CraigM
3858
@scottagibson is pretty much correct. Doubling the cost of labor would not double the cost of food, obviously. Labor is one aspect of the cost.
Now you are seeing increases across multiple factors. Depending on what food they serve, the food costs of raw materials has also increased. Supply chains are what they are.
But at a baseline economic level, raising wages has some impact on cost of food, but is much less than the wage increase.
Actually looking at Seattle and their minimum wage increase, one thing that shows up is that, in practice, the cost inflation was fairly low. Actual earned income didn’t increase that much for minimum wage workers, but what did happen is they made the same, or slightly more, money over less hours. Which obviously is a direct benefit for those workers. That was actually the biggest improvement, the low wage sectors had employees working fewer hours
Matt_W
3859
The kid’s menu is a loss leader designed to bring in families. I don’t think it’s fair to use its prices as an indication of labor/total cost movement. I don’t disagree with your conclusion, but don’t think this is a good indicator. Prices everywhere in San Diego have gone up and many places are upfront about it being a surcharge to recover lost business. I also hear through the grapevine that staffing is very tight, but I haven’t noticed that being a huge issue when actually eating out. Maybe because in CA waitstaff get the same minimum wage that everyone else does?
I mean, go ahead. It’s an established industry, the labor cost component isn’t a mystery.
We do. I pay a 10% wealth tax on my investment property every year! If I were Bezos, I’d helicopter it to a tax haven. I wouldn’t, really, I don’t mind paying taxes, but it’s helpful to remember that we not-so-wealthy people pay wealth taxes.
I don’t know what this means, sorry. I’m not married to using the kid’s menu, it was a throwaway remark unrelated to my point about the labor cost component of the restaurant business.
Scott’s right… there are no problems. Forget it!
Before prohibition, Food was a loss leader. It was all about selling booze.
That is the lamest pasta menu I have seen possibly ever. Certainly since I moved out of the white flight vortex of insular privilege where I grew up. Ye gods.
E: And I live in the Midwest, for fuck’s sake! This whole third of the country actively despises flavor in a way that the fuckin’ UK is jealous of.
US Italian food does seem to fall into a few iconic dishes, with some extra words thrown in to make it seem special.
Matt_W
3866
OK, no problem. You brought it up and then hammered it. Just pointing out that the kids’ menu doesn’t necessarily track costs. I think most restaurants try to keep labor costs at 20-30% of gross receipts. That said, they tend to be pretty low-margin businesses and cost increases in any part can pretty easily turn them into negative margin businesses. I wouldn’t be surprised at all to see $15 cheeseburgers become the norm. (Indeed it’s easy to find a $15 cheeseburger here.)
Well it still is for many restaurants. But pasta, especially, must be a profit center. It’s nearly impossible to find a plate of pasta for less than $18 and pasta is dirt cheap to make: bulk sauces, batch noodles.
Well, it is the ultimate peasant food. It just meant to bulk up the meal for whatever you are serving with it.
Sure. They’re not going to eat that increased labor cost, they’re going to price it into the menu. But that means menu prices are going to increase by relatively small amounts, something on the order of 10% tops, even for very large wage increases.
I don’t know what this means!
Me:
And me:
Forget the kid’s menu. It never had anything to do with my point, which is entirely unrelated to the kid’s menu.
Timex
3869
Aren’t those employees going to be in even worse poverty when they don’t have jobs at all?
Perhaps not all, as some of those workers might be kids who aren’t actually supporting themselves and their families on those wages.
KevinC
3870
Why won’t they have jobs?
Timex
3871
Well if the restaurants can’t afford to pay those wages, then they’ll either shut down, or move to automation.
I listened to a WSJ podcast last week and this is exactly what they’re doing. Not just in restaurants, but in healthcare too because of staff shortages. I don’t know how you automate a nurse’s job, but I’m sure you can automate some of it.
KevinC
3873
Sure, but we don’t have a caste system here. I’m sure a minimum wage earning dishwasher can find other work, they don’t have to work washing dishes or waiting tables.
Timex
3874
But aren’t those jobs going to be the same? Essentially unskilled labor with low wages?
KevinC
3875
Well, wages are going up, that’s the thing. Businesses will adapt or die just like they always have. If you’re pointing out that increased automation is going to lead to more unemployed people and that’s going to be a problem I completely agree and why things like UBI get floated.
I don’t consider restaurants critical to national security or something (and I know you don’t either) so I don’t know what to say. If workers aren’t willing to slave away in a restaurant for poverty wages then restaurants are going to have to figure that out. I’d be sad to see them go, but they either pay more, automate, or something else.
Sounds like a good time to cut working hours, then.
But, really, who knows they can’t? They can cut costs in other ways (and have been, as far as I know). From an efficiency point of view, why should everyone else pay for the employee’s food so the employer keeps the profit margins?
As long as bridges aren’t being fixed, and rail still needs to be laid and electrified, among many other things, countries could manage to employ them.
Timex
3877
Well, but that’s the thing… When I was a kid in highschool, I was willing to work for slave wages, generally because it was "extra’ money.
Is there no role for that kind of employee any more?
