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Forbes:We Are Seeing The Effects Of The Minimum Wage Rise In San Francisco


Redskins3D

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 Wages in San Francisco have been rising strongly so they’ve raised the prices of all their products in San Francisco strongly. There really is no free lunch. A rise in wages will come out of either less labor being employed, lower profit margins (and fast food doesn’t have those wide enough to take the strain) or price increases to consumers.

And it’s that last which is happening as Mark Perry points out:

• In our weekly survey of ten of Chipotle’s markets, we found the company implemented price increases in half of the surveyed markets this week—San Francisco, Denver, Minneapolis, Chicago, and Orlando. In most markets, the price increases have been limited to beef and average about 4% on barbacoa and steak, toward the lower end of management’s expectation for a 4% to 6% price increase on beef.

• San Francisco, however, saw across-the-board price increases averaging over 10%, including 10% increases on chicken, carnitas (pork), sofritas (tofu), and vegetarian entrees along with a 14% increase on steak and barbacoa. We believe the outsized San Francisco price hike was likely because of increased minimum wages (which rose by 14% from $10.74 per hour to $12.25 on May 1) as well as scheduled minimum wage increases in future years (to $13 next year, $14 in 2017, and $15 in 2018).

http://www.forbes.com/sites/timworstall/2015/07/07/we-are-seeing-the-effects-of-the-minimum-wage-rise-in-san-francisco/

 

 

I'm still pulling for the $60 per hour min wage. Make it happen.

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Hardly shocking. I've been in food service in the past when the minimum wage went up. And I've seen the pattern happen multiple times.

The restaurant's costs go up by 2%.

They raise prices 10%.

The employees get 20% of the extra money. The owner gets 80% of it.

And the employees are ordered, if customers complain about the price hike, to blame the minimum wage.

It makes great cover, for a price hike.

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http://www.seattletimes.com/seattle-news/studies-look-at-what-happened-when-cities-raised-minimum-wage/
"Ten years ago, San Francisco raised its minimum wage from $6.75 to $8.50 an hour, a 26 percent increase. Since then, it has gone up at regular intervals to its current $10.74 an hour, the highest big-city starting wage in the country.

The city has slapped other mandates on businesses, including paid sick leave and a requirement to provide health-care coverage or pay into a pool for uninsured residents.

What have the effects been on employment?

Almost none, according to economists at the University of California, Berkeley, who have studied San Francisco, eight other cities that raised their minimum wages in the past decade, and 21 states with higher base pay than the federal minimum."

No affect on jobs, some pass through (40% increase in wages and 17% increase in prices on average), but not nearly 100% pass through, which means that lower income people really do have more money.

General gains in efficiency, which are generally considered to be good.

(Realistically, minimum wage changes almost certainly have different affects based on other factors, but they certainly aren't the disaster the right likes to pretend they are.  They aren't a panacea either.  To me they generally seem to be an inelegant solution.)

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Hardly shocking. I've been in food service in the past when the minimum wage went up. And I've seen the pattern happen multiple times.

The restaurant's costs go up by 2%.

They raise prices 10%.

The employees get 20% of the extra money. The owner gets 80% of it.

And the employees are ordered, if customers complain about the price hike, to blame the minimum wage.

It makes great cover, for a price hike.

safe to say you're pulling those numbers straight out of your ass? I'm not saying I fact checked the author, but his sound a lot more reasonable than yours. If you're saying they're not we can look into it.

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Hardly shocking. I've been in food service in the past when the minimum wage went up. And I've seen the pattern happen multiple times.

The restaurant's costs go up by 2%.

They raise prices 10%.

The employees get 20% of the extra money. The owner gets 80% of it.

And the employees are ordered, if customers complain about the price hike, to blame the minimum wage.

It makes great cover, for a price hike.

Yeah...but...something something Obama. Something something socialism.

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Somewhere between Ayn Rand disciples who swear that any increase in the minimum wage will incite the the horsemen of the apocalypse and Pelosi /Sanders socialists who think uneducated dropouts flipping burgers deserve to be paid as much as certified accountants, there is undoubtedly a point in a bell curve where the increase in the purchasing power of manual laborers drives enough consumption to compensate for the increase in costs to business.

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Somewhere between Ayn Rand disciples who swear that any increase in the minimum wage will incite the the horsemen of the apocalypse and Pelosi /Sanders socialists who think uneducated dropouts flipping burgers deserve to be paid as much as certified accountants, there is undoubtedly a point in a bell curve where the increase in the purchasing power of manual laborers drives enough consumption to compensate for the increase in costs to business.

Now this is straight up crazy talk. It has to be one or the other. It has to!!

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Somewhere between Ayn Rand disciples who swear that any increase in the minimum wage will incite the the horsemen of the apocalypse and Pelosi /Sanders socialists who think uneducated dropouts flipping burgers deserve to be paid as much as certified accountants, there is undoubtedly a point in a bell curve where the increase in the purchasing power of manual laborers drives enough consumption to compensate for the increase in costs to business.

 

The ghost of Henry Ford is on his way to your house to pat you on the back. 

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The pure, unbiased, and (obvious) fact is that inflation is rising faster than the minimum wage. This, coincidentally, has the effect of making the people at the bottom get poorer, as companies make higher profits. That's great news if your a Republican in 2014, but bad news for people at the bottom who deserve to make a halfway respectable wage. Looking at minimum wage, adjusted for inflation, shows that the peak minimum wage was in 1964. Check this chart out:

 

http://www.pewresearch.org/fact-tank/2015/05/20/5-facts-about-the-minimum-wage/

FT_15.05.20_minWage_1938_2014.png

 

 

 

Adjusted for inflation, the federal minimum wage peaked in 1968 at $8.54 (in 2014 dollars). Since it was last raised in 2009, to the current $7.25 per hour, the federal minimum has lost about 8.1% of its purchasing power to inflation. The Economist recently estimated that, given how rich the U.S. is and the pattern among other advanced economies in the Organization for Economic Cooperation and Development, “one would expect America…to pay a minimum wage around $12 an hour.”

 

Price increases when increasing minimum wage are likely, but at very small levels. It's nowhere near the 1:1 ratio some outlandish people may suggest. A 10% rise in the minimum wage won't return a 10% rise in prices. Also, the unemployment increases that some may expect as a result of higher minimum wage may be overstated.

 

https://www.epionline.org/studies/r100/

 

 


Most economists believe that an increase in the minimum wage causes higher prices and lower employment. This belief rests partly on empirical evidence, but also on the view that labor markets are competitive; if markets are competitive, then increases in the minimum wage should both raise prices and reduce employment. However, a number of studies in the last decade have challenged these beliefs. Some of these studies have argued that the market for low-skilled labor has special characteristics that undermine the traditional economic consensus. They claim that the market for low-skilled labor isn’t competitive and employers have the power to set wages. As a result, an increase in the minimum wage will not necessarily lead to employment loss.

 

To test this claim, Daniel Aaronson and Eric French examined government-collected price data. In a series of studies over the last four years, Aaronson and French show that a 10 percent hike in the minimum wage increased restaurant prices on the whole by 0.7 percent, and prices at limited service establishments by 1.6 percent.

 

Short Version:

 

Redskins3D: Screw the poor, they are ruining the economy with their outrageous financial demands!

 

Reality: Um, no.

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There are 3 Chipotles in San Francisco - total.  One is in the most expensive shopping mall in town, one is in Fisherman's Wharf, and one in the heart of the Financial District.  

 

Talk about a small sample size and an opportunity to jump to huge, predetermined conclusions.   Forbes never ceases doing the heavy lifting.  

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safe to say you're pulling those numbers straight out of your ass?

Only if your definition of "safe" is "well, OK, I'm wrong, but so what? I'm wrong so often, here, that one more won't really cost me anything".

:)

 

Do you really want to try to tell me that I don't remember what happened to my pay, and to prices, and the instructions I was given, when I was running cash registers and being assistant managers in both McDonald's and Pizza Hut restaurants?  (For a while, there, both at once?) 

 

----------

 

Tell you what, though.  Let's just look at the numbers you posted, in your opening post. 

 

1)  Does the article try to say that the restaurants raised their prices by 10%? 

 

2)  How much does the article say the restaurant's costs went up?  (As a percentage of total sales)? 

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The reason republicans want no minimum wage is to compete w China using cheap expendable labor.

No one is saying fast food workers should be paid like doctors. But 40 hours of labor should at least put food on the table and a minimal roof over your head.

McDonald's and Walmart employees are the biggest food stamp users - meaning we are paying for thier corporate profits.

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. But 40 hours of labor should at least put food on the table and a minimal roof over your head.

.

I completely disagree with this based on the simple fact that a 16 year old flipping burgers shouldn't be making the money to support a family, even just barely.  I do agree that its sad the 28 year old doing the same thing can't afford a roof and formula for a child though.  I don't know what the perfect answer is.  Maybe a sliding minimum wage based on age? 

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There are 3 Chipotles in San Francisco - total.  One is in the most expensive shopping mall in town, one is in Fisherman's Wharf, and one in the heart of the Financial District.  

 

Talk about a small sample size and an opportunity to jump to huge, predetermined conclusions.   Forbes never ceases doing the heavy lifting.  

 

More like almost a dozen now.

 

;)

 

https://www.google.com/maps/search/chipotle+sf/@37.7577,-122.4376,13z/data=!3m1!4b1

 

But I do get the point..although the difference between SF downtown and adjacent cities like Daly City and South SF (which have additional Chipotles) is marginal these days when it comes to housing prices and liveable wages. 

 

That said..no one can make a liveable wage in the SF area by making anything close to minimum wage. The Bay Area is for high paid management and skilled positions. 

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I completely disagree with this based on the simple fact that a 16 year old flipping burgers shouldn't be making the money to support a family, even just barely.  

 

 

Why?   Assuming they work full time, of course.  

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I completely disagree with this based on the simple fact that a 16 year old flipping burgers shouldn't be making the money to support a family, even just barely.  I do agree that its sad the 28 year old doing the same thing can't afford a roof and formula for a child though.  I don't know what the perfect answer is.  Maybe a sliding minimum wage based on age?

It's pretty easy to get around

But to the greater points we have so many worthless pieces of **** in this country who do nothing at all, and simply take from all of us. I think we need to reach out with a big high five to those folks who get out of bed in the morning and give life a shot. These folks should be able to afford rent, healthcare, food, and education. Period.

This is why I think welfare and social help programs should be fundamentally changed. We need to quit devoting so many resources towards the people who aren't working. Let's start helping those that are

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Why?   Assuming they work full time, of course.  

Honestly because I don't think a complete lack of skill position is worth that much.  I only said the part about the older person because it's sad to see.  But from the colder portion of my heart no the older person shouldn't be able to support their family on that low skill of a job either. 

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Honestly because I don't think a complete lack of skill position is worth that much.  I only said the part about the older person because it's sad to see.  But from the colder portion of my heart no the older person shouldn't be able to support their family on that low skill of a job either.

Rather than a wage hike I could see businesses that employe unskilled labor paying an additional payroll tax, and that money distributed back to employees who qualify (I.e. Aren't 19 year olds working summer jobs between semesters)

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I really hate it when the peasants demand more. It's insulting. Where is the gratitude for how well they have it? These malcontents have no appreciation for the hard work their betters have to endure so that they have a chance to work.

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Honestly because I don't think a complete lack of skill position is worth that much.  I only said the part about the older person because it's sad to see.  But from the colder portion of my heart no the older person shouldn't be able to support their family on that low skill of a job either. 

 

 

I want everyone to work, not grab welfare.

 

Anyone who works full time in a job that needs to be done should be able to support themselves by their labor.  Otherwise we are discouraging work and encouraging welfare.   It is economically and fiscally irresponsible.  

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Rather than a wage hike I could see businesses that employe unskilled labor paying an additional payroll tax, and that money distributed back to employees who qualify (I.e. Aren't 19 year olds working summer jobs between semesters)

 

earned income tax credit...for the win :)

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