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View Diary: Warren politely SCHOOLS businessman at Senate hearing who tries to explain wage economics to her (219 comments)

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  •  Missing a bit of the point... (0+ / 0-)

    One aspect of the "different business model" aspect that Warren misses, though, is that non-fast-food restaurants are unlikely to raise prices by four or eight or twelve cents because they do all of their pricing in dollar (or, at least, half-dollar) increments. So the issue is not raising a price from $14.95 to $15.03, but raising a price from $14.95 to $15.95 (and, in turn, figuring out which prices to raise and which not to raise, in order to be revenue-neutral).

    •  Hang on though ... (4+ / 0-)
      Recommended by:
      bryduck, mrkvica, tardis10, trumpeter

      This guy maintained that he has lots of employees already making well above minimum wage, so it seems to me that his labor costs would go up substantially less than the fast-food joint that has most of its workers at or near minimum.  One has to factor that into the equation as well.

      “What’s the use of having developed a science well enough to make predictions if, in the end, all we’re willing to do is stand around and wait for them to come true?” - Sherwood Rowland

      by jrooth on Mon Mar 18, 2013 at 12:26:28 PM PDT

      [ Parent ]

      •  I made this point in detail above (2+ / 0-)
        Recommended by:
        jrooth, Sparhawk

        Rutigliano is probably the worst case for the impact of a min wage increase. Most of his employees are servers who earn about $20 an hour in tips. But under Conn law he still has to pay $5.69 per hour plus payroll tax and and unemployment insurance as a minimum wage for his tipped employees. Figure his back of house folks actually work for minimum or not much more so their wages would go up with minimum and you have worst case scenario - highest percentage of costs to labor, nearly all labor paid minimum (but generally earning much more).

        One might argue that Warren was "mansplaining" his business to Rutigliano, who was probably fairly representing the effect on his business. Point is that he is not representative of most businesses, even restaurants, and he was there for exactly that reason.

    •  So they can raise employee pay even more. (0+ / 0-)

      Or drop executive pay a tiny bit as well.

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