9 ms·

See my reply to zo1 on the same topic: https://news.ycombinator.com/item?id=7838800 https://news.ycombinator.com/item?id=7838800

by whimsy 12y ago

glenra 12y ago
Doesn't really answer my point. An average increase in costs of 5% or even 3% is still enough to kill restaurants on the margin. For instance, suppose you are a McD franchise owner whose restaurant has 50 "crew members" (source on that number: https://answers.yahoo.com/question/index?qid=20070917131148AAT0JbQ https://answers.yahoo.com/question/index?qid=20070917131148A... ) and your restaurant recently became profitable to the point that it currently makes an annual profit of $250k. A quarter million dollars in annual profit isn't a lot but it's respectable - that is a sustainable business! That's something you can afford to keep operating indefinitely (and try to grow over time). You have some room to invest, some room to make mistakes. Now suppose the state passes a law requiring you to give all 50 of your crew members an extra $5/hour. How much does that cost? 50 people * 2000 hours/year * $5 = $500,000. So your restaurant just went from gaining a quarter million to losing a quarter million a year. Now it is not a sustainable business. Your pockets are not deep enough to keep losing that year after year; you should probably close the business or scale it way back. Are you going to claim that every restaurant in the chain has enough buffer to take a half-million-per-year hit to the bottom line and stay standing? Of course not. There are always some marginal businesses; those are the ones that are likely to shrink, cut benefits, or close.
- bakhy 12y ago
  it would be foolish to expect that such a measure can be passed without negatively affecting some businesses. a lot of people, including the electorate of Seattle, and the authors of the here oft cited study, obviously consider that the gains outweigh the losses. surely you don't suggest we should allow majority of workers to be exploited because some weakly profitable restaurants might fail? (and 50 employees with 250k annual profits sounds pretty weak.) all these workers are paid the same miniscule wage, regardless of whether their restaurant makes more or less profit, so most of them are exploited, simply because they can easily be replaced.
  - glenra 12y ago
    > surely you don't suggest we should allow majority of workers to be exploited because some weakly profitable restaurants might fail? Who is exploiting whom here? Most restaurants fail. Nearly all restaurants lose money in the first three years of operation. During that time, when the firm is losing money but still paying salaries, isn't the firm owner the one being exploited? And aren't you exploiting the owner even more by forcing him or her to lose even more money on the way to a slim chance of profitability? People who consider that "the gains outweigh the losses" probably don't realize that even those who get a raise due to a minimum wage law might be on net worse off than before that law was passed. Certainly those who lose their job or fail to get a new one are worse off, but even some who keep their job are also worse off, because they lose other benefits in lieu of salary that they presumably valued more. There is no plausible theory that says low-skill workers are made better off by making it illegal to hire them for less than a specified price. Legally fixing one term in a contract in general makes both parties to that sort of contract worse off. There are many reasons why it should be hard to measure the damage the minimum wage does so it's not surprising that a few empirical studies return the "man-bites-dog" result, but we shouldn't fool ourselves into thinking it doesn't do any harm at all just because that harm is occasionally hard to measure. The minimum wage is callous and cruel; it harms those least able to afford being harmed. It is at heart indefensible. Fortunately, we live in a rich enough society that being legislatively forced into a suboptimal job situation or involuntary unemployment is usually recoverable. It's not a death sentence. Yes, Seattle is effectively kicking poor people in the face with this law, but in the grand scheme of things it's probably not the worst legislative indignity we inflict on them.
    - bakhy 12y ago
      "when the firm is losing money but still paying salaries, isn't the firm owner the one being exploited?" - no. please consult a dictionary. low-educated workers are abundant, and are thus forced, if they want to make an honest living, to take whatever they can. anyone who has been in that situation or has been close to people in that situation should easily be able to see that. "they lose other benefits in lieu of salary that they presumably valued more." - key word being "presumably", which is, given the election results in Seattle, apparently not true. and, there is of course no reason for all of them, or even a majority, to loose more in benefits than they gain in higher pay. makes no sense. "we shouldn't fool ourselves into thinking it doesn't do any harm at all just because that harm is occasionally hard to measure." - ah, but we should :) measurement is king. if any losses will occur, they should be measurable. otherwise, i guess we should throw the entire history of science out the window. "There is no plausible theory that says low-skill workers are made better off by making it illegal to hire them for less than a specified price." -- see my very simple explanation here: https://news.ycombinator.com/item?id=7840655 https://news.ycombinator.com/item?id=7840655 - generally, libertarians, a behavior typical of followers of any ideology, simply ignore all unfavorable aspects and just assume that the market automagically solves everything, without considering parameters under which a certain market operates. "The minimum wage is callous and cruel; it harms those least able to afford being harmed." -- your concern for the poor is very moving. i personally, OTOH, would use the same words to describe the libertarian approach to economy and to the poor. but, in the end, those are just emotional soundbites.

See my reply to zo1 on the same topic: https://news.ycombinator.com/item?id=7838800 https://news.ycombinator.com/item?id=7838800

by whimsy 12y ago

See my reply to zo1 on the same topic: https://news.ycombinator.com/item?id=7838800 https://news.ycombinator.com/item?id=7838800

glenra 12y ago

Doesn't really answer my point. An average increase in costs of 5% or even 3% is still enough to kill restaurants on the margin. For instance, suppose you are a McD franchise owner whose restaurant has 50 "crew members" (source on that number: https://answers.yahoo.com/question/index?qid=20070917131148AAT0JbQ https://answers.yahoo.com/question/index?qid=20070917131148A... ) and your restaurant recently became profitable to the point that it currently makes an annual profit of $250k. A quarter million dollars in annual profit isn't a lot but it's respectable - that is a sustainable business! That's something you can afford to keep operating indefinitely (and try to grow over time). You have some room to invest, some room to make mistakes. Now suppose the state passes a law requiring you to give all 50 of your crew members an extra $5/hour. How much does that cost? 50 people * 2000 hours/year * $5 = $500,000. So your restaurant just went from gaining a quarter million to losing a quarter million a year. Now it is not a sustainable business. Your pockets are not deep enough to keep losing that year after year; you should probably close the business or scale it way back. Are you going to claim that every restaurant in the chain has enough buffer to take a half-million-per-year hit to the bottom line and stay standing? Of course not. There are always some marginal businesses; those are the ones that are likely to shrink, cut benefits, or close.

bakhy 12y ago
it would be foolish to expect that such a measure can be passed without negatively affecting some businesses. a lot of people, including the electorate of Seattle, and the authors of the here oft cited study, obviously consider that the gains outweigh the losses. surely you don't suggest we should allow majority of workers to be exploited because some weakly profitable restaurants might fail? (and 50 employees with 250k annual profits sounds pretty weak.) all these workers are paid the same miniscule wage, regardless of whether their restaurant makes more or less profit, so most of them are exploited, simply because they can easily be replaced.
- glenra 12y ago
  > surely you don't suggest we should allow majority of workers to be exploited because some weakly profitable restaurants might fail? Who is exploiting whom here? Most restaurants fail. Nearly all restaurants lose money in the first three years of operation. During that time, when the firm is losing money but still paying salaries, isn't the firm owner the one being exploited? And aren't you exploiting the owner even more by forcing him or her to lose even more money on the way to a slim chance of profitability? People who consider that "the gains outweigh the losses" probably don't realize that even those who get a raise due to a minimum wage law might be on net worse off than before that law was passed. Certainly those who lose their job or fail to get a new one are worse off, but even some who keep their job are also worse off, because they lose other benefits in lieu of salary that they presumably valued more. There is no plausible theory that says low-skill workers are made better off by making it illegal to hire them for less than a specified price. Legally fixing one term in a contract in general makes both parties to that sort of contract worse off. There are many reasons why it should be hard to measure the damage the minimum wage does so it's not surprising that a few empirical studies return the "man-bites-dog" result, but we shouldn't fool ourselves into thinking it doesn't do any harm at all just because that harm is occasionally hard to measure. The minimum wage is callous and cruel; it harms those least able to afford being harmed. It is at heart indefensible. Fortunately, we live in a rich enough society that being legislatively forced into a suboptimal job situation or involuntary unemployment is usually recoverable. It's not a death sentence. Yes, Seattle is effectively kicking poor people in the face with this law, but in the grand scheme of things it's probably not the worst legislative indignity we inflict on them.
  - bakhy 12y ago
    "when the firm is losing money but still paying salaries, isn't the firm owner the one being exploited?" - no. please consult a dictionary. low-educated workers are abundant, and are thus forced, if they want to make an honest living, to take whatever they can. anyone who has been in that situation or has been close to people in that situation should easily be able to see that. "they lose other benefits in lieu of salary that they presumably valued more." - key word being "presumably", which is, given the election results in Seattle, apparently not true. and, there is of course no reason for all of them, or even a majority, to loose more in benefits than they gain in higher pay. makes no sense. "we shouldn't fool ourselves into thinking it doesn't do any harm at all just because that harm is occasionally hard to measure." - ah, but we should :) measurement is king. if any losses will occur, they should be measurable. otherwise, i guess we should throw the entire history of science out the window. "There is no plausible theory that says low-skill workers are made better off by making it illegal to hire them for less than a specified price." -- see my very simple explanation here: https://news.ycombinator.com/item?id=7840655 https://news.ycombinator.com/item?id=7840655 - generally, libertarians, a behavior typical of followers of any ideology, simply ignore all unfavorable aspects and just assume that the market automagically solves everything, without considering parameters under which a certain market operates. "The minimum wage is callous and cruel; it harms those least able to afford being harmed." -- your concern for the poor is very moving. i personally, OTOH, would use the same words to describe the libertarian approach to economy and to the poor. but, in the end, those are just emotional soundbites.