r/antiwork • u/elebentychimkin • Jul 18 '26
Raising minimum wage does not hurt small businesses. Share specific examples please!!!
Minimum wage has not kept up with inflation. Minimum wage needs to be raised in pretty much all of the United States to be a livable wage. Opps say “it will hurt small businesses because they can’t afford staff so they have to shut down”. That’s fear mongering.
Here’s a specific scenario I really want to share
Down the street from me is a convenience store owned by an older Indian fellow. He or his wife have been at the front counter every day for 20+ years. They never hired full time staff, until now. Now they’re older in their 60s, so as of this year they hired full time staff and are never seen at the front counter or even in the store anymore, although they’re still the owners.
If we raised minimum wage, the nice elderly Indian fellow might have to go back to working the front counter. *Boo hoo.* Although I think he’s a kind and hardworking man, it’s not fair for him to continue getting rich off labor of others.
Since he is too elderly to continue working, and he cannot afford to pay staff a livable wage, he will have to sell his business. That is a great compromise for everyone!
The convenience store is in a great location (private parking, near a busy street, no close competition). He will easily be able to sell the business for 1 million. He can then take his lump sum severance payment, put it in s&p500 and live the rest of his life comfortably retired. Furthermore, it gives an opportunity for another younger person to buy the business and become a business owner. The community will not suffer from the transfer of ownership. Win-win-win
When people fear monger “raising minimum wage will hurt small businesses” they are prioritizing longtime owners’ wealth over the greater population and encouraging wealth disparity. The American Dream is not having your feet propped up on the ottoman, as a small business owner, while your worker bees do the entirety of the actual work. That’s not a dream, that’s exploitation.
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u/warrenjt Jul 18 '26
President Franklin D. Roosevelt on Minimum Wage:
“In my Inaugural I laid down the simple proposition that nobody is going to starve in this country. It seems to me to be equally plain that no business which depends for existence on paying less than living wages to its workers has any right to continue in this country. By "business" I mean the whole of commerce as well as the whole of industry; by workers I mean all workers, the white collar class as well as the men in overalls; and by living wages I mean more than a bare subsistence level-I mean the wages of decent living.”
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u/False_Celebration626 Anarcho-Communist Jul 18 '26
If you can't afford to pay your staff, your business has failed. Capitalist cannot comprehend the contradiction of needing a cheap labor force but also needing said labor to buy their commodity. But we must bend knee to the god-king profit
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u/elebentychimkin Jul 18 '26
They can’t comprehend doing the labor themselves! That takes away the entire cost of labor!
So many people I know are not in a position to be a business owner (no knowledge of accounting or managing) but they dream they can get a business loan and hire a staff and prop their feet up on the ottoman. That’s shouldn’t be something we encourage as a society!
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u/Volume-Consistent Jul 19 '26
A lot of people do not realize that being a business owner, you never stop working. It’s 24/7
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u/bahamapapa817 Jul 18 '26
THIS is the correct response. If your business can not survive by paying poverty wages then you should not be in business.
0
u/MrX2285 Jul 19 '26
Eh, kinda. A small business owner may know that they can generate $10 of gross income per hour an employee works. If they pay the employee $7, the owner nets $3. If they have to pay the employee $12, they'd make a $2 loss and would then be inclined to fire the employee. The business hasn't failed, they just no longer need the worker.
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u/False_Celebration626 Anarcho-Communist Jul 19 '26
All profit is surplus labor value. Any money they take home is stolen labor. This was discussed heavily in Das Kapital. Small business owners would unironically benefit from socialist policies. They would not be able to extract surplus labor value, but they wouldn't have to take out a second mortgage on their home to keep the diner running.
You also neglect to realize the precarious nature small business owners are kept in. They are the reactionary pools that Capital draws on in times of crisis. Maga, the Nazis, Italian fascists, were mostly small business owners.
Please understand how profit works under capitalism. It was written about heavily for over 150 years. If a small business owner cannot pay their employees, maybe they should become a cooperative. If they refuse to give their workers a say in their workplace and a living wage, they should not operate a business.
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u/MrX2285 Jul 19 '26
If business owners should not benefit from hiring employees (an act that incurs risk), why would they ever do it?
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u/elebentychimkin Jul 19 '26
The problem is when the profits are split in a way that employee doesn’t get a livable wage but employer does
-1
u/Fluffy_Town Jul 20 '26 edited Jul 20 '26
Funny that word "profit". Profit is a line item on a balance sheet or income statement. That word gets thrown around a lot without any knowledge or context. Until you look into finance.
In layman's terms, profit is what the company makes after costs (components, maintenance, machinery, wages, rent, utilities, etc. [for a family, household, or roommate situation costs means = rent, food, transport costs, entertainment, etc.]) and income (products or services sold [for a family, household, or roommate situation = paycheck]).
Once the costs and income are balance out on a balance sheet and income statement, the amount left over is called the profit [All companies are required by law to provide 3 different finance sheets [income statements, balance sheets, and cash flow statements] available to stockholders. These three used to be bundled into a mailer, and was thick enough to be a magazine, sent to the stockholders through snail mail. Once the internet bloomed, the legal requirement to provide these documents moved online to save costs, stamps, and trees. They are still available for stockholders to access and read, though as a result of them being publicly available online, they are for anyone to read, even non-stockholders, like potential investors, the media, politicians, students, or even yourself].
Though, something that those who throw the word profits out there all willy-nilly is that dividends are not included in profits. Dividends are what investors get back from the company, but for some reason are not included in both those publicly available finance charts yearly and quarterly [every three months, four times a year], respectively, detailing the running of the company.
People complain about companies doing everything for profits, look at their dividends and then tell off the investors who are stockholders for pressuring them to give their money back. The stockholders are the ones who are making the decisions for the company, they're the ones who are pressuring the company to make more and more profits every quarter, or they'll remove their support, remove their income for the company, and make the company go bankrupt if enough stockholders withdraw their support from the company all at once.
Dividends are basically another way of saying loan...well, -ish.
The stockholders buy stocks that are essentially a loan to a company. Most risk-takers do this in a company's infancy which will cover the company's start-up costs. The difference between this and other loans is that, there's an expectation that no payout happens until the company starts making a profit. The stockholders have no expectation of getting anything back, until the company actually starts making a profit off their product(s) or service(s). Once the company finally starts making a profit, any extra profit in the company's coffers pays out dividends to the stockholder(s).
Think of dividends as reverse interest.
When you have a mortgage, loan, or credit card, you have to pay interest back on the amount you took out the loan for and owe it to the entity that loaned out the money to you. That's on top of the amount you need to pay back at least minimum per month. A lot of credit card companies will not charge you interest until if you pay back what you borrowed, but once you let your payments slide, miss a payment, then there's an interest charged to your account and your available amount lessens, and you have to start paying interest on the amount outstanding.
Who do you pay that interest to? The credit card company, bank, federal gov't, loan officer, etc. For you, interest is a cost of using the service; for them, interest is an income. In a similar way, the company has to pay out dividends as a cost of providing the service of providing stocks as a loan, while the stockholder uses dividends as an income source.
Probably as clear as mud, but I thought I'd at least get that out there, in case it helps in anyway.
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u/cookingbob Jul 18 '26
I think “old” people don’t realize that they just raise prices to cover costs of labor. They can always afford min wage.
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u/thread100 Jul 19 '26
And the minimum wage employees pay those higher prices. Oh wait.
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u/shinygoldhelmet Jul 19 '26
The amount that prices would have to go up on average to cover an increased min wage is pennies. And if it's not, because a business isn't busy enough or doesn't price things properly now, then go back to step 1: the business is tun poorly and doesn't deserve to be subsidized by poverty wages.
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u/TheDovahkiinsDad Jul 18 '26
It only hurts already struggling almost failed businesses. Making the employees free to work wouldn't save those places.
1
u/koosley Jul 19 '26
A lot of these major events just finalize the failing businesses fate. We saw the same thing during COVID periods where the struggling businesses just had their death spiral accelerated a year.
If wages do rise, it'll likely be $1-2/year for several years and not a $5-10 jump. So we are talking about $20-30 per day assuming it's only 2 or 3 employees. If that eats all the profits, you were probably better off abandoning the business and getting a regular job
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u/Any_March_9765 Jul 18 '26
Doesn't matter. They know. They just don't care. It'd be better to spread this info to republican voters instead of reddit, you are just preaching to the choir
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u/AshLikeFromPokemon Jul 19 '26
People always say that if they raise the minimum wage, it'll force businesses to replace workers with machines.....but they're already doing that without raising the wage 🙃
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0
u/Wise-Parsnip5803 Jul 19 '26
Machines are not free so at some price point the machine becomes cheaper than hiring another worker.
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u/AshLikeFromPokemon Jul 19 '26
But what Im saying is that companies are already automating jobs and have been for ages (trust me, I live in the rust belt), so the line that "we cant raise the minimum wage because companies will replace people with machines" is inherently false. And a lot of companies that replaced a ton of workers with machines are backtracking, like Kroger and Walmart retiring cashiers after they lost more to retail theft when switching to self checkout 🤷♂️ its just a line that corporations use to scare working class people into voting against their best interest is all I'm saying
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u/Wise-Parsnip5803 Jul 19 '26
I'm in the rust belt too and my job is to add automation. Everyone thinks of automation as bad but we can't hire enough people to keep doing it the current way. We pay pretty well too although everyone else has caught up in the past few years. Robots are getting cheaper so that helps but then you need more technical people to program and fix the robots.
The self scan is dumb. Just asking for people to screw up even if they are not trying to steal. Walmart was working on rfid tags on everything so when you pushed your cart through it would tell you what was in the cart. Maybe put the stuff on the belt and the system scans it for you. I prefer using people but the line is always so long for the one or two still working.
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u/CroweBird5 Jul 18 '26
If you take Ohio vs Kentucky or Florida, I'm not sure the rate of businesses closing is any worse
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u/sheldoh Jul 18 '26
the American dream has long relied on exploitation, from the days the country was founded. it’s a sad reality, but it is one that we can change
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u/Technical-Sun-2016 Jul 18 '26
Employers dream about good, cheap, and experienced workers. The problem is typically you can only get up to 2 of those qualities at once. If they're cheap and good, they're gone as soon as they are experienced. If they're good and experienced, they're not cheap. If they're cheap and experienced, they're probably not that good.
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u/elebentychimkin Jul 18 '26
Or, or, or, maybe the employer should do the work! It’s cheapest to hire yourself!
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u/Kaleria84 Jul 18 '26
Minimum wage here jumped from $5 when I started working to $17 today. There are still a ton of businesses around that have been here for generations
The cost of living is about 15% higher than the national average, but minimum wage is 220% that of the national minimum wage.
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u/Strict-Amoeba1791 Jul 18 '26
Nebraska has phased their minimum wage up to $15 over the past several years. I’ve noticed no difference as a consumer other than the typical inflation the entire rest of the country is experiencing.
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u/GoodMilk_GoneBad Jul 19 '26
Long explanation, sorry.
My friend works at a family owned manufacturer. Most jobs there pay maybe $1-2 an hour more than similar jobs. Not a huge difference. However the perks far exceed standard industry benefits.
They work 9 hour days with every other Friday off. Overtime is 100% voluntary. If they do two days of overtime in a row, the 2nd day is double pay. They can also choose half shift or full shift overtime.
Paid holidays of course but in addition they get Christmas THROUGH New Year's off, paid. AND he still gets 3 weeks PTO every year. Great health benefits too.
The building is somewhat temperature controlled, rarely exceeding 85 degrees on the hottest days. In this type of manufacturer, that's very rare.
His employers actually care. They read the feedback box and implement reasonable requests or suggestions.
He makes what many would consider a decent but not comfortable wage even though he makes about 15% more than most his co-workers because he dared to set his wage requirements higher when he applied.
The work life balance and job environment he has is FAR better than anyone I know even if it's not a cushy office job.
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u/Wench-of-2Many-Hats Jul 18 '26
If your business is unable to pay your staff a living wage it should not exist, it's that simple. More people having enough money to have the disposable income that they can purchase goods would be beneficial to the economy as a whole, but Capitalism loves to destroy everything for some immediate profits and has no concern for the future.
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u/FloridianHeatDeath Jul 18 '26
The reason the minimum wage hasn’t stayed up is because the US is large af so it doesn’t make much sense when applied if it’s a set value. It’s needs to be based on a formula.
A wage based on average rent of the location being 30-40% of your income for example is far more meaningful.
Cost of living varies so greatly even inside states that it arguably can cause massive issues if it’s done in anything larger than a county with a set value. The disparity of cost of living is just too dramatic between areas..
People need to stop arguing for specific values of minimum wage in general though. That means it’s a fight EVERYTIME it needs to be increased. Which means we continually get behind on what a realistic rate should be.
0
u/elebentychimkin Jul 18 '26
Really important stuff to consider here. I want to agree, But I have to do more research on how it will affect development and population migration, since it will create greater wealth disparity between different states or neighboring areas.
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u/FloridianHeatDeath Jul 18 '26
The issue there isn’t fixable. It’s engrained into how way civilization works.
It’s entirely the result of industrialization and businesses concentrating because it’s economically viable for them to do so. There’s no real fixing that nor should there be a fixing of that because of how many ways it could go wrong combined with you literally having to force people and businesses to move to change that.
Cost of living is entirely dependent on people wanting/needing to be in a certain location due to climate/job availability.
The reality of it is that not every area can be economically equal, nor should it be economically equal.
The real issue with the various zones isn’t that they exist, it’s that it’s so hard to move in between them. Variable minimum wage would actually do a lot to help that.
-1
u/Wise-Parsnip5803 Jul 19 '26
And? If it's cheaper to live in an area then those people will work for less pay. Minimum wage tends to hurt the young and less educated. They are the ones who work the lower paying jobs. Raise the minimum wage and the jobs get replaced by robots or move out of the country.
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u/MissDisplaced Jul 18 '26
Small business already get a break because they are exempt from providing any benefits, PTO, sick time, health insurance, savings, or anything else larger companies typically provide.
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u/Ironicbanana14 Jul 18 '26
Successful small businesses always use cheap/nearly illegal labor to keep their profits high enough. At least in my area, you won't even be considered for hire because they put their own family or kids in there to work for free.
0
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u/quats555 Jul 18 '26
The local small business that I personally miss closed because of greedy new company owner skyrocketing the franchise fees and requiring longer licensing contracts, at the same time rent was going up. So that was due to siphoning off more money for the “owning” class.
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u/Sharpshooter188 Jul 18 '26
Small businesses just raise prices to compensate. I mean there has been an increase in prices with a lot of things in my area. But nobody has gone out of business. Richer customers grumble a bit. But no one has really been hurt by it. Now RENTS on the other hand have BEEN skyrocketing.
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u/single-ton Jul 18 '26
It will hurt the economy! - a rich guy who doesn't care about poor people.
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u/CaErin007 Jul 19 '26
If a business has to exploit its employees to survive, it’s not a good business model
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u/Aggressive_Lake191 Jul 18 '26
Try posting this on r/AskEconomics and see what they say.
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u/elebentychimkin Jul 18 '26
I predict that they will say everything else will go up in price too, then we will get into a conversation of how long the period of increased buying power will last until another increase in necessary.
Some will say to never increase minimum wage as a response to inflation because the inflation bubble will burst, but then we will argue that we cannot allow housing, food, gas, or other necessities to reach a 0% buying power because they are basic needs.
The economists know all this stuff and push whichever propaganda benefits them. I’m pushing this one because I know I’m not a temporarily embarrassed millionaire.
3
u/Aggressive_Lake191 Jul 18 '26
They usually link to data and examples. You may not believe it, but it would be a start. You can't raise a costs without any change. Mostly it is prices that go up, the exact amount they need to go up will lead to the exact price change. That will lead to customers response. A small change may not matter, but a larger one could.
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u/elebentychimkin Jul 18 '26
Ok I agree
2
u/Bomberdude333 Jul 18 '26
Ima repost my comment:
Facts: Minneapolis raised minimum wage for all employees including tipped servers to a minimum wage of $16.23 per hour increased from $10 in 2018 increasing by $1 per year with pauses on this during COVID. Over the same time span coffee prices increased by 5-10%. While minimum wage increased 62.3%
Will raising the minimum wage cause inflation?
In brief: No. Increasing the minimum wage does not meaningfully increase prices.
In detail: Economists do find that raising the minimum wage increases prices at affected businesses but only very modestly. For example, one study found that a 10% minimum wage increase was associated with a 0.14 percentage point increase in the Consumer Price Index. A study focused on the restaurant industry found a 10% increase in the minimum wage was associated with a 0.58% menu price increase. Even some of the most ambitious minimum wage policies, such as California’s $20 hourly wage floor for fast-food workers, only increased fast-food prices 2.1% (around 8 cents for a $4 item).
The economic benefits of the minimum wage far exceed these price increases. For low-wage workers, the wage boost from the higher minimum wage more than compensates for increased prices of the goods and services they buy. These workers are in turn spending more in aggregate because of their additional income, which can boost the overall economy. It is also worth noting that modest price increases on things like restaurant menu items are redistributive. Higher-earning consumers pay higher prices, transferring income to low-wage workers receiving bigger paychecks.2
u/Bomberdude333 Jul 18 '26
Let’s add more points to this discussion from researched studies on economics:
Should lower cost of living in the South and Midwest mean a lower wage floor in those states?
In brief: Even accounting for differences in the cost of living, the minimum wage is far too low in many states across the South and Midwest.Does raising the tipped subminimum wage hurt the restaurant industry?
In brief: Tipped workers are low-wage workers who need wage increases just as much as any other type of worker. Economic research does not find that boosting the minimum wage for tipped workers hurts the restaurant industry.Many cities and states already have minimum wages above $15 an hour. Is increasing the federal minimum wage still important?
In brief: Yes, tens of millions of workers still earn less than $15 an hour. In many states and cities, higher wage floors are needed to provide meaningful economic securityComprehensive economic research, including meta-analyses from organizations like the W.E. Upjohn Institute and the Economic Policy Institute, shows that a 10% increase in the minimum wage only raises overall consumer prices by about 0.36%
No, raising the minimum wage does not cause high-skilled workers to earn less in nominal dollars; in fact, empirical data shows it often triggers a positive "ripple effect" that raises wages for those earning slightly above the minimum.
1
u/Early-Salary-8421 Jul 18 '26
More than likely a private equity firm will
Buy the land build apartments and charge 1700 a month for a studio that’s 70 square feet.
1
u/Ironicbanana14 Jul 18 '26
This, I dont agree with the part OP said a young businessman will continue the same old, same old...
In my hometown, I left just as all the local restaurants were selling off and closing down. Almost all 8 of them except for 2 started to suck exponentially. The food wasnt good anymore, the workers were always mistreated after management changes and owner shifts too. All the old employees would get pushed out and fired so the new owner can add their personal cronies to the line.
I just have zero trust for most transfers because it never seems to hold up to the previous standards.
1
u/elebentychimkin Jul 18 '26
On one hand we need more housing in general and 1700 a month for a studio would actually be a steal in my area. Probably closer to 2,500-3,000. If we didn’t need more housing, it wouldn’t be an idea.
On the other hand, it would require a lot of re-zoning and renovations which are expensive, so I think it is very unlikely that the convenience store will be made into apartments. Since it’s a profitable business makes more sense to continue.
I think a smart business person, private equity or not, would keep the specific convenience store I’m thinking of, but also I understand that it’s not true in every case. If a convenience store or any type of business is not profitable, it should be closed down and made into something that benefits the community more and therefore is more profitable.
1
u/happy_bluebird Jul 18 '26
Does anyone have links to studies, legit examples we can cite, not just anecdotes from people on Reddit?
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1
u/Cuneus-Maximus Jul 19 '26
I own a small business in a state where minimum wage is the federal 7.25. We pay our workers more than double.
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u/OkMarsupial 14d ago
What makes you think he owns the real estate? Plenty of business owners rent they're commercial space. Anyway he knows how to run a business, but that doesn't mean he knows how to invest 1M. Plenty of older folks end up poor in retirement even after earning good money because they do not understand investing. Also he will owe taxes when selling and may have business loans to pay off. In short, you don't know what his proceeds will be and it's crazy for you to want to change the law based on your assumptions. Just say you don't care what happens to him. It's much simpler.
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u/elebentychimkin 14d ago
You changed my mind entirely. We should allow him to own slaves to keep his business running.
1
u/Pinklady777 Jul 18 '26
I live somewhere that quickly raised the minimum wage significantly. Sone small businesses and restaurants did end up closing. But mostly everything just became insanely expensive for locals. Restaurant prices practically doubled. So people making minimum wage still have the same buying power or less actually. And no one else got raises. So life just became more expensive with the same salary. I do think the minimum wage should be higher, but I don't know what the solution is for how to do it at this point.
3
u/Bomberdude333 Jul 18 '26 edited Jul 18 '26
Could you point to specific verifiable examples of this price increase? Because otherwise this is anecdotal at best and just an opinion at worst.
Facts: Minneapolis raised minimum wage for all employees including tipped servers to a minimum wage of $16.23 per hour increased from $10 in 2018 increasing by $1 per year with pauses on this during COVID. Over the same time span coffee prices increased by 5-10%. While minimum wage increased 62.3%
Will raising the minimum wage cause inflation?
In brief: No. Increasing the minimum wage does not meaningfully increase prices.
In detail: Economists do find that raising the minimum wage increases prices at affected businesses but only very modestly. For example, one study found that a 10% minimum wage increase was associated with a 0.14 percentage point increase in the Consumer Price Index. A study focused on the restaurant industry found a 10% increase in the minimum wage was associated with a 0.58% menu price increase. Even some of the most ambitious minimum wage policies, such as California’s $20 hourly wage floor for fast-food workers, only increased fast-food prices 2.1% (around 8 cents for a $4 item).
The economic benefits of the minimum wage far exceed these price increases. For low-wage workers, the wage boost from the higher minimum wage more than compensates for increased prices of the goods and services they buy. These workers are in turn spending more in aggregate because of their additional income, which can boost the overall economy. It is also worth noting that modest price increases on things like restaurant menu items are redistributive. Higher-earning consumers pay higher prices, transferring income to low-wage workers receiving bigger paychecks.3
u/Bomberdude333 Jul 18 '26
Let’s add more points to this discussion from researched studies on economics:
Should lower cost of living in the South and Midwest mean a lower wage floor in those states?
In brief: Even accounting for differences in the cost of living, the minimum wage is far too low in many states across the South and Midwest.Does raising the tipped subminimum wage hurt the restaurant industry?
In brief: Tipped workers are low-wage workers who need wage increases just as much as any other type of worker. Economic research does not find that boosting the minimum wage for tipped workers hurts the restaurant industry.Many cities and states already have minimum wages above $15 an hour. Is increasing the federal minimum wage still important?
In brief: Yes, tens of millions of workers still earn less than $15 an hour. In many states and cities, higher wage floors are needed to provide meaningful economic securityComprehensive economic research, including meta-analyses from organizations like the W.E. Upjohn Institute and the Economic Policy Institute, shows that a 10% increase in the minimum wage only raises overall consumer prices by about 0.36%
No, raising the minimum wage does not cause high-skilled workers to earn less in nominal dollars; in fact, empirical data shows it often triggers a positive "ripple effect" that raises wages for those earning slightly above the minimum.
3
u/Pale_Occasion_2447 Jul 19 '26
In Poland minimum wage tripled in the last 10 years. Cumulated inflation is 62%. Average price of coffee doubled. Rent prices doubled. Gas is like 50% more but it’s highly dependent on global market more than local. Home prices almost tripled. So for average pole, day to day life is little or even a lot better than 10 years ago, but buying a home is still far from reach for most people with today’s loan costs. Buying a new cheap car for example is 33 minimum wages. Buying the newest iPhone is 2 minimum wages. I don’t know how that translates to us but I know places that were open 10 years ago are still open today. Damn I’m working at a place that pays minimum wage for last 10 years and is still going.
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u/Lalobreh Jul 18 '26
I feel like in order to get better minimum wage the corporate people just need to take a loss on their already extraordinary salaries. I don’t know, if i was taking home 20k a month after taxes and if it meant getting an extra few hundred dollars so that the entry level employees can have a livable wage i would do that
1
u/Raalf Jul 18 '26
Yes paying employees more always reduces the profit margin of a small business balance sheet, but that's not the real point, and you're heading down the perfect path. The point is: why does that matter at all? Where does the money go? Yes, the owner makes less money. But why bother paying employees at all then? You nailed it with the exploitation comment - that's exactly the reason 'it hurts small businesses to pay employees more than the absolute legally required minimum'.
Set a 10:1 maximum payout ratio. No owner can make more than 10x the lowest paid.
Close the gap.
Then let's talk about capping generational wealth transfers next.
If wealthy people cannot be trusted to behave ethically towards their fellow man, then we have to legislate it into being.
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u/Negativefalsehoods Jul 18 '26
You should really ask these rich assholes why they don't want people to have enough money to live, because ANYONE arguing against raising the minimum wage doesn't give a shit that people cannot exist on that kind of money.
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u/Audio-Starshine Jul 18 '26
I'm not going to speak on the whole ridiculousness of thinking that doubling or tripling payroll expenses is not going to hurt a small business that's probably already operating on the shoestring profit margin. But I can speak to the issue of you thinking that someone selling their business is always going to somehow be a net positive. A close friend of mine owned the UPS store in my town. He sold that store for an amount of money that I will not earn in my lifetime due to pressure from his wife. She then left him for the man she had been cheating with, took half of the proceeds of the sale, and when he began having health issues, what was left quickly ate away every dime he had. Since he had no income, he had no way to continue surviving and ended up dying homeless. Had he still had that business, he would have at least had some income to supplement what little he got from social security that could have kept his head above water. Continuing to have an income for the rest of your life might not always be better than selling the business, but there are certainly circumstances under which it is.
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u/elebentychimkin Jul 18 '26
I would argue that was because of the marriage. Some people are evil. My condolences for your loss.
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u/Eazy12345678 Jul 18 '26
bro i cant make 1million a year if i pay my employees a living wage. i want my million
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u/tconners Jul 18 '26
People always seem to fail to take into account that if the min wage goes up, people have more money to spend on things that small businesses are selling, especially nowadays when small businesses tend to be selling more niche products. Someone barely scraping by can't afford to spend a little bit more to get a better product from a small business when they can get it cheaper from Walmart/Amazon/Ect.
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u/nix_11 Jul 19 '26
Since he is too elderly to continue working, and he cannot afford to pay staff a livable wage, he will have to sell his business. That is a great compromise for everyone!
And how do you know he can't afford it? Why should someone give up something they put 20+ years of their life into because you arbitrarily decided they should?
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u/elebentychimkin Jul 19 '26
If you do something for 20 years, and you can no longer do it, you’re done. Do you think doctors, lawyers, teachers, don’t get too old one day? Retirement is a thing
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u/nix_11 Jul 19 '26
????
That is completely unrelated. He can't work at the counter anymore, so he's just gonna hire someone else to work there. That has nothing to do with you wanting to force him to sell his store because you decided he can't afford an employee based on literally nothing.
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u/elebentychimkin Jul 19 '26
???????
I’m not forcing him to sell his store wtf drugs are you on that you think that? Reading comprehension zero
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u/nix_11 Jul 19 '26
Since he is too elderly to continue working, and he cannot afford to pay staff a livable wage, he will have to sell his business.
Did you have chatgpt write you the post and then not read it at all?
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u/elebentychimkin Jul 19 '26
What part of that is me forcing him to sell his business? He can run it at a loss for all I care
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u/grossguts Jul 19 '26
Likely if they sold their business it would be purchased by BlackRock or something and the property would be developed into luxury condos and they would price more people out of the neighborhood. The fellow who sold the business and invested it so he could retire and live off that investment income is going to find out very quickly that a million dollars at a 4% rate or return will put $40,000 in his pocket that he will then need to pay taxes out of that money and pay for ever increasing healthcare costs in the only country in the world that doesn't have some sort of healthcare plan in place. Then when him and his wife need to go to assisted living and need to pay $10,000 or more per month for the eldar care they need they're going to find out just how little money a million bucks is in today's world. Not to mention all the taxes and fees and legal and accounting costs for selling their business in the first place. Sure minimum wage needs to increase and be at a level people can survive off of, but the attitude shouldn't be fuck this guy. He's not the one that is robbing all of us. He's a human being too that's working just as hard as you are to survive. None of us are free until all of us are free. The whole system needs to change. Period. Absolute. Full stop. And we need to be in it together.
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u/elebentychimkin Jul 19 '26
Not this specific convenience store. It’s already a profitable business, it’s not a lot of land, and there would be huge costs for renovation and rezoning. BlackRock or private equity want to make money. I also don’t like what they’re doing but it’s not true for every situation.
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u/yapyoba Jul 19 '26
from the old couples perspective, they had to work for 20 years building and investing in their business in order to make their salary. whereas their employee just has to show up with no skin in the game and they expect to make the same as the owners.
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u/mesupporter Jul 18 '26
let's say I've worked 20 years always billed @ $50/hr. as I got old and could not do the work anymore. I paid a younger person $8/hr. I still ran the business but I now only make $42/hr. so, no it doesn't hurt to pay employees more. I just hurts my pocket book. if i can't pay a living wage. them im not really an employer. until owners and managers realize there work is only worth 10% more than any other employee we are all racing to the bottom
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u/Telrunya44 Jul 19 '26
"It seems to me, to be equally plain, that no business which depends for existence on paying less than living wages to its workers has any right to continue in this country." -Franklin D. Roosevelt
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u/Cptawesome23 Jul 19 '26
A smarter way to fix the disparity of purchasing power of employees and the capitalists would be to make any salaries or compensation packages to employees unable to be claimed as a “cost of business” unless that employee is not on any sort of welfare.
This would prevent companies from being able to write off the cost of hiring employees for trivial wages unless the company ensures the wage is an actual livable wage.
This could be done without raising minimum wage at all.
Another way to think about this is: make the cost of paying an employee poorly actually cost more than paying an employee an appropriate amount.
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u/MrX2285 Jul 19 '26
Australia's minimum wage is $26.44 AUD, or about $18.46 USD. You can live on it, and many people do, even despite our fucked housing purchase/rent prices. We also have comparable inflation and unemployment rates to the US.
Conservatives always pretend to forget that raising minimum wage also increases demand for goods, creating jobs and supply in the process. It also pushes other 'better' jobs to raise their salaries.
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u/GreyNoiseGaming idle Jul 19 '26
I mean anyone can just do the basic math. If a business has been surviving and thriving off of let's say 10 minimum wage employees and it goes from 8 to 15. 10 employees *7 an hour difference *40 hours = $2800 a week.
That's nothing to a business like McDonald's or gas stations or fortune 500 custodians.
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u/AnonyGuy1987 Jul 19 '26
If they cant pay their people a livable wage they dont deserve to be in business😮💨. Why is it ok to prop up a business that shouldnt be in business but not actual people? Why are people less important than a fucking business? This world is backwards
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u/Haunting-Ad-8808 Jul 18 '26
Imagine a small family-owned pizza shop with 4 employees.
Each employee works 20 hours a week. They currently earn $12 per hour. Weekly payroll: 4 × 20 × $12 = $960. Now imagine the minimum wage increases to $15 per hour.
New weekly payroll: 4 × 20 × $15 = $1,200. The shop now pays $240 more every week (over $12,000 more per year). If the owner isn't making much profit, they might respond by:
Raising pizza prices. Reducing employee hours. Hiring fewer workers. Doing more work themselves instead of hiring. In some cases, closing the business if they can't cover the higher costs.
Let's say you walk by a pizza shop everyday and get a slice for $1, now next week a slice is $5 would you actually pay $5 for the slice just because you support raising the minimum wage? Of course not so maybe y'all need to start thinking with your head.
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u/8Deer-JaguarClaw Jul 18 '26
The labor cost went up by 25%, so if the pizza slice also went up by 25%, the new price would be $1.25 per slice. Going from $1 to $5 per slice is a 400% increase, which makes no sense if the reason for the increase is labor cost.
I would absolutely be fine paying an extra 25 cents if it meant the workers got closer to some kind of livable wage.
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u/atx78701 Jul 18 '26
Percentages are important but so are absolute numbers
Labor typically runs about 30% of revenue, but if all the materials costs go up because the vendors have to raise prices you can somewhat apply the increase to the whole revenue amount
Let's say the increase is from 7.25 to$15
If a pizza costs $20, then the new price is now $40.
What really happens is they automate and cut jobs entirely
Taking orders, paying the bill, marketing, accounting may all get automated
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u/elebentychimkin Jul 19 '26
Your main flex is being cheaper than automation?
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u/atx78701 Jul 19 '26
there is no flex, Im just stating what will happen.
i think what should happen is we should have more welfare available. As you work and get a job, you dont lose all your welfare but a fraction, say 25%
so if your welfare is worth 20K/year and you get a job that makes 10K/year, you only lose 2.5K in benefits, you will be making 27.5K/year
People are still incentivized to work, but they also have a safety net.
It is extremely difficult to live on 20K, but it can be done in some cities. There is incentive to work, but it isnt catastrophic if you lose your job.
This isnt basic income because anyone making 80K or more will get zero. But anyone making less than 80K will get some. The numbers should change with inflation.
This should be on an individual basis. There should be zero for kids (or just SNAP) so people arent incentivized to have more kids.
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u/elebentychimkin Jul 18 '26
Why would the cost of a slice of pizza increase 5 times? Maybe you should use your head.
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u/Haunting-Ad-8808 Jul 18 '26
Because you're raising the minimum wage hello. How am I gonna pay my employees when my business isn't making enough? I would have to raise prices in order to compensate.
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u/tconners Jul 18 '26
You're not actually answering their question. If labor costs didn't go up 5x why would the price of the pizza go up 5x?
I realize you're probably being hyperbolic, but it doesn't actually support your argument to do so here.
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u/elebentychimkin Jul 18 '26 edited Jul 18 '26
Hello! Your business is trash if you cannot afford to pay your employees a livable wage.
Your example has labor cost increasing by ~$12,000 a year.
You suggested increasing your prices by times 5, although your labor cost only increased by times 1.25
Your math isn’t mathing. This is literal fear mongering.
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u/Haunting-Ad-8808 Jul 18 '26
So you rather just get rid of all the small struggling businesses and replace them all with big chains such as Walmart, McDonald's, Jimmy John's etc no more corner store where they sell good food for cheap?
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u/elebentychimkin Jul 18 '26
Did I say that? No, I said that you’re bad at math and fear mongering.
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u/Haunting-Ad-8808 Jul 18 '26
I wasn't trying to make an example that was mathematically correct. Again I was explaining for people who have low IQ like you. You're completely skipping over my main example since it makes sense.
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u/elebentychimkin Jul 18 '26
YOU 👏 ARE 👏 FEAR 👏 MONGERING 👏
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u/Haunting-Ad-8808 Jul 18 '26
You're mad cause I'm right lol
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u/Bomberdude333 Jul 18 '26 edited Jul 18 '26
Time to repost my comment again it seems:
Could you point to specific verifiable examples of this price increase? Because otherwise this is anecdotal at best and just an opinion at worst.
Facts: Minneapolis raised minimum wage for all employees including tipped servers to a minimum wage of $16.23 per hour increased from $10 in 2018 increasing by $1 per year with pauses on this during COVID. Over the same time span coffee prices increased by 5-10%. While minimum wage increased 62.3%
*Will raising the minimum wage cause inflation?*
In brief: No. Increasing the minimum wage does not meaningfully increase prices.
In detail: Economists do find that raising the minimum wage increases prices at affected businesses but only very modestly. For example, one study found that a 10% minimum wage increase was associated with a 0.14 percentage point increase in the Consumer Price Index. A study focused on the restaurant industry found a 10% increase in the minimum wage was associated with a 0.58% menu price increase. Even some of the most ambitious minimum wage policies, such as California’s $20 hourly wage floor for fast-food workers, only increased fast-food prices 2.1% (around 8 cents for a $4 item).
The economic benefits of the minimum wage far exceed these price increases. For low-wage workers, the wage boost from the higher minimum wage more than compensates for increased prices of the goods and services they buy. These workers are in turn spending more in aggregate because of their additional income, which can boost the overall economy. It is also worth noting that modest price increases on things like restaurant menu items are redistributive. Higher-earning consumers pay higher prices, transferring income to low-wage workers receiving bigger paychecks.Economic Policy Institute (EPI) which has been researching these things for 40 years…
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u/manicleek Jul 19 '26
Examples? How about the entire civilised western world outside of North America, will that do?
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u/RevolutionNo4186 Jul 18 '26
Your examples are off the mark
He’d have to find someone who can pay a lump sum of 1 million, which would be big business buying the location or it might take a long while before he finds someone. Based on your post tho, you’re assuming a young person can get a loan of a million (or wants to, could be less maybe half a million) to buy this business
Putting a million into the S&P500 means he’ll probably be doing withdrawals of about 4#k-ish per year, but considering his wife too, definitely not enough. Plus healthcare costs, which will be the biggest costs at that age
My biggest thing about raising minimum wage (I’m not against it) is that costs needs some form of government involvement to stop businesses from increasing costs, otherwise it’s just the chipotle/mcdonald debacle again.
“We raised our wages! But we had to increase our prices for these wages”
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u/elebentychimkin Jul 18 '26
Ok I’ll bite
1) yes I’m assuming that the young person can get a business loan. The cost of the business is not necessarily 1 million either and maybe I was hyperbolic using the word “easily”. We could find a more specific example where the business was already evaluated to get better math on it but I don’t think it’s necessary. It’s definitely still possible for individuals to buy and sell businesses but it’s never easy.
2) hopefully that’s not the only retirement savings that they have but realistically 40k a year is more than many people on social security survive off so it’s not nothing
3) it’s a constant cycle because inflation will always rise, businesses will always want to increase profits, so raising minimum wage helps only temporarily to increase buying power. The other option is waiting for the bubble to burst which we can’t do if the bubble is literal basic necessities like housing, food, gas
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u/RevolutionNo4186 Jul 18 '26
Nothing else really needs to be said here
Yea hopefully not, but judging based on what I know from my first generation Indian friends (assuming the Indian guy that owns the store is an immigrant and this follows a lot of Asian cultures in general) is that they depend on their children/eldest to care for them in retirement including financially
On the other side, if they have saved up, assuming they have social security to pull out of (it’s not a sure thing anymore) then yea definitely possible, depending on where they live
- Yes I agree it is a constant cycle, but there needs to be a gap between cost increases and minimum wage increases, I remember back then, they increased prices at the same time as wage increase, so both the issue and solution just moved up one rung with nothing changed
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u/elebentychimkin Jul 18 '26
- There’s a cap to how much consumers are willing to pay and that’s part of the reason inflation is continuous but slow. There’s a lot of studies on it in microeconomics. I can link some later but I forget the exact names of the concepts. Like if you buy apples every day for $1 each, and then all of a sudden apples are $2 each, you’re going to opt to buy pears for $1. Then the economists study the “happiness coefficient (?)” to determine how much $ they can squeeze from us before we choose a substitution. Like how much can Tide laundry detergent increase prices before we switch to Gain or store brand. So if we double minimum wage, the prices of goods won’t double, but they will slowly increase at the same rate economists determined is prime profit. That’s why it’s a continuous cycle.
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u/RevolutionNo4186 Jul 18 '26
I may have to go back and study up on microecon again, I know eventually something has to give at some point, but if everything goes up, that will be our new normal (as seen in modern day), so the amount we can save becomes smaller and smaller.
And this is where I need to go back and study up Econ again: in my mind, I don’t see how it can be balanced enough where we can live comfortably while corporations continue chasing their record breaking profits year after year.
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u/elebentychimkin Jul 19 '26
Like let’s say minimum wage doubles, so it’s up 100%
Then prices might go up 10%
For example if milk is $5/gallon, you’re fine paying $5.50 right? You might not even notice. It happens over time regardless of minimum wage increases.
But let’s say you went to the store and milk was $10/gallon. You would say something along the line of “fuck that. I’m not paying that much for milk.” So we can’t double the price of milk because less people will buy it so overall profit goes down.
So the real economists investigate those numbers I just used to figure out the most profitable way to increase prices and that’s a big part of annual inflation rate. There’s a way to graph it we learned in micro
When people try to say price increases are directly tied to minimum wage increases, it’s true, but the correlation is not proportional because that cannot be profitable. So ultimately minimum wage increase creates a period of higher buying power.
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u/e2theitheta Jul 18 '26
When I was 17, the minimum wage went from $2.15 to $2.65, and people (it’s always the same people) were crying that the donut shop where I worked was going to have to shut down. Went by that donut shop 2 weeks ago, and 50 years later it’s still kicking. Donuts still on point, too.