If your business relies on hiring casual work on the minimum wage, and is so lean that you can’t make ends meet just by keeping their wages matching inflation, then your business was never going to last anyway. And you definitely shouldn’t be influencing business or labour market policy, since your own business model is hardly a sterling example.

What flashheast said.My friend works as a barista,and he can’t afford to by a fu*#ing latte at the price his employer has set.He also insists that a minimum wage of 7.50 Euros as demanded by leftists in our fair country would very likely threaten him with unemployment.The chain for which he works,however,(no,not Starbucks) is making larger profits every year…

“But it had collateral consequences as well, as their worker’s comp. and unemployment insurance costs rose in relation to their payroll, as did their payroll tax contributions.”

But here’s the best part.  Since the wage cap (which is rather low) of the unemployement tax did not change, that means that total unemployment costs did not change (although the timing of those costs would shift slightly seasonally.  And even in high-risk occupations (which I seriously doubt an ice-cream stand qualifies as), workers comp is about $0.05 per 1.00 paid.  Most non-construction/non manual labor jobs are under $0.01 per $1.00 paid.  It is indeed true that Medicate/FICA are an additional 7.65% of the wage base, but the most the payroll tax/workers comp burden could possible be is about 10%, not the 50% he claims in this math-addled article.

“My parents own an ice cream shop, and rely heavily in its operation on eight 16-20 year olds working part-time schedules of 16-24 hours a week, along with one full-time manager who is assisted by my parents in their free time.  Over the course of a 7 day work week, they typically employ the part-time workers for a total of about 340 hours a week.”

Oh, the sadness of industries that rely on teenaged sweatshop labor.  My heart always breaks for them!  I remember how awesome it was to be scheduled for as many 3.5 and 7.5 hour shifts as could fit into a week, because for shifts less than 8 hours long you only have to be given a 20 minute break instead of a 30 minute break and for shifts less than 4 hours long you don’t have to legally be given any kind of break at all! without putting me over the magic “40 hour” mark so I wouldn’t have to be paid overtime or be eligible for even the tiniest of benefits.

There always is the possibility that raising the minimum wage will put some bad business models out of business, that are only open because they can exploit cheap labor.

So be it. That’s how it’s supposed to work.

One of the common arguments given is that raising the minimum wage doesn’t say that they’ll go out of business, just that they’ll hire less. This is a bad argument. Why? To maximize their profits, pretty much every service industry outfit out there is already running on a skeleton crew. If they COULD cut any more they already WOULD have. In this case, you have the owner working himself. Which yes, eliminates A job. (Or two part-time). But that assumes that his labor isn’t more valuable or needed elsewhere, but ideally, the increased spending power given to much more people also increases the labor needed to serve those people. Now if in the end, economically it’s a plus or a minus amount is up in the air, as it’s far too complex to truly judge (but it looks like it’s a plus on the whole).

BTW. Even if it was a minus I still support modest raises to the minimum wage, as working poverty IMO is a massive social ill.

Please distinguish between small business (and by that I mean independents, not franchises) and large ones.  Large corporate entities are hostile to minimum wage increases but they are best able to absorb it.  Small businesses, though, may not be able to.  “[Y]our business was never going to last anyway ... you definitely shouldn’t be influencing business or labour market policy, since your own business model is hardly a sterling example” is a rather callous point of view to take.  It comes perilously close to the shrugs and “so?” of the corporate types when they gut another factory town in order to move the jobs to slave-level wages in the third world.  (FTR, I don’t think you meant it that way.  I do think that you didn’t pause to consider the brutal impact of the words and the casualness with which they were delivered.)

I have met quite a few small businessmen here in Canada* whose interests would be far better served by the principles behind NDP (social democratic) policies, but they’d never vote for them because NDPers are very prone to seeing all businesses as the same (or at least seeming to be), be they mom and pop operations or Wal-Mart.  There is a real fear amongst the small business class that a soc-dem government means a real disinterest in whether their life’s work goes down the tubes as long as some shiny new taxes and entitlement programs come along.  Whether people on the left really do give a shit about factory workers and the homelesss and don’t give a flying damn for shopkeepers I will leave for others to debate; I personally do not believe it to be so and I have been both a small businessman and a social services worker.  What I think is undeniable, though, is that we often seem to care more about social programs than successful businesses and the Right has been driving busloads of votes out of our camp through our foolish failure to communicate with people who are natural allies.

* - I note that flashheart uses the (ahem!) correct spelling of “labour” so I’m going to assume that he’s Canadian, or at least Commonwealth.

One thing that drives me nuts, though: that subset of people who own or manage businesses who will almost masturbate to the concept of the concept of value-for-dollar when, say, complaining about taxes and government but can’t see it in front of their nose vis-a-vis their employees: specifically, their inability to grasp that paying minimum wage guarantees receiving minimum effort.  If the employee has no fiscal or personal stake in your business then why on earth should they do more than the bare minimum?  Why should they do more than what they’re paid for?

Jeez, Mike, aren’t we in a mood today!

Can I buy you an ice cream?

IF someone asks me about ummeli I will reply, dignus est intrare.

The Republicans always talk about how horribly inflationary minimum wage hikes are, but the dirty little secret is that massive tax cuts are even more inflationary. So is fiscal irresponsibility on the part of the federal government.

I’m not sure if anyone has brought this up yet, but it’s very unlikely that part-time employed high school and college students who make minimum wage have anything to do with the unemployment rate.  Such people are generally not eligible to go on unemployment, which as far as I know is how the unemployment rate is determined. 

But adults who work full-time minimum wage jobs?  Now they sure are eligible.  And tend not to be cute middle class students who only need the work for spending money.  Though I guess those folks still factor in this stupid anecdote about how all small businesses will close down if we raise the minimum wage, because if ice cream prices go up people will just stop buying it (which, anecdotally speaking, hasn’t been the case thus far in my experience - food prices have risen over the last few months, but i’ll still buy the occasional ice cream, even if it’s a quarter more expensive than it was last summer).

Not all regulation is created equal. Some government regulation does indeed help big business at the expense of small business, but this usually isn’t the kind of regulation proposed by Democrats.

Its another unfortunate effect on our language of the conservative ascendancy since 1980 that now all government regulation is seen as the same.

I am so sick of these goddamned cheapskates carrying on about having to pay their employees an extra 50 cents an hour. Hey, fuckhead, if employing people is so onerous, why don’t you go to work for someone else and see how YOU like it.

if employing people is so onerous, why don’t you go to work for someone else and see how YOU like it.

Or, hey, why not fire all your employees and do all the work yourself, or hire the wife and kids for “an allowance”?  Teh Evul immigrants seem to be doing OK with that model…

The part I find most amusing is that minimum wage laws are about the fairest cost increase a small business owner gets because they affect all of the competition equally. Most of the other things vary in their effects - e.g. milk prices are going to hurt the people without large, long-term contracts the most, health insurance affects people with small plans and no full-time negotiators, etc. The owner of our small neighborhood coffee shop got hit with a massive health-insurance increase (roughly $400/mo -> $750/mo IIRC) a couple of months ago - since she has at most one other person working alongside her, that’s more than the equivalent of minimum wage jumping from $5 to $7 and it was unpredictable and, worse, places like Starbucks didn’t have anything like a corresponding jump.

Anybody with any sense knows that small businesses would proliferate if there was socialized health care in the US because more people would leave other jobs to take a chance. It is only the existing exploitative businesses that want you to think it is all the “regulation” that is “killing their profits” that means they don’t get to reenact slavery and squeeze money out of their workers like petty tyrant control freaks.

That needed saying again.

Oh, wait. Aren’t ice cream stands considered restaurants, in which case tippable staff are in many states not subject to the standard minimum wage? Also, assuming the typical 12-14 hour opening time of an ice cream stand, that would mean an average staff of 3 plus owners/managers, which you only need if you’re selling into the hundreds of cones an hour (in which case minimum wage is definitely not your problem). I call bullshit.

Oh, and one other thing: this must be the first year ever that high school and colleges students went out to look for summer jobs. Because otherwise the (actually very good) economists at the BLS would have data from how the summer-job influx affected the raw numbers, and the young-people unemployment rate would be, y’know, seasonally adjusted just like all the other major numbers the BLS releases.

I think what Chris said also needs saying again (and again and again). In a privately-owned business, direct wages are usually the smallest and least relevant portion of the cash outflow. Inventory, maintenance, rent/lease/mortgage, transportation and advertising cost a whole hell of a lot more than paying your employees.

And just to provide a counter-anecdote to Patterico’s useless maundering: My father recently dabbled in owning an ice cream store (two, actually) and eventually had to sell them off, not because he was driven broke by the government audaciously forcing him to pay his employees, but because selling ice cream is an inherently crappy business. Even if it weren’t a largely seasonal product, it’d still be damn near impossible to turn a useful profit off of it, because A) there’s nothing to mark up and B) nobody is going to pay more than about $3.50 for an ice cream cone (unless they’re eating at a Wolfgang Puck restaurant).

Food service is a bad industry on which to base an anti-minimum-wage argument, anyway, since those businesses tend to have pretty razor-thin profit margins regardless of the prevailing economic environment. Celebrity chefs aren’t rich because it’s just so easy to run a restaurant profitably, they’re rich because their restaurants generally target a clientele that can afford to buy already-expensive foodstuffs that are very easy to mark up further at the point of sale.

That’s a rule that cuts across all industries, anyway: If the things you’re selling aren’t expensive to begin with, you’re not going to make a huge profit. It’s easy to get rich selling BMWs for a living. But if you’re selling selling $3 ice cream cones at the mall, not so much.

Celebrity chefs aren’t rich because it’s just so easy to run a restaurant profitably, they’re rich because their restaurants generally target a clientele that can afford to buy already-expensive foodstuffs that are very easy to mark up further at the point of sale.

If you ever watch “Gordon Ramsay’s Kitchen Nightmares” on BBC America, his mantra for a successful restaurant is fresh local ingredients (which are always cheaper) made into simple dishes.  Spending a huge amount of money on really expensive imported ingredients is a one-way ticket to running yourself out of business.

Hey, each scoop at Baskin Robbins used to be a quarter!!!  $0.75 for a triple!  Why should I pay more than that just b/c Donny Osmond had the #1 record at the time?

Ice cream (and Italian Ice) here in Chicago will cost you more than $3.50.  People pay it if it’s ‘gelato’ or ‘custard’.

Plus, asshole’s paying ‘part-time’ minimum wage.  Over the summer, kids will work full time.  Really, they do.  So will adults.  But then you might have to pay for benefits, so, damn, there go profits again.

I’m with Mike Ess and becoming more Marxist as I age.  Capitalism, unrestrained and unregulated, is going to destroy the Republic.  Can’t have a real democracy when landed gentry own everything and most people are desperate just to keep their homes.

Funny, since all my high school friends in RepublicanLand (Indiana) always told me I’d be a Republican when I “grew up”.

Ms Kate has it about right.  Where I live (in Canada, but specifically the city I live in) has a really superb set of government programmes besides the single-payer healthcare, and our small business climate is fantastic.

I (as usual) don’t agree with Seeker about the NDP; I think everyone to the right of them (which is pretty much everyone else) says that about them, that they’re anti-business and everything, but they’re actually disturbingly pro-corporate for an ostensible labour party.  But the Liberals and the CRAPs wouldn’t be able to hand the baton back and forth ad infinitum if people actually knew that, so it’s a convenient piece of propaganda.

Celebrity chefs aren’t rich because it’s just so easy to run a restaurant profitably, they’re rich because their restaurants generally target a clientele that can afford to buy already-expensive foodstuffs that are very easy to mark up further at the point of sale.

Well, to be perfectly honest, Celebrity Chefs make money because they’re famous enough to sell their own name as a brand, usually via the media.  They’re in the intellectual property business, not the food business.  And even so, celebrity != wealth, and it’s certainly possible to make good money as an executive chef who is not famous.

“I am so sick of these goddamned cheapskates carrying on about having to pay their employees an extra 50 cents an hour. Hey, fuckhead, if employing people is so onerous, why don’t you go to work for someone else and see how YOU like it.”

Or, if wages above a certain level are so important to you, why don’t you try providing them yourself, instead of spending that energy trying to compel others to do so?

Or, if wages above a certain level are so important to you, why don’t you try providing them yourself, instead of spending that energy trying to compel others to do so?

So did it hurt? falling out of the stupid tree, I mean.

I’m at a loss for artful metaphors about how stupid that was. allow me to rephrase your comment and the one you quoted into a more clear context.

“If driving under the speed limit is too complicated a concept for you, perhaps you shouldn’t own a car.”
“Well, if you think people should only drive under a certain speed, maybe you should go FASTER than that and see how you like it!”

To maximize their profits, pretty much every service industry outfit out there is already running on a skeleton crew.

And let’s see how well those businesses survive when their customers have to wait in long lines for shoddy service.  Perhaps customers would prefer to pay a little more.