The Minimum Wage Eats Restaurants

[Dashinka 25,856]

2 hours ago, Teddy B said:

This couldn't be further from the truth. The reasons why are the employees still have to show up for work every day and perform his job to the company standard just like yours or my job right now. The only difference is that the majority of the employees will split a larger chunk of the pie rather than a handful getting most of it. There is no free ride or gov't hand out here. In the long run this will get more people who are working these minimum wage jobs and collect gov't assistance to live, off of gov't assistance and free up that money for other things.

 

Let them eat cake!

The majority of the employees already share the lion's share of the supposed pot.  If as a small business owner, I have 5 employees plus myself for a total of 6 employees to share the pot, and the five employees work 40 hrs a week for $15/hr they will collectively make $3,000 per week.  If my budget for labor is $3,450 (1.5% profit for my own pay), the 5 employees clearly get the majority of the money, and I take home $450 compared to their $600 per week and my per hour equivalent is much lower than theirs.  This is just one example, but it can be scaled to a larger company if needed.  It has nothing to do with letting them eat cake, it is pure economics,  As to the government, I wasn't talking specifically about the government handing the employees the money, but rather the intervention of putting in wage controls, or profit controls in place artificially which smacks of socialism, and generally fails.  If the small business owner is limited to only make 0.25 or 0.5% profit, why do it, then everyone will be making zero.

[Teddy B 17,252]

2 minutes ago, Bill & Katya said:

The majority of the employees already share the lion's share of the supposed pot.  If as a small business owner, I have 5 employees plus myself for a total of 6 employees to share the pot, and the five employees work 40 hrs a week for $15/hr they will collectively make $3,000 per week.  If my budget for labor is $3,450 (1.5% profit for my own pay), the 5 employees clearly get the majority of the money, and I take home $450 compared to their $600 per week and my per hour equivalent is much lower than theirs.  This is just one example, but it can be scaled to a larger company if needed.  It has nothing to do with letting them eat cake, it is pure economics,  As to the government, I wasn't talking specifically about the government handing the employees the money, but rather the intervention of putting in wage controls, or profit controls in place artificially which smacks of socialism, and generally fails.  If the small business owner is limited to only make 0.25 or 0.5% profit, why do it, then everyone will be making zero.

The only flaw in your example is that you've used a failing business model. Any business owner who gets paid less than his/her employees shouldn't be in business at all. The numbers would be very, very different for a successful business.

[Dashinka 25,856]

3 minutes ago, Teddy B said:

The only flaw in your example is that you've used a failing business model. Any business owner who gets paid less than his/her employees shouldn't be in business at all. The numbers would be very, very different for a successful business.

In that I agree with you which means that the business owner would either have to raise prices or pay the employees less.  If the market doesn't support the higher prices, then there is one option.  If the government requires an artificial non-market based wage, then yes, the business has a strong possibility of failing.

[Boiler 47,478]

Does not take much to kill a restaurant margins are tiny

[IAMX 3,055]

3 minutes ago, Boiler said:

Does not take much to kill a restaurant margins are tiny

They don't care. Hence why not to listen to them.

[Teddy B 17,252]

14 minutes ago, Bill & Katya said:

In that I agree with you which means that the business owner would either have to raise prices or pay the employees less.  If the market doesn't support the higher prices, then there is one option.  If the government requires an artificial non-market based wage, then yes, the business has a strong possibility of failing.

I'm going to say this one more time. The percentage based salaries are based on the company's prior year performance, so the business owner is working with the profits of the previous year. The money is already available. These are not numbers pulled out of thin air it's based on company performance. Everyone has an incentive to do their best work so the company succeeds and they make the most money possible. This system is similar to a commission based salary just like a car salesman and other jobs that are already set up this way. People will actually work harder with this system to make more money than they would in a minimum wage/lower paying job where they know they're getting paid peanuts compared to the people at the top.

 

This isn't a hard concept to grasp. I'm not sure why some of you are having such a difficult time understanding it.

[IAMX 3,055]

Small businesses have obligations to pay in real time and by the end of every accounting period's end (as per the income statement), and long term obligations to pay (per balance sheet), which especially includes tax season, so the notion that they have all of last years profits to hang onto throughout the next year (which would be evident they don't, as per their statement of changes to equity) is laughable. This is what happens when people who have no concept of running a business try and make decisions for businesses. 

Edited May 17, 2017 by IAMX

[Teddy B 17,252]

3 minutes ago, IAMX said:

Small businesses have obligations to pay in real time and by the end of every accounting period's end (as per the income statement), and long term obligations to pay (per balance sheet), which especially includes tax season, so the notion that they have all of last years profits to hang onto throughout the next year (which would be evident they don't, as per their statement of changes to equity) is laughable. This is what happens when people who have no concept of running a business try and make decisions for businesses. 

It's funny to watch someone who has no clue what they're talking about try to prove that they do. At least you're consistent.

 

[Dashinka 25,856]

12 minutes ago, Teddy B said:

I'm going to say this one more time. The percentage based salaries are based on the company's prior year performance, so the business owner is working with the profits of the previous year. The money is already available. These are not numbers pulled out of thin air it's based on company performance. Everyone has an incentive to do their best work so the company succeeds and they make the most money possible. This system is similar to a commission based salary just like a car salesman and other jobs that are already set up this way. People will actually work harder with this system to make more money than they would in a minimum wage/lower paying job where they know they're getting paid peanuts compared to the people at the top.

 

This isn't a hard concept to grasp. I'm not sure why some of you are having such a difficult time understanding it.

So with the 1.5% or less profit, the business owner is supposed to put that in escrow for the next year.  Makes their salary even lower and does not allow them the flexiblility to invest their profits either back into the business or on other ventures.  If you want to go to a market based commission system that may work, but the timeline for that is more current. Sure a top performer may get a raise or other reward annually, but their pay is based on current performance.  But again, this is market driven without government interference.

[Teddy B 17,252]

Just now, Bill & Katya said:

So with the 1.5% or less profit, the business owner is supposed to put that in escrow for the next year.  Makes their salary even lower and does not allow them the flexiblility to invest their profits either back into the business or on other ventures.  If you want to go to a market based commission system that may work, but the timeline for that is more current. Sure a top performer may get a raise or other reward annually, but their pay is based on current performance.  But again, this is market driven without government interference.

1.5% profit? You really like failing businesses, eh?

 

It's very evident that you either fail to grasp the concept or are being purposely obtuse, either way I'm done playing with you.

[IAMX 3,055]

3 minutes ago, Teddy B said:

It's funny to watch someone who has no clue what they're talking about try to prove that they do. At least you're consistent.

 

"but businesses have profits from last year to use for all of next year"

 

 

Please stop. You're quite clueless.

[Teddy B 17,252]

8 minutes ago, IAMX said:

"but businesses have profits from last year to use for all of next year"

 

 

Please stop. You're quite clueless.

Wait, your retort is lackiing a few "looney left's" and "social justice" jabs in there. You're slacking man.

[Dashinka 25,856]

7 minutes ago, Teddy B said:

1.5% profit? You really like failing businesses, eh?

 

It's very evident that you either fail to grasp the concept or are being purposely obtuse, either way I'm done playing with you.

What profit margin do you think small businesses achieve?  

 

Full-Service Restaurants

Full-service restaurants at all levels spent about 32 percent of each dollar on the cost of food and beverages, 33 percent on salaries and wages, and from 5 percent to 6 percent on restaurant occupancy costs. Profit margins, however, varied according to the cost of the average check per person. Those with checks under $15 showed a profit of 3 percent. Those with checks from $15 to $24.99 boasted the highest profit margin at 3.5 percent. Finally, those with checks of $25 and over had the lowest profits, at 1.8 percent.

 

Limited service or fast food restaurants may be a bit higher at an average of 6%, but that is also not very large, yet people still go into it for success.

 

http://smallbusiness.chron.com/average-profit-margin-restaurant-13477.html

[IAMX 3,055]

8 minutes ago, Teddy B said:

Wait, your retort is lackiing a few "looney left's" and "social justice" jabs in there. You're slacking man.

Now that you've given the ammo..

 

https://liberalsbackwardsthink.com/2015/03/06/the-4d-nutwork-of-liberal-debate-deride-distract-deny-demonize/

Quote

Distract – When a liberal realizes they are losing the argument they always change the subject.

 

Regarding business "profits" and the following year, a businesses leftover profits need to be roughly, as in more or less, the same amount as their receipts for the entirety of the previous year, presuming stability. If you take the "average" small business profits of 5%, versus a business' net worth (equity), if their leftover profits were, say, 100k, that would be a fraction of the millions they would need to cover the next year's expenses. 

 

Clearly you have absolutely no clue. Businesses that even run a petty 5% margin still rely nearly exclusively on month to month net profits just to help pay for the next month's expenses. So the idea that they can even remotely fund anywhere close to a years worth of expenses from their prior years leftover money would only be said by someone that needs to recuse himself from the discussion as he has no idea of the difficulty of running a business.

 

- Sincerely,

 

Someone with an education (two degrees) and work background (15+ years) in business management.

Edited May 17, 2017 by IAMX

[The Nature Boy 7,659]

Everybody in America is free to start their own business if it's so lucrative