Totally different demographics - that's why what works - and works well - in the Scandinavian countries would NEVER work in other locations, like the US.

As if any of us actually know what will happen.

:1orglaugh

The idea in the article was that if a company makes a 22% profit margin they may only make a 19-20% profit margin after paying higher wages.

There would still be profit, just not as much as before.

Says the vending machine.

no one makes 22% profit margin in the "real world", especially not in the restaurant business:

"Full-service restaurants at all levels spent about 32 percent of each dollar on the cost of food and beverages, 33 percent on salaries and wages, and from 5 percent to 6 percent on restaurant occupancy costs. Profit margins, however, varied according to the cost of the average check per person. Those with checks under $15 showed a profit of 3 percent. Those with checks from $15 to $24.99 boasted the highest profit margin at 3.5 percent. Finally, those with checks of $25 and over had the lowest profits, at 1.8 percent."

source: The Average Profit Margin for a Restaurant | Chron.com


no matter how anyone tries to spin it, if you are making few percent profit margin (typical in many industries), and one of your costs, which happens to account for 33% of your expenses skyrockets, then you are completely fucked....

I guess we will find out. A year or two from now if all of these businesses have gone under or prices have skyrocketed then it will be clear that it is/was a bad idea. If they are still alive and thriving then we know it didn't affect them as feared.

I cannot believe the amount of communist and socialist fucking losers on GFY. Suck a dick! Do any of you actually run your own businesses?

most of you are a fucking joke.

So what do you think businesses are in business to do? make less profit?

you socialist piece of shit.

I've been in situations where labor costs got out of control and tried to fight it out, get in front of it, make it work, trust me it's not worth it. And I'm not even talking about a change of 7-15 dollars an hour, even a smaller increase like 10-20% is drastic. If I was faced with that situation I would certainly close without hesitation.

One of the first things you learn in business is that payroll and employee compensation is the most controllable expense. It's the first place you look when you need to save money. I have always paid people as much as I could afford to. If someone came along and told me I had to double it, I'd say, here - they're all fired. You try it! Not because I wanted to, just because I know it's not possible, and to even try means I am accepting work from people that there's a high chance I won't be able to compensate them for, and that's not acceptable to me.

I can't think of a single small to medium business anywhere where employee compensation isn't at least 3 times the profit margin, in many cases much more.

Personally, every 100 bucks I gross, I am putting only 1-5 dollars in my pocket and paying out anywhere from 35-60 to "employees" depending on what you call an employee and what you call a contractor. The rest goes to overhead and if I'm lucky I keep a dollar or two.

Say what you want, Ayn Rand was right that good help is hard to find, there is always a lot of competition for good workers, and compensation packages are set up to make sure you get the best help available for your budget. People making too little either haven't developed valuable skills or they haven't found the right place where their skills are needed and appreciated.

I guess 15$ is ok for mac now

The conservatives gleefully associate this phenomenon with the coming increase in the city's minimum wage, which kicks in April 1 with a rise to $11 an hour from $9.32. (Employers whose workers earn tips get a break--they can pay $10 if the workers make up at least another dollar from their tips.) The wage hike builds over time; for employers with fewer than 500 workers, which would probably cover every full-service Seattle restaurant, the ultimate increase to $16.49--or $15 for tip earners--doesn't happen until 2021.

================================

So you all think that these businesses can't figure this shit out in the next 6 years by the time the $15 rate is actually instituted?

As for the bookstore closing in San Francisco... He can bitch all he wants. But this is what happens when you run a dying business model. Should Radio Shack complain about this too? Maybe he should cry foul about Amazon and Apple crushing his poor outdated business model?

Sometimes the savvy thing to do is quit while you are ahead and look into another venture. Especially if you are already on a downturn.

try and understand this fuckwad: I'm not calming ANYTHING,I read and article and posted the articular here at GFY, now I'm reading the opinion of others and following the threads they post...

instead of shouting out your ass like you always do try and form an open minded opinion. :2 cents:

I can tell you this from MY personal experience 'as a small business owner' though... after my medical cost more than doubled I spend less money in the community...

I'm sure you'll point to some other source telling me I'm lying and pushing a right wing agenda HOW THE FUCK EVER.. the statement is true.

between paying over 53% federal/state and city tax, a 12% self employed tax, then Obama care lifting about 10K from my after tax dollars... I don't spend much anymore...

closing a profitable business because of future wage challenges isn't savvy. that's giving up without trying. there's absolutely nothing to lose by trying ideas to deal with the wasge increase. putting out those sorts of fires is what being a business owner is all about. starting a profitable venture is exponentially more difficult and risky than trying to work with one that is already profitable and then if you can't figure it out, then close it. well, no, actually, then try and sell it, which is the weirdest part of the silly article in the OP, as if those restaurant owners aren't going to try to sell their profitable operations? they're just going to close up and walk away because of what might have not worked out on the accounting. right.

closing a business that is not profitable due to a downturn is another matter and not a part of the OP article.

you're off the beam about me :2 cents:

I'm extremely fiscally conservative. I was trying to provide solutions to your financial problems. Not sure what's "off beam" about that but I take it you just want to complain and not find remedy?

Nobody is going to fix our problems for us, it's up to us. Your tax issues are resolvable.

QFT :thumbsup

you guys make it sound like there is something to "figure out"... you will magically "figure out" how to increase your sales by lets say 30% next month to cover the additional expenses?

in many businesses if things are not quite working right, you are LOSING $$ each month... not making less, but actually have to pull money out of your saving account to piss away, with little hope of ever getting it back...

so imagine you worked out the numbers and unless sales increase by 30% next month you will be out of $20k...

What solution do you propose for a business owner in that position?

Go work for minimum wage?

I'm a content shooter, have been for 15 years and live just outside LA for one thing...I do have irons in the fire and will move when I can, not complaints just that many peeps here are not in the biz let alone business owners and do not understand budgets, gross, net and profit :2 cents:

thank you woj

Ok your profile says Montana I just assumed it was correct.

I've been shooting for 15 years too and live the OC. It's a fact that California is a bitch for taxes.

You're right about many people here not being in the biz. It's so fucking hard to keep track of. I need to goto a show finally, do face to face, and get all the jokers off my radar :thumbsup

Why would anyone be open minded about a blatant lie? That would just be stupid to go along and have an "open mind" as you claim, when the story has been proven bull shit at the very least a week ago.

Not to mention as Eric brought up, anyone whom knows anything in the slightest about this min wage hike, knows that it's not instantly hiking up to $15/hr. It will take several years to get to that level, meaning these restaurants wont feel much effect for several years.

Why don't you just do even the slightest bit of research before posting this shit if you don't want people showing you are posting BS.

ugh. could the so called business owners in this thread, which there are few, please understand the minimum wage is below poverty, has been that way since 1982, does not come close to tracking with the wage gains of the rich in the same timeframe, & that the rich work to minimize labor cost, & that the only thing protecting workers from 10 cents an hour is the minimum wage law?

sure there would be a tipping point that a minimum crushes business. just like there is a minimum (zero) that crushes the poor. somewhere in the middle, businesses profit & workers make a decent wage. at todays rate, we are not close to that, especially considering the wealth gap.

Where The Minimum Wage Would Be If The Top One Percent Didn't Leave Workers Behind

:upsidedow

Right and this isn't a bipartisan issue. Anyone who cares about our economy needs to realize that since 1988 Congress has raised it's pay 15 times to reflect changes in the economy, while only raising the minimum wage 3 times. Now we have wild swings in the economy trying to compensate and small businesses will suffer, but only those those haven't adapted in advance or are already on rocky ground as it is. :2 cents:

I didn't know it would be gradual, that changes things a lot. But even if it's gradual, most restaurants are opened on credit lines or through investors who are looking for long term profits and certainly didn't count on having to pay $15 per hour in 7 years. I guess if everybody's on the same page then it's just a matter of competing but if it's just within Seattle city limits, it would be a whole lot easier to start from scratch somewhere where labor costs are more in line with the national average.

not only that, but the federal income tax for warren buffetts secretary is higher than it is for buffett. absurd. for 30 years congress has been sucking rich cock with no concern for anyone else. Im sure the rich can afford only 2 yachts instead of 3 & millions can be lifted out of poverty at the same time. But no, the most important thing to congress is that the rich get as much as possible. fuck the poor.

between piracy and the condom issues my gross is off 60% last few years.... a 'webmaster' is not in porn to my thinking.... ...internet salesman isn't really like dealing with content people on a daily basis....

try and think in these terms: when I started my content biz I worked 80+ hours a week, didn't watch TV for 10 years.... so a guy hanging out, fucking around, gets a job at pizza hut and suddenly he's earned something?

you are combating the human condition....there has always been losers, winners and thief's... not going change because some bozo passes a law.. .. not sure what to do however one thing to comes to mind, is not allow people with such low income to have as many kids as they want... what's your thinking on that one?

I understand that businesses are in business to make as much profit as they can. However, I get annoyed when I see some businesses paying so little that their employees also end up on welfare of different types. This means the government is helping subsidize their profits.

I don't know that this is happening in these particular cases, but it happens with millions of employees all over the country.

Scandinavian countries don't have minimum wages. Almost every job in those countries falls under a union that negotiates wages and workers rights. The same is true in Germany as well. That's why all of their jobs have living wages.

But you are missing the part that the places out side of Seattle will have to compete for workers vs Seattle. Why would anyone go to work at McDonald's in the town next to Seattle for $8/hr when they can just go to Seattle and get $15/hr?

You are thinking it only goes one way, but all the wages in that area will increase meaning shutting down to move to the next town over won't really work. They will either learn how to run a business and pay a livable wage to employees or they will go out of business.

unlike you, if I was looking for a job at mc donalds I would much bigger issues than which town to work in :helpme

costco = made in China

According to the article, the % of Profit is small.

People who say it isn't the rise in pay,.......... Have you ever ran a Business and had to pay someone (Not an independent contractor)?

Not only does the employees paycheck go up, but the taxes you must pay as a business owner goes up as well... Social Security will kill ya..... If you think you pay a lot (looking at your W2's), just remember that the company has to match that!

there is a finite number of jobs in Seattle, so obviously not everyone that wants a job there can get it? getting an entry level job at $15/hr is like winning a job lottery for some... so entry level workers will try to move to Seattle to get a job... BUT they won't be able to find one...

to make things even worse, if you remember first lecture of econ 101, when price of something goes up, the demand (by employers for labor) goes down... so number of available jobs will actually shrink...

this will probably turn into a complete disaster... hopefully will end these ridiculous socialist experiments once and for all...

if government could run a business there wouldn't be a deficit would there? :2 cents:

You'd be safe hiring illegals.

I doubt they check lemonade stands too closely.

Maybe content production is a bit like that bookstore in San Francisco these days? Or radio shack?

In all fairness, the government is not a business.

Businesses do things for profit. If it doesn't make a profit or help to make a profit then most businesses won't do it. Most of what the government does is never intended to make a profit.

A more accurate statement would be "If the government could balance its budget there wouldn't be a deficit."

In Denver, Highlands Ranch to be exact.. The McDonnalds there had a sign on the door the entire time I was in the area (5 months). It said "Now Hiring" and after a bit of text it said $10/hr. (Anyone with half a brain and no criminal record can easily get a job for $15/hr or more meaning even at $10/hr it was most just school kids working there)

The Dollar menu still cost a dollar and most things seems to cost about the same as any other McDonnalds..


Meanwhile here in central FL.. the Dollar menu still costs a dollar and most things cost the same as any other McDonalds but they pay their employees here 7.65 to start.. (considering FL is a right to work state and wages are low, you see Adults working at McDonalds here because they don't get paid much better elsewhere for basic labor related jobs)


What is the difference? In one location the store makes a bit more profit per employee vs the other.

Wages really don't drive up per product cost very much in most businesses..

I have done so before, it was profitable but taking away time from other ventures that was more profitable. Sure I could have kept it running and have 2 half ass ventures or hired someone and loose the profit but keep the risks..
you need to look at what your own time is worth and invest it wisely

FYI, nice one bedroom apartments in areas of Seattle that are not shitholes now rent at $1,800 a month. :1orglaugh:1orglaugh:1orglaugh:1orglaugh These are LA prices.

You have no idea if the store is making a profit or not....

It is also supply and demand, as Many stores are now raising pay ABOVE min wage to get better workers, I assume..

Heck even in my state and even in my town different mcdonalds charge different prices... Sure its only about $.25 on items, but you never get the same total for same items at different places.

I am in a right to work state and the pay $9-$9.50 to START and my state is a very low cost to live state..

Not paying a Livable wage as you call it, will NOT run someone out of business... If the "workers" quit applying, then they will have to raise wages....

you mean the very exact same congress that pushed Obama care are on the people and made themselves exempt? that congress?

then maybe the government should not tell business how to operate? I have no idea what you do for a living, does that imply that I can step in and make you run your business the way I think you should?

Three things.

1. Many people in low wage jobs qualify for a variety of different welfare programs. This means that we the tax payers are subsidizing these people's incomes. Perhaps forcing businesses to pay a wage that is high enough that the average person working 40 hours per week no longer qualifies for welfare isn't such a bad thing. Walmart's employees alone costs the tax payers $6.2 billion dollars per year while Walmart made nearly $15 billion in net profit last year.

2. If the people in that area that this law is exists see a negative effect from this law or they flat out don't like the government telling people how to run their businesses they can always vote those people out of office in the next election and put people in office that will repeal the law.

3. Do I want the government telling me how to run my business. First off, I am self-employed and have been since 1999. However, I work on my own and don't have employees. If I do hire people it is as a contractor on a per job basis. If I did need to hire employees the odds are they would need to be skilled and would demand a higher wage than the minimum wage.

Not to defend Obamacare, but I don't think Congress is exempt.

Here is a factcheck article that says all congressional members and staff are actually being forced to buy insurance from the exchange unless they get it through a spouse who has a different job.

Ted Cruz just announced he is forced to use the Obamacare exchange now that his wife is not going to get insurance through her job.