Blade_Runner wrote:
The dunce that started this thread obviously doesn't know anything about running a business. Small businesses and franchises are going to lose big time if they are forced to pay higher wages, especially in this economic debacle. However, the real losers will be the employees who lose their jobs.
A business has a thing called "fixed expense overhead".
No matter what your sales volume is, fixed costs must be met every month. Fixed expenses include rent or mortgage payments, depreciation on fixed assets (such as cars and office equipment), salaries and associated payroll costs, liability and other insurance, utilities, membership dues and subscriptions (which can sometimes be affected by sales volume), and legal and accounting costs. These expenses don't change, regardless of whether a company's revenue goes up or down.
Put simply, a McDonald's franchise, for example--will have a certain number of employees to whom it will pay wages based on a fair amount (note: any government mandated wage is a definite negative) and business volume projections. The projections take into account sales volume (maybe over a quarter or season) and other variables such as change in vendor and/or vendor pricing, etc.
Bottom line is a business adjusts its operating expenses with the goal of maintaining a profit, even just to stay in operation--as is the case for many small businesses in this economic environment. If the business is forced to summarily increase wages that would push the profit into the red, the only way it can survive is to cut the workforce. So, raising the minimum wage will do nothing to "grow the economy". All it will accomplish is to put more people out of work.
The dunce that started this thread obviously doesn... (
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Some random thoughts that I have about the issue.
One only needs to look at the bigger picture to see that products made need enough money in the hands of consumers to buy the product..
Money (Demand) needs to be enough to meet supply,
Not paying enough in wages means not enough money to buy the product (Supply)
It seems that the rights of each individuals businesses right to increase Supply while not having to pay wages enough to
put money to meet Demand. Only puts the burden on some one else to pay wages for demand(People)
What we have now is Supply increasing faster than Demand can meet it.
I fail to see how this problem will ever get better if (demand) people are to work for less & less.
That means there is not a fair balance between Supply & Demand.
Yes as supply increases for some one to make a profit they need to control costs.
The popular way to to that is to pay the lowest wages they can get away with. All the while putting more money in their pockets.
While doing that on an individual basis is stated as a right of the individual business.
When too many businesses do it & use the government to keep taxes low so as to keep profits high some thing has to give.
Just how much food (Supply) can any one fast food place serve in a day. Just how much (Demand) do they actually serve. Just how much over supply is there.
How smart is it to keep increasing supply when this is happening.
How much of all of this is because of not paying a fair price to the workers.
How much profit is there? How does having more low wage jobs any where really help the market place?
Why wouldn't paying a higher wage (A wage that at least keeps up with inflation) & taking a little less in profits up front not help the market place in the long run.