Quote:
Originally Posted by PepsiFree
This isn't really true, though, it's just a lie people are told to convince them some people need to stay poor for the betterment of everyone.
Put it this way. In a restaurant, food costs should be about 30% (of which, about 40% is labour costs down the line) and labour costs should be about 30%.
So for every dollar of revenue, right now, 42 cents is labour. If labour costs doubled (pretending everyone was at $7.50 minimum wage and they're now at $15), it would go up to 84 cents. So to cover the labour increase, a $10 meal would have to be $14.20 (a 42% increase).
Say all the customers are minimum wage earners. Previously, at $60 per day ($7.50 x 8) they were spending 17% of their day's salary on that meal. Now, with the increase they're making $120 a day and spending 12% of their salary on that meal. They can buy that meal and still have $6 more in their pocket than they would've had if they bought the meal when everyone was making $7.50. Almost a whole hour's worth of income at their previous wage.
So even with the increased cost of food, they are spending a lower percentage of their income on it. Obviously those are rough numbers, but no, it is not true that there is no difference.
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Labour cost isn't the only thing that increases with a minimum wage increase though. The cost for everything goes up all the way through the supply chain. Every industry that plays a role in getting a product or service to market increases their fees relative to their increased wage costs and it shows up in the prices. The cost of food production, energy, transportation, and rent goes up. Property owners that charge rent will certainly notice their costs going up and will pass that on to both commercial and residential renters.
There is lag, but eventually it all catches up and it doesn't take long. If it didn't, there would still be a $4 minimum wage. It's not a real solution to a much bigger problem. To be fair, I don't think there is a solution that doesn't involve a complete restart of the current capitalist system which won't happen. I think when I started in the workforce, the minimum wage was $4.55 in Ontario and increases since then haven't fixed anything. The only thing that seems to change are major chains benefiting at the expense of small business every time these purges happen and industries see hiccups, which just makes the capitalist pyramid that much more pronounced.