[ModernMech]

Yes, that is an extreme example and quite absurd. But what if you pay them enough so they can comfortably afford their rent and healthcare? Then you charge a little bit more so the people who are comfortable enough to afford eating out can help make up the difference. Maybe you even make the restaurant a little less profitable in the process. What if in doing this, your line cooks now can afford to each out at other restaurants, and the cooks from those restaurants now can afford to eat at yours?

[squidlogic]

I think you underestimate how small margins are at most restaurants.

My example was hyperbolic to better draw attention to the principle.

The principle applies, as you admit, that the cost increase would need to be passed onto the customer, who in a competitive business environment will likely chose the lower cost option over two products of similar quality.

If the employer did offer a wage increase, it would need to fit in the overall business ecosystem. For small restaurants maybe they can only afford a $2 raise while breaking even. For the local car wash, maybe $1.25 is the limit. By increasing the wage to an arbitrary number ($15/hr), this ignores the market principles that each business operates under.

Another thought experiment: why only $15? Why not $25? Or $50? Wouldn’t that be better? To set a limit already admits the principle holds and therefore any solution without nuance is unlikely to result in a good outcome.

[ModernMech]

> By increasing the wage to an arbitrary number ($15/hr), this ignores the market principles that each business operates under....Another thought experiment: why only $15? Why not $25? Or $50?

Don't these arguments apply any time the minimum wage is debated? I heard these same arguments in 2007, and the economy didn't implode (well, not because of the minimum wage). Why did we set it to $7.25 over $6.55? Why did we set it to $6.55 over $5.85? The minimum wage is already set, so the "market principles" have already been violated, yet the industry remains and is profitable.

> I think you underestimate how small margins are at most restaurants.... The principle applies, as you admit, that the cost increase would need to be passed onto the customer, who in a competitive business environment will likely chose the lower cost option over two products of similar quality.

No, I don't underestimate it. But I think if workers can't be paid enough to comfortably afford rent and healthcare then there should be no profit whatsoever. If someone is making a profit while someone else can't afford housing, then something is wrong.

I say set the minimum wage at a point that allows people some dignity, and let the market sort the rest out. Restaurants will set a price and customers will choose whether or not to pay it. Those restaurants that have a compelling menu at an acceptable price will prosper, others will fail and be replaced. Eventually an equilibrium will be reached as higher prices are normalized.

As a customer of restaurants, I can tell you I almost never care about price -- it's all about food and experience. I'm going to a restaurant later today and I'm going to pay 25% over the price of the meal so I can assure the waiter gets the cut they deserve. If that restaurant raises their prices 30-40% to pay their workers more, I will still eat there because I want the food and I don't want to cook.

[Dah00n]

$15/h is insane. The lowest pay at a McDonald's in Denmark is $18+ which is a crap wage.

[danaris]

Any business that cannot survive without paying its employees too little for them to live comfortably (not "extravagantly", but also not "desperately") does not deserve to exist. Period. Its business model depends on being subsidized by government programs that support the destitute.

[imtringued]

>I think you underestimate how small margins are at most restaurants.

That just means your business model is unsustainable.