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:
Strange that there was a time I lived on minimum wage, and met all my obligations. I wonder why that was. I drove a Buick convertible, and paid my rent, health insurance, car insurance, utilities, food, gas, cigarettes, beer, chased women, indulged hobbies, and SAVED money. If that was possible then why isn’t it now? If you don’t know the answer to that you are buying a whole lot of lies.
Scott Zimov I assume nothing. Fixed costs and variable costs are used to arrive at a price. The article incorrectly states a 10% increase in one component (labor) of fixed costs translates to a 10% increase in price. My example clearly states it’s oversimplified. But a $2 increase in wage does not translate to a $2 increase in unit cost/price.
This is only true if you refuse to modernise your business model. Higher wages has been proven to work. Businesses make money, have better productitivity and employee retention. Consevitives can only react. They lack the mental skills to be proactive.
fast food businesses are going to automate soon. people who dont like the price kikes will just eat at home. nobody is gonna win!
Ha! They are just using that as an excuse. You know there profits are through the roof even with the wage increase.
Can’t wait to see this business fail due to “high overhead” !!
Exactly. Half these people don’t have a clue. You have payroll tax, comp insurance. Depending on your payroll company that will increase. A lot of hidden cost.
Socialism by any other name is still socialism.
And for those of you not in the industry, restaurants work on about a 3% profit margin. Yes, 3%.
chipoltes respond by infecting everyone with food borne illnesses