Liberals subscribe to magical thinking, believing that free college tuition and free health care to illegals will somehow end up a net win for the public. But reality often intrudes on this magical thinking like a big pimple on the end of your nose, and it is painful and unsightly. In this case, the laws of economics are intruding into the magical thinking of liberal politicians in San Francisco (as if there were any other kind there), and it is a growing problem.
San Francisco has declared that the minimum wage in the city, now being replicated in several other fact-challenged cities, will rise to $15 by 2018, and polls there predict happy, better-paid workers who will finally have a “living wage.” They have also insisted that this will not increase inflation and that it will be a boon to the minimum wage worker. That is a lie. And the impact is just now showing up as the first mandated rise from $10.74 to $12.25 is being implemented by certain retailers.
See who is raising prices in San Francisco, page 2:
What people either do not realize, or simply elect to ignore, is that this is much more than a simple increase in minimum wage. Financially, for businesses large and small, there are more items that a simple hourly rate this impacts and as such they need to adjust as necessary to maintain a profit. Something far too many seem to feel businesses should not do.
For each dollar an employee has deducted for taxes the employer also pays a dollar. In addition there are other employer taxes that increase with each rise in compensation. On a slow scale, that amount can be reasonably absorbed by employers. When you push a larger jump ($2-7$ an hour) that amount cannot be reasonably absorbed and the choices then become 1)Raise prices, essentially reducing the impact of the significant wage increase, or 2)Shutter the business resulting in employees losing that wage increase along with any income.
People need to look at who really wins with this. Government, and the politicians who run it, win. Higher incomes (especially a significant increase over a short, set time period) dramtically increases the tax revenues politicians now have to utilize for their favorite projects.
The dollar cost is the monetization of a product’s scarcity. This includes labor. Does changing the cost by fiat alter an item’s scarcity? Of course not. So, to keep scarcity ratios the same, what happens to the cost of everything else? Yep, it goes up.
https://www.facebook.com/notes/russell-stephan/the-illusion-of-the-concept-of-minimum-wage/10152365618815824
Seriously, I’ll cough up an extra 80 cents so those employees dont need to get on public assistance to make ends meet. But that’s what you get for going to a burrito place that puts rice in em, imo
More money in the economy can’t really be a bad thing, they’re trying to scare the middle class into fighting with them against the lower class imo
George, there no more money in the economy. There hasn’t been any money in the economy for a long long time. All we have is debt, and what you call money is in reality is merely promissory notes issued by the Federal Reserve bank.
Minimal economics is being understood here. If labor costs go up, yes, food prices will go up. But the very headline itself is economically incorrect. With the article it speaks of material costs (meat, etc) increasing, the article itself therefore disputes it’s own misleading headline. When labor costs go up 10%, unit price does not need to go up 10%. That’s the difference between fixed and variable costs. If you’re scratching you head right now about the impacts of fixed and variable costs on pricing, then commenting or linking this to progressive policy is dubious at best. Sheeple… I’ll make it simple: if the person making your burrito makes $2 more per hour, does every burrito they make during that hour go up by $2? No. What if they make 10 burritos? 60 burritos? With 60/hr, a burrito price should increase $0.0333. That’s just over 3 cents. Though oversimplified, this isn’t even within an order of magnitude of 10% of price of burrito. Again…sheeple.
Thank you for your opinion Jon Arnold.
It is simply amazing how poor some of the comments here addressing Chris’s post. #1 ad hominem fallacy, look it up. There goes about 1/2 the comments. #2 if you call someone a “moron”- see #1, AND if you repeatedly use incorrect grammar in calling someone a moron, well… #3, a $1 increase in wage does not equal a $1 increase in price. Fixed and variable costs. Does that employee make more than 1 burrito per hour? If so, then labor costs are spread over multiple units. With these three points, about 95% of comments above are irrelevant or incorrect. Have a nice day.
… Why don’t they just put a tip jar out and stop taxing TIPs (as it’s a GIFT) That way anybody can give anybody a “raise” right there on the spot…
I don’t believe in minimum wage. However I Also don’t care about below living standard jobs, if the job can’t provide life than it’s not a job it’s slavery. Therefore it shouldn’t exist.