A Non-Controversy

Apparently a restaurant up north is "facing heat" and has set off a FaceBook "firestorm" by adding to its receipts an explicit surcharge to cover the minimum wage increase that local voters have approved.

This seems like the sort of thing that both sides of the debate should love. If you are opposed to the minimum wage increase, you can say: "Good! This way all those do-gooder customers who voted for this increase have to face up to the costs they have imposed on everyone else. They can't hide from the fact that every single customer who comes in here now has to pay a higher price in order for the business to remain in operation. That'll teach them."

But if you're for the minimum wage, you can say: "Good! This shows everyone that the cost of providing these workers with a better life is just thirty-five cents per meal. I'm happy to pay that, and I think you should be too. If I eat at this restaurant twice a week every week all year, I'll still only be out an extra thirty-five bucks! That'll teach those minimum-wage opponents that their arguments that the costs will be ruinous is ridiculous."

Another front over the minimum wage regards the second-order effects of the thing: it turns out that, after every business has adjusted its prices, the minimum wage increase ends up doing no good at all for the worker. But if this is what you believe, then you too should enjoy seeing the information made explicit on the receipt. "See? If a minimum-wage worker wants to eat here, it now costs them an extra thirty-five cents every time. Once you increase every transaction they make by about that amount, how much is that increase really helping them?"

There's nothing here not to like. Everybody should be happy. Nobody is happy.


Texan99 said...

I'm happy. I love transparency in pricing.

Grim said...

Ok, well, you and I are happy. But apparently we're outliers here (as elsewhere, I suppose).

Cass said...

No, you two aren't alone. I'm happy too. I think I posted a receipt showing a similar surcharge several months ago. I think it's a great idea!

I'm also glad you posted this - I'd seen it somewhere but didn't have time to track it down.

MikeD said...

“Putting [minimum wage] fees on tickets and passing the cost on to consumers directly is strange at best, and creates an ‘us against them’ mentality while ordering dinner.”

Hey idiot... whenever you force a business to raise its costs (to include wage hikes) those costs WILL be passed on to the consumers. That's how business works.

And frankly, this quote from the article (clearly made by a minimum wage increase supporter) illustrates what's wrong with these peoples' thinking. They believe that the money to pay the increased wages will come out of the pockets of the owners. Because they're "rich" and "can afford it". What they don't realize is that's not how anything actually works in the real world (and restaurant owners rarely are wealthy, most of them are trying to keep their business afloat, and the good ones manage to keep above water).

Raise taxes on a business, the business has to pass those costs along to the customers. Make raw materials cost more, that too will be passed along. Raise the wages of the employees with unilateral action, that as well will be passed along. And why will customers stand for the increased costs? Because every one in that industry is paying those same costs. By levying these costs on an industry, the whole industry can raise prices at the same rate, and customers can't really "shop around" to find some place selling at the lower price.

I am by no means an economics whiz, and I realize this. They don't because they believe wealth is only ever stolen from someone else, and hoarded by "the rich" in some manner of bottomless vault.

E Hines said...

What MikeD said, with these addenda:

The minimum wage, when it was invented by FDR's Democrats during the Depression, was explicitly racist and intended to keep southern blacks from migrating north and outcompeting on price for jobs held by northern union members. It's still racist in outcome, regardless of any evolved intent, as it continues to price blacks especially, but Hispanics, also, out of the low skill and starter jobs that are minimum wage. That loss of starter job access has racist outcomes down the road, too.

Economics isn't rocket science. And we have evidence all over our history. Here's another example, that approaches Mike's example from a different direction. When you increase demand for a good, and supply can't keep up, the price of the good goes up. Often sharply. In the year before Medicare was enacted (another health program in which the government mandated participation), the price of a hospital bed was increasing at around 8%/yr, double the underlying rate of inflation. In the years immediately following that mandated and artificially created demand, the price of a hospital bed rose 12%/yr, with the underling inflation still running around 4%. That the rate of health cost increase hasn't got any better (although no longer solely due to Medicare) is the famous excuse for enacting Obamacare--and its mandated increase in demand for health services/hospital beds.

The other addendum is this: nobody teaches history or logic in our K-12 schools, anymore, or this claptrap wouldn't occur so much.

Putting the price of that bit of foolishness out front for all purchasers to see is a step in the right direction, no matter the vitriole of some over having the truth told.

Eric Hines

raven said...

The entire premise of "PC" is to obfuscate the truth. Pointing out directly what has caused a price increase on a product is rare, and makes a crack in the wall.
When was the last time you saw a ladder with a price breakdown of exactly how much that price was affected by liability insurance? IIRC, Cessna was paying around $30,000 per airframe in the 1990's for liability coverage.
I applaud the restaurant for illustrating the cost imposed by idiots. Too few are willing to do it. Probably because most of the costs are imposed by the government, and they have lawyers, guns, and money.