I have never read a more FOS statement in my life.
You don't read many of your own posts then.
Like this one.
They need them at one price. They don't need them at a higher price.
All things being equal, correct. But the assumption that a minimum wage hike only affects a few businesses in a give sector is, well FOS, to use your term.
Think of it in terms of you going to the grocery store. You see some nice filets over there at $50/lb. You'd like to have them but you recognize they're overpriced so you decide instead to buy some sirloin at a fraction of the cost.
Or even the bananas. Or pears.
This is minimum wage we are talking about. You can't run a business on sirloin. Or filets, for that matter. This is pretty confusing...
But because that person's labor becomes overpriced, you choose instead to buy another computer.
'Overpriced' is a relative term. Before that make sense, you have to have alternatives. Plopping a PC or laptop behind a counter doesn't help if it isn't suitable for the job. Sure, it is great to imagine that there are general purpose robots out there that can be able to evaluate a situation and modify its behavior to adequately address it, but we aren't there yet. We can't even throw hundreds of millions of dollars at a Mars lander and have it operate fully autonomously. I doubt if the local greasy spoon can do that.
Except that if a business raises prices, even a tiny bit, it will reduce sales.
Yeah. That is why prices have not risen in decades...
You were talking about FOS? There is a perfect example. Prices do go up. There is a technical term for it. Inflation. Perhaps you have heard about it. Granted, if the rate of increase is large, that can be a problem. But if it is small, at best some people grumble. And most minimum wage employers do not have the overwhelming vast majority of their business as labor costs. Domino's happens to be the one I know the best. Two decades ago, labor was the single largest cost in a given store. That was typically around 25%, including insurance and the meager benefits offered. Now say that labor costs went up 20%. Without changing anything else, that would increase the percentage of labor all the way to 28%. With a 4% increase in pricing would push it back down to 25%. And the profits would even be a bit higher. So not all of the labor cost increase need to be passed to the consumer if the company wanted to cushion that. By skipping a pepperoni or two on pizzas, a procedure change that came down on high a couple of times, even that 4% increase can be weathered without a change in profitability. |
