As an artist myself many of the visitors of this Blog are like-minded, and I’m afraid that many of us artists are not business minded folks— something sounds good— we want to go for it without considering what we’re actually agreeing to. “Make the corporations pay more!” “Make the Rich pay their fair share of taxes!” These are battle cries that certainly makes sense! “Raise minimum wage to a liveable $20 an hour!” All good.
This year we’ll be voting in Massachusetts to raise tip workers to minimum wage— and that sounds good, right? We need only look at California to see the devastating results. Don’t trust those “right wing” news sources? No worries, do a simple Google search of economic results of raising the minumum wage in California. Here’s a great report from the CATO institute.
It’s as simple as this; costs of goods has risen dramatically— some will blame this on the pandemic which was handled so poorly that every single person of authority in our government who stuck their hands in it should be fired and probably prosecuted. There is also the end of domestic oil production which was a result of a policy of our current administration which caused gasoline prices to rise— when gas goes up not only does it hurt us driving to work everyday— it costs much more to bring items across the country— because the number one way anything gets from Point A to Points B, C, D and E in the United States is via Truck.
Raising the minimum wage results in McDonald’s raising the prices on it’s menu, it results in Dunkin installing kiosks instead of cashiers, it results in Wal*Mart installing self checkouts so now ONE cashier oversees NINE checkout lanes. It’s very simple economics. If the cost of goods goes up it is passed on to the consumer. Is this a result of those evil greedy corporations trying to screw us over? Nope. In the Grocery Business which I had some fifteen years experience in management our margins are around 2%— you’re reading that right 2%— that means we have to control tightly every single expense we have and Payroll is almost always your biggest expense. So you cut workers, you close stores. In California Kevin Hart just closed his chain of Vegan Restaurants putting some 150 people out of work because he can’t afford to pay them and keep the menu prices low enough for a happy consumer. When menu prices shoot up, people start cooking at home.
It’s simple economics.
Tomorrow let’s look at Taxing Those Evil Corporate Fat Cats.