Splain This Rucy!

[audiophile]

Or dies?

That only helps big companies, that can afford it, and have an established business model.

The little guy is shut out from ever getting out the starting gate.

[TC Talks]

Or dies?

That only helps big companies, that can afford it, and have an established business model.

The little guy is shut out from ever getting out the starting gate.

I am at the start of many businesses. Access to funding and a proper business plan is how any respectable little guy gets started. Having a solid business degree is also important. Minimum wage isn't the major concern. You are just pulling it out of your butt it seems.

Example: Restaurant

$2 million in sales with 27% labor (typical)= $540,000 at $10 an hour (McDonalds wages) = 54,000 hours

54,000 hours at $15 = 810,000 or 40% labor at $2 million. Rate increase by 8% ($2,160,000) and you are at the same gross profit.

Hamburger meal $7 x 108% (wage adjustment) = $7.56

Implement this over 3 years and the market doesn't care.

[Lester The Nightfly]

Or dies?

That only helps big companies, that can afford it, and have an established business model.

The little guy is shut out from ever getting out the starting gate.

I am at the start of many businesses. Access to funding and a proper business plan is how any respectable little guy gets started. Having a solid business degree is also important. Minimum wage isn't the major concern. You are just pulling it out of your butt it seems.

Example: Restaurant

$2 million in sales with 27% labor (typical)= $540,000 at $10 an hour (McDonalds wages) = 54,000 hours

54,000 hours at $15 = 810,000 or 40% labor at $2 million. Rate increase by 8% ($2,160,000) and you are at the same gross profit.

Hamburger meal $7 x 108% (wage adjustment) = $7.56

Implement this over 3 years and the market doesn't care.

Oh shit, you're applying math, accounting, and business management principles to the discussion. We can't have that when mindless ideological conjecture prevails.
Good post TC

[Bryce]

A. You forgot to add in additional payroll taxes.

B. if you think the average small business gets started with the capital needed to open even a small McDonald's, you're dreaming.

[Deleted User 8570]

Or dies?

That only helps big companies, that can afford it, and have an established business model.

The little guy is shut out from ever getting out the starting gate.

Then how do all these tiny businesses seem to sprout out of nowhere every 5 seconds?

[Matt]

A. You forgot to add in additional payroll taxes.

B. if you think the average small business gets started with the capital needed to open even a small McDonald's, you're dreaming.

Also, he was earlier advocating $15/hour and his example has the wage going from $10 to $10.80.

[TC Talks]

Matt,

Do you know what goes into Gross profit at a restaurant? I used a spreadsheet we have for building pro-formas.

[Bryce]

I'm pretty familiar with the restaurant industry. You picked McDonald's as an example, but again, most folks don't have the needed capital to open one. Most folks aren't blessed to have three quarters of a million dollars in liquid assets.

Lets look at the industry as a whole. The average profit margin in the industry averages around 5 percent. Full service operations being lower and limited service establishments a bit higher. In your example, you maintain that raising prices 8% would keep gross profit the same. That's not a true statement. First, as I mentioned, you neglected to account for higher expenditures in payroll taxes. Going from the current wage of 9.00 per hour to the new wage of 15.00 per hour not only adds 6.00 per hour in new wages, it also adds about .55 cents per hour in higher payroll taxes. That adds another 30,000.00 in labor costs (under your scenario) that you failed to include.

Second, although you maintain that the gross profit will remain the same with an increase in sales prices of 8% you fail to mention the importance of, and the effect it will have on, the profit margins on those "gross profits".

Third, because of the demographics that frequent limited service restaurants, (fast food) price points have become VERY important. Notice all the 5.00 meal price points the chains are advertising? Maintaining volume, traffic and cash flow to a operation like this is so, so important. NRA studies show that for every 10% a restaurant raises its prices, sales decline by about 09.5%. This creates a vicious circle because prices will have to increase even further to cover fixed costs and maintain profit margins.

Last, because many will adapt and change to maintain margins, owners will figure out how to do more with less. Which in the long run will hurt the people this is supposed to help.

[TC Talks]

Well it looks like we will see all those poor millionaires suffer once California and NYC implement their new minimum wage of $15.

I predict the economy continues to grow in these states.

By the way cutting taxes? Really bad idea for the economy.

http://m.huffpost.com/us/entry/kansas-e ... 84454.html

[audiophile]

This plan will be ok for big businesses, mom and pops will forced out, or go underground.

Big businesses have the money to invest now in new machines to replace those minimum-wage employees.

Like self-serve gas stations - hello self-serve checkout lines only, automated factory jobs, crop harvesters and more.

[Bryce]

Well it looks like we will see all those poor millionaires suffer once California and NYC implement their new minimum wage of $15.

I predict the economy continues to grow in these states.

By the way cutting taxes? Really bad idea for the economy.

http://m.huffpost.com/us/entry/kansas-e ... 84454.html

You know who's the most excited about this? It's not the low skilled workers who now will have even more limited job opportunities, nor is it the 25 and under crowd, especially blacks, that are suffering from record un and under employment. It's the union members in these heavily blue states.

Why? Many private and public sector union contracts have wage increases tied to the minimum wage. When the minimum wage goes up, so does their pay. Champagne is flowing in the offices of labor bosses in both of these states.

[Deleted User 8570]

Well it looks like we will see all those poor millionaires suffer once California and NYC implement their new minimum wage of $15.

I predict the economy continues to grow in these states.

By the way cutting taxes? Really bad idea for the economy.

http://m.huffpost.com/us/entry/kansas-e ... 84454.html

You know who's the most excited about this? It's not the low skilled workers who now will have even more limited job opportunities, nor is it the 25 and under crowd, especially blacks, that are suffering from record un and under employment. It's the union members in these heavily blue states.

Why? Many private and public sector union contracts have wage increases tied to the minimum wage. When the minimum wage goes up, so does their pay. Champagne is flowing in the offices of labor bosses in both of these states.

Those blue collar employees will probably appreciate it too... Without labor the bosses have no reason to celebrate.

[audiophile]

If you can't make money paying $15 an hour, maybe you shouldn't be in business. The $5 in productivity example suggests that maybe the problem isn't the wage, but the business concept.
.

Try selling a 5 dollar pizza being made by people making 15.00 per hour. Not my business model by the way, but the guy who came up with it seems to be doing pretty well.

If you think someone that has never worked before and has difficulty writing and reading can hit the floor in all positions and be worth 15.00 per hour out of the gate, your in some kind of pot induced utopia.

These folks are not worth $15 an hour:
https://www.yahoo.com/news/burger-king- ... html?nhp=1

[Deleted User 8570]

If you can't make money paying $15 an hour, maybe you shouldn't be in business. The $5 in productivity example suggests that maybe the problem isn't the wage, but the business concept.
.

Try selling a 5 dollar pizza being made by people making 15.00 per hour. Not my business model by the way, but the guy who came up with it seems to be doing pretty well.

If you think someone that has never worked before and has difficulty writing and reading can hit the floor in all positions and be worth 15.00 per hour out of the gate, your in some kind of pot induced utopia.

These folks are not worth $15 an hour:
https://www.yahoo.com/news/burger-king- ... html?nhp=1

That's fantastic!

[TC Talks]

Anyone still heartbroken that the minimum wage is going up in some of the more thoughtful places in the US?

Still want to cry poverty for the rich?