The Minimum Wage Eats Restaurants

[Póg mo 1,749]

10 hours ago, Bill & Katya said:

San Francisco’s ever-rising minimum wage—set to hit $15 next year—has restaurant owners asking for the check. “At Least 60 Bay Area Restaurants Have Closed Since September,” read a January headline at the website SFist, which partly blamed “the especially high cost of doing business in SF, with a mandated, rising minimum wage that does not exempt tipped employees.” Another publication, Eater, described the rash of recent closures as a “death march.”

Perhaps the highest-profile closure in San Francisco this year was AQ, which in 2012 was a James Beard Award finalist for the best new restaurant in America. Rising costs chipped away at the restaurant’s profitability, according to a report by Thrillist, driving down the profit margin from 8.5% in 2012 to 1.5% by 2015.

When San Francisco added its own municipal minimum wage in 2004—one of the first in the country—the operating assumption was that tourists and techies would pay the higher prices necessary to offset the cost of the city’s generosity. Last year the San Francisco Chronicle looked at 20 years’ of menus from top restaurants and reported that prices had jumped 52% since 2005, twice the rate of inflation. But increasing prices isn’t a panacea for restaurant owners. “There’s only so much you can charge for tamales,” the owner of a small eatery said in 2015 to explain one reason he was closing.

 

For some empirical backup, consider an April study from Michael Luca at Harvard Business School and Dara Lee Luca at Mathematica Policy Research. They used Bay Area data from the review website Yelp to estimate that a $1 minimum-wage hike leads to a 14% increase in “the likelihood of exit for a 3.5-star restaurant.”

 

https://www.wsj.com/articles/the-minimum-wage-eats-restaurants-1494369579

Maybe sky high rents are causing restaurants to close, but certain groups with an agenda have decided to blame the minimum wage?

[Amica Nostra 4,803]

2 minutes ago, Póg mo said:

Maybe sky high rents are causing restaurants to close, but certain groups with an agenda have decided to blame the minimum wage?

For empirical data, they used Yelp...nuf said

[IAMX 3,055]

Just now, bcking said:

1. Restaurant prices aren't significantly different, having lived there and now live with a citizen from there

2. I paid more taxes in New York State than they do in the UK, here in Texas a pay less. It's a bit in the middle.

3. I don't see much squalor in the UK when I've been there, and I've travelled all around. Yes there are a lot of "welfare beneficiaries" but that is because they are a partly socialized system where everyone benefits from the government. Everyone has healthcare from the government, so everyone is a beneficiary. Heck even my Uncle who is a US citizen was a "beneficiary" when he needed healthcare there. He never got a bill. (Hit his head the day before my wedding, needed several stitches).

Only the first point really has anything to do with this topic. We are talking about how restaurants choose to pay their employees. In the UK, like in other European countires, you are generally charged a "table charge" (Like 5 euros/pounds or something) when you eat at a sit down restaurant. You aren't charged it for take away, and you aren't charged it at truly "fast food" places like McDonalds. That "table charge", to my knowledge, allows them to pay their wait staff fairly. Your tip is then "discretionary", and most local people I've eaten out with will tip very little (extra change) or none at all, unless there was exceptional service.

 

With that system I don't see a paucity of restaurants in London, Paris etc... Restaurants seem to be doing well enough, and I don't see a huge difference in the cost of dining out. Why can't we do that? It seems more fair to me.

I don't mean healthcare. Canada has universal too and the issue of squalor and entitlement is very low, especially in this province.. though because of the NDP it's certainly increasing. The more government benefits people get, the more they rely on government for everything, the less they are compelled to fight for a job, for better living, and so on.

 

I don't take argument with the concept you made about other European countries. Although, having been to Denmark and other countries in that region (DE, NL, AT, etc.) they have very significant issues as well with entitlement, which they need to be careful of, lest they turn into a country like Czech Republic or Slovakia.

 

But it's clear in my extensive vacations in the UK, that the sense of entitlement, and thus squalor, if you go to the cities, has been a huge problem.

 

Relating this to the topic, adding this entitlement to higher wages neither solves the problem of poor people, nor does it encourage them to maintain that extra effort for survival, making them appreciate the things they have. Instead, they presume they're owed it, so nothing changes by jacking up their wages. It's merely a feel good move by the left who think making more people reliant upon the government for every facet of their life to be utopia, in the face of clear dystopia every time government favors the rich vastly more.

[IAMX 3,055]

7 minutes ago, Póg mo said:

Maybe sky high rents are causing restaurants to close, but certain groups with an agenda have decided to blame the minimum wage?

So what do you propose? Rent ceilings? Property value ceilings?

 

In any place where population is extremely high an condensed (SF is easily one of the USA's top 5 cities when it comes to pop per square mile) it causes a significant rise in property value.

Edited May 15, 2017 by IAMX

[bcking 3,157]

5 minutes ago, IAMX said:

I don't mean healthcare. Canada has universal too and the issue of squalor and entitlement is very low, especially in this province.. though because of the NDP it's certainly increasing. The more government benefits people get, the more they rely on government for everything, the less they are compelled to fight for a job, for better living, and so on.

 

I don't take argument with the concept you made about other European countries. Although, having been to Denmark and other countries in that region (DE, NL, AT, etc.) they have very significant issues as well with entitlement, which they need to be careful of, lest they turn into a country like Czech Republic or Slovakia.

 

But it's clear in my extensive vacations in the UK, that the sense of entitlement, and thus squalor, if you go to the cities, has been a huge problem.

 

Relating this to the topic, adding this entitlement to higher wages neither solves the problem of poor people, nor does it encourage them to maintain that extra effort for survival, making them appreciate the things they have. Instead, they presume they're owed it, so nothing changes by jacking up their wages. It's merely a feel good move by the left who think making more people reliant upon the government for every facet of their life to be utopia, in the face of clear dystopia every time government favors the rich vastly more.

Unemployment in the UK is 4.7 percent or so.

 

Now perhaps they measure it differently, but that doesn't strike me as a country of "squalor and entitlement". If everyone was just relying on the government wouldn't they have higher unemployment?

 

Now if it is the quality of the job you are talking about, well some people have to fill every roll. As long as someone is working in a job contributing to society I see no reason to not at least give them some basic benefits (shelter, food, healthcare, education for children are my big four).

[IAMX 3,055]

6 minutes ago, bcking said:

Unemployment in the UK is 4.7 percent or so.

 

Now perhaps they measure it differently, but that doesn't strike me as a country of "squalor and entitlement". If everyone was just relying on the government wouldn't they have higher unemployment?

 

Now if it is the quality of the job you are talking about, well some people have to fill every roll. As long as someone is working in a job contributing to society I see no reason to not at least give them some basic benefits (shelter, food, healthcare, education for children are my big four).

While I agree with you a lot more on this post, I will point out on this site:

 

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/530905/households-below-average-income-quality-metholodogy-2014-2015.pdf

 

It shows that 15-20% of people in the UK live in poverty (clearly that low employment rate means little), coupled with low CPI indicating people should be able to afford more essential things but aren't. This puts more burden on the government to provide more for these people mentioned above, which is why the UK government was forced into austerity. And raising taxes isn't exactly an affordable thing to do at this point because they're already high. I don't think it's logical to compare an entire country's taxes to one extremely populated city in the US.

[bcking 3,157]

2 minutes ago, IAMX said:

While I agree with you a lot more on this post, I will point out on this site:

 

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/530905/households-below-average-income-quality-metholodogy-2014-2015.pdf

 

It shows that 15-20% of people in the UK live in poverty (clearly that low employment rate means little), coupled with low CPI indicating people should be able to afford more essential things but aren't. This puts more burden on the government to provide more for these people mentioned above, which is why the UK government was forced into austerity. And raising taxes isn't exactly an affordable thing to do at this point because they're already high. I don't think it's logical to compare an entire country's taxes to one extremely populated city in the US.

I was talking about new York state in general, not just city. That would be true about other states.

 

If you combine state and federal income taxes, plus social security tax...I think a lot for states are quite close if not more than the 20%/40% they pay in UK.

 

We have about 15 percent below poverty don't we? Not even sure if the UK rate would be statistically significantly different. Not to mention those in poverty in the UK at least have healthcare.

[IAMX 3,055]

15 minutes ago, bcking said:

I was talking about new York state in general, not just city. That would be true about other states.

 

If you combine state and federal income taxes, plus social security tax...I think a lot for states are quite close if not more than the 20%/40% they pay in UK.

 

We have about 15 percent below poverty don't we? Not even sure if the UK rate would be statistically significantly different. Not to mention those in poverty in the UK at least have healthcare.

In California making near 100k I was taxed about 30 (including fed/state/fica), so slightly over 30%. Looking at the UK tax bracket they're at 40% way lower than that.

Edited May 15, 2017 by IAMX

[Mr&Mrs G. 903]

1 hour ago, bcking said:

Maybe it's just me but I'd much rather spend a little more for a meal and know that the people who work there are "guaranteed" a standard minimum wage. That's why I prefer the European system where there is a "table charge" when you sit down for a meal, and then the tip is completely discretionary.

But that's like double dipping.

 

My father worked in a major hotel in Dublin, front of house for over 40 years. Guests who came from the USA generally didn't understand that the 12.5% service charge that was being added to their hotel bill and every meal they had in the restaurant was divided up among the staff every week. This meant that most also tipped the same as they did in the USA, so basically paying a tip twice. Gradually over the years in a lot of hotels the service charge has been done away with in favour of a higher flat rate wage.     

[Póg mo 1,749]

1 hour ago, IAMX said:

So what do you propose? Rent ceilings? Property value ceilings?

 

In any place where population is extremely high an condensed (SF is easily one of the USA's top 5 cities when it comes to pop per square mile) it causes a significant rise in property value.

I don't, perhaps I just don't believe that labor should loose out, just because of a relatively weak bargaining position. 

[IAMX 3,055]

1 minute ago, Póg mo said:

I don't, perhaps I just don't believe that labor should loose out, just because of a relatively weak bargaining position. 

You make a good point, but.. what caused that weak bargaining position?

 

Pretty clear.. free trades. The government got involved, removed long standing barriers to trade that kept unskilled labor, and thus currency, cycling within the country, rather than outward. 

 

Hence why the US' market is driven on it's #1 export which is debt, and it's primary function of debt financed consumption.

 

Even as unskilled labor jobs have been lost, the governments response is "more free trades". Clearly they want this to keep happening, so look forward to the lower class relying more and more on service sector jobs that have always been for teenagers.

 

It weakened labor value significantly forcing unskilled US employees to compete with people who make in the US what would be considered way below slave labor.

[Boiler 43,433]

San Fran is a sanctuary city, why not just employ illegals?

[IAMX 3,055]

6 minutes ago, Boiler said:

San Fran is a sanctuary city, why not just employ illegals?

Defeats the purpose of their illegal labor. (keeping in mind that George W. Bush and neocons were thrilled with the idea of illegal labor)

 

I've never heard of the left advocating for illegals out in the fields to make $15/hour. Wonder why?

 

Although, an ex of mine who's uncle was high up in Norcal Waste, when I mingled with him to see if their business was something I wanted to get into (since I have a handful of members of family who are rather high on Waste Management's payroll), and I found out they had several illegals on their payrolls as drivers making over 100k a year. Of course this was on the taxpayers' dime via lucrative contracts that the city (San Jose) later got busted for.

[The Nature Boy 7,659]

11 hours ago, ccneat said:

The people waiting on me should be entitled to a living wage. I try to tip 20%. I rationalize that if I cannot afford to pay a decent wage for my dinner, I should fix it at home. Some restaurants are experimenting with a no tip policy and a 20% increase in the menu to bring up wages. 

I am surprised only 60 (240) restaurants moved on in a quarter with the spike in rents. Sf has more restaurants or capital with 39 per 10, 000 people so 120 a year sounds like. Natural turnovre should make this number larger r. http://www.huffingtonpost.com/jed-kolko/eating-towns-drinking-towns_b_1729283.html?utm_hp_ref=food

SF, Portland , Seattle, Vancouver LA...these are great food destinations.

How can you try to tip 20%. Either you do or you don't. I always tip 20% unless they cop a really bad attitude.  If it's a small check then I tip more than 20%. 

18 dollar check at Waffle House I usually leave a 5.

 

I agree I'd you work hard you should make enough to survive. That does not mean 50 dollar nails, new doo every week . Live within your means .

[jg121783 3,907]

7 hours ago, ccneat said:

 

What is ridiculous is other people telling me that my burgers are not worth $15 an hour in San Francisco.    

 

If folks want to pay less than poverty wages they can, just not in San Francisco. 

 

 

I rarely eat fast food but the average meal at a place like McDonald's is $6-7 or more. To me that is already too much for the junk they sell. How many people do you think will want to pay say $10 for a meal from McDonald's? Not very many.

 

A place like McDonald's has two choices when faced with these ridiculous "living wage" laws. Raise the price of their food or lay people off. These "living wage" laws have the unintended consequence of causing lay offs because a business generally would rather cut labor costs than raise prices on their products.

 

Who is actually naive enough to believe a burger flipping job at McDonald's is supposed to be a job you can make a decent living from or even support a family from? These are supposed to be part time jobs for high school or college students to make a little extra money.

 

If you want to make a decent living or support your family perhaps you should find a job that produces a good or service that is worth enough to society to justify a living wage. I worked in fast food when I was younger and made about $7 an hour. I never expected a living wage from it and it motivated me to learn a skilled trade and better myself. If you want to make a career out of flipping burgers you shouldn't expect to earn the wage of a skilled worker.

Edited May 16, 2017 by jg121783