OT: Minimum wage proposal in SD

[urbanrealtor]

Hey there.
Curious who has seen this:

City Not Budging as Restaurants Calculate Cost of Minimum Wage Hike for Tipped Servers

I am calling bullshit right here.

These numbers do not add up.

The piece is one-sided and overall foxnewsworthy.

(To clarify:
I am not asserting that Scott Lewis is lying.
I am asserting Scott is throwing around numbers sloppily.)

Per the article:
“Gordon is going to have to immediately find an extra $327,000 a year to pay these (42)servers”.

That price point would mean $8000 per employee per year.
$4 (the alleged increase) times 2000 hours (50 weeks x 40 hrs).

That is not mathematically (or practically) possible.

Why?
Two reasons:

1: The increase is not a $4 per hour increase.
Nor is it immediate.

It appears (based on most news accounts) to be an increase of $3 over the state minimums phased in over years (as the $1 state increase would be).

2: This is an unrealistic schedule for waiters

Most waiters work far less than the 2000hrs standard for other jobs.

Most work 25-30 hrs per week for any give establishment (usually supplemented with a second income stream).

Bear in mind, that restaurant eating does not go on 9-6 monday thru friday.

It happens in 4hr bursts and usually on the weekends.
Therefore a waiter’s schedule will reflect this. (eg: 4-10 wed thru sunday)

How do I know this?
I got into real estate (and funded my UCSD education) while working as a waiter.
My top-producing employee still waits tables a couple nights a week.

Here is a better question:

Does Gordon follow state (or international) standards regarding breaks?

I ask because most restaurants don’t.

[spdrun]

More crap from the free shit mafia — a 50+% hike in a few years is frankly fucking insane. Instead of letting costs drop to reasonable levels, let’s inflate, inflate, fellate.

[The-Shoveler]

There are many reasons why deflation cannot be allowed to exist for long time periods.

the most obvious is long term debt.

And yes local Gov’s hold the most long term debt.

[spdrun]

Local govts have too many parasites working for them anyway. Maybe its time to fire 50% and tell them to get a real job.

As far as the $13 min wage– should be good incentive to automate a good portion of those jobs away…

[Coronita]

I think I must be insane to work in the tech industry…

I think the tech industry is probably the only industry in which a computer or mobile phone is 50x more powerful than something that existed 10 years ago, but costs 1/3 the price of that item 10 years ago, even in non-inflation adjusted dollars…

That cost squeeze gotta come from somewhere…. I guess it usually comes out of axing jobs in high cost areas….

I guess I’m pretty lucky so far (knock on wood) because I’m considered a high performer to justify my cost….

HP just announced 10k-16k layoffs btw…

I do not envy folks who are trying to start a small biz right now….It must be a tough environment out there…

[urbanrealtor]

Generally, min wage increases do not have a big impact upon business.

Its not as though this increase will harm fast food firms (or their workers).

Honestly if increasing waiters’ salaries is a burden, then your biz is already circling the drain.

I own a business and have done restaurant budgets when I was in that line of work.

Out of curiosity, which of you is a small business owner?

[The-Shoveler]

flu most of that has to do with scale, but yea I remember paying 3K for a Slow POS PC with one 40Meg hard drive back in the day (but is was made in America LOL).

The lower end of the wage scale has really lagged behind and suffered the last 20 or so years, so there needs to be some leveling IMO.

They are not going to manufacture I-Pads here anytime soon regardless.

You give a low wage earner a little more money he will spend it, you give the CEO a few million more bucks he will put it in a tax shelter somewhere.
(or maybe buy a NY condo).

[Coronita]

[quote=The-Shoveler]flu most of that has to do with scale, but yea I remember paying 3K for a Slow POS PC with one 40Meg hard drive back in the day (but is was made in America LOL).

The lower end of the wage scale has really lagged behind and suffered the last 20 or so years, so there needs to be some leveling IMO.

They are not going to manufacture I-Pads here anytime soon regardless.

You give a low wage earner a little more money he will spend it, you give the CEO a few million more bucks he will put it in a tax shelter somewhere.
(or maybe buy a NY condo).[/quote]

I think some things have to be done for wages on the low end.. But just pointing out that eventually, everything will most likely shift to fewer people working, even when wages do go up….

Looks what is happening right now in grocery stores. You have 1 cashier managing 4-5 self-service checkouts….

Keep moving up or get outdated by technology….

[spdrun]

I’d rather Americans not spend more money right now. More money spent == more competition to my plan of buying a few more fork-lost (HAH!) homes and renting them out to people not in the economic position to buy.

This being said, if the CEO buys a NY (or SF) condo, the money would still go into the economy:
(a) the seller would get paid
(b) broker(s) get paid
(c) people doing renovations on the apt get paid
(d) building staff (supers, doormen, etc) get paid
(e) city gets to re-assess. taxes get paid.

etc.

[an]

These are the reasons why IMHO raising minimum wage will actually hurt those who work for minimum wage:

http://money.cnn.com/2014/05/22/technology/amazon-robots/index.html?iid=HP_LN
http://money.cnn.com/2014/05/22/technology/innovation/fast-food-robot/index.html?iid=HP_LN

[CA renter]

While I generally agree that minimum wage needs to be increased, I think it would be better if we could tie the wages of employees to the top CEOs/officers of the company they work for, particularly if the company is incorporated and the owners/top executives benefit from any of our limited liability laws.

This would help prevent local small businesses with thin margins and low owner/worker pay ratios from suffering unduly from employment/wage laws that would run them out of business. It would also help rein in the ever-expanding (and very damaging, IMHO) CEO:worker pay ratio.

[Hobie]

urban: as you know and live, the owner is the last to get paid. Circling the drain is many small businesses. Not just the mom/pop. After everyone else is paid, reserves funded, etc. the owner draw can be very tiny even while driving the slick leased car and looking very successful.

Not slamming anyone, but if the market cannot bear a pass through added cost, labor is the first to be reduced as usually the highest expense.

[EconProf]

We economists are largely in agreement about raising the minimum wage: it will kill jobs.
The recently proposed mild increase in the federal minimum wage would cost about a half-million jobs, according to federal officials.
But the huge jump to $13.09 for San Diego only would have a far more powerful impact on employment within our city limits.

[no_such_reality]

[quote=Hobie]Not slamming anyone, but if the market cannot bear a pass through added cost, labor is the first to be reduced as usually the highest expense.[/quote]

Yes because fixing management ineptitude is too expensive

[CA renter]

[quote=EconProf]We economists are largely in agreement about raising the minimum wage: it will kill jobs.
The recently proposed mild increase in the federal minimum wage would cost about a half-million jobs, according to federal officials.
But the huge jump to $13.09 for San Diego only would have a far more powerful impact on employment within our city limits.[/quote]

Probably getting the 500,000 figure from the CBO, but you’re omitting some things, too:

———-

Effects of the $10.10 Option on Employment and
Income.

Once fully implemented in the second half of
2016, the $10.10 option would reduce total employment by about 500,000 workers, or 0.3 percent, CBO projects. As with any such estimates, however, the actual losses could be smaller or larger; in CBO’s assessment, there is
about a two-thirds chance that the effect would be in the range between a very slight reduction in employment and a reduction in employment of 1.0 million workers (see Ta b l e 1 ).

Many more low-wage workers would see an increase in their earnings. Of those workers who will earn up to $10.10 under current law, most—about 16.5 million, according to CBO’s estimates—would have higher earnings during an average week in the second half of 2016 if the $10.10 option was implemented.1 Some of the people earning slightly more than $10.10 would also have higher earnings under that option, for reasons discussed below. Further, a few higher-wage workers would owe their jobs and increased earnings to the heightened demand for goods and services that would result from the minimum-wage increase.

http://www.cbo.gov/sites/default/files/cbofiles/attachments/44995-MinimumWage.pdf

————–

I’d say it’s a positive, overall.

[Author]

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