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Restaurant die-off is first course of California’s $15 minimum wage
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777 / The White House
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Posted 6/17/17 , edited 6/17/17
This is quite sad. Peoples lively hoods and businesses are going under from the wage increase so instead of making min wage they make $0 and are unemployed.



In a pair of affluent coastal California counties, the canary in the mineshaft has gotten splayed, spatchcocked and plated over a bed of unintended consequences, garnished with sprigs of locally sourced economic distortion and non-GMO, “What the heck were they thinking?”

The result of one early experiment in a citywide $15 minimum wage is an ominous sign for the state’s poorer inland counties as the statewide wage floor creeps toward the mark.

Consider San Francisco, an early adopter of the $15 wage. It’s now experiencing a restaurant die-off, minting jobless hash-slingers, cashiers, busboys, scullery engineers and line cooks as they get pink-slipped in increasing numbers. And the wage there hasn’t yet hit $15.

As the East Bay Times reported in January, at least 60 restaurants around the Bay Area had closed since September alone.

A recent study by Michael Luca at Harvard Business School and Dara Lee Luca at Mathematica Policy Research found that every $1 hike in the minimum wage brings a 14 percent increase in the likelihood of a 3.5-star restaurant on Yelp! closing.

Another telltale is San Diego, where voters approved increasing the city’s minimum wage to $11.50 per hour from $10.50, this after the minimum wage was increased from $8 an hour in 2015 – meaning hourly costs have risen 43 percent in two years.

The cost increases have pushed San Diego restaurants to the brink, Stephen Zolezzi, president of the Food and Beverage Association of San Diego County, told the San Diego Business Journal. Watch for the next mass die-off there.

But what of California’s less affluent inland counties? How will they fare?

Christopher Thornberg, director of UC Riverside’s Center for Economic Forecasting and Development, told the San Bernardino Sun that politicians should have adopted a regional approach. He said it would been better to adapt minimum-wage levels to varying economies – something like the Oregon model, the nation’s first multi-tiered minimum-wage strategy.

Oregon’s minimum-wage law is phased, with increases over six years. By 2022, the minimum will be $14.75 an hour in Portland, $13.50 in midsize counties and $12.50 in rural areas.

“That makes sense,” Thornberg told the Sun. “That’s logical.”

California is even more varied economically than Oregon. Thornberg believes hiking wages in blanket fashion will spark layoffs and edge low-skilled workers out of the job market.

In the Central Valley, wages for all workers, on average, are lower than those of the coastal counties.

U.S. Census Bureau data show about 21 percent of workers in Bakersfield earned from $8 to $12 per hour in 2015, the most recent year for which data was available. In Fresno, 32 percent of workers were in that wage group, and in Modesto about 25 percent. Contrast that with Santa Clara County, home of Silicon Valley, which registered only 12.5 percent at that level.

The state’s diverse unemployment rates tell a similar tale. Unemployment in Bakersfield was 9.5 percent; 8.8 percent in Fresno, and Stanislaus County notched 7.9 percent. Compare that to Silicon Valley’s unemployment rate – 3.2 percent

“Part of our whole concern with (the $15 wage) is it’s a one-size-fits-all,” Rob Lapsley, president of the California Business Roundtable, told The Sacramento Bee last year. “Areas with double-digit unemployment, this is scaring them to death.”

Jamil Dada, chairman of the Riverside County Workforce Development Board, told the Sun that he believed the state’s Inland Empire will be hit harder than other parts of the state.

“It might be tolerable in the coastal regions,” he said. “Their business environment is completely different.”

As politicians insert their sausage fingers into subtle market mechanisms, scarcity and unintended consequences will ensue.

Joining San Francisco’s restaurant die-off was rising star AQ, which in 2012 was named a James Beard Award finalist for the best new restaurant in America. The restaurant’s profit margins went from a reported 8.5 percent in 2012 to 1.5 percent by 2015. Most restaurants are thought to require margins of 3 and 5 percent.

If what’s happening with one early adopter of the $15 wage progression is any indication, locally famous inland hash houses and burger joints from Calexico to the Cow Counties will disappear as mandated wages climb to $15 statewide. And that will only be the start of things.

Read more here: http://www.fresnobee.com/opinion/opn-columns-blogs/article155979969.html#storylink=cpy
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Posted 6/17/17 , edited 6/17/17
Just think about how it will affect things that are both "essential" and inexplicably low-paid.
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37 / M
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Posted 6/17/17 , edited 6/17/17
Even at $2.00 an hour for wait staff, restuarants have ridiculously high failure rates.

And EVEN before the higher minimum wage, there was a huge foodie boom that is seriously tapering off.

AND the economy is shit, meaning less people eat out as a whole, not just in california.
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Posted 6/17/17 , edited 6/17/17
Minimum wage is one of the controversial topics :/ so let's add salt to injury then

the needy/entitled people out there are demanding $30/hr minimum wage.. screw $15/hr ! we want $30/hr !!! so you either putting out more robots/computers for low level jobs as we will demand $30/hr !

flipping burgers is hard work!!! $30/hr is a fair price for the skill and labor provided -- We also want full benefits --medical, dental, vision, life, PTO, 12 paid vacation dates, 401K, discounts, reimbursements, etc..

just pass the cost to the customers, I'm sure they do not mind paying 2-4x for their meals A lot of love is putting into those burgers I'm sure you can taste it in the burger.. the happiness and love

Let's start the $30/hr movement right now!!

I think this is why most companies are having their products made overseas --
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777 / The White House
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Posted 6/17/17 , edited 6/17/17

dulun18 wrote:

Minimum wage is one of the controversial topics :/ so let's add salt to injury then

the needy/entitled people out there are demanding $30/hr minimum wage.. screw $15/hr ! we want $30/hr !!! so you either putting out more robots/computers for low level jobs as we will demand $30/hr !

flipping burgers is hard work!!! $30/hr is a fair price for the skill and labor provided -- We also want full benefits --medical, dental, vision, life, PTO, 12 paid vacation dates, 401K, discounts, reimbursements, etc..

just pass the cost to the customers, I'm sure they do not mind paying 2-4x for their meals A lot of love is putting into those burgers I'm sure you can taste it in the burger.. the happiness and love

Let's start the $30/hr movement right now!!

I think this is why most companies are having their products made overseas --


I've heard of companies pre-cooking everything at the manufacturing plant and just microwaving it all to prevent large labor costs.
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Posted 6/17/17 , edited 6/17/17
California has basically become the first large-scale economic laboratory, I find it more disturbing that politicians cave into emotion while ignoring studies and consequences. Yet again they follow the supposed idea that if it works in X country or city it should work here as well. A state is always far different from a major city, which most of these people point to when claiming it will work. I'm totally for the tiered system like Oregon. More importantly I find it sickening that politicians would approve of this just for the sake of making the state a "leader" for change or being "innovative". They should really make a statewide poll asking families if they really are better off now that the wages have gone up.
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Posted 6/17/17 , edited 6/17/17
Is there any solid evidence connecting this already common occurrence to the higher minimum wage? The AQ place seems to be one example that could connect the two but other than that this just sort of looks like scare tactics by someone with a rampant fear of government.
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Posted 6/17/17 , edited 6/17/17
hmm the only logical solution i can think off to fix this is to implement full communist control of the state.
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Posted 6/17/17 , edited 6/17/17

dulun18 wrote:

Minimum wage is one of the controversial topics :/ so let's add salt to injury then

the needy/entitled people out there are demanding $30/hr minimum wage.. screw $15/hr ! we want $30/hr !!! so you either putting out more robots/computers for low level jobs as we will demand $30/hr !

flipping burgers is hard work!!! $30/hr is a fair price for the skill and labor provided -- We also want full benefits --medical, dental, vision, life, PTO, 12 paid vacation dates, 401K, discounts, reimbursements, etc..

just pass the cost to the customers, I'm sure they do not mind paying 2-4x for their meals A lot of love is putting into those burgers I'm sure you can taste it in the burger.. the happiness and love

Let's start the $30/hr movement right now!!

I think this is why most companies are having their products made overseas --


Hopefully this $15 min wage produces enough evidence to stop us going higher because we would be pretty much screwed past the $20 point for min wage.

Most companies make their product overseas because there are people willing to work many hours in unsafe conditions for just a few dollars,or cents .We would have to drop the wage to one dollar,or less for entry level,and manufacturing jobs if we wanted to compete with China,and many of the third world countries that make our products now.
Humms 
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Posted 6/17/17 , edited 6/17/17
I'm so sick of hearing this.

People have billions of dollars, why the fuck does it matter, people should be offered a livable wage. We all can't be rich, but people can buy 500 million dollar yauts. How many people could you help with that money.

It's all a joke, but nobody look at the billionaire, no fuck that, creating money from nothing. In the end it doesn't matter if we increase minimum wage or not, we are all taking it up the ass one way or another, might as well buy your lube now and brace yourself.
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Posted 6/17/17 , edited 6/17/17

Humms wrote:

I'm so sick of hearing this.

People have billions of dollars, why the fuck does it matter, people should be offered a livable wage. We all can't be rich, but people can buy 500 million dollar yauts. How many people could you help with that money.

It's all a joke, but nobody look at the billionaire, no fuck that, creating money from nothing. In the end it doesn't matter if we increase minimum wage or not, we are all taking it up the ass one way or another, might as well buy your lube now and brace yourself.


So redistribute money from bill gates to min wage workers?
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Posted 6/17/17 , edited 6/17/17
$15 minimum wage is hyperbole in policy form. It's ridiculous. While I am a proponent of increasing the minimum wage, it should be done carefully, taking into account the differences in cost of living and what the local economies can handle and it certainly shouldn't be increased to $15.

This is not a denouncement of minimum wage, it is a denouncement of hyperbolic policy. Just because you like minimum wage, doesn't mean you can just turn that shit up to 11 and be in paradise...
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Posted 6/17/17 , edited 6/17/17

GotenLoooovesCorn wrote:

California has basically become the first large-scale economic laboratory, I find it more disturbing that politicians cave into emotion while ignoring studies and consequences. Yet again they follow the supposed idea that if it works in X country or city it should work here as well. A state is always far different from a major city, which most of these people point to when claiming it will work. I'm totally for the tiered system like Oregon. More importantly I find it sickening that politicians would approve of this just for the sake of making the state a "leader" for change or being "innovative". They should really make a statewide poll asking families if they really are better off now that the wages have gone up.


Well, the point of having so many States doing their own thing would be that one could experiment while others could watch. So in this sense the government is working right for a change. Colorado legalized pot and its pretty muhc okay, so other states are taking their wining formula and running with it. Some States have terrible charter schools, some states have great charter schools.

As to the wage itself, in my job a new postal employee gets under $20 an hour. I think around 17? Would you flip burgers or walk outside in the rain? the difference is $2 an hour. We haven't even begun to see how bad mandating such a huge jump in wages will be. The economy is very complex.

To put it in perspective, the economy is so complex the only way to understand it would be to apply all of the brainpower of all the people living to the problem. Its the Free Market. Or we could let politicians do it, who are only trying to look like nice people so they'll get votes.
scye27 
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Posted 6/17/17 , edited 6/17/17
I am completely in favor of people that work 40 hours per week receiving a livable wage. With that said, I do not think $15 in a rural town in the Midwest is the same as $15 in Los Angeles. I think the wage needs to be based on what is considered livable in that location. It may be $11, or it may be $18. They should be able to support themselves and not be reliant on social programs (not counting SS, Medicare, or unemployment).

The other initiative that I would like to see is a program that will help companies, especially small businesses, learn how to balance their budget. They should accommodate the wage while being able to produce a profit. This should be done without dramatic cuts or steep product/service price increases.
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Posted 6/17/17 , edited 6/17/17

H_Guderian wrote:

Well, the point of having so many States doing their own thing would be that one could experiment while others could watch. So in this sense the government is working right for a change. Colorado legalized pot and its pretty muhc okay, so other states are taking their wining formula and running with it. Some States have terrible charter schools, some states have great charter schools.

As to the wage itself, in my job a new postal employee gets under $20 an hour. I think around 17? Would you flip burgers or walk outside in the rain? the difference is $2 an hour. We haven't even begun to see how bad mandating such a huge jump in wages will be. The economy is very complex.

To put it in perspective, the economy is so complex the only way to understand it would be to apply all of the brainpower of all the people living to the problem. Its the Free Market. Or we could let politicians do it, who are only trying to look like nice people so they'll get votes.


I'd be fine allowing city governments to opt out of this, but that would defeat the purpose of making a wage increase at all. I know all about the postal issue, I don't know of a single neighborhood in town that isn't dealing with a rotation of inexperienced postal workers on a weekly basis. I do feel some cities deserve higher minimum wages, but the entire state is something only a few states the size of Los Angeles have ever tried out.
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