- cross-posted to:
- usnews@lemy.lol
- cross-posted to:
- usnews@lemy.lol
Business groups claim hard-fought $20 hourly wage victory will cause reduced hours, layoffs and price hikes – critics say otherwise
As fast-food workers celebrated a pivotal wage increase to $20 an hour in California last week, an old economic debate was awakened by business groups and others claiming the increase will wind up hurting workers through reduced hours and layoffs, hurt customers with price hikes, and harm the franchise owners of fast food restaurants.
Their critics are not so sure.
The hard-fought wage increase to $20 an hour from California’s current minimum wage, $16 an hour, was a compromise to initial demands of $22 an hour with annual wage increases. Representatives of fast-food workers and the fast food industry came to a deal to avoid what would have been a costly ballot initiative over the passage and signing of the California fast food sector bill last year.
“Frontline workers like me organized, went on strike, and fought to pass a historic law that raises our wages and gives us a seat at table with some of the biggest fast food corporations in the world,” said Anjelica Hernandez, a McDonald’s worker in Los Angeles for nearly 20 years. “Even though we are the engine of a billion-dollar industry, too many of us struggle to keep with rent, our bills and the rising cost of living.”
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Their critics are not so sure.
Oh my fucking god, FUCK that wording so hard. “Not so sure” is their way of playing down the strength and validity of the counter-arguments. God I hate the news.
And honestly, that’s the one thing we could’ve drawn from them calling them critics. Like no shit, thanks, I get that critics disagree can you please give us actual commentary.
Yeah, it’s pretty clear that this increase in wage will bump up the end cost of ordering at these restaurants but like… it’s by such a small margin where anyone complaining about it is a massive dork.
Big Mac is 30 cents more expensive so staff can get paid (closer to) a living wage. That’s a very fair trade off for the American people
Big Macs could have their prices slashed AND workers get more wages IF the execs at the top werent lining their pockets
Business groups claim hard-fought $20 hourly wage victory will cause reduced hours, layoffs
David Card was awarded the Nobel Memorial Prize in Economic Sciences for showing that this isn’t true.
(The study (PDF warning))
What was special about this research that won the guy the award?
According to Card:
the thing that has really influenced the field is the idea of looking for these pivotal events or things that have happened that could potentially inform our theorizing and understanding of the world.
That is to say, they actually looked at real world examples and compared (meaning they actually included evidence in their reasoning) rather than assuming it must be so based on neoclassical economic assumptions.
I’m not sure most people understand how neoclassical economics is based on “arm chair general” style models largely divorced from reality.
And how horrible an ideology it really is to have had infiltrate every aspect of western life and culture.
The more I look at it, the more I see how a large part of our current societal issues can be laid at the feet of this ideology masked as science.
“Mechanical” models that have a veneer of legitimacy have certainly compromised peoples’ view of reality. See also views of traffic that treat it like a liquid, so politicians keep advocating for “just one more lane” despite induced demand being proven close to a 100 years ago.
Business groups claim hard-fought $20 hourly wage victory will cause reduced hours, layoffs and price hikes – critics say otherwise
If someone says that this will reduce hours, and cause layoffs, you know that they are bullshitting.
Why would they add to minimum wage increase and reduce their profit? Might as well declare bankruptcy.
As for prices, they usually are set not by how much it costs to produce something, but how much a customer will pay. They might increase prices if they are below the cost of production, but again they are dictated by the customer. If they can’t the business would go bankrupt.
They didn’t mention about going out of business, so it is kind of clear that this is a lot of hot air and they really just comparing about earning less.
There’s one thing I didn’t mentioned related to employees. It is automation that could replace them. The thing with that is that whenever they can, those companies would do that anyway.
Workers aren’t choosing their hours though so yes they can have reduced hours. The supervisor might also be told to do with less manpower. Its like how when you go to a small boba or coffee shop and there is 1 person doing everything.
As for automation that is almost 100% going to happen and is already happening. From automated server to burger flipper to drive thru attendant it’s all being tried.
just like everything else in the US now there will be a select few states with high pay even at fast food
meanwhile the same job is only paying $7.25 an hour in other states
in the US it like a dystopian future that uses a demographic lottery to hand out what rights and pay you will have
see the US is the greatest country you make a high salary and these citizens will revote these people back in meanwhile their neighbor is making half that and told he should have voted better
presidents are always supporting states rights over federal even Biden who has lazily left to the states to decide while touting how well their economic policies are doing
this leaves the citizens even the ones not allowed to vote at fault for their issues and divides the populace against each other
