9 ms·

Small decrease in employment in exchange for ~25% higher wages for those employed? Did I get that right? Obviously every single row in the dataset is a unique h

Small decrease in employment in exchange for ~25% higher wages for those employed? Did I get that right? Obviously every single row in the dataset is a unique human, but overall sounds like a big success?

JKCalhoun 1y ago
Sounds like a net increase then in the money put into the California economy. Perhaps that has helped other sectors as well — like retail seeing more money spent in their stores as a result.
po1nt 1y ago
It's 100% lower wages for those who lost jobs.
- frikskit 1y ago
  Why not set very low maximum wage ceilings and have 100% employment? /s
  - roenxi 1y ago
    Because that happens naturally without a law. People lower the wage they ask for until they get a job.
    - actionfromafar 1y ago
      I think they were sarcastic.
      - frikskit 1y ago
        Thanks, yes, I was trying to show how the alternative is absurd
  - themafia 1y ago
    Are you going to reduce lottery payouts and maximum stock investments as well? Will I still be allowed to hunt for food? Society is something better encouraged than gamified.
    - Ray20 1y ago
      > Are you going to reduce lottery payouts They will decrease on their own if people think about where to get food, and not about extra money for the lottery. > and maximum stock investments as well? No, there are no restrictions. Any amount of investment. But there are only government's stocks and the terms of return on investment are determined by the government > Will I still be allowed to hunt for food? Only deep in the sparsely populated provinces. To avoid armed rebellions. > Society is something better encouraged than gamified. You'll be surprised at what methods encourage people best. Read the biography of Korolev, who sent the first satellite and the first man into space. A case was fabricated against him, he was sentenced to 10 years in a gulag, but after a year he was transferred to a prison for engineers, on the condition that he will be a very effective engineer. And he was. The results of such encouragement were amazing and almost unachievable by any other methods.
      - themafia 1y ago
        > And he was. The results of such encouragement were amazing and almost unachievable by any other methods. Oh boy. You've missed the glaringly obvious. They only did this because they couldn't pay him. In other countries that paid their engineers they produced more and better products. History is clear and obvious on this fact. > You'll be surprised at what methods encourage people best. There's very little surprise when you study the actual science of human psychology and performance and not the journals of demented cold war generals. Anyways, thanks for being honest about wanting to create a Company Scrip Town, I and many others, of course, will never cooperate with you. You're right to fear rebellion.
        Ray20 1y ago
        > They only did this because they couldn't pay him. But they could. But no amount of money will encourage an engineer as much as the need to escape the gulag. Especially if you add some variety to their experience by staying in the gulag. > In other countries that paid their engineers they produced more and better products. It is precisely for this reason that the overwhelming majority of engineers in the USSR were not threatened with the gulag for inefficiency. And many believe that this is a good thing, and that "efficient" engineers threaten to destroy the labor market entirely. > History is clear and obvious on this fact. Yes. The Soviet space program created by Korolev is the pinnacle of human engineering thought, only God is above it. History is definitely clear and obvious on this fact > I and many others, of course, will never cooperate with you. That's the best part. You will vote yourself out of economic freedom, and then there will be no reason to ask about your opinion. Just look at the trends and public opinion on the necessity for economic freedom. You are already in checkmate if you look a few moves ahead.
  - deleted 1y ago
    [deleted]
  - em500 1y ago
    Why not set very high minimum wage floors and make 100% of worker rich? /s Turns out economics is actually more difficult than "higher minimum wage is good/bad".
  - barchar 1y ago
    This has been tried, and actually does work reasonably well. Well, not maximum wages as policy but policies where high productivity workers take a lower wage than they could individually bargain for in exchange for boosting wages of low productivity workers. It provides a windfall to the most productive industries and a squeeze to the least productive ones.
- deleted 1y ago
  [deleted]
- simianwords 1y ago
  Also consider non linear utility of money.
  - skrebbel 1y ago
    For hamburger flippers? A 25% increase in wage might well be superlinear for some of them (eg better circumstances and opportunities for kids)
    - simianwords 1y ago
      Yeah but the other people lost their jobs and 100% of wages. So you can compare net utility gain or loss.
      - skrebbel 1y ago
        Yes but that’s not the argument you made.
        simianwords 1y ago
        I didn’t make any argument. I was expanding on parents point.
        skrebbel 1y ago
        Yes and I was responding solely to your expansion, which I believe is inapplicable here.
- BriggyDwiggs42 1y ago
  Correct?
- ath3nd 1y ago
  Nah, they didn't lose them, they got employed elsewhere for what they are worth, so if we do random calculations, it was probably something like 25% increase for many of them. The unemployment statistics were not influenced by raising the minimum wage here, so you can assume that the people who lost their low paid jobs simply moved elsewhere and got better paid jobs. It's mostly the employers' loss, which is how it should be. If you can't afford to start a business, don't start a business.
- StevenWaterman 1y ago
  If the total salary has gone up, for less work done, it is a positive change. You can solve the inequal distribution via taxes and benefits. Start: 100 people paid $100 After minimum wage change: 90 people paid $125, 10 people paid $0 After tax increase: 90 people paid $113 + $12 taxes, 10 people paid $108 from taxes Now everyone is paid at least as much as they were before, and fewer people are forced to perform labour In practice it was only 3% unemployment not 10%, which means the tax increase is less and there is more of an incentive to continue working. You can also pay the displaced workers less than their original wage, to reach an equilibrium where everyone is happy with either work+more money, or leisure+less money. Or have it be age-based with an earlier retirement. Or have people work part-time. We need to stop seeing having a job as being inherently good. Being able to live is good. Humanity should strive for 100% unemployment.
  - OrvalWintermute 1y ago
    Total salary going up for less work can truly hurt people that are low, aptitude, low skill, and do not produce sufficient value to hit minimum wage.
    - Ray20 1y ago
      Well, on the other hand, it can be seen as something like a eugenic program to cleanse society of those unworthy of the state. After all, there is nothing stopping them from going to work somewhere else where there is no such minimum wage.
  - kgwgk 1y ago
    "Less work done" doesn't look like a positive change, you can't tax your way out of a smaller pie. Specially if you strive for humanity to produce no pie to start with.
    - StevenWaterman 1y ago
      I disagree that increased employment and increased labour always makes the pie bigger. If minimum wage was low enough, we would decommission our cement mixers and use a human with a shovel instead. But that's not an improvement. Automation is happening, jobs can be replaced right now. The problem is that humans are too cheap to bother automating, and that the profits of the automation are not being distributed to the displaced workers.
- bravesoul2 1y ago
  They are working the same hours elsewhere for free?
  - po1nt 1y ago
    They might be living in a tent on a sidewalk for free if you ban them from working.
    - bravesoul2 1y ago
      They might get another job. People dont think holistically about the economy. They think there are jobs. When they go there are that fewer jobs. Immigrants come in a steal jobs. Etc. But in an economy, each richer consumer creates more jobs. The McD employees now buy better food, creating work for that supply chain. Or they can pay for education. Or they buy a takeaway coffee more often. The immigrants who come and do jobs work hard for lower pay them spend that money into the economy.
      - parineum 1y ago
        Why not set the minimum wage at $50? Why not set $20 for everyone? More money in employees pockets means more jobs and more disposable income, after all.
      - po1nt 1y ago
        If they could get higher paying job they would already do so. No legal immigrant dreams of working at McDonalds. No illegal immigrant would be employed by McDonalds.
sokoloff 1y ago
People with better fitness for employment had their situation improved. People with less fitness for employment may be more likely to be harmed. That’s a big success for the former group for sure. Whether that’s a policy success is slightly hazier than you presented I think, without other interventions to support those who are more likely to be harmed by the reduction in employment.
- MLR 1y ago
  If it's actually only a 2.7% decline in employment relative to baseline then the increase in total wages paid would have to be very small to make this a bad policy. I agree that a lost job should carry some kind of premium compared to a total increase in wages paid, and you also have to go and look at the total hours worked to get a good picture, but if the total relative increase in remuneration was higher than about 10% or so I think that's probably enough to be able to hand wave the employment decrease. If it only turns out to be 5% I'd be a bit iffier about it. In the UK we have a pretty generous minimum wage (for over 21s), I think even relative to $20 in California, and the effect on employment has been very small while minimum wage jobs now give a pretty OK life, so I'm inclined to support high minimum wages generally.
  - delusional 1y ago
    > I agree that a lost job should carry some kind of premium compared to a total increase in wages paid I don't think it's nearly that clear. Western nations are at a near record low unemployment rate. We should want to remove low paying jobs.
    - roenxi 1y ago
      But that was the best job they could find. Presumably those people are going to be unemployed now. I mean, maybe they're kids and their families will have enough slack to just adsorb the change but in theory they need welfare checks now to survive since they probably can't justify anyone paying them $20/hr. So it actually costs the broader economy more than the salary they lost - firstly the work they were doing isn't being done, secondly someone else now has to work to earn the keep of the person who was just laid off because the job that paid them around what their skills were worth just got regulated out of existence.
alphazard 1y ago
It's too soon to say. Increasing the cost of labor will reduce jobs in the short term, and increase the cost of fast food. In the medium term, that may lead to people cutting back on fast food, which then leads to more job loss. If fast food companies have perfect knowledge of their market, then the immediate job loss would be all that happens, but they don't so it will take some time to adapt to the new market, and see if consumers will bear the increase in cost. That's not even considering substitutes for labor, which have never been as competitive as they are now. AI, robotics, single-purpose machines, etc. One negative to a minimum wage is that we don't actually know the market price of labor. When there is a shift from humans to machines for labor, it will happen quickly and without warning, rather than slowly as humans become dissatisfied with decreasing wages.
- sroussey 1y ago
  Indeed, the positive for increasing minimum wages is that it makes robotics and automation more cost effective. With Silicon Valley being in California, one might think this is done on purpose—favoring the automation sector over the wage holders. Once these companies get some scale in California, they can then drive prices lower to be competitive in other states. In the end, sacrificing minimum wage workers in California will lead to (generally California based) automation companies taking this revenue across the country.
  - throwaway4496 1y ago
    Robots will always be cheaper, it is not a matter of if they will come, it is a matter of when. That is no reason the state should subsidise workers for big corporations by allowing them to pay such low income that workers are often eligible for social security.
  - toast0 1y ago
    Labor reduction in fast food doesn't necessarily look like 'automation' It's things like self-ordering, machines that make change (if cash handling still matters), conveyor ovens/charbroilers, more centralized food prep, self-service and automated beverage dispensing. Plenty of automation is happening outside of California though. Here's an Illinois bases company's blurb about beverage automation [1]. Reducing labor in small amounts increases service capacity, and in large enough capacity lets you operate a restaurant with a smaller minimum crew. [1] https://dimontegroup.com/projects/cornelius-quick-serve-pro/ https://dimontegroup.com/projects/cornelius-quick-serve-pro/
tomohawk 1y ago
[dead]
hyperman1 1y ago
One possible reason: People don't need a second job anymore.
anonymousiam 1y ago
It depends upon how you define "success." I visit California regularly, and since the new minimum wage law went into effect, I've noticed reduced hours, reduced staff, and increased prices. So now my normal breakfast spot isn't open when I want to go there, so I eat at home. The places I visit when they are open are mostly empty, because the customers don't want to wait longer and/or pay higher prices. So aside from the fewer employees getting a raise, the businesses are now under financial stress because of the reduced revenue, the customers have fewer options for where to eat, and the State of California and the local city/county governments will receive less tax revenue from these restaurants. Like most of the other recent California legislation, it's a "success" at further damaging the local economy and encouraging people like myself to stay away.
- DarkNova6 1y ago
  This only makes sense if staffing is a major cost factor, which it isn't.
  - MarkusQ 1y ago
    It is. Typically over 30%, higher in fast food. https://www.5out.io/post/a-detailed-breakdown-of-restaurant-operating-costs https://www.5out.io/post/a-detailed-breakdown-of-restaurant-...
- nxobject 1y ago
  Was your normal breakfast spot subject to AB 1228 regulations?
  - anonymousiam 1y ago
    [flagged]
    - tossandthrow 1y ago
      Ofcause it is unpopular. In the context you are literally complaining that you can not get your favorite breakfast because some people need to get less slave like wages. That should be wildly unpopular to utter. And yes, you have a side comment about job reductions, but it still misses the broader picture: some people can barely feed themselves.
ugh123 1y ago
Yes. The paper doesn't go into detail about the wider economic effects in the state in business growth, tax revenue, and less reliance on public assistance.
coldtea 1y ago
And the "decrease in employment" could very well be attributed to other factors, like inflated prices and shallow pockets of consumers, translated to them skipping on fast food more often...
slibhb 1y ago
Maybe a good trade if it was just a loss of employment. But there are other downsides...like fewer hours and higher prices.
forrestthewoods 1y ago
> overall sounds like a big success? It depends on how many hours were worked. Which the paper did not measure.
Aloisius 1y ago
First, 2.3 to 3.9% decrease in fast food employment in a year isn't really small given only a fraction were affected by increase. Second, the effective wage increase for fast food employment was actually quite a bit lower than 25% since several large municipalities had higher minimum wages and not all fast food restaurants were affected. Third, employment appears to still be dropping.
refurb 1y ago
If you assume the minimum needed for life is X, I’d say optimizing for the maximum receiving X+ is a better outcome than fewer getting X++
timmg 1y ago
> Small decrease in employment in exchange for ~25% higher wages for those employed? It's a 25% higher minimum. It doesn't mean everyone was making the minimum before the law. Certainly not all were. (It would be interesting to know actually how much the wages went up on average.) Also, do we know if prices went up? Because that could have a negative effect on the rest of the local population.
dehrmann 1y ago
One issue with a minimum wage is there isn't a great economic theory for what it should be. So even if this one had good effects, it doesn't mean $25 per hour would also have positive effects. It's also possible a personally beneficial outcome was a net-negative.
kesor 1y ago
What about all the people who are now priced-out from working at all because it is not economic for the business to employ them at these rates?
- fortran77 1y ago
  That was the original intent of minimum wages! https://mises.org/mises-wire/racist-history-minimum-wage-laws https://mises.org/mises-wire/racist-history-minimum-wage-law...
sethammons 1y ago
Squid Games, in a nutshell.

JKCalhoun 1y ago

Sounds like a net increase then in the money put into the California economy. Perhaps that has helped other sectors as well — like retail seeing more money spent in their stores as a result.

po1nt 1y ago

It's 100% lower wages for those who lost jobs.

frikskit 1y ago
Why not set very low maximum wage ceilings and have 100% employment? /s
- roenxi 1y ago
  Because that happens naturally without a law. People lower the wage they ask for until they get a job.
  - actionfromafar 1y ago
    I think they were sarcastic.
    - frikskit 1y ago
      Thanks, yes, I was trying to show how the alternative is absurd
- themafia 1y ago
  Are you going to reduce lottery payouts and maximum stock investments as well? Will I still be allowed to hunt for food? Society is something better encouraged than gamified.
  - Ray20 1y ago
    > Are you going to reduce lottery payouts They will decrease on their own if people think about where to get food, and not about extra money for the lottery. > and maximum stock investments as well? No, there are no restrictions. Any amount of investment. But there are only government's stocks and the terms of return on investment are determined by the government > Will I still be allowed to hunt for food? Only deep in the sparsely populated provinces. To avoid armed rebellions. > Society is something better encouraged than gamified. You'll be surprised at what methods encourage people best. Read the biography of Korolev, who sent the first satellite and the first man into space. A case was fabricated against him, he was sentenced to 10 years in a gulag, but after a year he was transferred to a prison for engineers, on the condition that he will be a very effective engineer. And he was. The results of such encouragement were amazing and almost unachievable by any other methods.
    - themafia 1y ago
      > And he was. The results of such encouragement were amazing and almost unachievable by any other methods. Oh boy. You've missed the glaringly obvious. They only did this because they couldn't pay him. In other countries that paid their engineers they produced more and better products. History is clear and obvious on this fact. > You'll be surprised at what methods encourage people best. There's very little surprise when you study the actual science of human psychology and performance and not the journals of demented cold war generals. Anyways, thanks for being honest about wanting to create a Company Scrip Town, I and many others, of course, will never cooperate with you. You're right to fear rebellion.
      - Ray20 1y ago
        > They only did this because they couldn't pay him. But they could. But no amount of money will encourage an engineer as much as the need to escape the gulag. Especially if you add some variety to their experience by staying in the gulag. > In other countries that paid their engineers they produced more and better products. It is precisely for this reason that the overwhelming majority of engineers in the USSR were not threatened with the gulag for inefficiency. And many believe that this is a good thing, and that "efficient" engineers threaten to destroy the labor market entirely. > History is clear and obvious on this fact. Yes. The Soviet space program created by Korolev is the pinnacle of human engineering thought, only God is above it. History is definitely clear and obvious on this fact > I and many others, of course, will never cooperate with you. That's the best part. You will vote yourself out of economic freedom, and then there will be no reason to ask about your opinion. Just look at the trends and public opinion on the necessity for economic freedom. You are already in checkmate if you look a few moves ahead.
- deleted 1y ago
  [deleted]
- em500 1y ago
  Why not set very high minimum wage floors and make 100% of worker rich? /s Turns out economics is actually more difficult than "higher minimum wage is good/bad".
- barchar 1y ago
  This has been tried, and actually does work reasonably well. Well, not maximum wages as policy but policies where high productivity workers take a lower wage than they could individually bargain for in exchange for boosting wages of low productivity workers. It provides a windfall to the most productive industries and a squeeze to the least productive ones.
deleted 1y ago
[deleted]
simianwords 1y ago
Also consider non linear utility of money.
- skrebbel 1y ago
  For hamburger flippers? A 25% increase in wage might well be superlinear for some of them (eg better circumstances and opportunities for kids)
  - simianwords 1y ago
    Yeah but the other people lost their jobs and 100% of wages. So you can compare net utility gain or loss.
    - skrebbel 1y ago
      Yes but that’s not the argument you made.
      - simianwords 1y ago
        I didn’t make any argument. I was expanding on parents point.
        skrebbel 1y ago
        Yes and I was responding solely to your expansion, which I believe is inapplicable here.
BriggyDwiggs42 1y ago
Correct?
ath3nd 1y ago
Nah, they didn't lose them, they got employed elsewhere for what they are worth, so if we do random calculations, it was probably something like 25% increase for many of them. The unemployment statistics were not influenced by raising the minimum wage here, so you can assume that the people who lost their low paid jobs simply moved elsewhere and got better paid jobs. It's mostly the employers' loss, which is how it should be. If you can't afford to start a business, don't start a business.
StevenWaterman 1y ago
If the total salary has gone up, for less work done, it is a positive change. You can solve the inequal distribution via taxes and benefits. Start: 100 people paid $100 After minimum wage change: 90 people paid $125, 10 people paid $0 After tax increase: 90 people paid $113 + $12 taxes, 10 people paid $108 from taxes Now everyone is paid at least as much as they were before, and fewer people are forced to perform labour In practice it was only 3% unemployment not 10%, which means the tax increase is less and there is more of an incentive to continue working. You can also pay the displaced workers less than their original wage, to reach an equilibrium where everyone is happy with either work+more money, or leisure+less money. Or have it be age-based with an earlier retirement. Or have people work part-time. We need to stop seeing having a job as being inherently good. Being able to live is good. Humanity should strive for 100% unemployment.
- OrvalWintermute 1y ago
  Total salary going up for less work can truly hurt people that are low, aptitude, low skill, and do not produce sufficient value to hit minimum wage.
  - Ray20 1y ago
    Well, on the other hand, it can be seen as something like a eugenic program to cleanse society of those unworthy of the state. After all, there is nothing stopping them from going to work somewhere else where there is no such minimum wage.
- kgwgk 1y ago
  "Less work done" doesn't look like a positive change, you can't tax your way out of a smaller pie. Specially if you strive for humanity to produce no pie to start with.
  - StevenWaterman 1y ago
    I disagree that increased employment and increased labour always makes the pie bigger. If minimum wage was low enough, we would decommission our cement mixers and use a human with a shovel instead. But that's not an improvement. Automation is happening, jobs can be replaced right now. The problem is that humans are too cheap to bother automating, and that the profits of the automation are not being distributed to the displaced workers.
bravesoul2 1y ago
They are working the same hours elsewhere for free?
- po1nt 1y ago
  They might be living in a tent on a sidewalk for free if you ban them from working.
  - bravesoul2 1y ago
    They might get another job. People dont think holistically about the economy. They think there are jobs. When they go there are that fewer jobs. Immigrants come in a steal jobs. Etc. But in an economy, each richer consumer creates more jobs. The McD employees now buy better food, creating work for that supply chain. Or they can pay for education. Or they buy a takeaway coffee more often. The immigrants who come and do jobs work hard for lower pay them spend that money into the economy.
    - parineum 1y ago
      Why not set the minimum wage at $50? Why not set $20 for everyone? More money in employees pockets means more jobs and more disposable income, after all.
    - po1nt 1y ago
      If they could get higher paying job they would already do so. No legal immigrant dreams of working at McDonalds. No illegal immigrant would be employed by McDonalds.

sokoloff 1y ago

People with better fitness for employment had their situation improved. People with less fitness for employment may be more likely to be harmed. That’s a big success for the former group for sure. Whether that’s a policy success is slightly hazier than you presented I think, without other interventions to support those who are more likely to be harmed by the reduction in employment.

MLR 1y ago
If it's actually only a 2.7% decline in employment relative to baseline then the increase in total wages paid would have to be very small to make this a bad policy. I agree that a lost job should carry some kind of premium compared to a total increase in wages paid, and you also have to go and look at the total hours worked to get a good picture, but if the total relative increase in remuneration was higher than about 10% or so I think that's probably enough to be able to hand wave the employment decrease. If it only turns out to be 5% I'd be a bit iffier about it. In the UK we have a pretty generous minimum wage (for over 21s), I think even relative to $20 in California, and the effect on employment has been very small while minimum wage jobs now give a pretty OK life, so I'm inclined to support high minimum wages generally.
- delusional 1y ago
  > I agree that a lost job should carry some kind of premium compared to a total increase in wages paid I don't think it's nearly that clear. Western nations are at a near record low unemployment rate. We should want to remove low paying jobs.
  - roenxi 1y ago
    But that was the best job they could find. Presumably those people are going to be unemployed now. I mean, maybe they're kids and their families will have enough slack to just adsorb the change but in theory they need welfare checks now to survive since they probably can't justify anyone paying them $20/hr. So it actually costs the broader economy more than the salary they lost - firstly the work they were doing isn't being done, secondly someone else now has to work to earn the keep of the person who was just laid off because the job that paid them around what their skills were worth just got regulated out of existence.

alphazard 1y ago

It's too soon to say. Increasing the cost of labor will reduce jobs in the short term, and increase the cost of fast food. In the medium term, that may lead to people cutting back on fast food, which then leads to more job loss. If fast food companies have perfect knowledge of their market, then the immediate job loss would be all that happens, but they don't so it will take some time to adapt to the new market, and see if consumers will bear the increase in cost. That's not even considering substitutes for labor, which have never been as competitive as they are now. AI, robotics, single-purpose machines, etc. One negative to a minimum wage is that we don't actually know the market price of labor. When there is a shift from humans to machines for labor, it will happen quickly and without warning, rather than slowly as humans become dissatisfied with decreasing wages.

sroussey 1y ago
Indeed, the positive for increasing minimum wages is that it makes robotics and automation more cost effective. With Silicon Valley being in California, one might think this is done on purpose—favoring the automation sector over the wage holders. Once these companies get some scale in California, they can then drive prices lower to be competitive in other states. In the end, sacrificing minimum wage workers in California will lead to (generally California based) automation companies taking this revenue across the country.
- throwaway4496 1y ago
  Robots will always be cheaper, it is not a matter of if they will come, it is a matter of when. That is no reason the state should subsidise workers for big corporations by allowing them to pay such low income that workers are often eligible for social security.
- toast0 1y ago
  Labor reduction in fast food doesn't necessarily look like 'automation' It's things like self-ordering, machines that make change (if cash handling still matters), conveyor ovens/charbroilers, more centralized food prep, self-service and automated beverage dispensing. Plenty of automation is happening outside of California though. Here's an Illinois bases company's blurb about beverage automation [1]. Reducing labor in small amounts increases service capacity, and in large enough capacity lets you operate a restaurant with a smaller minimum crew. [1] https://dimontegroup.com/projects/cornelius-quick-serve-pro/ https://dimontegroup.com/projects/cornelius-quick-serve-pro/

tomohawk 1y ago

[dead]

hyperman1 1y ago

One possible reason: People don't need a second job anymore.

anonymousiam 1y ago

It depends upon how you define "success." I visit California regularly, and since the new minimum wage law went into effect, I've noticed reduced hours, reduced staff, and increased prices. So now my normal breakfast spot isn't open when I want to go there, so I eat at home. The places I visit when they are open are mostly empty, because the customers don't want to wait longer and/or pay higher prices. So aside from the fewer employees getting a raise, the businesses are now under financial stress because of the reduced revenue, the customers have fewer options for where to eat, and the State of California and the local city/county governments will receive less tax revenue from these restaurants. Like most of the other recent California legislation, it's a "success" at further damaging the local economy and encouraging people like myself to stay away.

DarkNova6 1y ago
This only makes sense if staffing is a major cost factor, which it isn't.
- MarkusQ 1y ago
  It is. Typically over 30%, higher in fast food. https://www.5out.io/post/a-detailed-breakdown-of-restaurant-operating-costs https://www.5out.io/post/a-detailed-breakdown-of-restaurant-...
nxobject 1y ago
Was your normal breakfast spot subject to AB 1228 regulations?
- anonymousiam 1y ago
  [flagged]
  - tossandthrow 1y ago
    Ofcause it is unpopular. In the context you are literally complaining that you can not get your favorite breakfast because some people need to get less slave like wages. That should be wildly unpopular to utter. And yes, you have a side comment about job reductions, but it still misses the broader picture: some people can barely feed themselves.

ugh123 1y ago

Yes. The paper doesn't go into detail about the wider economic effects in the state in business growth, tax revenue, and less reliance on public assistance.

coldtea 1y ago

And the "decrease in employment" could very well be attributed to other factors, like inflated prices and shallow pockets of consumers, translated to them skipping on fast food more often...

slibhb 1y ago

Maybe a good trade if it was just a loss of employment. But there are other downsides...like fewer hours and higher prices.

forrestthewoods 1y ago

> overall sounds like a big success? It depends on how many hours were worked. Which the paper did not measure.

Aloisius 1y ago

First, 2.3 to 3.9% decrease in fast food employment in a year isn't really small given only a fraction were affected by increase. Second, the effective wage increase for fast food employment was actually quite a bit lower than 25% since several large municipalities had higher minimum wages and not all fast food restaurants were affected. Third, employment appears to still be dropping.

refurb 1y ago

If you assume the minimum needed for life is X, I’d say optimizing for the maximum receiving X+ is a better outcome than fewer getting X++

timmg 1y ago

> Small decrease in employment in exchange for ~25% higher wages for those employed? It's a 25% higher minimum. It doesn't mean everyone was making the minimum before the law. Certainly not all were. (It would be interesting to know actually how much the wages went up on average.) Also, do we know if prices went up? Because that could have a negative effect on the rest of the local population.

dehrmann 1y ago

One issue with a minimum wage is there isn't a great economic theory for what it should be. So even if this one had good effects, it doesn't mean $25 per hour would also have positive effects. It's also possible a personally beneficial outcome was a net-negative.

kesor 1y ago

What about all the people who are now priced-out from working at all because it is not economic for the business to employ them at these rates?

fortran77 1y ago
That was the original intent of minimum wages! https://mises.org/mises-wire/racist-history-minimum-wage-laws https://mises.org/mises-wire/racist-history-minimum-wage-law...

sethammons 1y ago

Squid Games, in a nutshell.