Businesses hurting as San Francisco raises minimum wage

[ShaneEnochs]

http://libertysolutions.org/2011/12/13/businesses-hurting-as-san-francisco-raises-minimum-wage/

San Francisco has the highest standard of living in the nation currently, but come the new year, it will also be the first city in the nation to surpass a $10 minimum wage. This will help some who are already secure in their jobs whose bosses have enough to pay them. Many small businesses, however, will be forced to lay off some people or go out of business, meaning fewer jobs in the long term. Some of the salaried kitchen workers will have to suffer a pay cut as the waiters who survive on tips and minimum wage get paid more.

 

[seraphson]

Let's build off of this: To the forums, what do you think of minimum wage as a whole?

 

[Len Larson]

Price controls invariably cause shortages. This will only cause MORE unemployment.

 

[Travlyr]

Let's build off of this: To the forums, what do you think of minimum wage as a whole?

Virtually irrelevant. Ending elastic money should be the focus.

 

[roho76]

How long until they blame greedy business owners for the rise in unemployment?

 

[KingRobbStark]

How long until they blame greedy business owners for the rise in unemployment?

They already do.

 

[Seraphim]

Counterfit and elasticity are seperate issues.

Even under a sound money system, money/credit remain elastic...The market caps the elasticity, however. That's the key.

Wouldn't be surprised if that's what you meant.

Virtually irrelevant. Ending elastic money should be the focus.

 

[Seraphim]

It's a price control, which is self defeating.

Well intentioned, but fails miserably.

Let's build off of this: To the forums, what do you think of minimum wage as a whole?

 

[Travlyr]

Counterfit and elasticity are seperate issues.

Even under a sound money system, money/credit remain elastic...The market caps the elasticity, however. That's the key.

Wouldn't be surprised if that's what you meant.

Yes, but could you please elaborate on how sound 100% redeemable money can be elastic?

 

[dannno]

Let's build off of this: To the forums, what do you think of minimum wage as a whole?

The minimum wage does nothing but cause poverty, suffering and misery.

 

[No Free Beer]

*sigh*

 

[Travlyr]

Price controls invariably cause shortages. This will only cause MORE unemployment.

I'm not sure that increasing the minimum wage at this point does increase unemployment. If history is any guide, then the minimum wage should be at $30 per hour already.

In 1964, when silver certificates were fully redeemable, and coins were 90% silver, the minimum wage was $1.25 which is equal to $29.65 per hour today.

 

[dannno]

I'm not sure that increasing the minimum wage at this point does increase unemployment. If history is any guide, then the minimum wage should be at $30 per hour already.

In 1964, when silver certificates were fully redeemable, and coins were 90% silver, the minimum wage was $1.25 which is equal to $29.65 per hour today.

You aren't looking at it from a proper economics perspective.

If I own a business and somebody only makes me $9.90 per hour and it costs $10/hour to employ them, plus other costs associated with risk/liability, there is no way in hell I am going to pay them $10/hour and lose money hiring another worker.

As a business owner you only hire workers when it is profitable to do so.

 

[Diurdi]

I'm not sure that increasing the minimum wage at this point does increase unemployment. If history is any guide, then the minimum wage should be at $30 per hour already.

In 1964, when silver certificates were fully redeemable, and coins were 90% silver, the minimum wage was $1.25 which is equal to $29.65 per hour today.

If anyone is getting a wage under the proposed future minimum wage, then it will cause unemployment.

A minimum wage at $1 would have no effect because no one is going to work for that anyway. A minimum wage of $100 would have a crippling effect on the economy

A minimum wage of $10 will have a negative effect but not it's not going to ruin the economy.

 

[Travlyr]

You aren't looking at it from a proper economics perspective.

If I own a business and somebody only makes me $9.90 per hour and it costs $10/hour to employ them, plus other costs associated with risk/liability, there is no way in hell I am going to pay them $10/hour and lose money hiring another worker.

As a business owner you only hire workers when it is profitable to do so.

If anyone is getting a wage under the proposed future minimum wage, then it will cause unemployment.

A minimum wage at $1 would have no effect because no one is going to work for that anyway. A minimum wage of $100 would have a crippling effect on the economy

A minimum wage of $10 will have a negative effect but not it's not going to ruin the economy.

I think you are both right in a 100% redeemable sound money environment, but we don't have that. So I question the validity of that scenario.

What we have are central banks and government regulations picking winners and losers. For example, Home Depot came to town and put the small well established (80+ years) local lumber yard & hardware store out-of-business because they don't have to compete honestly. Markets are completely distorted with elastic money and that includes, labor, products and tax incentives.

I am just trying to get a better understanding. Yet, I am convinced that Capital markets work quite differently than Socialist markets.

 

[Zippyjuan]

Yeah- they think this will make already expensive to live in San Francisco even more affordable? The increase in labor costs will eventually get included in the price of everthing so you will be back where you started. Some will be even be made worse off.

 

[Steven Douglas]

Yeah- they think this will make already expensive to live in San Francisco even more affordable? The increase in labor costs will eventually get included in the price of everthing so you will be back where you started. Some will be even be made worse off.

They're making it less affordable, not more - and that it their intent. Because they have "fixed" the minimum that one laborer can earn, they are, in effect, raising the standard for hiring, telling everyone who is willing to work for less to leave the city.

 

[Zippyjuan]

telling everyone who is willing to work for less to leave the city.

If you were willing to work for one wage and an employer offered you a higher one, would you turn it down? I can't think of anybody who would do that. "But I want to work for less- I'd rather make $5 an hour than $10 an hour- I'm out of here" isn't going to happen.

Higher wages (assuming that the cost of living is the same which it won't be- that will be higher too) would encourage more workers to move there- not to leave. It is the other end- the higher cost of living- which will force people to leave.

 

[Steven Douglas]

If you were willing to work for one wage and an employer offered you a higher one, would you turn it down?

Of course not, but that dynamic exists completely independent of any compulsory minimum.

Higher wages (assuming that the cost of living is the same which it won't be- that will be higher too) would encourage more workers to move there- not to leave. It is the other end- the higher cost of living- which will force people to leave.

There is no one hand/other hand to it. You have encouragement on one hand, and a force to leave on the other, which are tied together in a common cause and effect loop. You cannot pull and push simultaneously without a resultant net force - one in this case that is repulsive. Thus, what you just wrote is essentially a tautology of exactly what I wrote - namely, that "A higher minimum wage forces people to leave." The mechanism for forcing people to leave: a higher cost of living brought about by a higher minimum wage.

In other words, the unintended consequence, the net effect, is that it is against the law in San Francisco to be poor. It's no different, in essence, than mandatory smog, insurance and other laws which essentially state that it is against the law for the poor to drive - given that the privilege of driving has been virtually taxed out of existence for some of them.

 

[Cutlerzzz]

It's a price control, which is self defeating.

Well intentioned, but fails miserably.

It is meant to price unskilled labor out of the market to protect skilled labor (frequently unions) from competition. Not as well intentioned as many think.