Democrats introduce Raise the Wage Act ($15 min wage)

[IndyMelissa 303]

On 1/26/2021 at 2:17 PM, Ronnie said:

I work for a small business in AZ and when our minimum wage increased a few years back, it almost killed us. We had to raise prices which negatively affected our revenue which caused lay offs.

Even if small businesses were allowed more time, it would be hard to find employees because they would all be working for larger corporations.

This! I owned a small Ice Cream store where a lot of our employees were high school kids, their first job.  Many of them made a great deal of money with tips, so they made more than minimum wage. If we paid them starting at  $15, then the appropriate pay increase for managers, etc our shop would have no choice but to either close or raise prices. A small ice cream would go from about $4.00 to $10.00. People cant demand to have the minimum wage raised and then be mad when business'  raise their prices to make up the difference. Thats what will happen with this increase. Small business owners employ 52% of the work force in the US. I believed they tried this a few years ago in Seattle and several small business went under as its just not sustainable. Finding other places to lower costs to make up the difference isn't as easy as it sounds, when margins are slim to begin with. This is not an indication of a non-successful business, it's an indication of a business that is run "lean and mean."  If the business isn't profitable, there is not reason to keep it open. No business owner will keep their doors open if there is zero profit  after an increase just so so they can keep people employed. They will close and it will result in layoffs.  Its's unfortunate, as everyone deserves a wage they can live on.  Not every small business owner in America is living the high life. Many of them are just making a good, honest living and doing their best to take care of their employees. Plus the business owner takes ALL the risk from personal to financial. They often go without if needed to pay their employees. Its easy to be critical of a business owner and say what you think they should be doing  when you aren't a business owner yourself.

 

[AJRocketMan 2,684]

57 minutes ago, IndyMelissa said:

This! I owned a small Ice Cream store where a lot of our employees were high school kids, their first job.  Many of them made a great deal of money with tips, so they made more than minimum wage. If we paid them starting at  $15, then the appropriate pay increase for managers, etc our shop would have no choice but to either close or raise prices. A small ice cream would go from about $4.00 to $10.00. People cant demand to have the minimum wage raised and then be mad when business'  raise their prices to make up the difference. Thats what will happen with this increase. Small business owners employ 52% of the work force in the US. I believed they tried this a few years ago in Seattle and several small business went under as its just not sustainable. Finding other places to lower costs to make up the difference isn't as easy as it sounds, when margins are slim to begin with. This is not an indication of a non-successful business, it's an indication of a business that is run "lean and mean."  If the business isn't profitable, there is not reason to keep it open. No business owner will keep their doors open if there is zero profit  after an increase just so so they can keep people employed. They will close and it will result in layoffs.  Its's unfortunate, as everyone deserves a wage they can live on.  Not every small business owner in America is living the high life. Many of them are just making a good, honest living and doing their best to take care of their employees. Plus the business owner takes ALL the risk from personal to financial. They often go without if needed to pay their employees. Its easy to be critical of a business owner and say what you think they should be doing  when you aren't a business owner yourself.

 

I get you. If minimum wage had been consistently raised incrementally over the past 11 years then this wouldn’t be happening. It’s unfortunate that our government was run by neoliberals and neoconservatives who were only looking out for themselves instead of the constituents who voted them into office in the first place.

As for the Seattle situation, there were conflicting findings, mainly as results became more positive after more time passed. That’s how demand side economics works in a country that practices supply side economics — the short term effects tend to be negative, but over the long term they’re positive as more money is put in the hand of the workers and it flows back into the local economy. Read these two articles:

https://www.vox.com/the-highlight/2019/7/13/20690266/seattle-minimum-wage-15-dollars

https://www.google.com/amp/s/www.cnbc.com/amp/2020/01/02/seattle-passed-a-15-minimum-wage-law-in-2014-heres-how-its-turned-out-so-far.html

[Woolfsmck 2,763]

5 hours ago, AJRocketMan said:

 more money is put in the hand of the workers and it flows back into the local economy.

So a gov. that meddles with the supply and demand dynamics of a 'free' market actually damages said market...

hmmmm....

 

[IndyMelissa 303]

7 hours ago, AJRocketMan said:

I get you. If minimum wage had been consistently raised incrementally over the past 11 years then this wouldn’t be happening. It’s unfortunate that our government was run by neoliberals and neoconservatives who were only looking out for themselves instead of the constituents who voted them into office in the first place.

As for the Seattle situation, there were conflicting findings, mainly as results became more positive after more time passed. That’s how demand side economics works in a country that practices supply side economics — the short term effects tend to be negative, but over the long term they’re positive as more money is put in the hand of the workers and it flows back into the local economy. Read these two articles:

https://www.vox.com/the-highlight/2019/7/13/20690266/seattle-minimum-wage-15-dollars

https://www.google.com/amp/s/www.cnbc.com/amp/2020/01/02/seattle-passed-a-15-minimum-wage-law-in-2014-heres-how-its-turned-out-so-far.html

Thanks for the info! I will check these out for sure. A steady increase is much more tolerable for the business owner. Its definitely a trickle down effect...with a constant raise in prices from vendors, suppliers, landlords, so on which are regularly happening without a raise increase....owners are usually left with little choice but to raise prices for their goods/services. There is definitely a limit though that people will pay for certain goods. I don't know anyone who would pay $8-$10 for a small 4 ounce ice cream, and there is no way I could ever ask that with a good conscious, even if the cost of that Ice Cream to me with a wage increase was $7-$9. With a limit to what  I could charge, and little profit,  I would just shut the doors and be done.  I think a lot of it depends on the the product being offered, and the job market in the city that you live in. Large cities with a competitive job market are much different than rural towns.

[AJRocketMan 2,684]

On 1/28/2021 at 10:24 AM, IndyMelissa said:

Thanks for the info! I will check these out for sure. A steady increase is much more tolerable for the business owner. Its definitely a trickle down effect...with a constant raise in prices from vendors, suppliers, landlords, so on which are regularly happening without a raise increase....owners are usually left with little choice but to raise prices for their goods/services. There is definitely a limit though that people will pay for certain goods. I don't know anyone who would pay $8-$10 for a small 4 ounce ice cream, and there is no way I could ever ask that with a good conscious, even if the cost of that Ice Cream to me with a wage increase was $7-$9. With a limit to what  I could charge, and little profit,  I would just shut the doors and be done.  I think a lot of it depends on the the product being offered, and the job market in the city that you live in. Large cities with a competitive job market are much different than rural towns.

Do you live in a small town? What’s your guys’ foot traffic like? Have you thought of adding an automatic gratuity above a certain price point? Have you thought of getting rid of the tipping system altogether and just adding a 20% administrative charge? There might be ways to get around just blatantly raising the price that much.

There’s this female chef named Amanda Cohen who owns a restaurant called “Dirt Candy” in the Lower East Side of Manhattan and she successfully managed to get rid of the tipping system. She just adds a 20% administrative charge.

[IndyMelissa 303]

1 hour ago, AJRocketMan said:

Do you live in a small town? What’s your guys’ foot traffic like? Have you thought of adding an automatic gratuity above a certain price point? Have you thought of getting rid of the tipping system altogether and just adding a 20% administrative charge? There might be ways to get around just blatantly raising the price that much.

There’s this female chef named Amanda Cohen who owns a restaurant called “Dirt Candy” in the Lower East Side of Manhattan and she successfully managed to get rid of the tipping system. She just adds a 20% administrative charge.

We haven't owned the store in a few years, but because the way the Ice Cream/Deserts were made (With liquid nitrogen) our staff was tipped fairly well, usually several dollars per order. So, even kids who started at minimum wage (15 was the youngest we hired) were making much more than minimum wage. Our store was in a very good location with a lot of foot traffic. I remember Joes Crab shack did that for awhile, raised their prices but got rid of tipping. I don't remember it going over well, because people would complain that they were getting tipped out of the price increase, even if the service was terrible. I know the owners who bought the store from us, and they would 100% close their store down if minimum wage went to $15.00. Its just not sustainable for a low cost product. I think a lot depends on the business model and the product. Ice Cream is fairly cut and dry. There is an industry standard/ price the market will bear for the product.  DQ, Cold Stone, Sub Zero...the prices for their products based on ounces served is fairly similar across the board depending of course, where you live. There is only so much you can ask to charge before people just wont buy. Again, its just not the wage price that will increase...but as an owner you are still a customer to your vendors. The people from who you buy your cups, spoons, cream, mix-ins, toppings, cleaning supplies...all of that.  Each increase for each item adds up quickly. They will have to absorb the cost somewhere so it gets passed on to their customers...which would be us. All of the sudden the price goes up for cost of goods sold, and what it takes us to make the product. Its definitely a domino, chain reaction kind of effect. Some business may be able to absorb it in other places, but simple business' with a low price point product don't have a lot of places to adjust unfortunately. My husband and I ran the math when as we still owned the store when it started in Seattle, and we looked at several scenarios and options. Talked extensively with our corporate office, and at the end of the day it just wouldn't work. The store would be able to stay open, but there would be little to no profit. We would just shut it down, as it's too much work to own a business that makes no money. Ice Cream store owners aren't living the high life. You can make a nice little living from it, but no one is becoming a millionaire off of it, thats for sure!

 

[Woolfsmck 2,763]

1 hour ago, AJRocketMan said:

she successfully managed to get rid of the tipping system. She just adds a 20% administrative charge.

Explain the difference 'administrative charge' is from a 'mandatory tip' or 'tax'???????

 

other than raising the price by 20% because of tax errrr... minimum wage increase

[AJRocketMan 2,684]

25 minutes ago, IndyMelissa said:

We haven't owned the store in a few years, but because the way the Ice Cream/Deserts were made (With liquid nitrogen) our staff was tipped fairly well, usually several dollars per order. So, even kids who started at minimum wage (15 was the youngest we hired) were making much more than minimum wage. Our store was in a very good location with a lot of foot traffic. I remember Joes Crab shack did that for awhile, raised their prices but got rid of tipping. I don't remember it going over well, because people would complain that they were getting tipped out of the price increase, even if the service was terrible. I know the owners who bought the store from us, and they would 100% close their store down if minimum wage went to $15.00. Its just not sustainable for a low cost product. I think a lot depends on the business model and the product. Ice Cream is fairly cut and dry. There is an industry standard/ price the market will bear for the product.  DQ, Cold Stone, Sub Zero...the prices for their products based on ounces served is fairly similar across the board depending of course, where you live. There is only so much you can ask to charge before people just wont buy. Again, its just not the wage price that will increase...but as an owner you are still a customer to your vendors. The people from who you buy your cups, spoons, cream, mix-ins, toppings, cleaning supplies...all of that.  Each increase for each item adds up quickly. They will have to absorb the cost somewhere so it gets passed on to their customers...which would be us. All of the sudden the price goes up for cost of goods sold, and what it takes us to make the product. Its definitely a domino, chain reaction kind of effect. Some business may be able to absorb it in other places, but simple business' with a low price point product don't have a lot of places to adjust unfortunately. My husband and I ran the math when as we still owned the store when it started in Seattle, and we looked at several scenarios and options. Talked extensively with our corporate office, and at the end of the day it just wouldn't work. The store would be able to stay open, but there would be little to no profit. We would just shut it down, as it's too much work to own a business that makes no money. Ice Cream store owners aren't living the high life. You can make a nice little living from it, but no one is becoming a millionaire off of it, thats for sure!

 

That sucks. By the way, the Raise the Wage Act proposes a gradual increase to the minimum wage, reaching $15/hr by 2025 and $15/hr for tipped workers by 2027. If it were to pass, the minimum wage would go from $7.25 to $9.50/hr on June 1st of this year. I don’t even understand why the minimum wage didn’t rise once in the past 11 years. Thanks, Obama.

[IndyMelissa 303]

1 hour ago, AJRocketMan said:

That sucks. By the way, the Raise the Wage Act proposes a gradual increase to the minimum wage, reaching $15/hr by 2025 and $15/hr for tipped workers by 2027. If it were to pass, the minimum wage would go from $7.25 to $9.50/hr on June 1st of this year. I don’t even understand why the minimum wage didn’t rise once in the past 11 years. Thanks, Obama.

Yeah I definitely think $7.25 is waaaay to low for any job! And we all know it's not a wage anyone can live on if that is their prime means of support. It makes no sense it didn't increase for 11 years for sure. That should be a #1 priority!

[Lion Heart 15,041]

This article shows how a large corporation like McDonald's was able to accommodate the rising wages in 29 states and come out fine. However, it also mentions how mom and pop stores don't have the resources to quickly adjust to an increase in wages:

"Still, a higher-menu-price solution could be a challenge for independent restaurants navigating rising wages. Mom-and-pop operators don't have the scale and resources of McDonald's, and may need to increase prices more dramatically to offset new labor costs. The National Restaurant Association released a statement earlier this week arguing against raising the federal minimum wage during the COVID-19 crisis.

"The Raise the Wage Act imposes an impossible challenge for the restaurant industry … Our industry runs on a 3-5% pre-tax profit margin in a good year — during a pandemic is not the time to impose a triple-digit increase in labor costs," the association wrote." 

I do hope we can find ways to either help small business accommodate these changes, or maybe change the culture around local restaurants and encourage people to visit local restaurants as opposed to fast food locations.

[GagaSine 7,464]

Honestly in terms of small businesses I really think rent control would be a saving grace for those with razor thin profits that will struggle to pay employees more. Almost every small business I’ve worked at that shut down was largely due to rent being the biggest cost and not being able to afford sinking that much money into it whenever profits slowed. Or perhaps some kind of tax break based on how many employees they have.