Minimum wage hikes are causing restaurants to close, costing jobs

[Inconel]

What unexpected expense can turn a successful business into a dead one? The only ones that come to mind are lawsuits or natural disasters.

Tariffs...

[freezion]

Tariffs...

Those are not unexpected either.
If you fail to account for tariffs to a level where it ruins your company, then you had no business running one that does exports/imports in the first place.

It'd be like saying taxes is an unexpected expense that can bring down the conpany.

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The latter of which would be covered by insurance.

But oh the dread, they can barely afford to pay their employees minimum wage, so how are they ever going to afford an insurance plan, especially a decent one that covers things like that? /s

[Inconel]

Those are not unexpected either.
If you fail to account for tariffs to a level where it ruins your company, then you had no business running one that does exports/imports in the first place.

It'd be like saying taxes is an unexpected expense that can bring down the conpany.

That's a curious contention. Are you saying that the agriculture, steel, and other industries should have expected the election of Donald Trump and the subsequent imposition of sizable tariffs on allies and adversaries alike, and somehow planned for them?

[Draco-Onis]

That's a curious contention. Are you saying that the agriculture, steel, and other industries should have expected the election of Donald Trump and the subsequent imposition of sizable tariffs on allies and adversaries alike, and somehow planned for them?

Those industries are also not regular businesses as they receive large amount of government subsidies, agriculture for example has received almost 30 billion dollars under Trump to buy their vote I mean help them stay afloat.

[Inconel]

Those industries are also not regular businesses as they receive large amount of government subsidies, agriculture for example has received almost 30 billion dollars under Trump to buy their vote I mean help them stay afloat.

Agreed. And yet despite that, many farms have gone under due to the unexpected tariffs. Hence my contention earlier that it's also an unexpected expense that can turn a successful business (under prevailing market conditions) into a dead one. Mostly the smaller farms of course, since as noted in other threads most of the bailout cash has gone to the larger consortiums.

[Draco-Onis]

Agreed. And yet despite that, many farms have gone under due to the unexpected tariffs. Hence my contention earlier that it's also an unexpected expense that can turn a successful business (under prevailing market conditions) into a dead one. Mostly the smaller farms of course, since as noted in other threads most of the bailout cash has gone to the larger consortiums.

Farms are special case as they are for the most part not profitable and only survive thanks to government subsidies, they got hit two folds though tariffs and labor shortages due to Trump's immigration policy. It's fair to say though that tariffs are not wage increases and have a much bigger effect.

[Endus]

Agreed. And yet despite that, many farms have gone under due to the unexpected tariffs. Hence my contention earlier that it's also an unexpected expense that can turn a successful business (under prevailing market conditions) into a dead one. Mostly the smaller farms of course, since as noted in other threads most of the bailout cash has gone to the larger consortiums.

An inability to adapt to changes in the market, like taxes, minimum wages, or yes, tariffs, demonstrates that the business in question has a failing business plan and is slated for collapse. It's not a well-structured and resilient business model; it's a house of cards that can't tolerate or adapt to change.

Whether that kind of model warrants government subsidy to maintain it through those kinds of changes is a question that needs to be answered based on the value to the nation for that company, in terms of national security and not economic value. Farming fits this descriptor, since sourcing food supplies locally is more secure than importing them. Some military suppliers would also fit, or natural resource extractors. But that's about it. Restaurants definitely would not fit.

But those subsidies are a way to prop up a failing business model. If that business was resilient and capable of adaptation to changing markets, subsidies wouldn't be required.

[Shadowferal]

That's a curious contention. Are you saying that the agriculture, steel, and other industries should have expected the election of Donald Trump and the subsequent imposition of sizable tariffs on allies and adversaries alike, and somehow planned for them?

If I recall most people on those industries supported Trump and his contention that tariffs would create jobs.

[Orange Joe]

That's not true. Maybe a business model requires x number of months to scale up before the business becomes stable or even insanely profitable. An unexpected expense can cause the company to go under before time expires.

min wage increases are not generally instant and give employers plenty of time to prepare.

[bladeXcrasher]

People are seriously posting that the hourly wage employees pay is going to put a company under? Hourly employees pay isn't the issue, its pure overhead positions that company's hate, not the hourly labor.

[Captain N]

People are seriously posting that the hourly wage employees pay is going to put a company under? Hourly employees pay isn't the issue, its pure overhead positions that company's hate, not the hourly labor.

It's just easier for your $35,000 to $40,000 a year employee to gripe at the folks making $25,000 or less a year. Ya know because they worked so hard and went eyeballs deep into student debt for that $18/hour, degree/vocational training required job.

[Rozz]

In my simple opinion:
If you can't afford to pay your workers, you can't afford to own a business. You're probably also bad at managing your budget and have draining costs elsewhere that "couldn't be the issue".

You don't cut corners at the foundations of your establishment.

[Omega10]

If I recall most people on those industries supported Trump and his contention that tariffs would create jobs.

They DID support Trump. They DID support the tariffs. And many ARE going under. And they are insisting that this will not stop them from supporting Trump in 2020.

Agreed. And yet despite that, many farms have gone under due to the unexpected tariffs. Hence my contention earlier that it's also an unexpected expense that can turn a successful business (under prevailing market conditions) into a dead one. Mostly the smaller farms of course, since as noted in other threads most of the bailout cash has gone to the larger consortiums.

So the only real question is: do these tariffs count as an expected or unexpected expense? It's possible that they never really expected Trump to actually put these tariffs into effect, and thus never planned for them in the least. In the case of soybeans, they certainly did not expect China to just stop buying US soybeans, with South American countries providing them instead of the US.

[Kujako]

Welfare state or living wage, pick one and I don't really care which.

[Endus]

So the only real question is: do these tariffs count as an expected or unexpected expense? It's possible that they never really expected Trump to actually put these tariffs into effect, and thus never planned for them in the least. In the case of soybeans, they certainly did not expect China to just stop buying US soybeans, with South American countries providing them instead of the US.

They should have expected that, the moment Trump started talking about tariffs that affect their business, yes.

Tariffs encourage international trade to go elsewhere. They ensure local citizens pay more for products they could otherwise get cheaper overseas. That's explicitly what tariffs are, and are intended to do. If you didn't know that's what tariffs are and how they work, and voted for someone who was talking about putting tariffs in place, then you made a stupid-ass decision based on your own willful ignorance, and your business tanking is exactly what you voted for. This is the price you pay for making a terrible, ill-informed decision, without understanding what the consequences would be.

Next time, be smarter.

The above aimed at hypothetical whiners, not you, Omega10, if that's not clear from context.

[Thereturn]

Those fucking cheapskates flip beverages 5x and food for 7x the original cost. If you are cutting jobs because minimum wage cuts in your 6 figure profits you can go fuck yourself.

[mvaliz]

Do you know how many plantations (and resulting townships) closed down when Slavery was abolished due to that nasty expense of needing to "pay" their workers?

Times change.

Also, shouldn't this be some pro-capitalist thing? Like, people who can't pay workers living wages will be flushed out and replaced by resturaunts who CAN pay workers a living wage?

[Endus]

Also, shouldn't this be some pro-capitalist thing? Like, people who can't pay workers living wages will be flushed out and replaced by resturaunts who CAN pay workers a living wage?

Do you mean original-flavor Adam-Smith capitalism? Or New Capitalism, which is just mercantilism gussied up with high fructose corn syrup and lead paint.

[mvaliz]

Do you mean original-flavor Adam-Smith capitalism? Or New Capitalism, which is just mercantilism gussied up with high fructose corn syrup and lead paint.

Guess it really depends on who fills the space. If it's a new resturaunt with a solid plan and capital behind it... as opposed to a McDonalds/Starbucks? >.>

[Nellise]

Also, shouldn't this be some pro-capitalist thing? Like, people who can't pay workers living wages will be flushed out and replaced by resturaunts who CAN pay workers a living wage?

Customers don't choose where to spend money based on what employees of the restaurants are paid, they go based on price and quality. And restaurants that were able to make profits before the wage hikes and already have an established customer base use that savings to cover the increased costs while new restaurants have to start off at that level and a much higher barrier to entry. Once those new places can't compete because their prices are higher to cover the higher costs, they close, and now without competition, the established restaurants are free to raise their prices.