Applebee's Owner: The Truth About $15 Minimum Wage

[OnePercenter]

American workers would be so much better off if they made less money.

"Prosperity Through Lower Wages!"

American workers would be so much better off if they made less money.

Raise the minimum wage too high and they will make less money.

Why?

 

[Econ4Every1]

Matt recently brought you up to date on how liberals’ minimum wage demands have done severe damage to Seattle's and New York’s businesses. He highlighted a New York Post report revealing that, in the wake of the increased rate to $15 an hour, New York lost a staggering 1,000 restaurants.

Applebee's was one of the businesses that has been especially hard pressed by the minimum wage hike. Zane Tankel, the CEO of Applebee’s New York franchise, explained that his restaurants were forced to fire at least 1,000 employees so far thanks to the liberal policy. He shared the unfortunate news with Fox Business's Stuart Varney on Monday.

Instead of typical servers, the CEO explained that they will soon be replaced by concierges, who merely check on customers from time to time to make them feel "warm and comfortable."

"The model now that we're heading towards where we had one server for three or four tables, we're moving towards one server for ten tables, eliminating about two-thirds of our labor ultimately. But it's because of Cuomo, De Blasio, the liberal agenda."

If Applebee's completely follows through with its concierge service, nearly 2,000 employees will be heading for the exit, Newsbusters explains.

Tankel discussed this same issue with Varney in January, back when he had *only* fired 500 employees.

“We can’t raise prices anymore,” he said at the time, rather candidly, so they had to take drastic measures.

The lost workers, he explained, could be replaced with tablets that are placed on customers’ tables.

"Increasing minimum wage is technology's best friend," Tankel concluded.

One server for ten tables has been an industry norm for decades. The story is a lie.

https://www.quora.com/What-is-the-ideal-waiter-to-table-ratio-in-a-restaurant

I find this response utterly baffling.

"Prices have gone up now we're just going to have to fire people and provide terrible service"

This is what innovation is all about. Wages are just one of hundreds perhaps even thousands of costs that go into running a business. Complaining that when one of those costs increases means that you can't run your business effectively?

Again, this is just a bias toward business and places the burden on workers.

This, of course, is why the distribution of wealth and income matters.

 

[Econ4Every1]

You've established why most businesses fail. Beyond that, not much.

Something, in particular, you'd like to discuss with respect to this issue?

 

[Econ4Every1]

You've established why most businesses fail. Beyond that, not much.

Actually, I'm attempting to uncover the hidden bias towards business owners, at least by some. I've also pointed out that increased wages are linked to an increased capacity to consume, something that pro-business think-tanks don't take into account.

But don't think that I'm anti-business, it just happens to be what this post was about. I'm simply challenging the prevailing wisdom that this thread represents.

Personally, I don't like the minimum wage as a tool. It's like pushing a pin a with a sledgehammer. Its effectiveness (minimum wage) is limited because it does not take market conditions and cost of living into account, at least a federal minimum wage.

So I freely concede that a $15 minimum wage will have a much larger impact in Biloxi than it will in Burbank.

 

[Toddsterpatriot]

Paying your employees more than they produce doesn't sound very efficient.

Here is the problem with that notion.

Wages enable workers to purchase business output. Decreasing wages decreases the consumption capacity of the majority of potential customers.

Since 1980 here's what we've seen:

The gap between purple and blue is the problem. Not because it's "unfair", but because the top quintile (in blue - roughly 32 million families) regardless of its increasing income, cannot purchase enough to drive necessary demand in the businesses owned by the same top 20%. In simple terms, it's bad for the economy (though it tends to be great for individuals) and it's bad for demand. This is because buying more expensive versions of everyday items, watches, pots and pans, dishwashers, cars ect doesn't employ more people. The families on the bottom 80%, roughly 65-70 million families can, if they have adequate income drive much greater demand.

There is a paradox of sorts that exists between the individual business owner and the economy as a whole. What's good for the business owner (decrease expenses by decreasing the cost of labor - lowering wages and automation) can be bad for the economy as a whole and ultimately bad for that same owner. Not to mention the fact that societal costs increase as the government is left to help those that cannot find work that pays enough to afford healthcare, food, shelter ect....

Now to your point, you say that; "Paying employees more than they produce" is inefficient.

I could simply turn that around and say, "Paying employees less than they are worth decreases their capacity to consume and isn't very efficient." At least from an overall economy standpoint.

But how do we determine what an employee is worth? An employees value is linked to demand. As demand falls and under/ unemployment rises employee salaries tend to go down as competition increases. When times are good and under/ unemployment declines the value of employees rises. The problem with both of these states is they tend to feedback. Paying less decreases costs but also decreases overall demand. Conversely paying more can increase costs as competition for workers increases, but it can also increase demand.

Thus owners, not workers, are creating the environment we see today.

There is always a shifting equilibrium between wages and costs. By pushing wages incrementally higher we expect to observe an overall increase overall demand and decrease the need for government services as people are increasingly capable of paying for themselves.

You are looking at things from a very owner-centric point-of-view.

Your statement assumes fix costs, but costs aren't fixed. Higher wages lead to greater consumption capacity. Greater consumption leads to growing businesses and decreased marginal costs due to economies of scale. The whole scale, not just wages, moves.

The problem is that marginal wages have been allowed to decrease over time. Trying to slide the "scale" back to where is should be to drive adequate demand will cause instability and disruption until that point is reached. The justification for doing nothing is the instability and a sign of the very short-sighted nature of our culture.

Now, as I said, I'm not necessarily arguing for a MW, I think there are better alternatives. Something I'm not going to get into now.

Exactly! The best way to help the employees is to drive their employers under.

Again, I could turn that around and say that failure to increase wages is the best way to decrease demand in the economy overall.

Thus it is possible for employers to pay too little and it's possible to employees to ask for too much (think late 1970's). The problem usually comes, not in the nominal figures paid, but in the transition between where wages are and where we'd like to be as a soiciety.

Wages enable workers to purchase business output. Decreasing wages decreases the consumption capacity of the majority of potential customers.

So every employer should pay their workers more than they produce.....for the economy!! LOL!

Since 1980 here's what we've seen:

Increasing income, across the board.

Not because it's "unfair", but because the top quintile (in blue - roughly 32 million families) regardless of its increasing income, cannot purchase enough to drive necessary demand in the businesses owned by the same top 20%.

Of course, because savings are bad for the economy. What a load of crap.

Not to mention the fact that societal costs increase as the government is left to help those that cannot find work that pays enough to afford healthcare, food, shelter ect....

It's true, booting illegal aliens would increase jobs and wages for our low skilled workers.

By pushing wages incrementally higher we expect to observe an overall increase overall demand

Increasing wages leaves less money available for other business purchases.
Lowering overall demand.


The problem is that marginal wages have been allowed to decrease over time.


The problem is your claim is false.

Again, I could turn that around and say that failure to increase wages is the best way to decrease demand in the economy overall.

Driving employers out of business isn't good for employment, wages or demand.

 

[Toddsterpatriot]

American workers would be so much better off if they made less money.

"Prosperity Through Lower Wages!"

American workers would be so much better off if they made less money.

Raise the minimum wage too high and they will make less money.

Why?

Because they'll be unemployed.

 

[Econ4Every1]

Apologies, still lerning how to use this forum...My previous comments are in bold.

-E4E1

Wages enable workers to purchase business output. Decreasing wages decreases the consumption capacity of the majority of potential customers.

So every employer should pay their workers more than they produce.....for the economy!! LOL!

Again, costs aren't fixed.

Since 1980 here's what we've seen:

Increasing income, across the board.

Again, costs aren't fixed and nominal numbers are useless when looking at different time periods.

Not because it's "unfair", but because the top quintile (in blue - roughly 32 million families) regardless of its increasing income, cannot purchase enough to drive necessary demand in the businesses owned by the same top 20%.

Of course, because savings are bad for the economy. What a load of crap.

Yes, Keynes was right. It's called the Paradox of Thrift.

Not to mention the fact that societal costs increase as the government is left to help those that cannot find work that pays enough to afford healthcare, food, shelter ect....

It's true, booting illegal aliens would increase jobs and wages for our low skilled workers.

Yes and at the same time lowering national productivity which is what gives the dollar (most of) its value (see Japan)

By pushing wages incrementally higher we expect to observe an overall increase overall demand

Increasing wages leaves less money available for other business purchases.
Lowering overall demand.

True or false Spending=Income?

The problem is that marginal wages have been allowed to decrease over time.

The problem is your claim is false.

Evidence?

Again, I could turn that around and say that failure to increase wages is the best way to decrease demand in the economy overall.

Driving employers out of business isn't good for employment, wages or demand.

Driving wages down isn't good for demand either.

There is an equilibrium point between high wages and low costs of production. Either extreme is bad.

 

[Toddsterpatriot]

Apologies, still lerning how to use this forum...My previous comments are in bold.

-E4E1

Wages enable workers to purchase business output. Decreasing wages decreases the consumption capacity of the majority of potential customers.

So every employer should pay their workers more than they produce.....for the economy!! LOL!

Again, costs aren't fixed.

Since 1980 here's what we've seen:

Increasing income, across the board.

Again, costs aren't fixed and nominal numbers are useless when looking at different time periods.

Not because it's "unfair", but because the top quintile (in blue - roughly 32 million families) regardless of its increasing income, cannot purchase enough to drive necessary demand in the businesses owned by the same top 20%.

Of course, because savings are bad for the economy. What a load of crap.

Yes, Keynes was right. It's called the Paradox of Thrift.

Not to mention the fact that societal costs increase as the government is left to help those that cannot find work that pays enough to afford healthcare, food, shelter ect....

It's true, booting illegal aliens would increase jobs and wages for our low skilled workers.

Yes and at the same time lowering national productivity which is what gives the dollar (most of) its value (see Japan)

By pushing wages incrementally higher we expect to observe an overall increase overall demand

Increasing wages leaves less money available for other business purchases.
Lowering overall demand.

True or false Spending=Income?

The problem is that marginal wages have been allowed to decrease over time.

The problem is your claim is false.

Evidence?

Again, I could turn that around and say that failure to increase wages is the best way to decrease demand in the economy overall.

Driving employers out of business isn't good for employment, wages or demand.

Driving wages down isn't good for demand either.

There is an equilibrium point between high wages and low costs of production. Either extreme is bad.

Again, costs aren't fixed.

So? Never said they were.

savings are bad for the economy.

Yes, Keynes was right

LOL!

It's true, booting illegal aliens would increase jobs and wages for our low skilled workers.

Yes

Excellent! And we wouldn't have to force employers to pay more than their employees produce.

Evidence?

I agree, you should provide evidence for your claim.

 

[rightwinger]

Matt recently brought you up to date on how liberals’ minimum wage demands have done severe damage to Seattle's and New York’s businesses. He highlighted a New York Post report revealing that, in the wake of the increased rate to $15 an hour, New York lost a staggering 1,000 restaurants.

Applebee's was one of the businesses that has been especially hard pressed by the minimum wage hike. Zane Tankel, the CEO of Applebee’s New York franchise, explained that his restaurants were forced to fire at least 1,000 employees so far thanks to the liberal policy. He shared the unfortunate news with Fox Business's Stuart Varney on Monday.

Instead of typical servers, the CEO explained that they will soon be replaced by concierges, who merely check on customers from time to time to make them feel "warm and comfortable."

"The model now that we're heading towards where we had one server for three or four tables, we're moving towards one server for ten tables, eliminating about two-thirds of our labor ultimately. But it's because of Cuomo, De Blasio, the liberal agenda."

If Applebee's completely follows through with its concierge service, nearly 2,000 employees will be heading for the exit, Newsbusters explains.

Tankel discussed this same issue with Varney in January, back when he had *only* fired 500 employees.

“We can’t raise prices anymore,” he said at the time, rather candidly, so they had to take drastic measures.

The lost workers, he explained, could be replaced with tablets that are placed on customers’ tables.

"Increasing minimum wage is technology's best friend," Tankel concluded.

Servers work for tips

 

[Toddsterpatriot]

Apologies, still lerning how to use this forum...My previous comments are in bold.

-E4E1

Wages enable workers to purchase business output. Decreasing wages decreases the consumption capacity of the majority of potential customers.

So every employer should pay their workers more than they produce.....for the economy!! LOL!

Again, costs aren't fixed.

Since 1980 here's what we've seen:

Increasing income, across the board.

Again, costs aren't fixed and nominal numbers are useless when looking at different time periods.

Not because it's "unfair", but because the top quintile (in blue - roughly 32 million families) regardless of its increasing income, cannot purchase enough to drive necessary demand in the businesses owned by the same top 20%.

Of course, because savings are bad for the economy. What a load of crap.

Yes, Keynes was right. It's called the Paradox of Thrift.

Not to mention the fact that societal costs increase as the government is left to help those that cannot find work that pays enough to afford healthcare, food, shelter ect....

It's true, booting illegal aliens would increase jobs and wages for our low skilled workers.

Yes and at the same time lowering national productivity which is what gives the dollar (most of) its value (see Japan)

By pushing wages incrementally higher we expect to observe an overall increase overall demand

Increasing wages leaves less money available for other business purchases.
Lowering overall demand.

True or false Spending=Income?

The problem is that marginal wages have been allowed to decrease over time.

The problem is your claim is false.

Evidence?

Again, I could turn that around and say that failure to increase wages is the best way to decrease demand in the economy overall.

Driving employers out of business isn't good for employment, wages or demand.

Driving wages down isn't good for demand either.

There is an equilibrium point between high wages and low costs of production. Either extreme is bad.

True or false Spending=Income?

True or false, raising wage costs by $100,000 reduces other possible business purchases by $100,000?

 

[Wyatt earp]

American workers would be so much better off if they made less money.

"Prosperity Through Lower Wages!"

Yup the left prefers no jobs like what's happening in Flagstaff Arizona after they raised the MW, places closing down.








.

 

[Wyatt earp]

Apologies, still lerning how to use this forum...My previous comments are in bold.

-E4E1

Wages enable workers to purchase business output. Decreasing wages decreases the consumption capacity of the majority of potential customers.

So every employer should pay their workers more than they produce.....for the economy!! LOL!

Again, costs aren't fixed.

Since 1980 here's what we've seen:

Increasing income, across the board.

Again, costs aren't fixed and nominal numbers are useless when looking at different time periods.

Not because it's "unfair", but because the top quintile (in blue - roughly 32 million families) regardless of its increasing income, cannot purchase enough to drive necessary demand in the businesses owned by the same top 20%.

Of course, because savings are bad for the economy. What a load of crap.

Yes, Keynes was right. It's called the Paradox of Thrift.

Not to mention the fact that societal costs increase as the government is left to help those that cannot find work that pays enough to afford healthcare, food, shelter ect....

It's true, booting illegal aliens would increase jobs and wages for our low skilled workers.

Yes and at the same time lowering national productivity which is what gives the dollar (most of) its value (see Japan)

By pushing wages incrementally higher we expect to observe an overall increase overall demand

Increasing wages leaves less money available for other business purchases.
Lowering overall demand.

True or false Spending=Income?

The problem is that marginal wages have been allowed to decrease over time.

The problem is your claim is false.

Evidence?

Again, I could turn that around and say that failure to increase wages is the best way to decrease demand in the economy overall.

Driving employers out of business isn't good for employment, wages or demand.

Driving wages down isn't good for demand either.

There is an equilibrium point between high wages and low costs of production. Either extreme is bad.

Driving wages down isn't good for demand either.


Who drives wages down? The only real examples I know of today is the big company's like apple, they are in cahoots with others to keep IT wages low..living in South Carolina now I know no manufacturing company starting off paying less then $4 over minimum wage, even McDonald's here is starting people off $2 bucks over minimum wage.

.

 

[Econ4Every1]

So? Never said they were.

So then how do you determine the value of labor?

With respect to savings, I agree that savings can have positives aspects, but tell me, how do you think large pools of savings helps the economy?

It's true, booting illegal aliens would increase jobs and wages for our low skilled workers.

Even if that were true it would cause a decrease in overall productivity, though I don't expect you to fully understand the repercussions of that.

Yes

I assume you are responding to the question, does spending=income.

If the answer is yes is it also fair to say that in the aggregate less income=less demand?

 

[Toddsterpatriot]

So? Never said they were.

So then how do you determine the value of labor?

With respect to savings, I agree that savings can have positives aspects, but tell me, how do you think large pools of savings helps the economy?

It's true, booting illegal aliens would increase jobs and wages for our low skilled workers.

Even if that were true it would cause a decrease in overall productivity, though I don't expect you to fully understand the repercussions of that.

Yes

I assume you are responding to the question, does spending=income.

If the answer is yes is it also fair to say that in the aggregate less income=less demand?

So then how do you determine the value of labor?

I prefer to let the market determine that. Not government.

how do you think large pools of savings helps the economy?

You're kidding, right?

Even if that were true it would cause a decrease in overall productivity

Deporting low skilled workers would tend to raise average productivity.

though I don't expect you to fully understand the repercussions of that.

I'm interested in the higher wages and lower government spending that we'd see.

 

[Econ4Every1]

Who drives wages down? The only real examples I know of today is the big company's like apple, they are in cahoots with others to keep IT wages low..living in South Carolina now I know no manufacturing company starting off paying less then $4 over minimum wage, even McDonald's here is starting people off $2 bucks over minimum wage.

I didn't mean to suggest that there is some nefarious plan by business owners to drive down wages. The fact is, any owner is going to pay as little as they can. That is their fiduciary responsibility to their company. This is the paradox I was speaking of.

It's not necessarily that there is an active conspiracy to drive wages down, but a lack of support to increase wages.

The reality is that spending=income. The less money spent the less income is earned and so on....

As a nation we can't save our way to prosperity, it's simply impossible.

 

[Econ4Every1]

how do you think large pools of savings helps the economy?

You're kidding, right?

No, I'm not, please educate me.

 

[Toddsterpatriot]

how do you think large pools of savings helps the economy?

You're kidding, right?

No, I'm not, please educate me.

What limits the production growth of goods and services is the introduction of better tools and machinery (i.e., capital goods), which raises worker productivity. Tools and machinery are not readily available; they must be made. In order to make them, people must allocate consumer goods and services that will sustain those individuals engaged in the production of tools and machinery.

This allocation of consumer goods and services is what savings is all about. Note that savings become possible once some individuals have agreed to transfer some of their present goods to individuals that are engaged in the production of tools and machinery. Obviously, they do not transfer these goods for free, but in return for a greater quantity of goods in the future. According to Mises, "Production of goods ready for consumption requires the use of capital goods, that is, of tools and of half-finished material. Capital comes into existence by saving, i.e., temporary abstention from consumption."

Since saving enables the production of capital goods, saving is obviously at the heart of the economic growth that raises people's living standards. On this Mises wrote, "Saving and the resulting accumulation of capital goods are at the beginning of every attempt to improve the material condition of man; they are the foundation of human civilization."

Is Saving Bad for the Economy?

 

[Toddsterpatriot]

Who drives wages down? The only real examples I know of today is the big company's like apple, they are in cahoots with others to keep IT wages low..living in South Carolina now I know no manufacturing company starting off paying less then $4 over minimum wage, even McDonald's here is starting people off $2 bucks over minimum wage.

I didn't mean to suggest that there is some nefarious plan by business owners to drive down wages. The fact is, any owner is going to pay as little as they can. That is their fiduciary responsibility to their company. This is the paradox I was speaking of.

It's not necessarily that there is an active conspiracy to drive wages down, but a lack of support to increase wages.

The reality is that spending=income. The less money spent the less income is earned and so on....

As a nation we can't save our way to prosperity, it's simply impossible.

As a nation we can't spend our way to prosperity, it's simply impossible.

 

[MrShangles]

American workers would be so much better off if they made less money.

"Prosperity Through Lower Wages!"

Are you even listening, higher minimum =les jobs


Sent from my iPhone using Tapatalk

 

[Econ4Every1]

how do you think large pools of savings helps the economy?

You're kidding, right?

No, I'm not, please educate me.

What limits the production growth of goods and services is the introduction of better tools and machinery (i.e., capital goods), which raises worker productivity. Tools and machinery are not readily available; they must be made. In order to make them, people must allocate consumer goods and services that will sustain those individuals engaged in the production of tools and machinery.

This allocation of consumer goods and services is what savings is all about. Note that savings become possible once some individuals have agreed to transfer some of their present goods to individuals that are engaged in the production of tools and machinery. Obviously, they do not transfer these goods for free, but in return for a greater quantity of goods in the future. According to Mises, "Production of goods ready for consumption requires the use of capital goods, that is, of tools and of half-finished material. Capital comes into existence by saving, i.e., temporary abstention from consumption."

Since saving enables the production of capital goods, saving is obviously at the heart of the economic growth that raises people's living standards. On this Mises wrote, "Saving and the resulting accumulation of capital goods are at the beginning of every attempt to improve the material condition of man; they are the foundation of human civilization."

Is Saving Bad for the Economy?

Let's take this question up in the thread I started about banks and where they get money to lend since it's related and getting off track here....