For one, the food business has notoriously thin margins. For two, wages are almost always the most expensive part of running a business. What the employer pays can easily be double what the employee receives.
So were California workers not already significantly above minimum? I live in a shit town in Florida and the lowest pay I’ve heard of lately was $12. Reminds me of visiting Manhattan in the early 90s. I was marveling at the prices of everything and asked my friend how somebody like a bellhop survives on minimum wage. He laughed, “Dude! Nobody makes minimum wage!”
The article makes a great point about employee retention driving down costs, and maybe that’s my answer, or a large part of it. In Florida an employer has to pay something like $7,000 to the state unemployment fund. If their turnover sucks, they have to pay that over and over again. When I worked at a payroll company, turnover was considered when we figured the employer’s rate.
While I’m at it, worker’s comp insurance is a thing. Every job has an associated code. The code for a roofer is “fuck you, uninsurable” or “fuck you, astronomical”. A clerical code carries super low rates and I’d imagine rates for fast food worker aren’t way higher. That’s part of the reason we would look at retention. More seasoned employees aren’t nearly as likely to get hurt on the job. (I think our calculations were partially figured on, “Treat your damned employees better.”)
And keep in mind, this new wage only applies to large companies who have the benefit of scale. $20/hr. could easily tank smaller outfits.
Labor is the largest cost to pretty much any company. Food margins are notoriously low that’s true but in theory with slightly raised prices and volume (because of the increase people have more money) it can equal or beat the profit beforehand.
When the wealthy get money they hoard it. When the poor get money they spend it on all the things they’d been cutting back on to stay afloat such as going out to eat.
There would be some point where this stops holding true and inflation just screws everything but we’re a ways off that point.
I have questions about this.
For one, the food business has notoriously thin margins. For two, wages are almost always the most expensive part of running a business. What the employer pays can easily be double what the employee receives.
So were California workers not already significantly above minimum? I live in a shit town in Florida and the lowest pay I’ve heard of lately was $12. Reminds me of visiting Manhattan in the early 90s. I was marveling at the prices of everything and asked my friend how somebody like a bellhop survives on minimum wage. He laughed, “Dude! Nobody makes minimum wage!”
The article makes a great point about employee retention driving down costs, and maybe that’s my answer, or a large part of it. In Florida an employer has to pay something like $7,000 to the state unemployment fund. If their turnover sucks, they have to pay that over and over again. When I worked at a payroll company, turnover was considered when we figured the employer’s rate.
While I’m at it, worker’s comp insurance is a thing. Every job has an associated code. The code for a roofer is “fuck you, uninsurable” or “fuck you, astronomical”. A clerical code carries super low rates and I’d imagine rates for fast food worker aren’t way higher. That’s part of the reason we would look at retention. More seasoned employees aren’t nearly as likely to get hurt on the job. (I think our calculations were partially figured on, “Treat your damned employees better.”)
And keep in mind, this new wage only applies to large companies who have the benefit of scale. $20/hr. could easily tank smaller outfits.
Labor is the largest cost to pretty much any company. Food margins are notoriously low that’s true but in theory with slightly raised prices and volume (because of the increase people have more money) it can equal or beat the profit beforehand.
When the wealthy get money they hoard it. When the poor get money they spend it on all the things they’d been cutting back on to stay afloat such as going out to eat.
There would be some point where this stops holding true and inflation just screws everything but we’re a ways off that point.