In case you don't read all the blogs daily that I have listed at right -- here is an excerpt from one of them today concerning the raising of the minimum wage to $15:
Now back to more Unintended Consequences.
I try not to pick on Seattle, but it’s just so easy. A recent paper in the Economic Policy Journal documents how, as Seattle’s minimum wage has increased from $9.47 to $11 to $13 to $15, restaurant health code violations has risen even faster.
And this is not per capita, but just on total violations. Which is even stranger, since as the minimum wage went up, the number of restaurants has been falling, either from going out of business, or moving out of t he city. Some people found this strange and couldn’t figure out the cause and effect.
Having been in the restaurant business a long time ago, I can tell you exactly what’s happening. They’re cutting the staff and the dedicated cleaning crew is the first to go. Then the cleaning jobs get spread out among the remaining staff. But as more and more reductions hit, there’s less and less time to do anything but your basic job, i.e. making hamburgers, for instance. So the cleaning jobs fall further and further behind.
In pretty much any business, but the restaurant business especially, if your labor costs suddenly increase, you have two real options . . . cut other costs or raise prices. So you start by cutting hours, and then cutting jobs. And of course that’s when you can start to have a problem with things like health code violations.
Now any time the idea of increasing the minimum wage comes up, the ivory tower elites will say, “Just raise prices. Since everyone will be doing it, you won’t be at a disadvantage.”
First off, if the business could get away with raising prices to make more money, THEY WOULD HAVE ALREADY DONE IT! THEY ALL WOULD HAVE.
When you raise prices, people stop coming to your establishment. Now you hope that the higher prices will offset the loss of some customers. But at some point you start falling behind the curve and are just losing money. As you keep raising prices, sales go down.
Like the old adage, “I lose money on every sale, but I make it up in volume. Yeah, right!
Or like the story of the little boy who sets up a lemonade stand in front of his house. A guy comes by and asks how for a cup of lemonade, and the boy says, “$1000.00.”
The guy says, “How in the heck do you plan to make money selling lemonade for a thousand dollars a cup.
The kid says, “Well, I only have to sell one cup.”
I guess that goes for a $1000 hamburger too.
Of course some companies are using the minimum wage to restructure and cut costs even more.
The Applebee’s franchisee for NYC has over 40 restaurants there, and as the state’s minimum wage increased, he’s cut over 1000 jobs in the last year, two-thirds of his employees. But he’s doing this not by reducing service due to less employees, but by embracing technology.
He’s moving all his stores to the table-top kiosks for ordering, paying, and playing games.
Instead of having one server for every three tables, he will have one ‘concierge’ for a dozen tables, there mostly to be sure you understand how operate the kiosks.
He expects eventually to cut over 2000 total jobs.
And according to the New York Post, the state’s lost over 1000 restaurants last year, about double the number lost in the previous years before the wage hike. And now they’re complaining about tax revenues being down, and are talking about raising taxes.
They never learn
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I have started writing my book "The Way I Remember It" and here is just a bit: (I have done this in my mind for the last 15 years - about time to put in print -- and the name comes from the fact that in the past when I was visiting with my brothers and a discussion came up about some incident it seems like there were always several different versions -- so this is just the way I remember it)
"I was born in a farm house about 2 miles south of Callaway,
Nebraska in June of 1943. This is on the eastern edge of the Sandhills of Nebraska in Custer County. I had an older
brother that was born in 1937 and another brother born in 1939. Later, in 1945 my younger brother was born
and little sister came in January of 1950.
A few years ago, with my older brothers, I drove by the location of that
place (they had to point it out to me as I did not remember it - I was just 4
years old when we moved away from it) and it is just a corner of a corn field
now. Dad was renting that farm and in
the spring of 1947 he rented a much larger farm/ranch a little west of Highway
40 about half way between Callaway and Oconto, Nebraska and we moved
there. There was a house and a barn
located at "the ranch" some seven miles from nearest road and both of
these were moved out to the closest corner of the land owned by Jim Cornish to
a road. This was about 7 miles from
Callaway where we did our shopping and went to High School -- all on
river-gravel road. The only grocery store
in Callaway was The Cash Store. It was a
very unusual name, as Mr. Edgington had huge books where he kept all the charge
accounts for customers. When I was going
to High School it wasn't unusual to call home -- 13F22 (which was Farm Line 13
and our ring was two long rings and two short rings) and go to the grocery
store to pick up some food and charge it to account. Our grade school was a two-room plus basement
building, Lower Lodi District 73 of Custer County, about 2 miles from our
place. When I was small I remember
riding the horse to school and carrying a tin lard bucket which contained my
lunch strapped to the saddle. There were times when a snow storm closed the
roads but school still went on and I recall walking across the fields in the
snow to get to school. Until sometime in
the 1950's this school had two teachers and the second room was for the high
school which had grades 9 and 10. I
think it closed the high school just as my oldest brother reached 9th grade and
he boarded 4 days a week at a private house in Callaway while he attended
school.
Will add to this as I think it up!
GROANER’S CORNER:(( During a performance for the high
school talent show at the local theater, a hole appeared in the stage floor.
Subsequent acts managed to avoid the damaged area until little Freddy, juggling
bowling pins, accidentally stepped through the hole right up to his
chest. He apologized to the audience for his clumsiness. But a heckler in
the back of the theater shouted: "Don't worry, Freddy! It's just a
stage you're going through!"
-----------------
Knock knock.
Who’s there?
Tank.
Tank who?
You’re welcome.
-----------------
Knock knock.
Who’s there?
Tank.
Tank who?
You’re welcome.
Later, Lynn
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