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In my experience for food and beverages the airports tend to be pretty close to local rates - or at least normal retail. I know Port of Portland and Port of SeaTac regulate prices for exactly this reason.
At least in Portland, it seems that the employees inside the airport are actually employed and paid by the Port too. Local businesses pay the Port of Portland a fee to be inside the airport, and provide a significant amount of the franchise's needs. But the Port seems to supply the employees themselves. This leads to several issues - biggest ones being a huge drop in product quality vs. the outside establishments.
Really, I actually never knew that about PDX. Another reason why I love that airport so much.
Exactly, which means their profit margins are much higher than a normal restaurant. And they are typically always busy in airports with travelers willing to spend that money.
You are assuming that the rent and operating costs are the same at an airport as at a normal restaurant.
How do you feel about the accuracy of that assumption?
Really, I actually never knew that about PDX. Another reason why I love that airport so much.
Yeah, some do....some don't.
I wouldn't put it past Chicago to award O'hare contracts to political cronies and relatives etc. and then allow them to have the higher profit margins you were suggesting. I'm sure there is a variety of fairness as well as corruption and gouging.
Lol...after all the guy running O'hare a couple years ago got in trouble after using Ohare work crews and materials to pour him a new concrete patio at his house. That sh*t goes on all the time there....
according to the sandwich shop owner whose interview I mentioned earlier, the cost of building a restaurant in an airport is roughly 3 times the cost in, say, a strip mall.
according to the sandwich shop owner whose interview I mentioned earlier, the cost of building a restaurant in an airport is roughly 3 times the cost in, say, a strip mall.
Because it's a monopoly. They got you or you don't operate on their turf.
That is so local it would have to be controlled by each city.
Now each city is free to enact laws, like this city did, to go above and beyond the national min wage.
But that is what Congress sets for the nation.
Congress cannot set a min "living wage" on a national level because it's impossible to do so.
Thus is why I support any city, region, and state that sets a proper living wage.
Minimum wage in Washington state is currently $9.19 an hour. So the $6/hour figure you use is incorrect. Not sure what the fully loaded rate would be based on unemployment insurance and worker's comp. But let's say it's around 2% as a guesstimate. That would be a fully loaded rate of $9.37. At 2080 hours, that is an annualized cost to the employer of $19,489.60 at current minimum wage rates for one FTE.
Now, let's bump it up to the new rate of $15/hr. Add the 2% and you have a fully loaded rate of $15.30. At 2080 hours, that is an annualized cost of $31,824.
This is a delta of $12,334.40. If this employer has a modest six employees per your example, that's a $74,006.40 increase in labor costs. Typical profit margin for a small limited service restaurant is approximately 6%[1]. Now, knowing this, do you genuinely believe the restaurant can remain profitable with this type of labor cost increase and not increase prices significantly?
When was the last time you were in an airport and thought to yourself, "everything here is really cheap."
Actually I had that precise thought about five years ago at the San Jose airport. But that's because my previous airport experiences had been outrageously expensive. (I've passed through PDX a few times but never considered any prices there.)
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