Seattle $15/hr min wage mean boost for Automation Industries, Demise of Franchise Model

While I am against this raise, it is Seattle's choice. The folks there voted for these clowns-especially the openly socialist member of the city council.

What I think could cause trouble is that the law is applied differently to different types of businesses. While it is common to treat businesses differently based on number of employees I think it is sketchier to treat them differently if they are a chain versus a mom and pop.

photofinish wrote:

it means a lot of businesses are not going to get created there.

From what I have seen the higher the pay the more business! Look at Silicon Valley. The REAL PROBLEM for workers is not wages but RESUMES! Get rid of resumes and the unemployment rate drops 10% and wages go up! A resume is used the same way all labels are used, NOT for the employee but for the employer! In other words just to rip them off.

Ken Osha wrote:

McDonalds is experimenting with screens in which the customer simply touches the items he wants and then pys with a debit card - eliminating the need for a worker. This technology is what the worker is competing against. At low wages, the technology is too expensive. When the wages of the worker rise beyond a certain point, the technology becomes a bargain.

In Europe they have this at a lot of McDonald's. I assume one of the reasons is because the checkout workers are paid more in Europe.

If a machine is cheaper than a $15 worker, people will hire machines.

The Democratic party generally wants more immigration to the US. I wonder how much all the unskilled laborers depresses wages for McDonald's workers. If there weren't a lot of immigrants willing to work for $8 an hour, the existing people here in the US would have to get paid more.

luv2run wrote:

While I am against this raise, it is Seattle's choice. The folks there voted for these clowns-especially the openly socialist member of the city council.

What I think could cause trouble is that the law is applied differently to different types of businesses. While it is common to treat businesses differently based on number of employees I think it is sketchier to treat them differently if they are a chain versus a mom and pop.

It really wont make a difference as the city board bill will be null and void in November when the city residence vote to raise the min wage to $15 staring Jan 2015 with no phase in and no exceptions for age or size of business. I live in Seattle and watched the board meeting yesterday and thought it was dumb not to pass the amendments that were wanted. It seemed that they were trying to help out business by giving exceptions for age and when the phase in starts because they put exceptions in the bill the 15Now group will continue to pursue getting it on the ballot in November eventually screwing all amendments.

QUOTE: Wasn't it McDonalds that was working on out sourcing the order taking at the drive thru. The person that took your order at the drive thru didn't work in the restraunt but at some service center centrally located, perhaps in India.

Not sure if they ever followed through with that but I bet they start taking a closer look now.

END

Wendy's and McD's in some places used a service where your order was actually routed to a call center in MN and then back to the restaurant. We had them here in Colorado, but I do not think it proved to be cost effective. Also there would be a little bit of a lag in going to India and back.

I think what will happen is that when voice recognition software gets better that will replace the human. You will speak your order, it will come up on a screen (just as it does now in some places) and you will confirm. Or you will be able to pull up an app on your phone, place your order when you get to the place and the pick it up.

Red Robin is already testing out tablets to place orders in its restaurants. The server then just serves. I wonder how many jobs that eliminates. Also should increase efficiency. You place the order with special instructions. It goes directly to the kitchen.

If people do not think automation will come or that people will not do it themselves, then just look around and see how many gas station attendants there are (only in OR and NJ where it is the law--a stupid one from what I can tell in 48 other states and Western Europe) or grocery baggers or who have done self check-in at the airport.

Not so easy for Australia to ship jobs a few miles south to another country where workers are willing to work for much smaller wages don't ya think?

If people decide to open their businesses outside of Seattle instead of inside the cities limits, they will in fact be losing tax money and it will impact them.

Another issue I have not seen a lot about regarding the minimum wage is what I call "wage cree". I know inflation will eat into some of these gains, but if minimum wages go up to $15 what about people making $15 to $20 per hour now for jobs that require more skill and training than minimum wage jobs? Those workers aren't going to sit around accepting the same wage as the fast food worker down the street. This idea that we can just drastically bump up the low end of the wage scale and the rest of the wage scale will stay the same doesn't make sense. I sometimes feel unions and high wage proponents think we can just pay people more money and there will be no inflation, no influence on demand, etc. etc. with the only real world impact that Howard Schultz is going to make less money.

about to happen wrote:

Not so easy for Australia to ship jobs a few miles south to another country where workers are willing to work for much smaller wages don't ya think?

If people decide to open their businesses outside of Seattle instead of inside the cities limits, they will in fact be losing tax money and it will impact them.

You are correct they can ship their jobs North to Indonesia. Australian's choices are based on community and civil engagement rather then the individual when it comes to business. It works well there because, what large business doesn't want an extra 20M in their consumer base.

I do find the "people need to work harder and get and education" argument laughable. I work for a large tech firm and I can tell you that our Executives make $3M+ in the US but their counter parts (within the same corporation) in Europe makes around $500K+. On average the median income for non management in the US for my corporation is $78K but in europe it is 83K Euro (approx. $110K). We have it backwards in the US and people love drinking the koolaid ie. believing they may once get to become an executive that makes tons of money.

Furthermore how much money do this companies cost the tax payer in food stamps, Medicaid, welfare, ect. paying their employees less then that standard of living is worse for the economy even though you don't see it with your pay. If you do a bit of research you will realize the real welfare recipients in this country are the businesses.

NWrun wrote:

If someone can please explain what her business contributes to the economy.

Can you explain to me what some of the workers will EVER contribute to the economy? Here in Chicago we've had a string of protests from an obnoxious band of fast food workers. One was interviewed by a reporter on the news. She is a single mother of three and said $500 for rent $500 FOR A CAR LOAN, then after groceries there isn't anything left.

$500 for a car loan? This is less about a "living wage" and more about a vocal group of people who want a middle class existence without the bother of responsibility.

Here is a woman who is more than likely getting government assistance, now she wants someone else to kick in more so she can afford a $500 CAR LOAN?

This woman will never replace what she is taking from the economy, and you want to reward here even more?

Your last paragraph is the one argument that just about wins me over on this issue.

If a person is WILLING to work, even a minimal skill job, they are better than the person who isn't working at all living off the government. I'd rather they be able to support themselves without further government assistance.

why just franchises? wrote:

Why will this impact "the franchise industry" differently than it will impact other types of chains?

Can someone explain this? Why will the proposed minimum wage impact franchises more significantly than other similar types of businesses?

akvcx wrote:

Can you explain to me what some of the workers will EVER contribute to the economy? Here in Chicago we've had a string of protests from an obnoxious band of fast food workers. One was interviewed by a reporter on the news. She is a single mother of three and said $500 for rent $500 FOR A CAR LOAN, then after groceries there isn't anything left.

$500 for a car loan? This is less about a "living wage" and more about a vocal group of people who want a middle class existence without the bother of responsibility.

Here is a woman who is more than likely getting government assistance, now she wants someone else to kick in more so she can afford a $500 CAR LOAN?

This woman will never replace what she is taking from the economy, and you want to reward here even more?

We live in a consumer economy the more money people are able to spend the more benefit the economy gets. Business owners operate a model of what is best for me is best for the business ie. more money for the business and myself the better. Which is wrong if your employee can't afford to shop at your business due to low wages you are in fact hurting the economy for the benefit of the bottom line.

Next if the lady you are referring to has a higher wage she is forced to get off government assistance as it is proven that a higher min wage reduces poverty. Rich entrepreneurs and corporations tend to hoard cash where as, when you raise the bottom's wage they put it directly back into the economy. Henry Ford had this ideal and built a hugely successful business off of reducing working hours and increasing pay.

I will agree with you that it is infuriating when people like your example are spending $500 per month for their car loan. Makes me wonder what she drives. I guess my point is in your example she is most likely receiving government benefits raising her wage could force her off of the tax payers bill.

Corporations are making record profits and the top 5% of earners have more wealth compared to everyone else then ever before. Forcing these people (corporations) to pass a little more of their profits down to the workers won't be a bad thing.

The easy automation for fast food places for drive thru or going inside would be a touch screen where you select your order and a card swipe to pay for it right there.

That'll take a couple of jobs away.

But automation sometimes breeds efficiencies that create new jobs.

Before computers there were no tech support jobs.

Accounting must have been hard before computers but there are more accountants than before because more detail and analysis can be provided.

Automation is going to happen no matter the rise in minimum wage.

L L wrote:

The easy automation for fast food places for drive thru or going inside would be a touch screen where you select your order and a card swipe to pay for it right there.

That'll take a couple of jobs away.

But automation sometimes breeds efficiencies that create new jobs.

Before computers there were no tech support jobs.

Accounting must have been hard before computers but there are more accountants than before because more detail and analysis can be provided.

Automation is going to happen no matter the rise in minimum wage.

You are absolutely correct. This is good for people with technical and computer skills. This is not good for people that do not have skills which are the very people the raise is supposed to help. Catch 22?

Not so easy for Wal-Mart or McDonald's to ship jobs a few miles south either. Lots of minimum wage employers have no choice but to remain near their customers.

drivel wrote:

Liberals hate poor people. By making low paying jobs illegal, poor people will have to leave Seattle in order to earn a living.

Seattle for the rich.

Yep. San Francisco's high minimum wage is basically a way to say "if you can't make this much money, get your business the f**k out of our city." Seattle wants to follow suit.

HRE wrote:

about to happen wrote:

Not so easy for Australia to ship jobs a few miles south to another country where workers are willing to work for much smaller wages don't ya think?

If people decide to open their businesses outside of Seattle instead of inside the cities limits, they will in fact be losing tax money and it will impact them.

Not so easy for Wal-Mart or McDonald's to ship jobs a few miles south either. Lots of minimum wage employers have no choice but to remain near their customers.

This is exactly it. Many of these low wage companies are competing in a specific geography with other businesses. They cannot simply pick up and move elsewhere because they'd be ceding market share to those that stay closer to consumers. This applies both to the fast food and retail industries.

Remember, businesses can take the hit from increased wages in three ways: increase their prices, decrease their profits (of which most large companies are seeing record profits currently), or shift to automation. While the option of shifting to automation is worrying, there are significant upfront costs, and I'm not quite sure the technology is there yet. Also, it seems like some jobs can't really be automated -- some people want to pay cash, shelves need to be stocked, and people might still prefer some type of personal interaction while shopping.

It's also important to note the actual empirical evidence from various natural experiments generally show small negative to neutral effects on employment. Here are the results of a study from Goldman Sachs, not exactly a bastion of liberal economics (http://jaredbernsteinblog.com/a-non-thumb-on-the-scale-look-at-the-impact-of-higher-minimum-wages/)

Although a $15 minimum wage is high, it will be an interesting experiment that will yield results in the coming years. Past evidence suggests it will be a large net positive for the vast majority of low wage workers. All of you doomsayers are wrong.

Having lived in Seattle for several years there are very few fast food restaurants compared to other cities. I think its funny that everyone is concerned about the success of Mcdonalds. They will be fine. They sell garbage and mark it up 400%

Now they will sell garbage and mark it up 350%

there are 5 Mcdonalds in a city of 650,000

30% of the workers at mcdonalds make over minimum wage. So how many workers are talking about here? 20?

Automation may be continuing but in Seattle $15/hr is just not that much and will insure that working people will not live in deep poverty. Competition and cost pressures will mean that this will likely cut some into business profits, meaning that there will be a far more equitable distribution of income. For far too long, business owners have been taking an enormous share of GDP because workers have lacked collective bargaining power with limited government enforcement of unionizing laws and "free trade" agreements that have allowed capital to flow freely among the rich of all nations while the poor and working class can neither move freely across borders, nor access any of that capital. Meanwhile, productivity increases have continued from decades prior to 1980, yet wages have hardly risen at all. Remember too that this will stimulate the economy in Seattle, because all of the increased wages will be spent, whereas the business profits are often not spent. Apple Computer is the best example, sitting on a pile of well over $100 billion, and rather than investing in America with that or paying their workers, they'd prefer to sit on it or give dividends to their wealthy investors while actively preventing their workers from getting higher paying job offers from their supposed competitors, like Google.