Higher Wages = Less JOBS

GURPS

INGSOC
PREMO Member
San Diego's Experiment With Higher Minimum Wage: 4,000 Fewer Restaurant Jobs
San Diego's restaurant recession is another data point suggesting that making it more expensive to employ people causes fewer people to be employed. Shocker.


California is hiking the statewide minimum wage to $15 per hour by 2023, and San Diego is getting a head start on the higher wage mandate—and, maybe, the consequences of it.

Rather than inch upward from $10 per hour to $10.25 per hour in January 2016, as the rest of the state was doing, San Diego jumped its minimum wage to $11.50 per hour. In the year and three months since then, the number of food service jobs in San Diego has dropped sharply, with perhaps as many as 4,000 jobs lost, or never created in the first place.

"If job growth in the restaurant sector had just kept pace with the state's performance … the industry could have created 5,200 jobs instead of the 1,300 that took place," Lynn Reaser, chief economist of the Fermanian Business & Economic Institute at Point Loma Nazarene University, told Dan McSwain, a columnist with the The San Diego Union-Tribune.

Economists say the restaurant industry is a good barometer for the consequences of minimum wage increases because those businesses rely heavily on low wage workers, operate on small margins, and have high rates of turnover (that is, restaurants tend to pop-up quickly in some areas and go bust just as quickly in others).


hmm coulda, woulda, shoulda .....

I have no doubt forced higher wagers would result in less overall jobs ... and more automation



San Diego's new minimum wage already may be killing jobs


Evidence has emerged of an economic dark side to San Diego’s decision last year to vault over the state minimum wage — it may have already destroyed thousands of jobs for low-wage workers even as higher pay helps tens of thousands of others.

Consider the restaurant industry, for example, which economists study because it relies on low-wage workers, yet generally faces no foreign or out-of-state competition.

Amid an abrupt slowdown in growth, nearly 4,000 food-service jobs may have been cut or not created throughout San Diego County from the beginning of 2016 through February of this year, according to an analysis of federal payroll data by Lynn Reaser, chief economist of the Fermanian Business & Economic Institute at Point Loma Nazarene University.

“This was at a time when both overall economies performed similarly well,” Reaser said. “If job growth in the restaurant sector had just kept pace with the state's performance … the industry could have created 5,200 jobs instead of the 1,300 that took place.” Last month growth turned negative, as the sector actually lost jobs.

I’ll hasten to add that Reaser draws no sweeping conclusions from a relatively short period of economic data. For one thing, restaurants in the region still employed 126,000 people in February, and many of them are enjoying higher wages because San Diego increased its minimum from the statewide $10 an hour in June to $11.50 inside the city as of January.
 

Larry Gude

Strung Out
If wages were cut in half we could employ twice as many people! Yay!!!

So, the study suggests 4,000 less jobs out of 126,000 people employed in food service. Due to a $1.50 an hour increase.

That's 3% los of workers and an increase of about 14% in wages.

Roughly speaking, 126,000 people make an extra $84,000 an hour, in total, while 4,000 make zero. Ostensibly, $1,449,000 an hour being earned now vs. at $10, and 130,000 workers, $1,300,000.

So, net total dollars is up. There is now $149,000 an hour being earned net total more and if we divide that by 4,000 idle hours, that's the equivalent of $37.35 per person per hour that is available that was NOT there before WITH everyone working.

Anyone getting the implications of this? I'll spell it out; the raise in the minimum wage causes a net gross dollar increase going into the economy while costing 4,000 jobs. And if you say the raise costs those 4,000 jobs, you have to say those 4,000 made $37.35 an hour. Which they didn't.
 

This_person

Well-Known Member
If wages were cut in half we could employ twice as many people! Yay!!!

So, the study suggests 4,000 less jobs out of 126,000 people employed in food service. Due to a $1.50 an hour increase.

That's 3% los of workers and an increase of about 14% in wages.

Roughly speaking, 126,000 people make an extra $84,000 an hour, in total, while 4,000 make zero. Ostensibly, $1,449,000 an hour being earned now vs. at $10, and 130,000 workers, $1,300,000.

So, net total dollars is up. There is now $149,000 an hour being earned net total more and if we divide that by 4,000 idle hours, that's the equivalent of $37.35 per person per hour that is available that was NOT there before WITH everyone working.

Anyone getting the implications of this? I'll spell it out; the raise in the minimum wage causes a net gross dollar increase going into the economy while costing 4,000 jobs. And if you say the raise costs those 4,000 jobs, you have to say those 4,000 made $37.35 an hour. Which they didn't.

And, what did that do to the costs of the products?

Meaning, now we have 126,000 people who are paid more, but their buying power is less, plus 4,000 whose buying power is zero. So, not only do the 126,000 earn a net less in terms of buying power, but their taxes are higher due to the increase in income as well as due to the net load on "government" (read: taxpayer). So, all in all, everyone is worse off! Woo Hoo!!
 

Larry Gude

Strung Out
And, what did that do to the costs of the products?

Meaning, now we have 126,000 people who are paid more, but their buying power is less, That's wrong. I showed how it is MORE. A good bit more and FAR more than the 4,000 would have earned. The NET is well up. plus 4,000 whose buying power is zero. So, not only do the 126,000 earn a net less in terms of buying power, but their taxes are higher due to the increase in income as well as due to the net load on "government" (read: taxpayer). So, all in all, everyone is worse off! Woo Hoo!!

I do not know how you come to that conclusion when I laid out you are incorrect. :shrug:
 

This_person

Well-Known Member
I do not know how you come to that conclusion when I laid out you are incorrect. :shrug:

You laid out that they have more dollars. You didn't follow through with what that net increase in the cost to the employer (for less employees) does to the employer's bottom line, and how employers don't absorb such costs, and how the cost of their product then goes up. When you take that into account, the additional 14% increase in wages costs the employer about an increase in 25% (at least), which means a proportionate increase to the consumer. So, their increase in pay, when considered over a large group of employers doing the same thing, ends up with $1 that used to be $1 worth of stuff, and now buys no more than $0.80 worth of stuff (if that much).

But, they do get taxed higher, and now there are thousands of workers not working, increasing the load on taxpayers which pretty much always ends up in additional taxes being taken.

It just doesn't work when you force pay that is not market-driven.
 

Larry Gude

Strung Out
You laid out that they have more dollars. You didn't follow through with what that net increase in the cost to the employer (for less employees) does to the employer's bottom line, and how employers don't absorb such costs, and how the cost of their product then goes up. When you take that into account, the additional 14% increase in wages costs the employer about an increase in 25% (at least), which means a proportionate increase to the consumer. So, their increase in pay, when considered over a large group of employers doing the same thing, ends up with $1 that used to be $1 worth of stuff, and now buys no more than $0.80 worth of stuff (if that much).

But, they do get taxed higher, and now there are thousands of workers not working, increasing the load on taxpayers which pretty much always ends up in additional taxes being taken.

It just doesn't work when you force pay that is not market-driven.


You're making a bunch of suppositions as though business owners all did the exact same thing in response. Labor costs are not 100% of product costs. In food service it's something like 1/3, tops. Most is lower and the majority of wages are tips.
I would constantly take objection to objections of working people making more just as I will object to this quaint notion of 'market' driven.

We are a ####ed up culture. We celebrate some mean ass MF'er who makes billions as being a success no matter how much monopoly power and gummint help or lying or cheating or stealing he did. He's a winner! And #### over even the suggestion of some schulmp making $1.5 an hour more.
 

Gilligan

#*! boat!
PREMO Member
This upward pressure on wages and salaries is relentless. Not sure how much longer I can hold out...
 

tommyjo

New Member
And, what did that do to the costs of the products?

Meaning, now we have 126,000 people who are paid more, but their buying power is less, plus 4,000 whose buying power is zero. So, not only do the 126,000 earn a net less in terms of buying power, but their taxes are higher due to the increase in income as well as due to the net load on "government" (read: taxpayer). So, all in all, everyone is worse off! Woo Hoo!!


Ok...so this is stupid post of the day (GURPS' dumbass poll numbers would have been first...but he simply won't/can't understand that Rasmussen is flawed...then again GURPS doesn't care...he is only about posting propaganda...like this piece)...

Anyway...so here is why your post is stupid:

1. You point that the minimum income earner's pay is lost due to higher product costs...why is that stupid? Because there is not one bit of data in the article or in any article that shows the entire cost of living goes up because the min wage does.

2. The taxes of those min wage workers have not gone up. They are paying the same percentage...they have MORE dollars in their pockets for the same amount of work. They are NOT worse off...

That was a really dumb post...
 

Gilligan

#*! boat!
PREMO Member
Ok...so this is stupid post of the day

By george, sweet cheeks, for once you've got it right. But don't sell yourself so short..you win "stupidest post of the day" so often that they might have to retire the trophy.
 

TPD

the poor dad
Anyway...so here is why your post is stupid:

1. You point that the minimum income earner's pay is lost due to higher product costs...why is that stupid? Because there is not one bit of data in the article or in any article that shows the entire cost of living goes up because the min wage does.

That was a really dumb post...

As a retail store owner, I can assure you I am raising prices on some items in my store ONLY because of the increase in the minimum wage here in Maryland. If the minimum wage was NOT increasing, I would NOT even think about an increase in prices at this point. For those of you who think prices will not go up because of minimum wage increases, YOU ARE THE DUMB ONES! And we have not yet taken into account the new paid leave act that looks like will be enacted here in Maryland. Liberals - gee wiz!
 

Gilligan

#*! boat!
PREMO Member
As a retail store owner, I can assure you I am raising prices on some items in my store ONLY because of the increase in the minimum wage here in Maryland. If the minimum wage was NOT increasing, I would NOT even think about an increase in prices at this point. For those of you who think prices will not go up because of minimum wage increases, YOU ARE THE DUMB ONES! And we have not yet taken into account the new paid leave act that looks like will be enacted here in Maryland. Liberals - gee wiz!

TJ lives on her disability check and never ran a business in her entire life. So not worth fussing about anything she posts too much.
 

GURPS

INGSOC
PREMO Member
Ok...so this is stupid post of the day (GURPS' dumbass poll numbers would have been first...but he simply won't/can't understand that Rasmussen is flawed...

That was a really dumb post...



Which is why I linked AND Commented Real Politics POLL [an amalgamation of 5 polls] still had Trump @ 42%

you just cannot handle the fact Trumps popularity is rising AGAIN
 

frequentflier

happy to be living
As a retail store owner, I can assure you I am raising prices on some items in my store ONLY because of the increase in the minimum wage here in Maryland. If the minimum wage was NOT increasing, I would NOT even think about an increase in prices at this point. For those of you who think prices will not go up because of minimum wage increases, YOU ARE THE DUMB ONES! And we have not yet taken into account the new paid leave act that looks like will be enacted here in Maryland. Liberals - gee wiz!

I agree but have also had to increase some prices due to the increase of prices from the manufacturers...some of which could come from not only from increased cost of materials but their wage increases as well. It trickles down and the consumers will pay.
 

Bird Dog

Bird Dog
PREMO Member
As a retail store owner, I can assure you I am raising prices on some items in my store ONLY because of the increase in the minimum wage here in Maryland. If the minimum wage was NOT increasing, I would NOT even think about an increase in prices at this point. For those of you who think prices will not go up because of minimum wage increases, YOU ARE THE DUMB ONES! And we have not yet taken into account the new paid leave act that looks like will be enacted here in Maryland. Liberals - gee wiz!
The problem is not the increase in minimum wage. I know your business and I don't think you pay minimum wage. No legitimate business person wants to pay minimum wage, they are the lowest common denominator on the social wage scale. They can't read, write or do anything close to math...no less understand your business without glyphs on your register. Your employees are intelligent and customer oriented. So, when the minimum wage goes up..it's not proportional for you. Your wage expense goes up. So your choices are.....less talented help, less hours for those you have, lower staffing, etc. none of which help your customer experience.

Minimum wage should be determined by the market, not the government...jmho
 
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