Minimum Wage in NY

Permabear · 05-04-2016 12:40pm

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joeysoap · 05-04-2016 1:00pm

dont know about NY but when I was in Boston in 2014 I didn't find it particularly cheap eating out and that was before the mandatory tip. After taxes and the tip the original price quoted was only on nodding terms with the actual cost. In one very busy restaurant they even ringed the 3 options for the tip 18.5, 20 and 22 per cent and the amount was shown on the bill. I asked my American host if we didn't pay the tip what would happen or if we put down say 10%. He said we wouldn't get as far as the door before we would be intercepted by the manager who would ask was there a problem with the meal or the service. If we replied, no everything was good, he would then ask why only a tip of 10%. At that stage I would inform him that in Ireland (and europe generally) 10% was pretty normal and my Amerian host thought about this for a moment and said he didn't think they could call the cops!!!!!!!!! He stated that the wages were 'pretty low' for restaurant workers and they relied on the tips. I said I thought the should pay a fair wage and reduce the tip, but of course that would have the appearance of making the restaurant more expensive. Not actually more expensive, just appearing to be more expensive.

draiochtanois · 05-04-2016 1:41pm

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Permabear · 05-04-2016 1:47pm

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draiochtanois · 05-04-2016 1:51pm

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KomradeBishop · 05-04-2016 2:00pm

Except the CBO did no such thing - they put forward a potential range of job losses, ranging from very little up to 1 million, and then they picked the midpoint.

So they are predicting something within the range of roughly 0, up to 1 million.

No surprise to see another example of misleading use of statistics.

Permabear · 05-04-2016 2:02pm

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Permabear · 05-04-2016 2:23pm

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ancapailldorcha · 05-04-2016 2:33pm

You can't be serious? I wouldn't be able to buy a hovel for that here!

Permabear · 05-04-2016 2:41pm

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KomradeBishop · 05-04-2016 3:55pm

Except it is misleading, because their estimate is between ~0 and 1 million.
You are wrong about what the CBO said, you are warping the stats they generated - their stats support the position of minimal ~0 job losses, as much as they support the position of 500,000...

We're dealing with predictions here - not statements of what 'will' happen. We have a concrete empirical benefit, the vast majority of affected workers getting a real rise in wages - and we have that compared to a very tentative/uncertain loss with little empirical backing (a lot of it based on flaky economic models, which don't represent the real world very well), affecting 'maybe' 0.3% of people, and maybe ~0% of people instead...
Figures that are dwarfed by other changes in unemployment figures.

I'm not really convinced you care about unemployment figures here, you advocate policies all the time that would worsen unemployment under 'Free Meerkat' principles, and against policies that would actually alleviate them (like the US government actually doing a New Deal style jobs program).

Permabear · 05-04-2016 4:40pm

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KomradeBishop · 05-04-2016 5:11pm

Except the original quote, explicitly notes the midpoint issue, which you treat separately there:

According to CBO’s central estimate, implementing the $10.10 option would reduce employment by roughly 500,000 workers in the second half of 2016, relative to what would happen under current law.[10]
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[10]. A central estimate is one that uses values at or near the midpoints of estimated ranges for key inputs.

The CBO did not do original research on the minimum wage issue there, they did a meta-analysis of other minimum wage studies - ones which found a minimum wage change on jobs of ~0, and others which found increased job losses.

In other words, they 'balanced out' conflicting studies, by picking a value in-between them. This isn't a rigorous economic forecast - this is a guess, based on 'averaging out' conflicting minimum wage studies, where one outcome is not more or less likely than any other.

I think people know more than enough about the quality of economic forecasts, after watching economists proclaim the permanence of a Great Moderation of economic stability, right up until the economic crisis hit - and stuff like e.g. the joke of economists (particularly IMF's) GDP growth forecasts, after implementing austerity.

Economists credibility in being able to generate accurate predictions, is pretty much in tatters among the public. A lot of economists have long exposed themselves, as just being lackeys for putting out finance-industry propaganda - with entire think-tank propaganda networks (bankrolled by a huge range of conflicted interests) to show this.

kupus · 05-04-2016 5:36pm

The only winners in minimum wage are ......drum roll.... the big companies that can afford it.

Think of it long term.. mom and pop stores when they cant afford to pay minimum wage, staff leave, shop closes and competition for multinationals has gone. They now absorb all the customers of mom and pops store. They get new staff and get "extra tax" benefits for taking these people on. And eventually when this company is big enough they can lobby to gov for reduction in min wage. or "extra incentives" tp keep them employed.

Whenever I hear gov trumping how great something is.... I always ask why, and I always see who is pushing the agenda. Big business is not in it for the good of employees health. I wish it was but thats the way it is.

Permabear · 05-04-2016 5:50pm

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K-9 · 05-04-2016 6:02pm

The state subsidises a lot of these low paid jobs so replacing them might not turn out as cheap as they think!

Seriously though, that's a hefty jump, but until people cop we are living in an era of very cheap food prices that are arguably unsustainable, I don't know if people will pay higher prices.

Listened to an interesting podcast about an NY high end restaurant that has done away with tipping. Wages for chefs are so low that attracting them to the industry, or retaining them, is becoming a major problem. Front of house staff keep all the tips so you get highly trained chefs receiving basic wages and waitresses getting the financial rewards. He upped his prices by what people would tip anyway and there's no expectation on the customer to tip. Seemed to be working well for everybody 6 months or so in.

Anyway, you'd need your head examined to train and do all that tough work chefs do to earn 9 or 10 dollars an hour, especially after paying hefty college fees. Highly trained chefs on the bread line!

KomradeBishop · 05-04-2016 6:19pm

Except I didn't say 'economists', I said 'a lot of economists', when referring to many of them acting as lackeys - pretty easy to establish by looking at the funding and agenda of many prominent economic think-tanks. I didn't say anything presented in this debate was 'propaganda' either, you're deliberately quote-mining me, to misrepresent my post.

The field of economic forecasting is pretty much mired by the catastrophic failure of past predictions (the supposed 'Great Moderation' followed by the economic crisis being one, major institutions like the IMF and austerity growth figures being consistently wrong, to give only two prominent examples), and widescale use of economic 'research' as just a platform for putting out political propaganda ('research' shaped around a political goal, instead of politics shaped around research).

The corruption of economic 'research' (through the conflicted think-tank network), and the poor empirical standards and track record of economic forecasting, are very plain to see - as is the poor empirical basis for a lot of economic teaching itself.

Forecasts aren't 'evidence' either - evidence is showing an actual hike in unemployment due to the minimum wage - and the CBO report itself shows that the studies are conflicted there, with many citing no increase in unemployment.

Permabear · 06-04-2016 11:11am

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etoughguy · 06-04-2016 11:13am

I still call the place new amsterdam, then again im old fashioned that way

FA Hayek · 06-04-2016 1:13pm

As per the Luas issue in Dublin this will only speed up automation which will lead to job losses overall.

Permabear · 06-04-2016 1:43pm

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KomradeBishop · 06-04-2016 2:11pm

Eh, no actually I didn't say that either - another deliberate misrepresentation from you, where you never shy away from putting words in my mouth, to embellish your posts. It's an extremely regular thing from you.

It's very easy to look for economists who are bankrolled by e.g. oil oligarchs, who just-so-happen to parrot economic views, that help further the political agenda of their funders.

In a world where conflicts of interest are a real and valid ethical concern, it's extremely easy to find conflicts with a wide range of economic 'research', that ends up being used for pushing a political agenda.

Cite a single thing about the Naked Capitalism website, that makes it propaganda - the only thing anyone has ever been able to criticize about that site on Boards, is its name - and even then, nobody can even explain what is wrong with the sites name.

You're directly lying here again as well, as I have engaged with the arguments, data and evidence in this thread - I've picked apart the CBO data, and have shown how they are relying upon a meta-study, of other minimum wage studies, and how focusing on the midpoint figure is misleading etc..

Heh - economists have gotten wrong more than just 'some' past predictions - the prediction of a Great Moderation in the run up to the economic crisis, was the most catastrophically failed prediction in many generations, which helped spur on deregulation, and has negatively affected almost every living person on the planet.

I did not say economic forecasting was 'pointless' either - another deliberate lie/straw-man from you (simple guide: if you can't directly quote it, I didn't say it...that will never stop you just making shít up though...) - I've explained how the field of economic forecasting, has little-to-no credibility among the public anymore.

Why should we believe people in a field with such an abysmal track record, of failed predictions - and who base their predictions on models that don't actually match the real world - and who fail to even have a solid understanding of economic theory that represents the real world? (given that critical aspects of economic theory that get taught and used in modelling for economic forecasts, are empirically wrong)

Anyone who knows a little about e.g. weather forecasting, and the difference between linear and dynamic systems, knows that economies - like the weather - are dynamic systems, where the range of forecasting is very limited; yet economists, are still stuck in the pre-Lorenz age, modelling economies as if they are linear systems. The field of economic forecasting is still stuck in an infantile stage, with no signs of changing.

KomradeBishop · 06-04-2016 2:27pm

Not a single restaurant owner in that article states the minimum wage as the reason for closure - only a business lobbyist does (and they expressly had to update the article to note the lobbyist...):

And for Seattle restaurateurs recently, there is also another key consideration. Though none of our local departing/transitioning restaurateurs who announced their plans last month have mentioned this as an issue*, another major factor affecting restaurant futures in our city is the impending minimum wage hike to $15 per hour
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*Update: we changed the word "elaborate" to "didn't mention" for the sake of clarity, and noted that Anthony Anton is also a lobbyist against the minimum wage increase

In fact, the restaurants cited operation-cost increases - not labour cost (and the article speaks of these as two separate things, not the same thing):

Why do restaurants close? According to Fernandez, there are many reasons "from ownership changes and concept switches, to operational cost increases and failure to thrive.” Last July Komo’s Naomi Tomky named location as its first of six reasons why “awesome restaurants close”—which Shanik chef-owner Meeru Dhalwala and Little Uncle proprietors Wiley Frank and Poncharee Kounpungchart have both told devotees is their main reason for shutting.

In Shanik’s case, South Lake Union requires a much more substantial bar presence and more casual overall atmosphere, Dhalwala (of Vij’s and Rangoli in Vancouver) has learned, than the Vij’s-inspired elegant Indian dining house she built.

As for Little Uncle (which has reopened its Madison Avenue takeout window since the Pioneer Square restaurant closed), Frank and Kounpungchart originally expanded to their basement space on Yesler to extend their menu and host gatherings, but ultimately learned that “bigger is not better. We have come to the conclusion that the Pioneer Square location ultimately does not fit into the goals of our professional life and personal life. Passing the Pioneer Square location on will give us the opportunity to refocus and find a better way to build Little Uncle,” they told Eater.

In addition to location, Tomky cites that good restaurants also close because of overly good (and thus pricey) ingredients (“Farm-to-table stuff doesn’t often pay off,” she writes); strange menu items (foie gras, pig ear, etc.) that alienate some; too much concept or too little; poor atmosphere (too loud or too quiet, uncomfortable high French bistro seats, no purse hooks, etc.) and poor management (ranging “from the chef/owner who tries to do it all himself, to the one who doesn’t do enough and loses employee confidence (and effort).”)

So that whole minimum wage controversy from that article, is just completely manufactured/made-up out of nothing.

jester77 · 06-04-2016 2:35pm

Good idea in the short run, bad idea in the long run. Having a high minimum wage, especially in high tech locations like California, will only foster more automation. So instead of companies investing in people they will invest in technology which will replace a lot of the minimum wage jobs.

ancapailldorcha · 06-04-2016 2:38pm

Are you saying that any opinion that disagrees with yours is propaganda?

Naked Capitalism is a blog, plain and simple. You said once that it was written by a TCD economist but then you go ahead to rubbish economists above. I'm confused.

KomradeBishop · 06-04-2016 2:42pm

Automation is really a red herring. Do people really think the cost of automation is static and isn't only going to go down over time?
Anything that is affordable to automate after a minimum wage increase, will be affordable to automate without a minimum wage increase - given a relatively short amount of time (a few years maybe).

Automation is going to happen anyway. It's not an argument against minimum wage increases.

In fact, companies should be sharing their productivity improvements with workers, so improvements to productivity through automation, should be shared with workers through increased wages anyway - especially in the US, where corporate profits are hovering around a record high, workers should be demanding a lot more in terms of wages.

KomradeBishop · 06-04-2016 2:43pm

What are you on about? I never said that about Naked Capitalism. Also, it being a blog doesn't affect its credibility - their work has been published in the Financial Times before. People like Glenn Greenwald gained their rep as bloggers - the line between journalist/blogger is only the platform they publish on these days (with many publishing on both print/blog platforms).

Where are you even pulling the first question from there? That's the same smear PermaBear tried to pull on me - and which I pointed out as a straw-man - you just put it in question form this time instead.

If you're going to try and smear me as holding that view/opinion, either quote it or retract it.

Arbiter of Good Taste · 06-04-2016 2:48pm

I would also go as far as to say waiting staff relying on tips will lose out once tipping culture becomes less prevalent.

Just as an aside, many moons ago, I worked in the US over two summers in college. One year i waitressed in NJ at in a low end pizza restaurant on minimum wage for waiting staff ($2.15 p/h :eek:) and made a fortune in tips. I never had seen so much money in my life. The following year I waitressed at a high end restaurant in Boston where staff were paid significantly higher, and patrons were advised not to tip. My takings that summer were crap.

My personal view is to pay waiting staff a better hourly wage and ban the ridiculous mandatory tipping culture in the US. I'm just back from NY and have seriously found the level of service over the years to have declined dramatically, as 20%+ tips are now automatically expected for mediocre service.

However, that does not equate to a ridiculously inflated minimum wage which will just end up inflating all costs and wages, making the cost of living prohibitively expensive.

ancapailldorcha · 06-04-2016 2:55pm

My mistake. You were referring to ronanlyons.com. I've also seen you reference Brian Lucey of TCD, both economists at the same institution so I believe my point still stands.

KomradeBishop · 06-04-2016 2:58pm

What 'point' was that? N.B. pointing out the faults with economic forecasting as a field, isn't the same as rubbishing all economists.

While it's factually true that nearly all economists are taught empirically wrong views of how economies work (which causes grave errors in a huge range of economic models, including those prominently used for economic forecasting), not all of them hold onto those faults - in fact, the Naked Capitalism site is among the best places to learn of those faults.

Minimum Wage in NY

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