Real example of why $15hr min wage for L.A small businesses is crazy (Los Angeles: sales, 2015)

[skyegirl]

So I've read the back and forth for the past few pages and now my question, to those against the minimum wage hike to a (finally) livable wage, what is your solution for the working poor? You must understand that 7.25/HR is a joke for a person trying to pay rent, eat, etc. At what point can we all agree that not everyone is going to be a doctor, attorney, or rocket scientist, but everyone who works 40 hrs/week has the right to a decent life? The republicans are always complaining about the welfare recipients sucking the teet of our gov't, this is a way to encourage people to go to work and better themselves and their families. Why would anyone want to work when you can make more "not working" on welfare? And as far as the Mom and Pop businesses go, they have something like 6 years to fully implement this pay increase, and they will have to be prepared to pay a fair, living wage to their employees.

[jm1982]

Originally Posted by PDF

$15 an hour is still only $28,800 a year. Not crazy at all. I guess small businesses should just keep paying them non-livable wages and profit off of them.

I agree... $15hr or 28,800 a year doesn't get you a great lifestyle in L.A

I doubt many businesses want to keep their employees at a low wage..but on the other hand they are in a business to turn a profit.
In that example of the burger place for sale in L.A The owner is only making $21 per hour and that was after the place was opened 15 years. That was also assuming they are only putting in 40 hours a week..many business owners actually work longer hours than that.

I just think a lot of small business owners are looking it like ' how can I keep my doors open and pay my people'
rather than "This sucks..now it's less money for me"

I mean it would be most small business owner's dream to be able to afford to pay their employees great money. The problem is just that the economics and nature of these industries doesn't allow for that and to still make a profit.
The business owner needs to make a profit to pay their own bills.
Lot's of business owners have debt because it costs a lot to open a business and they often don't even pay themselves for a long time. They have to pay their employees weekly or biweekly , but they might not take money out of the business for a while and either live frugally or off any savings they might have.

[jm1982]

Originally Posted by skyegirl

So I've read the back and forth for the past few pages and now my question, to those against the minimum wage hike to a (finally) livable wage, what is your solution for the working poor? You must understand that 7.25/HR is a joke for a person trying to pay rent, eat, etc. At what point can we all agree that not everyone is going to be a doctor, attorney, or rocket scientist, but everyone who works 40 hrs/week has the right to a decent life? The republicans are always complaining about the welfare recipients sucking the teet of our gov't, this is a way to encourage people to go to work and better themselves and their families. Why would anyone want to work when you can make more "not working" on welfare? And as far as the Mom and Pop businesses go, they have something like 6 years to fully implement this pay increase, and they will have to be prepared to pay a fair, living wage to their employees.

I know you are probably well intentioned. But some of your numbers are wrong in regards to L.A
Min wage in L.A today is $10 hr..it hasn't been $7.25 for a while.

The right to a decent life? Well that's relative right? What is decent?

You also mention "why would anyone want to work if they can make more on welfare" . I think someone that would rather be on welfare than work has a terrible work ethic. Also if people can make more on welfare than working, there is something wrong with the system and it must change.

Also the pay increase will go up every year until it hits $15 an hour. So they don't really have 6 years to implement it.

Another thing you mention is
"they will have to be prepared to pay a fair, living wage to their employees"

No , actually they don't have to pay the $15 hr wage imposed by the government.
They can shut down their business or move it out of state to a more business friendly environment.
I think that's a big problem with the pro $15 crowd...it's dangerous to call the bluff of business.
We saw it happen with manufacturing too.
"Give us higher wages NOW!" "Give us More!"
Then you saw a lot of those jobs get shipped out of state or overseas.

[BRinSM]

Originally Posted by jm1982

You also mention "why would anyone want to work if they can make more on welfare" . I think someone that would rather be on welfare than work has a terrible work ethic. Also if people can make more on welfare than working, there is something wrong with the system and it must change.

This whole paragraph is a non sequitur. skyegirl made a valid point about welfare vs min wage. Republicans can't have their cake and eat it too. In a capitalist society there will be suffering. CA has decided to transfer some if that suffering from low wage employees to business owners and ultimately the consumer. It's easy to make assumptions on how the chips will fall, but in reality we won't know for years. My guess is that this law will hurt non chain operations more than anything else, small business owners like the hamburger guy. His workers will end up at McDonalds though, so they should be fine since people aren't going to magically stop eating hamburgers even if they cost ten cents more. I feel for hamburger guy, but I don't think there's any reason to claim the sky is falling because he's closing shop.

[alliance]

Originally Posted by BRinSM

This whole paragraph is a non sequitur. skyegirl made a valid point about welfare vs min wage. Republicans can't have their cake and eat it too. In a capitalist society there will be suffering. CA has decided to transfer some if that suffering from low wage employees to business owners and ultimately the consumer. It's easy to make assumptions on how the chips will fall, but in reality we won't know for years. My guess is that this law will hurt non chain operations more than anything else, small business owners like the hamburger guy. His workers will end up at McDonalds though, so they should be fine since people aren't going to magically stop eating hamburgers even if they cost ten cents more. I feel for hamburger guy, but I don't think there's any reason to claim the sky is falling because he's closing shop.

So basically we'll be left with nothing but crappy chains. Brilliant.

As a small business owner, I can tell you with 100% certainty that I would never take those risks again in California. We have very little to gain, and no one gives a **** when we lose. It almost seems like people actually root against us. Eh, I'll be selling soon, but unfortunately this law has decreased the value of my business by tens or even hundreds of thousands overnight.

But at least McDonald will be ok.

[alliance]

I wonder if bank loans will be effected. When banks analyze possible loans they use current income data as estimates along with these increases in expenses. They cannot increase assumed incomes to counteract such dramatic expected expenses, though. So I'd have to assume that they will be rejecting loans at an increased rate due to this increased risk. As a result, less suckers, I mean new business owners will be able to start or buy these businesses even if they wanted to.

[gelofogo]

It isn't failing in Seattle. How is LA different?

http:// http://www.seattletimes.com/...owners-say-no/

[jm1982]

Originally Posted by alliance

So basically we'll be left with nothing but crappy chains. Brilliant.

As a small business owner, I can tell you with 100% certainty that I would never take those risks again in California. We have very little to gain, and no one gives a **** when we lose. It almost seems like people actually root against us. Eh, I'll be selling soon, but unfortunately this law has decreased the value of my business by tens or even hundreds of thousands overnight.

But at least McDonald will be ok.

Right, personally I like to support small businesses so I think it will be a shame if a bunch of them close up.
I guess our point of view isn't shared by everyone though.
I think the problem is that many people just don't realize how many small business owners there are.
I think it would be horrible if L.A turned into a sea of chains. It would really just change the whole culture of the place.
It would be great to start a business in L.A, but I just think for a lot of businesses like a restaurant, there are now too many obstacles versus opportunity.
Like i've said before $15 hour is fine if you have a tech company, accounting firm or some type of other place where you are hiring people that will likely be paid $15hr or more..but the economics just don't work well for small restaurants.

[Vacanegro]

Originally Posted by jm1982

I know you are probably well intentioned. But some of your numbers are wrong in regards to L.A
Min wage in L.A today is $10 hr..it hasn't been $7.25 for a while.

The right to a decent life? Well that's relative right? What is decent?

You also mention "why would anyone want to work if they can make more on welfare" . I think someone that would rather be on welfare than work has a terrible work ethic. Also if people can make more on welfare than working, there is something wrong with the system and it must change.

Also the pay increase will go up every year until it hits $15 an hour. So they don't really have 6 years to implement it.

Another thing you mention is
"they will have to be prepared to pay a fair, living wage to their employees"

No , actually they don't have to pay the $15 hr wage imposed by the government.
They can shut down their business or move it out of state to a more business friendly environment.
I think that's a big problem with the pro $15 crowd...it's dangerous to call the bluff of business.
We saw it happen with manufacturing too.
"Give us higher wages NOW!" "Give us More!"
Then you saw a lot of those jobs get shipped out of state or overseas.

Actually the increase- especially in LA - is long overdue. What bothers me is the simplicity of the talking points spoken by the politicos saying now people can make a living wage when the truth is far more complex.

In a capitalist economy there is simply no free lunch. Every action will spur reaction until things regain balance so prices will go up, employment will go down, people will likely have to work harder, etc. It is not simply a matter no having 50% more money in your pocket.

[jm1982]

Originally Posted by alliance

I wonder if bank loans will be effected. When banks analyze possible loans they use current income data as estimates along with these increases in expenses. They cannot increase assumed incomes to counteract such dramatic expected expenses, though. So I'd have to assume that they will be rejecting loans at an increased rate due to this increased risk. As a result, less suckers, I mean new business owners will be able to start or buy these businesses even if they wanted to.

Yeah good point. Just another side effect that is not considered.