This was originally posted at NMFBIHOP. I'm re-posting here because this race needs some help - it's far from in the bag and Ed Tinsley is the worst sort of Republican. His problem with George W. Bush is that the President isn't cold-hearted enough. Please, support Harry Teague and our New Mexico Democrats.
In my first post of this series, I looked at Ed Tinsley's rabid paranoia and how it was aimed at "union-funded labor activists" - wrongly. As of today, churches still don't qualify as "union-funded labor activists". But we're moving on to a different topic.
Again, Ed Tinsley in his own words:
My corporation-I'm president and CEO of K-Bob's Steakhouses, a 26-restaurant chain headquartered near Albuquerque-operates in four southwestern states and employs around 1,000 people. Recently, a new business I planned to open in Santa Fe became one the latest victims of the "living wage" campaign that is crippling firms and hurting local economies across the U.S. The campaign is the work of union-funded labor activists, whose success so far has been nearly 100 percent.
Tinsley's ideology tells him that giving his employees a higher wage will kill his business. This is a short-range kind of thinking that betrays a total lack of understanding of how a modern economy works. To quote a dead poet: "No man is an island..." Similarly, no action takes place in a vacuum.
According to Tinsley, any payraise an employer gives an employee comes entirely out of his/her pocket and they never make it back. In certain small examples, this can be true. But when you have a mega-evolution in an economy - even such a small change as raising the minimum wage in the local economy - it turns out to work much more like tossing a stone in a pond (remember Mike Gravel?).
It isn't just Tinsley's workers that were going to see their pay increase - it is every minimum wage worker in the area. This puts more money in the hands of people who will actually go out and spend it. Tinsley just might find that his forced pay hike actually makes him more money. How?
Allow me to digress in the sad tale of my life. When I was growing up in Hobbs, my mom worked several part-time minimum wage jobs. We barely scraped by, but I was a kid and I didn't worry about it. But every year, for her birthday, Mom would take us kids out to dinner - to KBOBs Steakhouse as it happens. So we were regular customers, in a sense - every year, once a year.
What would have happened if my mom's wages had been raised by a couple dollars an hour? Fewer hand-me-downs and home-canned foods, maybe. But I think, parents being what they are, she would have expanded our extravagant dining habits. So instead of once a year, we may have stopped by KBOBs for everyone's birthday - which would have been five times a year.
That isn't going to make anyone another million bucks - if it was just my mom getting a raise. But if every person in town got that kind fo raise, it would be one heck of a kick for the local economy. Not all of it would go to KBOBs, of course, but some of it would. Heck, even Tinsley's employees just might be able to take their family's to work as customers once in a while.
There's another way that Tinsley's position is simply dishonest. Yeah, he's going to have to give people more money - but guess who is in charge of the prices charged at Ed Tinsley's restaurant? Oh yeah, he is! If he's dumb enough to let his product sell for less than a break-even price, then he needs to come clean about who has actually been running his restaurants.
Sorry about this, but I'm going to have to inflict some math on you.
Let's say, for the sake of argument, that there are ten employees who get their pay raised by three dollars an hour. That's a total of thirty dollars an hour more that Tinsley has to make to maintain his current level of earnings.
So let's say that those ten employees are two cooks, a busboy, and seven servers. And, let's say that each server can provide service for five tables. That means Tinsley would somehow have to make an extra thirty dollars between thirty-five tables. Impossible? Hardly.
Let's say that the average table seats three - that's one hundred and five customers who have to give up thirty extra dollars. That means each customer only has to cough up an extra thirty-three cents for Tinsley to make his money back. Would you refuse to eat at KBOBs if it was going to cost you an extra thirty-three cents per person? How much less likely would that be if you were making an extra eighty to a hundred and twenty dollars a week?
But there is yet another layer of dishonesty to Tinsley's diatribe. You see, Tinsley wouldn't be responsible for paying that much of the pay increase anyway. By federal law, restauranteurs are exempt from part of the federal minimum wage. They count the reported tips of their staff against the required minimum wage. A restauranteur only pays the difference between the reported tips and the minimum wage.
So whatever amount the minimum wage increases, Tinsley pays some smaller amount. Exactly how much less depends on tips. Tips, in general, are calculated on the price of the bill. So if Ed Tinsley raises his prices a dollar per person to get that thirty-three cent per person increase, he's actually going to boost his servers' tips. How much? Dunno. That depends on his servers and the patrons of KBOBs. What matters for this example is that Tinsley is playing the victim and it's total bunk. If anything, he's victimizing his employees.
Here's a final part of the puzzle. This whole equation works best if the entire economy has to raise wages at the same rate - such as when the minimum wage is increased. If it is left up to individual employers, you run across a lot of small-minded fools who refuse to raise their employees' wages. The effects of higher wages are then blunted. In plain words, employers fighting minimum wage increases cut their own throats.
Or at least their bottom lines. Ed Tinsley could easily break even on the living wage hike - and more than likely he'd see his earnings inch higher. But he either can't, or won't, see how that works. To my mind, that says he's too small minded to be making decisions that impact the entire country. It's better to keep him at KBOBs where his employees can get away from him simply by taking another job.