Posted on 05/15/2016 8:59:32 PM PDT by Jim W N
Overregulation: Carl’s Jr. and Hardee’s CEO Andy Puzder has people all in a huff over his idea to automate restaurants. But why be upset with Puzder? This is an inevitable consequence of massive minimum wage hikes by the government.
“With government driving up the cost of labor, it’s driving down the number of jobs,” said Puzder. “You’re going to see automation not just in airports and grocery stores, but in restaurants.”
He’s right. That’s why whenever the minimum wage rises above the market-set prevailing wage, jobs are destroyed. Who would pay someone $15 an hour to do a job that’s worth less than that? No one.
This isn’t rocket science or even advanced economics. It’s plain common sense — something that populist demagogues on the left seem to be missing entirely.
Consider:
IBD’s Jed Graham surveyed six big U.S. cities that hiked the minimum wage in 2015 and found they took a serious jobs hit. “Wherever cities implemented big minimum-wage hikes to $10 an hour or more last year, the latest data through December show that job creation downshifted to the slowest pace in at least five years,” Graham wrote.
American Enterprise Institute looked at Seattle’s recent minimum wage hike. After it began phasing in a series of hikes in 2014, Seattle lost 10,000 jobs between September and November, and the unemployment rate jumped a full percentage point. As AEI economist Mark Perry notes, Seattle’s minimum wage hike from $9.32 to $15 an hour amounts to a $11,360 tax on every minimum wage job.
A 2014 Congressional Budget Office study estimated that raising the federal minimum wage from $7.25 an hour to just $10.10 an hour would kill half a million jobs. Worst of all, those who suffer most are the young, minorities and those with little education or training.
(Excerpt) Read more at investors.com ...
What makes Jim’s rant more ironic is that this involves Carl’s Jr.
Carl Karcher, the founder, attended mass every single day. He was a very generous man who treated his longtime employees like family and paid them well. There are hospital wings, renovated housing, and a church in north Orange County that all owe their existence to Mr Karcher’s generosity and Catholic faith. He was an entrepreneur, but about as far from an Ayn Rand capitalist was you can get.
Mr Karcher lost control of his company to the Puzder crew after he took his company public, a great regret for him. The Puzder bunch are exemplars of the Managerial Class as described by the late great James Burnham.
You're on a site called "Free Republic" which is supposed to be a site about life, liberty, and free pursuits, and you think businesses like Carl's Jr.'s are America's economic problem? Yours and others' posts on this thread belong on MoveOn.org.
Why are you pinging the owner of this site? Bizarre.You seem angry someone correlated substantially reduced business operational costs with product price reductions.
Where did ya get all that Moveon BS slick? All the McWhoppers franchises, much of which are now owned by very wealthy foreigners and Muslim investors are going to be saving significant sums of money with their automated process and little or no labor.
Are we to expect all these thousands of businesses will not be passing along significant price reductions to the customers?
I’m already familiar with elasticity of demand and Giffen goods. You don’t need perfect competition for the Law of Demand to hold. You are merely muddying the waters to confuse people.
I think the Fast Fooders are waiting for Carrier, Ford and Nabisco to make the first move in that area.
“Problem isn’t “solved” until the federal government is put back into its constitutional cage.”
Put the federal government back in its cage and the issue addressed by the IBD editorial....won’t change one iota.
Because the minimum wage hike in California is the result of a vote by the California Assembly, not the Federal government.
lol, yeah that’s the ticket. Pointing out to people that ‘perfect competition’ is assumed in simple modeling is “muddying the waters”.
Here, I’ll let investopedia add to their confusion:
“Real-world competition differs from the textbook model of perfect competition in many ways. Real companies try to make their products different from those of their competitors. They advertise to try to gain market share. They cut prices to try to take customers away from other firms. They raise prices in the hope of increasing profits. And some firms are large enough to affect market prices. But the perfect competition model is not an ideal that we should try to achieve in the real world.”
“Perfect competition is a theoretical market structure. It is primarily used as a benchmark against which other, real-life market structures are compared. The industry that most closely resembles perfect competition in real life is agriculture.”
http://www.investopedia.com/terms/p/perfectcompetition.asp
Check the date on the document
The conditions then were different. The society is not backward now.
“He is just using the minimum wage as an excuse.”
Doesn’t it make sense to hire fewer workers when the minimum wage is $15/hour than when it is 7$/hour? Doesn’t automation make more sense when wages are $15/hour than when it is $7 per hour?
McDonalds is automating ordering. Self check out lines are being put in place at grocery stores, Home Depot, and probably other places that I don’t happen to frequent.
It costs money to put that equipment in. As a consumer, I don’t like self check out lines. So why are companies automating the check-out process. Well, it’s pretty much what you would expect after all this talk of paying a “living wage” and “raising the minimum wage” - outlawing lower paying jobs.
Should we be surprised when the government outlaws low paying jobs and employment goes down?
“The conditions then were different. The society is not backward now.”
The same applies to David Ricardo’s theory of comparative advantage in international trade, the linchpin of free trade.
But it is good to see that you concede that the protective tariff was promoted and enacted by the American Founders.
They are all breaking the system - the shareholders and the CEO. Our economic model can’t sustain itself without money circulating. This is basic, conservative 101 stuff.
Once disparity of wealth reaches a point where there is no longer any semblance of a middle, you will see change forced upon you much greater than the minimum wage push - and the total irresponsibility of the share holders you mention will be the cause.
The conservative view is not just because you can, you should or just because it was authorized by the shareholders it is good and right.
You are correct, sir. And I love this perspective on the minimum wage hike. It's just another way of driving home the fact that anyone whose work isn't worth $15/hour will be replaced by someone or something else.
Mine is the conservative view, very conservative. Our economic system will not survive with the approach you advocate. You don't have to take my word for it. You can see it happening.
You are blaming the symptoms and ignoring the cause. That is not conservative.
It won't be a surprise when they come for your savings, force you to sell your second home because people have given up on conservative principles that made our economic model a success.
Somewhere you have been convinced there can be this great disparity of wealth without consequence. Where did you get such a notion?
“If the government forces people to be paid more than their labor is worth, then those jobs are doomed. It’s inexorable.
Don’t blame the CEO for protecting his shareholders.”
True. And he is protecting us consumers. If you increase the minimum and make no effort to cope (for example with automation) then companies will try to pass the cost on to consumers. I can just see the minimum wage advocate saying “I’m glad they pay the higher minimum wage, but their prices are WAY too high.”
It’s on a par with “I’d love a union job - but there aren’t any.” Or, “I love Obamacare, only doctors aren’t accepting new patients.” A basic understanding of cause and effect has been given up for wishful thinking. Goodbye science, hello magic.
No, it is a factual model. There is a direct inverse relationship between the size of government and your standard of living. As government grows and exercises more control over you and the economy, you pay more for the same stuff, if its still available, and you end up with less to spend.
Tariffs are like shooting yourself in the foot. If other countries want to shoot themselves in the foot, it doesn’t mean we have to.
You’re confusing political ideology with economic supply and demand. That’s like trying to mix oil and water. Buyers and sellers care about getting the best for the least paid regardless of political ideology.
Don’t confuse political boundaries, required for national sovereignty, with the free market economy trading across open economic borders.
“Pointing out to people that ‘perfect competition’ is assumed in simple modeling is “muddying the waters”.”
I never said that.
Simple modeling includes perfect competition. It also includes monopoly, oligopoly, monopolistic competition, and duopoly. Nor are these meant to be collectively exhaustive and complete. These are an introduction to economic thinking. Each teaches the student something. There will always be additional challenges in application.
You seem be arguing against economics generally. That is where you muddy the waters.
Investopedia is no substitute for a classes in economics.
“Real-world competition differs from the textbook model of perfect competition in many ways.”
Duh. There are several models as I mentioned, not just perfect competition. And as I mentioned above, there are challenges in application. That there are challenges in application should not be used by you as an excuse to disregard all theory.
“Real companies try to make their products different from those of their competitors. They advertise to try to gain market share. They cut prices to try to take customers away from other firms. They raise prices in the hope of increasing profits. And some firms are large enough to affect market prices.”
There is nothing in that quote that would surprise textbook authors - or readers for that matter.
You cannot separate the two.
Should we have had free trade with the Japanese in the 1930s when they were committing the “Rape of Nanking”?
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