[BartSimpson]

Hey, Andy?

I'm curious as to how this minimum wage hike has been a benefit to the workers who lost their jobs? Feel free to explain to me how they're better off on unemployment than they were working at a job that paid more than unemployment?

http://finance.yahoo.com/news/fast-food ... 42952.html

The article is sourced to the LIBERAL CNBC network.

$1:

CKE Restaurants' roots began in California roughly seven decades ago, but you won't see the parent company of Carl's Jr. and Hardee's expanding there much anymore.

What's causing what company CEO Andy Puzder describes as "very little growth" in the state?

In part it's because "the minimum wage is so high so it's harder to come up with profitable business models," Puzder said in an interview. The state's minimum wage is set to rise to $9 in July, making it among the nation's highest, and $10 by January 2016.

In cities in other states where the minimum wage has gone up considerably, Puzder said "franchisees are closing locations" after riding out lease expirations.

If the federal minimum hourly pay shoots up to $10.10 from the current $7.25-as many lawmakers and President Barack Obama are advocating-Puzder predicts fewer entry-level jobs will be created. If this happens, CKE would also create fewer positions, he forecast.

A recent nonpartisan Congressional Budget Office study also predicted mass job losses, estimating that a hike to $10.10 could result in a loss of about half a million jobs by late 2016, even as it lifted many above the poverty line.

"When the minimum wage increases, there are two things you can do," he said. "One is you can reduce the amount of labor that you use or you can increase your prices."

But with increased costs from food, taxes, fuel, health insurance and regulatory compliance, Puzder said businesses can only raise prices so much before customers become less willing to shell out.

Obamacare regulations, which impact businesses with 50 or more workers more than those with fewer employees, are also affecting CKE's franchise growth.

"I actually have franchisees...who've either gotten out of the business or refused to build two restaurants because with one restaurant you have less than 50 employees," he said. "With two, you have more than 50."

Instead, some cautious franchisees are considering alternatives to expanding their businesses.

"They're actually looking at other investments, which have less risk and lower costs-for example, bonds," he said.

Puzder says it's difficult to justify the risk of opening a business when government policies have hindered would-be entrepreneurs' ability to generate profits due to increases costs.

Indeed, jobs data reflects this hesitancy.

Over the past two decades, businesses with 500 or fewer workers created about two-thirds of net new jobs, according to CNBC's analysis of BLS data. This portion had dropped to about half by 2013.

"People don't just grow because it's Tuesday," he said. "They grow because they think they can make a profit."

To boost U.S. growth, Puzder says more business sympathetic policies need to be in place.

"I'm not saying the government should disappear or I hate the government," he said. "We need a government. We have a good government, but the government's gotten overzealous with respect to what it thinks it should do...The government needs to get out of the way."

[stratos]

No one opens a business so others can make money.

[herbie]

Yes one should feel sorry for those that can't run a business because they have to pay the lowest wage legally possible. Poor them...

[martin14]

stratos stratos:

No one opens a business so others can make money.

And yet some days it feels like that, believe me.

[sandorski]

Market Saturation, perhaps. Their excuse is BS though.

[andyt]

$1:

The Congressional Budget Office lobbed a small grenade into the debate over an increased minimum wage on Tuesday, releasing a report that found an increase to $10.10 an hour by 2016 would increase the wages of 25 million Americans, but also cost the economy around 500,000 jobs.

Here are the CBO’s key findings:

Seventeen million Americans would be directly affected by raising the minimum wage gradually to $10.10 by 2016, and 8 million workers who earn above $10.10 would also see indirect wage increases as a result, totalling 25 million Americans who would earn more.

A $10.10 wage hike would reduce employment by 0.3 percent, or 500,000 jobs. The CBO warns that “as with any such estimates, however, the actual losses could be smaller or larger; in CBO’s assessment, there is about a two-thirds chance that the effect would be in the range between a very slight reduction in employment and a reduction in employment of one million workers.”

Americans who make less than six times the poverty line (that is, $70,020 annual earnings for an individual) would see $19 billion in increased aggregate wages as a result of a minimum wage hike, with 90 percent of that going to people who make less than three times the poverty line ($35,010 in annual earnings for an individual). These are net numbers, meaning they account for the aforementioned job losses.

People making less than the poverty line ($11,060 for an individual) would see $5 billion in increased aggregate wages, which again is a net number. The CBO also says 900,000 Americans would be lifted above the poverty line.

A minimum wage hike would have no clear impact on the country’s budget deficits even in the long term.

Republicans naturally pounced on the job loss numbers. “This report confirms what we’ve long known: while helping some, mandating higher wages has real costs, including fewer people working,” said Brendan Buck, a spokesman for House Speaker John Boehner. “With unemployment Americans’ top concern, our focus should be creating—not destroying—jobs for those who need them most.”

The progressive response has been twofold: one, that the CBO’s findings on job loss are out of step with a majority of the economic research, and two, that the big picture tradeoff still makes a minimum wage hike a good deal.

Several economists Tuesday, including Jason Furman and Betsy Stevenson at the White House, stressed that the CBO report doesn’t match the “consensus view” of economists.

It’s not that the CBO cooked the books or had serious methodological problems, they say. But what the CBO did was a meta-analysis of economic data: in other words, instead of running its own empirical study on the employment effect of minimum wage increases, the CBO simply looked at a bunch of existing studies and did an analysis of that body of work.

Past meta-analyses have found that, of the many studies that have been done, the conclusions cluster around zero for job loss estimates:

The CBO of course found a slightly higher number. Nobel Prize–winning economist Joseph Stiglitz told reporters on a Tuesday afternoon conference call held by the Economic Policy Institute that he would quibble with the heft CBO gave to some studies versus others. “When you do a meta-analysis, the question is how do you weight different studies. Some of the studies come closer to being controlled experiments, and therefore have more credibility with most economists,” he said. “The CBO analysis I think underestimated the benefits and overestimated the costs in several respects.”

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Lawrence Katz, an economist at Harvard University, told reporters that he thinks perhaps the CBO used a slightly higher number for elasticity of labor market demand than was necessary. “At every stage they’re being a little higher than I would do, but I think they’re trying to be reasonable at reading the evidence, and as they stress, there’s a lot of uncertainty,” he said.

But in the bigger picture, many economists said the trade-off would still be worth it even if one accepted the job loss numbers.

“I’ve worked for longer than I care to remember on policies and programs to reduce poverty and to improve living conditions at the bottom,” said Robert Greenstein of the Center on Budget and Policy Priorities. “When you have a policy that adds $5 billion in income to people under the poverty line, and lifts nearly one million of them above the poverty line…and you get all of these net gains for no federal budgetary cost, that’s a pretty good endorsement of this as a positive policy to go forward.”

http://www.thenation.com/blog/178429/cb ... cost-jobs#


To reverse your usual argument, Bart, y'all could have three jobs for everybody if the minimum wage were $0. The min wage has to be set to balance job losses with the benefits of higher wages.

I understand California is not doing well economically. Could this company's troubles have more to do with that than the minimum wage?

[andyt]

$1:

Raising the Federal Minimum Wage to $10.10 Will Not Lead to Job Loss - See more at: http://www.epi.org/blog/raising-federal ... K8hwQ.dpuf

Does increasing the minimum wage lead to job losses? What does economics literature say?

Based on the economic multiplier effect that results from putting additional income in the hands of lower-income workers, raising the minimum wage will likely have a modest but positive impact on job creation, leading to an additional 85,000 net new jobs when fully phased in. Lower-income earners spend their income more immediately, more completely, and more locally, than do higher income earners, and therefore generate more economic activity. Increasing the wages of 27.8 million workers by $35 billion over the phase-in period generates an additional GDP impact of $22 billion.1

This finding is consistent with the most recent, highly rigorous, peer-reviewed economic literature based on an analysis of real-world minimum wage increases across counties on state borders that shows essentially no disemployment effect resulting from raising the minimum wage.2

- See more at: http://www.epi.org/blog/raising-federal ... K8hwQ.dpuf

[PublicAnimalNo9]

It's easy to understand why Hardees will be hit by store closings from an increased minimum wage. No one is going to pay even more for shit that makes McPukes seem like gourmet food.

[raydan]

Less fast food restaurants...

I fail to see the downside.

[herbie]

Yet here the problem is with Temporary Foreign Workers in fast food joints. That end up costing more.
As a lot of kids tell me - they'd rather work in Mom & Pop cafes. They get the minimum wage PLUS tips...

[andyt]

herbie herbie:

Yet here the problem is with Temporary Foreign Workers in fast food joints. That end up costing more.

How so?

[smorgdonkey]

People working at Mickey Dee's in Denmark get $21 an hour. The cost of a Big Mac is only the equivalent of $0.56 more.

http://politicalblindspot.com/mcdonalds ... ey-did-it/

It's all about rich staying rich.

The US has always sustained itself by having slaves, whether it was obvious like black slavery, or outsourcing their slavery to other countries and now the push is to have massive amounts of working poor.

[jj2424]

smorgdonkey smorgdonkey:

People working at Mickey Dee's in Denmark get $21 an hour. The cost of a Big Mac is only the equivalent of $0.56 more.

http://politicalblindspot.com/mcdonalds ... ey-did-it/

It's all about rich staying rich.

The US has always sustained itself by having slaves, whether it was obvious like black slavery, or outsourcing their slavery to other countries and now the push is to have massive amounts of working poor.

Horse shit or is that smorg donkey shit?

The Big Mac Index places socialist Denmark as the fourth most expensive hamburger in the world – almost a full $1 more expensive than the same sandwich in The Land of the Free. While Denmark has been ranked one of the most economically free European countries, it also imposes stringent regulations on businesses. Taxes don’t help, either; Denmark has raised its value added tax (VAT) from the low single digits a few decades ago, to its current 25% level. Income taxes are as high as 59%. And if you eat too many Big Macs, you might get hit by Denmark’s “fat tax”.

http://nomadcapitalist.com/2013/11/24/t ... mac-index/

That's also only for employees over 18. I would like to see how many teenagers work there and what they get paid. Being the literacy rate is so high in Denmark I doubt you'll find as many adults working there compared to the US or Canada.

Norway, the socialists favorite country wins le Big Mac attack!

Lefties love to preach about minimum wages in other countries. No surprise where those countries stack up.

http://www.theguardian.com/world/2014/a ... says-study

[Brenda]

BC went from $8.60 to $10.25. McD's is still open. Even 24/7 in my neck of the woods, which it wasn't a year ago. The 4 Subways (serving communities totaling 15.000 people) are still open as well. Guess it ain't all bad.

Dairy Queen closed, instead there is now an A&W.

[Guy_Fawkes]

The average starting wage for service jobs around where I live is $11.50. Yet the businesses that pay lower have a large percentage of foreign workers; most kids feel that they are above a job that pays minimum wage.