Early analysis of Seattle’s $15 wage law: Effect on prices minimal one year after implementation · 10
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- “Our preliminary analysis of grocery, retail and rent prices has found little or no evidence of price increases in Seattle relative to the surrounding area,” the team concluded.
Workers, for their part — many of whom reported struggling to make ends meet despite community and government assistance — responded to the survey wondering doubtfully if the wage increases would truly improve their financial situation. Most knew about the law but many were uncertain of details, the study found.
“Today’s report documents both the hopes and fears that workers and business managers expressed as Seattle began its initiative to raise the minimum wage,” said Vigdor. “Business owners are hopeful that small changes to their operation — such as small price increases — will keep them in the black.
user-inactivated · 589 days ago · link ·
The math is pretty simple for larger businesses. Let's say you run a medium retail store that has 10 people an hour to run the place. Those 10 people who all get a raise of roughly $7 an hour. Let's say you move 200 units an hour. To break even, all you have to is raise the average price of your items by only 35 cents. Some higher price items will see a slightly bigger jump, smaller items, less. Either way, most people aren't gonna freak out about 35 cents. Let's say you run a grocery store that has 50 people and let's say they all get the same $7 raise. Grocery stores move a lot more, but we will be conservative and say they move about 3,500 units an hour. That's only a 10 cent average raise in price per item to counteract those raises. How would things like taxes and other benefits factor in? I don't know. But to say that raising wages would affect prices astronomically when no body says shit about raises in rent, utilities, shipping costs etc., strikes me as dishonest.
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Target has pointed out in the past that its biggest single line item expense (other than inventory)isn't wages, isn't benefits, but is credit card fees. ButterflyEffect and I had drinks at a bar in Seattle last year that had a sign on the wall that said something like "prices include a 15% surcharge to provide our servers a $15/hour living wage." It made the math pretty simple: tip nominally as your server is no longer living off tips. I'd be curious as to cgod's thoughts. He's in a retail reality that I happily will never inhabit. I did an episode of Bar Rescue where Tapper was saying things like "You've got two thousand dollars a month in rent." (check!) "You're a quarter million dollars in debt." (likely to be check!) "You've got 30,000 cars a day in front of this business." (We've got closer to 50k) "Isn't that suffocating?" That's when I realized these poor sonsobitches needed to make their nut one order of buffalo wings at a time... rather than needing to make two four-thousand-dollar sales a month. I said some likely dumb shit about coffee back before cgod opened a shop; I'm curious how dumb my shit actually was.
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This post Has some great statistics about how, as small businesses go, coffee shops are stunningly survivable. That said, having been through the tenant improvement wringer I have gained a lot of respect for businesses that attempt to make their nut off of simple retail markup.