>> But the assumption that a minimum wage hike only affects a few businesses in a give sector is, well FOS
>> 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.
Well, the examples are everywhere if you'd care to pay attention. Almost every new McDs has an automatic drink dispenser which fills cups at the drive through window. A job that has been done by a person since forever.
When I was a kid working for my dad, every single day two or three of us would peel potatoes for a couple hours. Labor was cheap. In the mid-70s, we bought an automatic potato peeler. Over the course of the next couple years McDs will eliminate order takers in many of their establishments in favor of touch screens.
As Bill Gates pointed out last week, the increase in the MW will speed that process up. And frankly, these poor workers need all the time they can get to get retrained. They need decades, and increasing the MW deprives them of that.
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.
No. If it is small, basic microeconomics tells us with some precision what will happen. A small number of people won't buy the product. Some will grumble. Others will decide they don't need it.
As it turns out the price elasticity of demand for items at McDs is such that a price increase translates to a roughly equivalent loss in sales, at least within the relevant range. There has been a ton of research on this subject.
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.
No. A 4% increase in prices would translate in roughly a 4% reduction in sales. I say roughly because various fast food categories are affected in a slightly different way. But we know what these numbers are in the fast food category. It isn't a guess.
And this is the point you continue to not understand: When you increase prices, you will ALWAYS decrease unit sales. Price elasticity determines to what extent, but food service, and particularly so-called "take out", is hit hard by price increases. There is a lot of research on this subject.
As a result, the motivation is great to find alternatives to labor. The high hurdle right now in fast food is getting customers trained to use touch-screens. Applebees is making a big move on this by putting terminals at every table. McDs has already replaced thousands of jobs in Europe and will, over the next few years massively cut payrolls.
It is a moot point. While you don't understand it, most people do. Minimum wage kills jobs for those who most need them, and no one in in the country wants that for our people. The minimum wage is not going to increase, except those that were increased by idiotic executive order. |
