“I was shocked, I was stunned by the business.”CEO says profits soared after minimum wage hike

originally posted by: tothetenthpower
a reply to: ugmold

They don't realise the middle class actually has to spend money to get ahead.

Yup. The middle class must spend money on pretzels. That's the premise here. The pretzel company saw profits go up BECAUSE the minimum wage went up--or so they say. Therefore, spending money on pretzels is necessary to get ahead.

Now we go off on yet another higher minimum wage is good, student debt is bad thread. Here's a thought. If you spent your college education getting a degree in chemical engineering, paying off your student debt would be easy. Instead you spend it on a B.A. in English and wonder why you can't get the job YOU DESERVE. Naturally, you want someone else to pay off your student debt because you're in no position to do so.

Perhaps you should have gone into plumbing.

Murica: Blaming someone else for your self-created problems since 1776.

originally posted by: xuenchen
This story sounds suspiciously fabricated.

Most "Living Testimonials" are.

Let's see the books !!!!

Wasn't there some company that was supposedly paying all of their employees 70 grand a year and the company ended up flopping?

originally posted by: Krazysh0t

originally posted by: TheBulk
Well there is deception right off the bat. They give you the idea that this is a $15 an hour minimum wage hike when in fact it's only $10.

What most people took issue with is the idea of arbitrarily raising entry level jobs to a $15 or more an hour. Many people invest a lot of money to go to school and get an education so they can make that much.

"Let's not make these service sector jobs worth having by paying a decent wage guys! Let's instead reclaim lost jobs that can't come back for an industry that is just as #ty to work in but has a history of good pay and benefits because workers and unions demanded those benefits until they got them!"

Those jobs can be done by anyone including robots. Those jobs aren't even going to be around much longer.

a reply to: TheBulk

DUH! That's why we should worry about improving the quality of service sector jobs. That was the point I was trying to beat you over the head with.

originally posted by: SlapMonkey
a reply to: ugmold

Not discounting his reasoning outright (but I would argue that it usually takes longer for those making more money to just frivolously spend it on pretzels in the mall), but it seems pretty apparent that he's using deductive reasoning to make a guess as to the correlation between the two.

And what isn't addressed is whether or not this is a sustained increase in sales, or just a knee-jerk reaction to a few more dollars in someone's pocket. And is this across the board for most restaurants, or just his? Has he specifically asked people why they're buying more of his product, or is he just, again, making that correlation without proving causation?

These are questions that need answering before one can just jump on the bandwagon that increased minimum wage is better for the majority of businesses and employees alike.

ETA: Also, if people are making just a little bit more and running out to buy things like pretzel snacks, it doesn't seem like these people making minimum wage are really on the cusp of poverty. I bet they all stood in line messing on their smart phones while waiting to order, too.

I was thinking the same thing. The CEO would need to commission a marketing study to survey customers and their income levels to really drill down if the increase in sales is correlated to a broader increase in minimum wage.

Most of their stores seem to be in malls, so it stands to reason that they could benefit from mall employees who are likely to be making minimum wage.

I do think in the short term businesses would benefit as those making minimum wage are likely to spend the money immediately. However, in the long term they don't benefit. It takes awhile for competition and increased costs to show up along with the subsequent decisions that would occur as a result.

a reply to: TheBulk
This is a major issue right here.
There are multiple thousands of college grads that have to take jobs which require a bachelor's yet pay $15/hr or less, even.

That's next to nothing for an educated poosition and yet here you have the fry guy or the delivery boy making comparable salaries.
If minimum wage is $8-9 right now and you raise it to $15 which is what they want then the business sector has to raise wages across the board. Skilled or educated positions should see a $7-8 increase to make their education worth while somewhat. I doubt that will happen.
All you do is further socialize our country by mandating workers make more than their job is worth.

This would be the most damning problem.
Wages have not kept up with inflation.
Taxes and healthcare are backbreakers.

Even making 6 figures in the high cost-of-living areas only just gets you by if you have a mortgage. Without any rental, forget it.

The profits have not been shared. For decades prices soared while wages have not.

The more illegal or uneducated workers you have them more water has been added to the stew and the market is lukewarm.
Stocks are doing great but where are the jobs?
With stores closing and businesses failing what will be left?
Once the brick and mortars go under what happens to all that real estate?
Jobs that will never return?
Blow bubbles and bubbles burst.

A minimum wage that high across the board seems unsustainable. Maybe the pretzels do good.

a reply to: Edumakated

Yeah, and another thing to consider is that he's talking about increased sales around the time of Christmas shopping, where more people are in the malls, willing to spend money, and maybe have already received Christmas spending cash that they didn't earn through a job.

I call propaganda.

So now that they raised minimum wage, people are eating more pretzels to celebrate the extra money. Talk about using their money wisely.

There was a time when wages were so high, a man could afford to be the bread winner and the wife could stay home.

Wages were good, goods were not cheap but people still afforded them. In fact due to high prices, people looked prized their possessions and a secondary economy of repairing said goods also flourished. Almost everything was made in the country it was bought in and life was very good.

Why and how is it that we turned our backs on this and started going for offshore made goods that sent all of our economies in countries like USA, Australia, NZ, UK, Europe into death spirals?

a reply to: markosity1973

We shouldn't want those jobs anymore. Technology is making them irrelevant and even without offshoring, it would have been inevitable that wages would eventually decrease in these industries.

a reply to: Krazysh0t

Okay - let's do some simple math here;

Population USA (just as a sample) in 1945 - 139.9 million - more jobs than people and no robot factories taking work away from anyone.

Skip forward to 2014 - last update on Google - and that population has nearly trebled to 318.9 million. There are more people than jobs and factories are falling over themselves to either go offshore or replace workers with robots.

Simple fact of being a human in the society we have all created together - we need money. And the way to get money is to have a job.

See the disconnect between industry and humanity yet?

We don't actually need all of this robotic / AI nonsense. In fact as the population grows it is already making many lives redundant.

originally posted by: tothetenthpower
The effects have been nothing but positive, but I attribute some of that to the slow roll out of raising the wage, not a huge hike, as I agree with you, there would be some negative repercussion to doing that.

~Tenth

Alberta disagrees.

We now have the highest Provincial min wage and the fastest growing min wage rate...we also have the fastest growing unemployment rate.

Min wage increases never fix actual economic problems. Just another band-aid, bought and paid for by the middle, expected to be fixed at some never actually mentioned point in time.

a reply to: peck420

I did some research and according the Calgary Herald the rate increased because more people moved to Alberta looking for work.
"Alberta’s unemployment rate jumped sharply in July — to its highest level in nearly 22 years — as more people began looking for work in the province, Statistics Canada reported Friday.

The federal agency said employment in the province remained “essentially unchanged” from June, but a growing workforce saw the unemployment rate rise 0.7 points to 8.6 per cent. That’s the highest rate in the province since September 1994."
calgaryherald.com...

a reply to: markosity1973

I do and I have solutions that I have offered in the thread, but rekindling lost glory is a dumb way to fix these problems.

But by pointing out how the economy used to work to generations that have never experienced it may shed some light to them on where we are going wrong.

a reply to: markosity1973

The economy also used to be fueled by a near 90% progressive tax plan that encouraged businesses to reinvest in their companies instead of keep all the profits. It was also assisted by us being the only game in town when it came to 1st world nations since all the others were rebuilding from WWII.

originally posted by: MOMof3
I did some research and according the Calgary Herald the rate increased because more people moved to Alberta looking for work.
"Alberta’s unemployment rate jumped sharply in July — to its highest level in nearly 22 years — as more people began looking for work in the province, Statistics Canada reported Friday.

The federal agency said employment in the province remained “essentially unchanged” from June, but a growing workforce saw the unemployment rate rise 0.7 points to 8.6 per cent. That’s the highest rate in the province since September 1994."
calgaryherald.com...

OMG! Say it ain't so! Other Canadians started flocking to Alberta, for work, shortly after the min wage increase was announced!

I wonder why?

a reply to: peck420

I think the point of the article was the rate did not increase because of job losses.

a reply to: VinylTyrant

For decades prices soared while wages have not.

Nope. Not when states like Louisiana import workers by the thousands for jobs to keep wages low. Human trafficking is not just in the sex trade, and not just in Saudi Arabia.

Accident sheds light on use of Filipino 'guest workers' in offshore industry

According to court papers, the Filipino workers originally responded to job offers from Industrial Personnel and Management Services Inc., a recruiting firm based in Quezon City, Philippines, and a second company. The workers had to pass skill tests showing they could perform the trades required by Grand Isle Shipyard, including welding and pipefitting, and were told they would be paid $16.25 an hour for regular time and $24.37 an hour for overtime, along with transportation to the United States, housing and food.

Actual pay was as low as $5.50 an hour, the lawsuit says.

The lawsuit alleges that the workers were required to sign two different contracts, containing differing pay rates, with the contract containing higher wages complying with federal law filed with the U.S. Embassy in Manila, and a second contract, with lower wages, filed with the companies.

Trafficked Teachers: Neoliberalism’s Latest Labor Source

Labeling the immigrant teachers as “interns,” the district only spent $18,000 for each of their yearly salaries—well below a regular teacher’s rate. But because the district paid the wages to Florida Atlantic University, rather than the teachers themselves, the university pocketed most of the money, giving the teachers a mere $5,000 each.

a reply to: Krazysh0t

The USA is only one economy that has gone through this cycle.

NZ , where I am from enjoyed the highest quality of life in the world during the same period.

No post WW2 rebuilding there or military might fueling that economy. Just hard work and food exports.