Fresno Struggles With $15 Min Wage (Orange: roofing, restaurants, food)

[Perma Bear]

Originally Posted by jm1982

Yes and they have the choice to move out of a city of state that makes it difficult for them to operate.
Just like with real estate investing a lot of people that live in high cost cities where they can't make a profit , look to the midwest and other areas where they can make a good profit/cashflow.

Just like a minimum wage worker living in a high cost city has the option to move to a low cost city to improve their financial situation.

No they don't. Notice how Bay Area housing is still stupidly expensive while you can buy a mansion in the Midwest for pennies?

[jm1982]

Originally Posted by Chimérique

No, not nonsense, rather COMMON SENSE comes to mind when you consider that minimum wage increase could just be the straw that breaks the camels back so that a small business doesn't open a business in Fresno after considering the extra artificial costs that he will have to endure versus a wealthy city that has lower labor costs.

A more thoughtful response would be to answer the question.



That's a pretty callous and insensitive response to a small business who strives to make it on his own providing tax revenue to support all of our social programs and who his trying to add to the culture of his city OR .....simply, to support his family without having to work for someone else.

So being extra interesting is a requirement now. It used be if the mom and pop diner provided decent clean caring service and fresh ingredients and tasty food was enough. Now the mom and pop has to hire lawyers and expensive business associates to help him through red tape, avoid lawsuits and constantly worry about protecting the rights of his employees and customers. And customers and employees that have the potential and power to be HOSTILE to the business owner. The small business owner has to worry about theft, violence, random vandalism, and destruction to his business property on a daily basis as well.

How about a little sensitivity and love for the small business owner who risks so much more than the average person/worker. The small business owner risks a lot more of his time, energy, money, reputation, credit rating, and sometimes his LIFE to make it all work for his family and for the livelihoods of his employees.

Seems like we are punishing the small business owner because he dares to be independent.

Yes it is callous and insensitive. This poster claims to be a retired successful small business owner too, which makes it even more bizarre. How could a successful business owner be so anti small business??

In that article about San Francisco businesses it mentions how employers with over 100 will be penalized by having to pay even MORE than the $15hr wage

"San Francisco was one of the first US cities to pass a $15 minimum, through a ballot initiative in November 2014, when the city’s wage floor was $10.74. That measure raises the minimum in increments, culminating in $15 in July of 2018. In addition, under a 2006 law aimed at providing health care to everyone in the city, SF businesses with 100 or more employees, like Karp’s, are required to pay at least $2.53 an hour toward each worker’s health care. Taken together, the health care and minimum wage laws mean Karp must pay $14.78 an hour this year, which will climb to at least $17.53 in July of 2018 (the health care payment is pegged to health costs across the state, which will surely rise)."

What a slam in the face to small business owners.
You employ 100 people...Now we are going to slam you with an extra $2.53 per hour PER worker!

This guy employs almost 100 people but barely makes much money.
If he decides enough is enough , he could likely just get a job making as much or more without the headache and his 100 employees would be without a paycheck..

This guy already has to pay $14.78 THIS year for minimum wage workers ..which are unskilled workers generally.
Then in July 2018..just around the corner... it goes up to $17.53 per hour per worker..
It's incredible really.
That's $36,462 a year for a minimum wage worker..
He's only paying himself $40,000 a year..and has all the headache, all the liability ,etc.

None of you pro $15hr people see anything wrong with this picture..or how it might make small business owners not want to do business there?

[NJ Brazen_3133]

Originally Posted by jm1982

I posted this in another thread regarding the minimum wage, these businesses are barely getting by and operating on very tiny margins.

This is a good read about the min wage hike in relation to 3 small actual businesses in SF.
Please read the article and tell me if you think these business owners are greedy

Forbes Welcome

OWNER #1 This guy brings in $3million...but lives in a houseboat and only pays himself $40,000
"Philip DeAndrade, 72, runs Goat Hill Pizza, which has three locations, 60 employees and revenue of more than $3 million last year, according to DeAndrade. He has an even thinner profit margin than Karp’s, just 2.7%, which means he has little room to maneuver on profits of around $81,000. He pays himself $40,000 and lives on a houseboat near the AT&T baseball stadium. "

OWNER #2 The math just didn’t work for Beatts’ store, where payroll was his biggest expense. In 2014, it accounted for 42% of his overhead, followed by the good deal he has on rent, which made up 26%. Beatts employed five people in the bookstore beside himself, and only one worked full-time. Four made minimum wage or slightly higher. He didn’t earn much more, at $28,000.

OWNER #3
But it’s going to be very tough to continue to be so generous, he says. Last year, profits were 3% to 4% of sales, he says. If he stays ahead of the $15 minimum, he could wind up erasing his profits,

I am sure there is more to the stories than what was being written. Just putting out those numbers makes it sound really bad. But even magazines have agendas, or maybe those business owners have ulterior motives.

As an example, I find the first one very fishy. $3mil revenue, only pays himself such and such, has so many employees, and locations, and $81K to maneuver with. That sounds very odd. If you really want to prove something, you gonna have to show me the books.

Yet, apparently the Pizza guy is able to pay the higher wage as the article claims (if I am reading it correctly).

[Tulemutt]

Originally Posted by jm1982

So you are fine with restaurants being sacrificed because you are confident that restaurants will move into those locations?
You don't think that maybe potential restaurant owners will run the numbers and see that they are unlikely to succeed at $15 hr?
There are also a ton of non full service , take out type of places. Are these customers not price sensitive? Many of them are lower wage workers themselves..
I also disagree that raising prices all the time is "no big deal" even higher income customers could get fed up with that.

The middle class isn't exactly thriving in America as we know too. They'll likely start eating out less too since prices will be higher and they aren't getting a wage boost...at least not one mandated by law.
I know you will argue that "middle class wages will rise too! and everything will be fine!" but that isn't certain.
The companies that middle class people work for also often operate on small profit margins too.

"Run the numbers". eh? jm, I asked you a couple times what you do for a living and you won't answer I guess. But it clearly doesn't have anything to do with being a business person. You talk in these threads as if there are are barriers to structuring a business resembling immutable laws of physics or something. I just gave you example above of how little it takes to alter the profits of a pizza business. But you just persist with these bizarre statements about what can and can't be done. Humans have managed to find their way through war and pestilence, economic depressions, revolutions, changing technologies, for thousands and thousands of years. But you think they can't figure out how to "run the numbers" to at least modest profitability?

[Perma Bear]

Originally Posted by Tulemutt

"Run the numbers". eh? jm, I asked you a couple times what you do for a living and you won't answer I guess. But it clearly doesn't have anything to do with being a business person. You talk in these threads as if there are are barriers to structuring a business resembling immutable laws of physics or something. I just gave you example above of how little it takes to alter the profits of a pizza business. But you just persist with these bizarre statements about what can and can't be done. Humans have managed to find their way through war and pestilence, economic depressions, revolutions, changing technologies, for thousands and thousands of years. But you think they can't figure out how to "run the numbers" to at least modest profitability?

Not when drooling illegal immigrants or brain dead kids can charge 15 dollars an hour for their labor.

[NJ Brazen_3133]

Originally Posted by Tulemutt

Good read indeed.

Guy sells $3 million in pizzas and can only get $40K out for himself huh?
Here's the thing. Let's say an average pizza is $20. To pay himself $120K a year, the pizza guy would have to increase his pizza prices by less than $2 each. Right. Less than 10%. Think he can't do that because all his competition is at $20 each? Bet they're not. Bet the prices are all over the map different from one restaurant to the next except the cheap chains. If he's selling $3 million worth of pizzas, he's got a desirable product and an aware and interested market.

Bet the other independent pizza shops are paying the owners more than $40K on $3 million in sales.

So, if this pizza guy can't find where his expenses are higher than his competition's costs - he sucks as a businessman.

Here's some information on the pizza business: Average margins run at least 7% say the industry journals. 7% of $3 million is $210,000 ... out of which he'll have to pay taxes and reinvestment on depreciation and new equipment and perhaps some other things. But, he damn sure should be taking over $100K out for himself.

Other pizza independents report up in the 20% range. That would be $600,000 on $3 million.

Italian food in general has pretty high margins, and does not require lots of prep work. It is not like French cuisine, that needs lots of prep work, and much labor.

[Tulemutt]

Originally Posted by Perma Bear

Not when drooling illegal immigrants or brain dead kids can charge 15 dollars an hour for their labor.

Lol. Because employers have to hire people that are undocumented and drooling?

Perma Bear, you are - um, well - um, unique. Lol. At least.

[jm1982]

Originally Posted by Tulemutt

"Run the numbers". eh? jm, I asked you a couple times what you do for a living and you won't answer I guess. But it clearly doesn't have anything to do with being a business person. You talk in these threads as if there are are barriers to structuring a business resembling immutable laws of physics or something. I just gave you example above of how little it takes to alter the profits of a pizza business. But you just persist with these bizarre statements about what can and can't be done. Humans have managed to find their way through war and pestilence, economic depressions, revolutions, changing technologies, for thousands and thousands of years. But you think they can't figure out how to "run the numbers" to at least modest profitability?

Yes it's so easy , you are so smart and all these business owners are dumb right? You should get out of retirement and become a business consultant and show them how to make money.They NEED your help. Amazing how condescending and arrogant you are.

[Tulemutt]

Originally Posted by NJ Brazen_3133

Italian food in general has pretty high margins, and does not require lots of prep work. It is not like French cuisine, that needs lots of prep work, and much labor.

Not sure what your point is here. Pizza isn't "Italian food", if that's what you mean. And if Italian food is easier to make a bigger margin than French, open an Italian eatery instead of French. Or charge more for your Frenchy food if you think enough people want it to pay more than for Italian.

Like I said, small business isn't physics.

[Perma Bear]

Originally Posted by Tulemutt

Lol. Because employers have to hire people that are undocumented and drooling?

Perma Bear, you are - um, well - um, unique. Lol. At least.

It's what they do currently. Have you tried to order food in the last 15 years?