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:
Tony Geis most franchisees take home about 5% as profit.
Minimum wage increase does increase the cost of gas. The gas station has to pay the cashier more, so they’ll charge more to cover the cost. The driver who delivers the gasoline has to be paid more, so the delivery company charges more to cover the cost, which makes the gas station charge more to cover the increased cost. The refining factory has to pay it’s workers more, so they charge more power gallon to cover the cost, and the gas station again has to increase price. The drilling company has to cover increased wages, so the price per gallon is increased again. The garbage collection company has to charge more, and if they have private security, they’d have to charge more. That’s six price increase pressures in one supply chain.
The alternative would be to decrease costs elsewhere. The three biggest expenditures are materials, machinery/equipment, and labor. They can get cheaper materials, but that usually means a poorer product (just ask McDonald’s compared to, say In N Out). Machines and equipment are fixed price, and although they could try getting cheaper machinery, it would likely increase maintenance costs, to net zero benefit. They can decrease labor costs, which currently is effected by lowering wages and hours. With mandated wage increases, they can only lower hours, possibly to the elimination of jobs.
Increasing minimum wage is NEVER going to make the collective CEOs of the world go “huh, I guess I need to take a pay cut now so that I can pay some unskilled labor what government arbitrarily decided was fair.” If that’s your goal, it would much better to legislate a “maximum wage”, because America is the land is the land of the free! Your opportunity at self advancement is only limited by bureaucrats….
Plantation owners said if they did not have slaves they would not make money. Same principle that is being used by lobbied now. I have managed multiple restaurants some of them being corporations. There is plenty of room to pay people’s wage that does not require their wages to be subsidized by the federal government. Will it be harder for managers and business owners, yes. Will the quality of life go up for most Americans, yes.
Get another job. There are thousands of plumbing, landscaping, electrician, etc jobs out there. They make better money than fast food. Or is that work too hard?
What part of you can’t lift the bottom up are people not getting the bottom is the bottom end of story all this does is take everyone else closer to the bottom
Because Doug, you and everyone else invested in retirement plans or other funds complain when you don’t see a hit enough return. In turn, fund and retirement managers and stock holders complain to management when returns don’t meet their expectations, so management has to cut cost or raise income to meet stockholders wishes or risk losing outside investors. Simply put, you want return on investment, they figure out how to give it to you.
Matthew Fiore refinery worker makes more, truck driver makes more, station attendant makes more, sounds like somebody’s going to have to pay those wage increase and guess where that bill lands.
Umm…there is so much ignorance in this statement.
Your local McDonald’s is not a cooperate entity. It is a franchise, started by an individual with a family and a mortgage just like everyone else. They are the ones risking it all for their dreams. Profit margins are slim. The stock market is where it is at because it is being propped up by the fed and manipulated by globalist bankers.
If you want a higher wage, provide a better service. Don’t have kids if you can’t support them. Always be looking to improve. No one owes you anything.
Refinery workers make about 20 dollars an hour
Why would their wages go up.