New “min” wage

[PWMDMD]

Restaurants are always failing. If a business can't sustain paying it's employees $16.28/hr in a high COLA then they don't have a viable business model.

The one-year success rate for restaurants has always been terrible with 60% out of business or in serious distress at one year. By year 5, 80% are out of business or in serious distress. Thin margins, lots of competition, difficulty with location selection, the need to embrace technology, and the fact that you actually have to be good at what you do is a recipe for failure.

To your second point, the minimum wage here is $16.50 and restaurants are still open. While some have closed, it was because they were terrible - bad food, bad service, bad ambiance in the restaurant, etc, etc, etc.

 

[tbm5690]

As I assume is the case in most places, starting wages far outpace minimum wage at least in full-time positions. Food service is paying $16+ here with the minimum wage of $7.50. The point is, let the market dictate wages, not the government. Absolutely no one is forced to work at minimum wage.

 

[SC Maintenance]

I fail to see where FDR lied... but I can see where the Congress failed to live up to the intent of the original law.

So we agree the original law of 0.25 in 1939 was not a living wage ?

I worked for minimum wage in the mid 90’s. Was definitely not a lot then but plenty for a teenager.

What some person said 100 years ago does not trump math.

 

[Dave Hess]

Honestly I don’t think it’s worth owning a mom & pop restaurant…… or fast food franchise.

Just get a good full time job with good benefits and don’t have the never ending stress and aggravations.

 

[PWMDMD]

Honestly I don’t think it’s worth owning a mom & pop restaurant…… or fast food franchise.

Just get a good full time job with good benefits and don’t have the never ending stress and aggravations.

I have good friends who started with fast-food franchises and they do very well with those. They've now branched into pilates franchises and those are doing really well. They have the background for doing well at these (he has an MBA and she a JD from Columbia) and constantly state they are a lot of work but he/she are in their late 40's and basically they don't ever have to work again. Not many FT jobs offer that opportunity. Of course, not all franchises go this way and the reason they branched into pilates was because getting a fast-food franchise in a prime location is nearly impossible now but he said his only mistake was staying in corporate finance for 10 years before quitting his job and opening the first fast food restaurant.

 

[PandaBear]

It is impossible to get any sort of guarantee and at the same time having that guarantee being optimal, that's really a fundamental conflict in economy. Business owners can't get customers to promise coming in at the same time spend the same amount every day, and if you want to force them to pay you a minimum, guarantee rate, it would be a worst case scenario rate. I think this is basically what minimum wage is, or what European gets paid vs Americans for the same jobs because they get job security and cannot be laid off that easily.

Living wage on the other hand, typically is a market rate that can overall support someone when the good and bad days average out. It would likely be different for everyone and if everyone gets paid better, then cost like rent, local entertainment, etc would go up in price when people throw money at these.

 

[PandaBear]

As a society on a whole we have a substantial amount of wealth. Nobody should be starving or homeless. Get someone stable, and if they want it nicer, then it's on them.

Minimum wages are a good floor during deflationary times so employers don't undercut each other in a race to the bottom.

For every action there is always reaction. The rise of gig economy basically is a work around against minimum wage as the delivery drivers are just self employed. They can get paid below min wage if they don't get enough frequent business. We do have section 8 program so most low income folks won't go homeless. We also have EBT card programs for people who need a bit of help in food.

 

[Dave Hess]

The one-year success rate for restaurants has always been terrible with 60% out of business or in serious distress at one year. By year 5, 80% are out of business or in serious distress. Thin margins, lots of competition, difficulty with location selection, the need to embrace technology, and the fact that you actually have to be good at what you do is a recipe for failure.

To your second point, the minimum wage here is $16.50 and restaurants are still open. While some have closed, it was because they were terrible - bad food, bad service, bad ambiance in the restaurant, etc, etc, etc.

I know a great mom & pop Italian restaurant that’s been in business for 25 years.

About 20 years ago the opened another location (with same great food) and 2 years later they closed.
Then 5 years ago they opened another location ((great food) and closed 1 year later.

With consumers trying to stretch their budget, many are buying pizza from Papa John’s and Dominos to earn points to redeem for free pizza.

 

[Pablo]

Three solid investments: Restaurants, malls, boats.