Comment by GuB-42
21 days ago
It is a convincing rebuttal.
Same for your water example. At some point, water stops being healthy, without knowing at what point, you can't just ask people to just drink more water, otherwise they may die. In fact people have died for that reason.
At some point, increasing minimum wage will cause unemployment and destroy companies. Maybe we are at that point, or maybe not, without a bound, there is no way to tell.
Well we're not at that point right now, and in 2009 $7.25/hr also wasn't at that point either. So surely we can bump to $10.83 pretty darn safely since it's the same in real dollars.
On the other hand, experiments with $20+ minimum wages in places like Seattle are creating an unsustainable drop in revenues for a lot of restaurants and the tips that employees expected.
It is a curve, and price discovery is definitely a thing that the government can’t ignore. In Seattle they are in the awkward phase where the politicians admit the problem but walking back the minimum wage policy, which ratchets upward every year, is not something they want to consider politically.
I have close friends in the food service industry in Seattle that have become quite against the minimum wage increases (which they earn as base pay) because it is costing them a lot of money in real terms and they foresee future reductions in employability, which puts them at risk economically.
This coming from an era when competent service employees were so in demand that employers would make concessions that even tech employees don’t get. They weren’t paid as much but they were given flexibility that most people would envy.
I doubt your friend base is predominantly min wage. Mine is, and universally, every single person’s opinion has been gratitude bordering on disbelief that as gen Z we can get by. “They were given flexibility that most people would envy”…then you leave tech to work at McD’s. Yes the restaurants are expensive but they haven’t been for the working class since the automat anyway.
IIRC, retail and restaurants are way overbuilt in the USA. Plus, disposable income is declining. Plus, decline in revenue and inflation is causing a die off. (Of course, labor has to be scapegoat.)
Also, holding up restaurant workers as the token reason for opposing living wages for all workers is a bit disingenious. Like using family farms to argue against inheritence taxes.
Is this evidence of a bubble predicated on suppressed wages though?
When lending costs were near-zero, housing was doing "great". That doesn't mean it's a smart or sustainable policy, even if we had gotten used to that as the norm.
I sometimes wonder if the same applies to restaurants. Consumers got used to lower prices predicated on lower labor costs. Many got used to eating out very often and to a certain extent the economy responds with more restauranteurs. But it couldn't sustain that once the service cost "bubble" popped. Maybe those low labor rates are not the norms we should accustom ourselves to.
Hey. Remember that time a bunch of economists and politicians got together and decided we'd brick domestic manufacturing and switch to a service economy? Well this is what a service economy looks like.
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