[dreamache]

100% agree. In Ford's case, it was a voluntary decision to attract and keep the best workers. In the case of federally mandated minimum wage, it's a threat of force against business owners who are otherwise acting peacefully and quite literally, minding their own business.

Raising the minimum wage results in: - A raise in the price of products (hurting the poor the most) - Firing employees - Reducing hours - Going out of business - Outsourcing

I'm a business owner, and I'm not going to sit here eating up the cost of a higher minimum wage. The central planners don't seem to understand this -- or they do, and they ultimately want more people dependent on them. If that's the case, raising the minimum wage is a great idea.

[jimmaswell]

As you must know being a business owner, labor is only one component of expenses, so prices don't go up x% just because labor went up x%. In McDonald's case, a 100+% rise in wages would represent a 4% rise in price. Obviously most minimum wage increases don't double at once so it would be even less. You don't go on a firing spree and shut down the business when property taxes or materials go up so why would you need to do that if labor went up?

https://www.marketwatch.com/story/raising-fast-food-hourly-w...

There would be no need for a minimum wage if we had UBI but that kind of thing is too far off.

[opo]

>...n McDonald's case, a 100+% rise in wages would represent a 4% rise in price.

Estimates are that labor costs are more like 33% of the costs of a fast food restaurant like McDonalds:

https://s3.amazonaws.com/s3.documentcloud.org/documents/2915...

Increasing pay by close to 50%,one would expect that prices would have to increase by closer to 15%, not 4%. Though, given how price sensitive those customers are, it isn't clear how much you can raise the price.

In terms of margin, it looks like McDonalds is doing much better than other chains:

>...In 2012, for example, when McDonald's had a net profit margin of just under 20 percent; Burger King's net margin was less than a third of that and another big chain; Wendy's, had a scary thin 0.3 percent.

https://smallbusiness.chron.com/average-profit-margin-restau...

But even at McDonalds, I think it is safe to assume that in the longer term, fast food restaurants would look into replacing rising labor costs with machines - that might be replacing cashiers with kiosks or even machines that prepare and cook the food, etc. This would be expected to happen anyway, over time, but mandating huge increases in labor costs will mean it happens quicker and be more disruptive. (One might say "good riddance" as these aren't great jobs, but they are entry level jobs which are disappearing in all industries.)

[brightball]

> There would be no need for a minimum wage if we had UBI but thay kind of thing is too far off.

This is my primary reason for supporting it.

[Consultant32452]

The production cost of a McBurger may only go up 4%, but the consumer price of goods is also significantly dependant on how much money is in consumer's hands. If you just hand everyone in the country $500/mo, rent is going up everywhere.

[isostatic]

Which is what happened when families started having 2 full time high wage earners.

Both rent and house prices shot up. Those who owned houses profited massively from the unearned wealth increase. Those renting suffered.

We're now in a situation where everyone needs 2 full time high wage earners to pay for the same housing and lifestyle that used to be done by 1 full time high wage and perhaps 1 part time low wage

[jimmaswell]

Only <4% of people make the federal minimum wage. Couldn't find stats on state minimum wage earners but it's still probably not so much that rent would be hugely impacted.

Not to mention, rent control is a good idea in addition, or finding ways to make homeownership more in-reach for more people.

[Consultant32452]

Rent wasn't intended to mean literally just rent. You'd need price controls on everything, which is historically a terrible idea.

[paulddraper]

> a 4% rise in price

But a much larger change to profits. And it's the profits that matter to the business decision makers.

[jlokier]

> I'm a business owner, and I'm not going to sit here eating up the cost of a higher minimum wage.

Yes you are.(1)

(1) "You" here means the collective cohort. You as an individual business owner might be principled enough to refuse to hire, but I believe the data from other places that have a low but non-zero minimum wage indicates your cohort will usually raise wages, rather than not hire. Bearing in mind minimum wages are still very low wages. If business is so tight that would catastrophically affect profits, you will usually raise prices, and the cost isn't so much eaten as the pressures in the business adjust around the new reality; this is made easier by the fact that your competitors are doing the same.

> or they do, and they ultimately want more people dependent on them.

At least in some countries, raising minimum wage makes people less dependent on the state, not more. Two reasons: People need less top up from the state to plug the gap between low wages and high costs of housing and health, and people are more motivated to take a job because it makes a material difference to their situation, indeed poverty-level wages (far below minimum) often cost more to earn than they provide.

[icebraining]

This[1] discussion on the minimum wage (specifically centered on Seattle's recent laws) provides a more nuanced goal than just "helping workers" or "getting them dependent"; essentially he's saying there are two types of minimum wage workers - teenagers looking for summer money, and adults making a living -, and you can help the latter if you don't mind screwing the former.

[1] http://www.econtalk.org/jacob-vigdor-on-the-seattle-minimum-...

[setr]

I think the teenage bit is unnecessary; they’re talking more about anyone trying to find entry-level work. Which happens to often be teenagers, but would presumably also include low-level career transitions, homeless, etc.

The restaurant part is particularly notable: “'We're going to be fine. Our members of this [Washington Restaurant] Association--the minimum wage, it's not going to break them.' And the reason why, he said, is because, 'there are so many strategies that we have to basically reduce our labor.'”

And then it goes on to basically list alternatives to having any entry-level jobs in the first place; buying cut fruits from offsite, self-order machines, etc.

That is, its a bit more dangerous than the simple job-hour reduction; its a more permanent transition to the total removal of low-level full-service work

[rtkwe]

It'd be very interesting to see the history of who was working minimum wage jobs over time and what kind of jobs were paid minimum wage. Anecdotally it seems more and more people are working a lot of minimum wage jobs that formerly wouldn't be minimum wage like retail or food service (a la fast food places) and there's more people working full time minimum wage.

No matter what the goal of raising it I think the fact that it's now a fraction of what it was in real dollars demands we either raise it or completely rethink how it's applied and what kinds of jobs can be min wage. People working full time should be able to live on their wages, anything else is just subsidizing the labor costs for huge profitable companies.

[leetcrew]

> there are two types of minimum wage workers - teenagers looking for summer money, and adults making a living -, and you can help the latter if you don't mind screwing the former.

when you put it like this, it seems obvious to say that the right move is to screw over the teenagers who are much less likely to be supporting a family or themselves.

I'm not sure this is great in the long run though. imo, having some kind of part time job is very important in highschool. for a lot of teens, it might be the first time they are exposed to an environment that has no inherent reason to make things work for them. until we finally get luxury space communism, this is a really important experience to have early in life.

[jlokier]

I don't know about other countries, but in the UK the approach is to set the minimum wage significantly lower for teenagers.

Which sucks if you're an adult making a living who happens to be young, but that's what we do.

There's also a dirty hack: We call some young people "apprentices"(1), which sometimes means the same job as before and not having to pay the minimum wage, with a veneer of marketing. See also "unpaid interns".

(1) I don't want to disparage proper apprenticeships, which from reports can be excellent, e.g. at engineering firms like Rolls-Royce.

[leetcrew]

the obvious problem here is that if you have a different minimum wage for teenagers, they will be preferred over adult candidates.

by the way, we do have special rules in the US for what kind of work you are allowed to give to interns. in general you are not allowed to give work to interns that would otherwise be performed by a full employee. this is intended to prevent adult employees being put out of a job by low pay interns. unfortunately, I don't think most minimum wage employers are interested in dealing with these complicated rules for interns.

[icebraining]

It may be an important experience, but it's not such a common one: https://www.oecd.org/statistics/students-at-work.htm

[leetcrew]

if it's important and uncommon, isn't that a good reason not to add additional barriers?

[larrydag]

Harvard Business Study on impacts of firm exit with increased minimum wage

https://www.hbs.edu/faculty/Pages/item.aspx?num=52552