was...but then again half of the places I knew when I was there fifteen years ago are no longer there either. Let's see...from my day it was The Little Nell, Cache Cache, Mezzaluna, Krabloonik, Pinons, Syzyergy, The Weinerstube, Little Annie's, and there was a little place right on Main Street in an old Victorian that I can't remember the name of but it was great for romantic special occaisions. I took my girlfriend there for her birthday and we ended up the night having cocktails with Mick Fleetwood at the bar. Gotta love Aspen!

I was there in 1978 and 1979. Little Nell's was huge then. Mezzaluna was there, and Little Annie's. Not sure about the others. I went to dinner with a group of 7 people - in a nearby town, and dinner came to over $900 before tip. But these people were wine connoisseurs. We drank a bottle of Chateau Margaux 1957 with dinner. I still remember the taste of it. I tried to buy some when I got home but they wanted $250 a bottle for it. That was almost a week's salary for me back in 1979.

Good times!

Aspen is an expensive town if you're a visitor. Of course if you're a local it can be a different animal. I made so many friends over the ten years that I very rarely even got a bill when I went to eat at some places. I met a guy named John Vogel the first day I was in Aspen and he ended up becoming the dining room manager at the Little Nell. If we'd go there to eat, he'd comp the meal. I played a lot of golf and would buy the "locals punch card" which was ten 9 hole punches on a card you could buy through the city rec department for like a hundred bucks. Greens fees were around $85 back then so that was a nice deal to start with but if you knew the guys at the course they'd only pretend to punch your card when you signed in. Most years I'd play 50 plus 18 hole rounds of golf and still have half my punches left. I never paid to see a movie at the movie theatre, the ticket takers would know you and just nod as you walked on by. Now if there was only some way to get a decent place to live without paying a king's ransom I'd still be living there. I think my rent on a three bedroom condo on Water's Ave. was $2,800 a month and that was a "deal". I do miss it though...

 

[Dragonlady]

Why would he raise his prices? Because when you raised his costs, he had to pass the increased costs to his customers. You betray your lack of understanding of how business works.

No one posting in these scenarios has displayed the slightest bit of knowledge of how businesses operate, yourself included.

If you have a carpenter employing 3 men at $11 and hour, he would be charging approximately $50.00 per hour for their work. He can well afford to increase their pay by $2 an hour with only a minor increase in his prices - $6 an hour, or he can absorb the costs, reduce his profit, and keep his prices the same. Either way, he has some leeway in his pricing. No one in any business charges out their help at the same hourly rate they pay them.

Those in construction or home renovations who are successful, reach the point where they raise their prices, or they hire more help. Raising prices increases profit, but may reduce the amount of work, so you can make more money doing less work. Where raising prices doesn't decrease your work, you are now in a position to take on more help, but you wouldn't double your work force unless your workload doubled.

When you people are coming up with your "what if" scenarios, it would be useful if you used realistic models based on how business functions, instead of just posting rubbish and proving how little knowledge of business you really have.

 

[Wyatt earp]

Why would he raise his prices? Because when you raised his costs, he had to pass the increased costs to his customers. You betray your lack of understanding of how business works.

No one posting in these scenarios has displayed the slightest bit of knowledge of how businesses operate, yourself included.

If you have a carpenter employing 3 men at $11 and hour, he would be charging approximately $50.00 per hour for their work. He can well afford to increase their pay by $2 an hour with only a minor increase in his prices - $6 an hour, or he can absorb the costs, reduce his profit, and keep his prices the same. Either way, he has some leeway in his pricing. No one in any business charges out their help at the same hourly rate they pay them.

Those in construction or home renovations who are successful, reach the point where they raise their prices, or they hire more help. Raising prices increases profit, but may reduce the amount of work, so you can make more money doing less work. Where raising prices doesn't decrease your work, you are now in a position to take on more help, but you wouldn't double your work force unless your workload doubled.

When you people are coming up with your "what if" scenarios, it would be useful if you used realistic models based on how business functions, instead of just posting rubbish and proving how little knowledge of business you really have.

I know how bussiness works I was making a simple small exanple and not into writing novels and I know how low the profit is at alot of small businesses. again you paying 3 guys $21 bucks it goes up to $33 what are you going to do? get rid of one guy...he was prolly always laying out anyways.

Btw I use K.I.S.S. keep it simple stupid. you can bore alot of readers to death when its to long..

 

[Dragonlady]

I know how bussiness works I was making a simple small exanple and not into writing novels and I know how low the profit is at alot of small businesses. again you paying 3 guys $21 bucks it goes up to $33 what are you going to do? get rid of one guy...he was prolly always laying out anyways.

Again, this scenario is not realistic. If you had three employees and one was a lay about, you'd fire him. It would make no sense to keep him because he's (a) not making you any money; and (b) your good workers are apt to get pissed off and quit because he's getting the same money as them and they're doing all of the work.

If you have three workers and your costs go up, you have to either raise your prices or reduce your profits. Firing someone would be stupid because then you'd have to reduce the amount of work you take on.

AGAIN, NO ONE BILLS OUT THEIR EMPLOYEES AT THE SAME RATE THEY PAY THEM. The standard billing rate is about 3 times hourly.

 

[hunarcy]

Why would he raise his prices? Because when you raised his costs, he had to pass the increased costs to his customers. You betray your lack of understanding of how business works.

No one posting in these scenarios has displayed the slightest bit of knowledge of how businesses operate, yourself included.

If you have a carpenter employing 3 men at $11 and hour, he would be charging approximately $50.00 per hour for their work. He can well afford to increase their pay by $2 an hour with only a minor increase in his prices - $6 an hour, or he can absorb the costs, reduce his profit, and keep his prices the same. Either way, he has some leeway in his pricing. No one in any business charges out their help at the same hourly rate they pay them.

Those in construction or home renovations who are successful, reach the point where they raise their prices, or they hire more help. Raising prices increases profit, but may reduce the amount of work, so you can make more money doing less work. Where raising prices doesn't decrease your work, you are now in a position to take on more help, but you wouldn't double your work force unless your workload doubled.

When you people are coming up with your "what if" scenarios, it would be useful if you used realistic models based on how business functions, instead of just posting rubbish and proving how little knowledge of business you really have.

I am sorry to ignore your utopian visions, but in the real world, the businessman prices his services and if his costs go up, he raises his prices to keep the same profit margin that he is in business to make. Your ignoring this fact makes your posts fiction and unworthy of attention.

 

[Dragonlady]

I am sorry to ignore your utopian visions, but in the real world, the businessman prices his services and if his costs go up, he raises his prices to keep the same profit margin that he is in business to make. Your ignoring this fact makes your posts fiction and unworthy of attention.

I'm not ignoring the issue. I have said that the businessman can absorb the costs, or he can raise his prices. He also has the option of cutting other costs. The poster here who owns a seafood restaurant in Florida buys his fish directly from the fisherman to keep his prime costs at 65% because he pays he kitchen staff higher wages. There are other ways of keeping costs in line than simply raising prices.

Business people work within a framework of costs and profits but the margins are not hard and fast. Most businesses are not nearly as profitable as people think they are, by the time all expenses are considered. As such they learn to be flexible. If I thought I'd lose too much business if I raised my prices, I'd eat the increased labour costs or I would make a slight price adjustment now and one later.

The point being, that there are other ways of dealing with increasing costs than simply raising prices, if the business owner so choses. I've done a lot of contract work and negotiating contracts is always fun. When I've had resistance to my prices, I find ways of saving the firm hiring me enough money that I pay my own salary, or I find them operational savings. There's lots of ways of finding the money to pay your staff. Business smarts and imagination.

 

[LittleNipper]

I am sorry to ignore your utopian visions, but in the real world, the businessman prices his services and if his costs go up, he raises his prices to keep the same profit margin that he is in business to make. Your ignoring this fact makes your posts fiction and unworthy of attention.

I'm not ignoring the issue. I have said that the businessman can absorb the costs, or he can raise his prices. He also has the option of cutting other costs. The poster here who owns a seafood restaurant in Florida buys his fish directly from the fisherman to keep his prime costs at 65% because he pays he kitchen staff higher wages. There are other ways of keeping costs in line than simply raising prices.

Business people work within a framework of costs and profits but the margins are not hard and fast. Most businesses are not nearly as profitable as people think they are, by the time all expenses are considered. As such they learn to be flexible. If I thought I'd lose too much business if I raised my prices, I'd eat the increased labour costs or I would make a slight price adjustment now and one later.

The point being, that there are other ways of dealing with increasing costs than simply raising prices, if the business owner so choses. I've done a lot of contract work and negotiating contracts is always fun. When I've had resistance to my prices, I find ways of saving the firm hiring me enough money that I pay my own salary, or I find them operational savings. There's lots of ways of finding the money to pay your staff. Business smarts and imagination.

Lay off a worker and make the rest work harder for the raise they get...

 

[Dragonlady]

Lay off a worker and make the rest work harder for the raise they get...

Worst possible option for me. If I have three workers earning $11 an hour, I will bill the three of them out at $100 an hour. If I only have two workers, making $15 an hour, I will have to lower my prices to $90, because my total costs are down. Furthermore, if the job requires 500 man hours to complete, it will take three people 21 days to finish it, and two people over six weeks. With three workers at $11 an hour, I charge $16,000, and my gross profit, after paying my workers is $10,500. With two workers at $15 an hour, although my costs are less, it's going to take them over 6 weeks to finish the job. Even if I charge the same price as with three workers, my overall profit goes down because my company's output goes down.

It would make more sense for me to pay all three guys $15 an hour, and keep my prices the same. Yes my gross profit on a 500 hour job goes down to $8,000, but I can take on 50% more work with three people than I can with two. I could also increase my billing rate slightly, to $110 an hour to cover a portion of my increased expenses

The ONLY time I would consider cutting that third guy, is if I didn't have sufficient work to keep him. Because I cannot build my business up, and increase my profits, by cutting staff. The more people I have working for me, the more money I make off their work. Cutting staff means cutting my own pay and I don't want to do that. For business, that's going backwards.

 

[Derideo_Te]

I am sorry to ignore your utopian visions, but in the real world, the businessman prices his services and if his costs go up, he raises his prices to keep the same profit margin that he is in business to make. Your ignoring this fact makes your posts fiction and unworthy of attention.

I'm not ignoring the issue. I have said that the businessman can absorb the costs, or he can raise his prices. He also has the option of cutting other costs. The poster here who owns a seafood restaurant in Florida buys his fish directly from the fisherman to keep his prime costs at 65% because he pays he kitchen staff higher wages. There are other ways of keeping costs in line than simply raising prices.

Business people work within a framework of costs and profits but the margins are not hard and fast. Most businesses are not nearly as profitable as people think they are, by the time all expenses are considered. As such they learn to be flexible. If I thought I'd lose too much business if I raised my prices, I'd eat the increased labour costs or I would make a slight price adjustment now and one later.

The point being, that there are other ways of dealing with increasing costs than simply raising prices, if the business owner so choses. I've done a lot of contract work and negotiating contracts is always fun. When I've had resistance to my prices, I find ways of saving the firm hiring me enough money that I pay my own salary, or I find them operational savings. There's lots of ways of finding the money to pay your staff. Business smarts and imagination.

Lay off a worker and make the rest work harder for the raise they get...

Layoffs have a negative impact on morale. Making those left work even harder has a negative impact on morale. The real cost of layoffs is rarely factored into the anticipated "savings". If the business is not publicly traded there is no share price gain either.

 

[Dragonlady]

Layoffs have a negative impact on morale. Making those left work even harder has a negative impact on morale. The real cost of layoffs is rarely factored into the anticipated "savings". If the business is not publicly traded there is no share price gain either.

What has happened when firms downsize to save money is that it creates a climate of fear. A friend who used to work for KPMG Consultants told me that every time the company merged or bought out another firm, layoffs followed. Then people who feared being next, or that the company wasn't in as good a shape financially as was being advertized, would dust off their resumes and start looking. Those who left first were the best and the brightest because they were the most employable. She saw this not only at KPMG, but also at clients firms as well.

The unintended consequences of layoffs is often the loss of employees you really wanted to retain.

 

[Derideo_Te]

Layoffs have a negative impact on morale. Making those left work even harder has a negative impact on morale. The real cost of layoffs is rarely factored into the anticipated "savings". If the business is not publicly traded there is no share price gain either.

What has happened when firms downsize to save money is that it creates a climate of fear. A friend who used to work for KPMG Consultants told me that every time the company merged or bought out another firm, layoffs followed. Then people who feared being next, or that the company wasn't in as good a shape financially as was being advertized, would dust off their resumes and start looking. Those who left first were the best and the brightest because they were the most employable. She saw this not only at KPMG, but also at clients firms as well.

The unintended consequences of layoffs is often the loss of employees you really wanted to retain.

Employers and employees are in a relationship. All relationships rely upon trust. Layoffs are a betrayal of that trust. Once the trust is gone the relationship is in jeopardy.

 

[Wyatt earp]

Lay off a worker and make the rest work harder for the raise they get...

Worst possible option for me. If I have three workers earning $11 an hour, I will bill the three of them out at $100 an hour. If I only have two workers, making $15 an hour, I will have to lower my prices to $90, because my total costs are down. Furthermore, if the job requires 500 man hours to complete, it will take three people 21 days to finish it, and two people over six weeks. With three workers at $11 an hour, I charge $16,000, and my gross profit, after paying my workers is $10,500. With two workers at $15 an hour, although my costs are less, it's going to take them over 6 weeks to finish the job. Even if I charge the same price as with three workers, my overall profit goes down because my company's output goes down.

It would make more sense for me to pay all three guys $15 an hour, and keep my prices the same. Yes my gross profit on a 500 hour job goes down to $8,000, but I can take on 50% more work with three people than I can with two. I could also increase my billing rate slightly, to $110 an hour to cover a portion of my increased expenses

The ONLY time I would consider cutting that third guy, is if I didn't have sufficient work to keep him. Because I cannot build my business up, and increase my profits, by cutting staff. The more people I have working for me, the more money I make off their work. Cutting staff means cutting my own pay and I don't want to do that. For business, that's going backwards.

Lmao dragon lady I know you mean well and take the time and energy for a well thought out and written reponse. but dang. in the real world of small bussiness they dont think like you. they would just get rid of one worker.

 

[Dragonlady]

Lmao dragon lady I know you mean well and take the time and energy for a well thought out and written reponse. but dang. in the real world of small bussiness they dont think like you. they would just get rid of one worker.

I worked in the real business world for a lot of years, first as a banker, and then in law. I even did a 6 month stint as a consultant for the Ontario government in the area of construction liens and holdbacks. So yes, I do have experience working with both large and small businesses.

In banking, I did both business and consumer lending, but was known as a mortgage specialist, which included construction financing for builders and developers. I also had many small business customers, which required balance sheet analysis. Even worse, the branch manager used to stick me with doing balance sheet analysis for his large corporate clients. Balance sheet analysis involves doing calculations of rate of turnover of inventory, average collection period for accounts receivable, calculating working capital, and income and expense ratios. And all of the numbers derived from the balance sheet analysis have to be within acceptable ranges for that particular sector in order for credit applications to be approved. Banks look really hard at the rate of inventory turnover, and average collection period for receivables because those are the first things we use as security.

In law, I worked in the areas of corporate, commercial (business) and real estate. One lawyer I worked with did a lot of work bringing new products to market - trade marks, patents, licensing and distribution contracts, financing, marketing, all on an international basis. When I worked on Bay Street, it was exclusively in commercial real estate. Big $$$ deals and projects, development agreements, and condominiums.

Development work is guaranteed to drive you crazy. There is a reason why it takes so long to go from bare land to a new subdivision. I have spent most of my working life cutting through red tape.