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Comment by reallydontask | Hacker News Reader

Take the first guy, he sacks six employees out of ten and closes the dinner shift. Given that on an 8 hour shift the extra cost is just over $60 this just does seem to make sense, in other words, the sacking of people it's unrelated to the minimum wage increase.

He clearly has reasons for doing what he is doing but I find it hard to believe that increase in minimum wage is the issue, specially when the way it's due to increase yearly, preceeds he starting his business (unless the reporting is wrong and is not 2017)

Is there anything I'm missing here?

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> Given that on an 8 hour shift the extra cost is just over $60

Don’t other labor costs (e.g. payroll taxes) scale with pay? So the daily savings are more than $60.

And $60/day conserves $1,800 a month, which is a decent amount of cash for a restaurant. If it’s a lunch-rush shop with marginal dinner business, $2,000/month could be the break point for that shift and those jobs.

Absent zoning reform, however, these wages are more likely to flow into higher rents versus consumption or savings.

Correct - the fully baked cost of these employees is much higher than the extra $/hr increase. The bigger kicker is this location is fixed, they HAVE to pay their employees this amount. The consumer is NOT fixed and given an increase in prices, has the ability to conduct commerce in an area near Emeryville that was not impacted by the higher wages. So all things being equal, the same sandwich made a few miles away may be a few $ cheaper and for people on a limited budget, the consumer may make that choice. It is similar to when a city/county raise taxes within their limits on certain items, lets say cigarettes, then are surprised when instead of raising revenue, the amount of revenue overall collected falls after this increase. Consumers have the ability to purchase outside of the city's taxing authority when the marginal increase is more than the perceived cost to the consumer to travel to purchase them. This is basic econ 101, maybe 201. While these attempts are great, they fail to factor that in and should be coordinated at the state level to have any impact. Even with that, states deal with this all the time when people go across state lines to purchase booze, or leave high sales tax states when making large ticket purchases. It is no coincidence that just across the border from Illinois in Wisc/Indiana there are best buys / appliance stores that do huge volumes of business.

Payroll taxes, unemployment insurance, benefits like 401k matching.

I wish I could be making an extra $1,800 a month. Alternatively, I'd be pretty honked off too if a government regulation cut my pay by that amount.

Makes sense that some taxes go higher, I should remembered about this. What are the dollar amounts, I'm not familiar with payroll taxes in the US.

Also, my original calculation assumed 8 hour shifts for all employees per day, which is likely wrong (could be more or less)

Granted that $1800 is a decent amount of money for a small restaurant but staffing levels are at 40% of what they were, is the service/quality not going to suffer a bit (a lot?)?

It is probably a strategy to make the building owner lower the rent without shuting down first.

If they really want me to believe it was because of minimum wage, they should share their business balance sheet and income statement. Restaurants close down every day. Prices of food, insurance, real estate, taxes, etc are always changing and generally going up. Customers are fickle and tastes change. It isn't unusual for a business owner that is shutting down their business to use the event to make a political point that supports their ideology.

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