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Quote:$15 Minimum Wage Hike Causes Shop to Sell $30 Pizzas, Sales Plummet

 

Raise the minimum wage, because unskilled workers deserve to be paid as much as anyone else, says the Left.

There’s just that one tiny problem that liberals never seem to understand – prices go up!

It’s not a ‘maybe’ that prices will jump, it’s definitive.

 

http://www.youngcons.com/15-minimum-wage...s-plummet/

 

 

http://libertyfirstnews.com/minimum-wage...m=facebook

 

 

They could always do the work themselves and not hire anyone... oh wait if they themselves cant live off of that wage why ask others to?

on the backs of the bruised... got money...

Quote:They could always do the work themselves and not hire anyone... oh wait if they themselves cant live off of that wage why ask others to?

on the backs of the bruised... got money...

 

Because that isn't how the economy, or running a business, works?

Quote:Raise taxes on the wealthy or give them more handouts depending on which one you are talking about. None have come out in favor of a total revamp of the tax code as far as I know because as much as some people may like it, it's not likely to happen anytime soon. To many gears and too many people that fund the political process making too much money off the loopholes for that to come close to happening. Changing the tax code is DOA IMO.

This is pretty much right...


As a side note, with globalization there is a push to get all countries on similar accounting principles as well as similar tax codes... the consumption tax isn't the international push, I think it would be a hard sell...


A revamp of tax statutes to benefit small businesses and to incentivize large corporations from leaving the us is really the only realistic option...

Quote:They could always do the work themselves and not hire anyone... oh wait if they themselves cant live off of that wage why ask others to?

on the backs of the bruised... got money...

Because that's not how business works. The 40-something who owns the business should not be expected to make the same amount of money that the 16-year-old who's delivering pizzas in his parents' car should.

Quote:This is pretty much right...


As a side note, with globalization there is a push to get all countries on similar accounting principles as well as similar tax codes... the consumption tax isn't the international push, I think it would be a hard sell...

A revamp of tax statutes to benefit small businesses and to incentivize large corporations from leaving the us is really the only realistic option...

 

So which candidates have come up with reasonable ideas for doing this?  Let's look at just small business since that's what this thread really deals with.

 

Marco Rubio gave an interesting speech outlining some of his ideas.  It's around a 25 minute speech, but does put some information out there.  He specifically talks about the economy with an emphasis not only on small businesses but their employees as well.

 

Carly Fiorina gave an interview to MSNBC that was specifically about the tax system, small business and crony capitalism.  She doesn't go into as much detail as the Marco Rubio speech, but she does identify the problem and offers ideas on how to solve it.

 

I usually try to watch interviews or speeches by all candidates.  Off the top of my head, the only thing that I've seen from the democrat side are "raise taxes" and "more regulation".  If there are any common sense interviews or speeches from those on the left, post a link and I'll be happy to watch them.

I have to laugh at a comment made earlier which claimed businesses don't raise prices because wages go up. After I commented that they actually do, this person was so sure of himself he told me I was wrong.

 

Setting the price on items comes two-fold. The price must cover the actual expenses to produce and sell that item and then it must generate an adequate profit. You will see businesses increase the price of items until it reaches a point where sales drop off. That's where the price point is to generate the optimum profit.

 

That's not easily achieved since there are many market factors affecting sales, but for the most simplistic protocol that's what happens.

 

A behemoth like Walmart or Publix or McDonalds can go to their suppliers and say; "You are cutting your prices by 7% or you're not doing business with us anymore". A small business like ours can't. In 1992 I sat in a meeting at Ford Motor Company in Dearborn, Michigan as a representative of our company who supplied product to them, when their VP of purchasing told everyone in the room exactly that. The meeting lasted about 5 minutes. Follow the daisy chain! We went to our suppliers and told them the same. And on it went.

 

Labor is like any other consumer good. It follows the laws of supply and demand. A minimum wage prevents that law from functioning, however I understand also that in times of high unemployment a large labor pool would be working for less than what they could receive from government handouts. So in essence, a minimum wage [BLEEP] the growth of government handouts which everyone subsidizes.

 

Regards...................the Chiefjag

Quote:So which candidates have come up with reasonable ideas for doing this?  Let's look at just small business since that's what this thread really deals with.

 

Marco Rubio gave an interesting speech outlining some of his ideas.  It's around a 25 minute speech, but does put some information out there.  He specifically talks about the economy with an emphasis not only on small businesses but their employees as well.

 

Carly Fiorina gave an interview to MSNBC that was specifically about the tax system, small business and crony capitalism.  She doesn't go into as much detail as the Marco Rubio speech, but she does identify the problem and offers ideas on how to solve it.

 

I usually try to watch interviews or speeches by all candidates.  Off the top of my head, the only thing that I've seen from the democrat side are "raise taxes" and "more regulation".  If there are any common sense interviews or speeches from those on the left, post a link and I'll be happy to watch them.

 

 

Bernie actually puts his money where his mouth is as far as how to fix the tax code...  http://www.budget.senate.gov/democratic/...pholes.pdf

Chiefjag I fail to see what you are saying. If Wal-Mart McDonalds etc are always going to undercut you then why would raising or lowering minimum wages change this?

Quote:Chiefjag I fail to see what you are saying. If Wal-Mart McDonalds etc are always going to undercut you then why would raising or lowering minimum wages change this?

McDonald's and Walmart can afford to eat a lot more of that wage hike than a local business could. A local business may well have to pass that cost through at a 1:1 ratio to bear it. McDonald's, on the other hand, has incredible volume and much lower supply costs, so it may be able to pass that increased labor cost through at a significantly lower ratio

 

If I'm on lunch and I come across a burger joint, I would probably go ahead and buy the local burger/fries combo for $8 even though I can get a similar one from McDonald's for $6.

 

If the local place raises its combo price to $16, and McDonald's only raises the price of their combo to $10, my wallet might take me to Mickey D's, even if my heart and stomach want the local burger.

Valid point, TJ...


I haven't run any cost analysis on it, so I'm just spit balling-- but I'm not sure a 15 dollar minimum wage would bump the cost of a burger up to 16 bucks for a small business... I could be wrong...

In some cases that could increase cost of labor by at least 50 percent which would correspond to at least a 15% increase in cost

Quote:Bernie actually puts his money where his mouth is as far as how to fix the tax code...  http://www.budget.senate.gov/democratic/...pholes.pdf

 

However, the letter that you linked doesn't address small business.  It's all about getting the "evil rich and corporations" to "pay their fair share".  This thread is more about small business and how they will be affected by a raise in the minimum wage.

 

If you don't have time to watch the Marco Rubio speech (about 25 minutes) I challenge you to at least watch the Carly Fiorina interview (about 6 minutes).

Quote:However, the letter that you linked doesn't address small business. It's all about getting the "evil rich and corporations" to "pay their fair share". This thread is more about small business and how they will be affected by a raise in the minimum wage.


If you don't have time to watch the Marco Rubio speech (about 25 minutes) I challenge you to at least watch the Carly Fiorina interview (about 6 minutes).

Yeah, I tried to find something specific to small business... the sad thing is the media doesn't cover Bernie, it's hard for me to find something more specific...


I'll try to listen to carly... No promises though... lol

Quote:Yeah, I tried to find something specific to small business... the sad thing is the media doesn't cover Bernie, it's hard for me to find something more specific...


I'll try to listen to carly... No promises though... lol

 

You can find stuff on youtube or from a simple google search usually.  A lot of what I've watched actually comes from CSPAN.

 

I've watched a few speeches and interviews given by Bernie Sanders, and I don't recall him ever addressing small business.  Most of what he talks about as it relates to economics is "taxing the rich and corporations" as well as "giving away more free stuff".  More specifically, both him and Hillary talk more about "raising revenue" (more taxes on the rich and corporations).  I don't recall either one of them addressing the real creators of jobs in this country, those being small businesses and entrepreneurs.

 

Consider this.  Raising taxes for someone that earns say $250,000.00 per year on paper (tax return).  That $250,000.00 might be what was brought in by a small business owner that uses a portion of that income to reinvest or expand their business.  The business owner reports the income on their personal tax form, and would be penalized under a Clinton or Sanders plan.

 

I'm not saying that all small business owners do their taxes this way, but there are some that do.  The current Clinton and/or Sanders vision for taxes would actually place a larger burden on the small business owner.

TJ is correct.

 

I have 210 hours of minimum wage pay per week. Minimum wage is $8.05 in Florida. If the minimum wage goes up to $15 per hour that increases my cost; ($15-8.05)= $6.95 / hr. x 210 hr / week x 52 weeks / year........$75, 894 per year.

 

Yes, that's steep for a small business but it doesn't stop there. IF the dishwashers are making $15 per hour the cooks and bartenders have to make more to be paid according to their abilities and contributions to the business. So let's say we just double that number for the sake of simplicity. Therefore my labor cost goes up roughly $150,000 per year. Ahem, that's not up to $150,000, that's $150,000 above what my current labor costs are.

 

If I were to try to absorb that additional cost through bar sales alone this is how it works. I sell approximately 750 alcoholic drinks per month. Over 12 months that calculates to 9000 cocktails per year. If you divide $150,000 by 9000 drinks my drink prices would have to increase $16.66 per drink!

 

I'm selling basic well drinks for $4.95, i.e. gin and tonic, rum and coke, et. al. Nobody would come into my business and pay $21.66 for a drink when Appleby's, Chili's, and Outback are selling them for $6.50.

 

And somebody (obviously nobody who owns a business) had the audacity to claim businesses don't raise prices because wages go up!

 

Regards...................the Chiefjag

Quote:Consider this.  Raising taxes for someone that earns say $250,000.00 per year on paper (tax return).  That $250,000.00 might be what was brought in by a small business owner that uses a portion of that income to reinvest or expand their business.  The business owner reports the income on their personal tax form, and would be penalized under a Clinton or Sanders plan.

 

I'm not saying that all small business owners do their taxes this way, but there are some that do.  The current Clinton and/or Sanders vision for taxes would actually place a larger burden on the small business owner.

 

I've done taxes before in this manner, as a "sole proprietorship".  What you've described is not quite what happens, if you fill out the form correctly.  Business expenses are deductible on Schedule C, and don't count in your net income.

 

But what DOES happen is you pay Social Security tax, as an employee and employer, on the 1099 income you've received before you get your deductions.  It's an incredible disadvantage, which is only one reason the S-Corp and LLC options are almost always a better way to construct your company.

So it's impossible to run a business without paying people Livable wages?


I'm sorry, with people earning more money there is more money being spent in the wider economy. You are only considering one variable.


Australia not only has high minimum wages it has a great independent cafe culture. Come and see how many Starbucks etc you see...

Quote:TJ is correct.

 

I have 210 hours of minimum wage pay per week. Minimum wage is $8.05 in Florida. If the minimum wage goes up to $15 per hour that increases my cost; ($15-8.05)= $6.95 / hr. x 210 hr / week x 52 weeks / year........$75, 894 per year.

 

Yes, that's steep for a small business but it doesn't stop there. IF the dishwashers are making $15 per hour the cooks and bartenders have to make more to be paid according to their abilities and contributions to the business. So let's say we just double that number for the sake of simplicity. Therefore my labor cost goes up roughly $150,000 per year. Ahem, that's not up to $150,000, that's $150,000 above what my current labor costs are.

 

If I were to try to absorb that additional cost through bar sales alone this is how it works. I sell approximately 750 alcoholic drinks per month. Over 12 months that calculates to 9000 cocktails per year. If you divide $150,000 by 9000 drinks my drink prices would have to increase $16.66 per drink!

 

I'm selling basic well drinks for $4.95, i.e. gin and tonic, rum and coke, et. al. Nobody would come into my business and pay $21.66 for a drink when Appleby's, Chili's, and Outback are selling them for $6.50.

 

And somebody (obviously nobody who owns a business) had the audacity to claim businesses don't raise prices because wages go up!

 

Regards...................the Chiefjag

Wouldn't Applebees, Chilis, and Outback have to sell their drinks for $25 just to make a profit under you scenario?  Remember, your competition would have to pay higher wages too.

 

And I don't think anyone is talking about raising the federal minimum wage to $15, just moving it off it's currently historically very low rate, adjusted for inflation, as compared to recent times.  Remember, in the example, the local wage rate was already over $10.

Quote:Wouldn't Applebees, Chilis, and Outback have to sell their drinks for $25 just to make a profit under you scenario?  Remember, your competition would have to pay higher wages too.

Applebee's has some key advantages:

 

1. Volume. The old rule of volume applies--the more you have, the more you can afford to lower prices based upon predictable consistency of numbers.

 

2. Food supply costs. A local restaurant might have to pay $100 for a pallet of hamburger buns from their supplier. McDonald's--again, because of volume--could go to that same supplier and say that they want ten pallets of hamburger buns, and they'll pay $600 for them. The supplier is delivering a shipment in bulk, which lowers transportation costs, and they're offloading a large amount of product at once, making it easier to provide a lower price.

 

3. Overhead. I was the manager of a pest control branch in California once. We had small, single-unit restaurants on service that corporate salespeople had signed up at $125 per month. $125 per month for a kitchen the size of a typical home's living room! The service usually took about 20-30 minutes, depending on what issues came up (if any), and then our tech would go on his way. Those small single-unit operations were paying over $250/hr. for service, and if we had to go back out there, depending on the problem, they might be paying a ton more. Say we had to fog the place for roaches and vacuum up any that we found (and there were usually hundreds of thousands). The shop owner had to pay his staff overtime to clean and prep the kitchen, which is no small feat, then had to pay a fee of up to $400 for the service, and an additional $150 if they wanted the cleanout done between 8 PM and 7 AM--they almost always wanted it done around midnight, for obvious reasons.

 

Now, contrast that with a major fast food chain that had us under contract. Their kitchens were much larger than the average hole in the wall, and we had contractual minimum amounts of time that we had to be there, even if the place was spotless, our baits were fine and there were no reports of anything so much as an ant walking in. Know what that chain paid? $35 a month per location, with a contracted minimum of 30 minutes per stop. What happened if they had a roach problem? We went and took care of it with the same level of service that we gave to that small business owner, only this time we didn't get paid a penny for it, even after the location's manager demanded that we be out there at 2 AM on the nose and not leave the building until he returned to lock it back up at 6 AM--even though the service takes two hours, tops. The fast food chain paid $35 for the same amount of work that the local restaurateur paid $675 for. Know why? Because the fast food chain had 7,000+ locations on service in the United States, all on a five-year contract. The sole proprietor? He had one location on service, and his contract had expired leaving him month to month and able to cancel anytime.

 

See why your logic doesn't work? Applebee's will eat the wage increase, yeah, but their peripheral costs are so much lower that they don't have to pass the brunt of that price hike along to customers. Chiefjag isn't getting those same big-brand prices on everything but labor, so he has no choice.