Originally Posted By: dareo
Fast food usually runs 20 to 30 % labor to sales. So if you double 7.25 to 14.50 you need to increase sales by at least that 30%.
When I go to one of the TWO McDs in immediate walking distance to my store it is for a very cheap $4 average ticket. If i want to spend $8 on lunch i buy from the awesome little thai restaurant.
You don't have to increase sales, you just increase prices. If your labor cost is 30% of the product price, then a $4 ticket is $1.20 in labor. Double that and now you're at $2.40. So now your $4 ticket is $5.20, not $8. Your Thai place will probably have to follow suit and your $8 alternative won't be there. Also it might not be a $1.20 increase because in theory once you're paying $15, you can be more selective or turnover will be much lower yielding a more efficient workforce.
Remember, it was Henry Ford that started paying workers a lot more and they were then able to afford the products he was selling. Similarity with workers collecting government benefits, you're actually subsidizing the cost of that $4 ticket with your taxes whether you want to or not. Minimum wage actually hasn't kept pace with inflation, had it been indexed to inflation, we probably wouldn't even be having this discussion.
Originally Posted By: eljefino
If you rent apartments you should be STOKED if wages go up. You've got a mortgage and the price you paid for your property locked in. Any increases in rents you can finagle you can put on your books and show prospective buyers, and you'll have nearly instant equity.
I do rent apartments and you're clueless as how the rents are set. It's based on supply and demand, that's why in one area of the city you can command 2k rents on a one bedroom and in other cities they're $600. Has nothing to do with wages. Set the rent too high and no one will rent your apartment. Doesn't matter if they make more or less, there will be other apartments that they can rent at a lower price.
Originally Posted By: 3800Series
I haven't seen anyone mention savings yet. How are young family's who cut costs and have a savings going to feel when over night their $10-$15k it took them 7 years to save up for a new car, down payment for a new home, or child's college find is instantly worth 35% less.
Probably because this is meaningless and not reality. Do your really think that Bill Gates or Warren Buffet will instantly be worth 35% less if minimum wages go to $15/hr? Did you know that if you had placed your money in the S&P 500 in 2013, you would have gotten a 32% return that year?
The sky will not fall and the economy will not collapse if wages go to $15/hr.
