More Los Angeles restaurants add #Obamacare surcharge

September 4, 2014
"Obamacare has arrived"

“Obamacare has arrived”

First it was Republique, announcing they were charging customers an additional 3% to cover the added costs imposed by Obamacare and being ripped for it by outraged liberals. Now the owners of Lucques and other trendy restaurants have decided to add a healthcare surcharge, too.

Economics — it’s the law:

The cost of offering these benefits is significant and the reality is that restaurants, particularly smaller restaurants like the ones many of us own, have a very high ratio of staff members to revenue and run on very slim profit margins. Successfully run restaurants generally make between 5-10% net profits so a health care benefit which eats away 3% of gross sales will take away anywhere from 30% to 50% of annual profits for a restaurant. We’ve discussed simply raising menu prices, but ultimately food prices are tied in many ways to the ingredients we purchase. Those ingredient costs have increased astronomically recently so we’re already struggling with working creatively to keep menu prices down and don’t feel it’s right to try to factor health care costs into menu prices as well. We’d rather keep our menu costs as an accurate refection of our ingredient prices so that customers know that if we have to raise them it’s because we can’t avoid passing on our increased costs.

Like I’ve said before, labor is a cost. If you increase the cost of labor –in this case, by commanding employers to provide  expensive health insurance coverage– something has to give. Either the restaurant takes a huge hit in their profit margin, calling into question the reason for being in business in the first place, or they cut hours and jobs, or they raise prices. There is no way to avoid that choice. These restaurant owners have chosen the third option: raise prices, and they have chosen to be bluntly honest with their customers about it.

Good for them, and I hope all businesses follow the trend. Why shouldn’t customers know why their meal or other commodity or service has become more expensive? Isn’t transparency good? Or is it gauche to remind the largely progressive clientele of places like Melisse that their legislated largesse to the proletariat actually has a cost?

The ACA is an anti-constitutional monstrosity of a law. It needs to be repealed; it’s inflationary effect is just one reason why.

More under Elections have consequences.

via Truth Revolt


Surprising no one, California loses another business to Texas

July 20, 2014

Moving

This time, Perry’s Poachers have snagged Omnitracs LLC of San Diego, a fleet management firm that will be moving to Dallas and taking 450 jobs with it:

Fleet management software company Omnitracs LLC will relocate it headquarters to Dallas from San Diego, creating 450 jobs and $10 million in capital investment, Gov. Rick Perry’s office announced Friday.

The company will move into KPMG Centre downtown.

Omnitracs is the latest in a wave of California relocations to North Texas announced this spring and summer.
The Texas Enterprise Fund is providing a $3.9 million incentive to attract Omnitracs. The new headquarters will house jobs in a variety of high-paying fields, including engineering, research and development and finance.

Omnitracs provides fleet management solutions for the trucking industry. Its services include software applications, GPS fleet tracking, platforms and information services.

Omnitracs is just the latest in a long line of businesses that have fled or are about to flee the once-Golden State. The article lists others, including Toyota, and mentions Vista Equity Partners, a California firm that specializes in buying firms and moving them to Texas.

Yes, the one business that California can keep is one that helps others get the heck out.

Well, we bloody well deserve it, with a business climate that’s designed to drive people away, not bring them here. I’m old enough to remember when California was a place to people rushed to, in order to build a future.

Now, thanks to 40 years of progressive misrule, they rush to get out, in order to save what future they have left.

via Stephen Frank

RELATED: Victor Davis Hanson, a fellow Californian, on our frivolous legislature. Must reading.

(Crossposted at Sister Toldjah)


It begins: SeaTac businesses add “living wage surcharge” to cover minimum wage

June 6, 2014

When discussing Seattle’s new, progressive –FAIR!!– $15 per hour minimum wage, I wrote that business owners had just a few choices in response:

Critics, on the other hand (and including your humble correspondent), argue that the laws of economics cannot be repealed by legislative fiat: raise the cost of labor, and businesses will be faced with a choice from among four options — pass the costs on to the consumer; reduce labor costs by cutting hours or whole jobs; eat the costs and accept lower profits; or cease doing business in that jurisdiction, either by moving or closing shop. 

Having seen some businesses hold off on hiring, while others moved out of Seattle, we now have an example of another option: pass the cost along to the consumer:

And just look at that sales tax, too: 10.9%. Add the “living wage charge” and…

Yep. This is going to be a very interesting experiment.

via Twitchy

UPDATE: Just had it pointed out to me that SeaTac is not Seattle. My mistake; I’m not that familiar with Washington. Still, it can’t be all that long before Seattle itself sees these “living wage surcharges.” Also fixed the headline.

via:

(Crossposted at Sister Toldjah)


Seattle: $15 minimum wage already costing jobs

May 28, 2014
"But at least we won the election! Obama!!"

“But at least we raised the minimum wage!”

And it’s not even in effect, yet.

But, it’s not surprising. Business managers have to plan for the future, and a looming huge increase in their labor cost will force many to rethink how they do business in Seattle, if they continue to do business there at all. Writing for the free-market Washington Policy Center, Erin Shannon reports on how small businesses are planning to cut back on hiring, delaying expansion, or moving out of the city to deal with the new wage law. Most striking, though, is the account of one business owner who supported the law, but now thinks she may have made a mistake:

One of those business owners is a well-known and active supporter of “progressive” labor policies, including a higher minimum wage. Jody Hall, owner of Cupcake Royale, initially supported a $15 minimum wage. But now Hall admits the proposed policy is, “keeping me up at night like nothing ever has.”

While Hall has serious concerns with Mayor Ed Murray’s plan to phase in a $15 minimum wage over seven years with a temporary tip credit, her biggest fear is if voters approve the radical charter amendment sponsored by the group 15Now. The charter amendment would force all large employers to begin paying $15 in 2015, and would give small business owners just three years to acclimate to the high wage. And the 15Now proposal would not allow for any tip credit.

If the charter amendment passes, Hall says she would be forced to close half of her seven locations and lay off 50 of her 100 workers.

But beyond the differences between Mayor Murray’s proposal or the more aggressive 15Now proposal, Hall says she now has “serious second thoughts” about a $15 minimum wage in general, especially since Seattle would be “going it alone” with a wage that is significantly higher than any other minimum wage in the nation.

Hall’s second thoughts about a $15 minimum wage have led to second thoughts about expanding her business. She was set to open a new business in Seattle this year, but has tabled the plan until after voters have their say on the charter amendment in the November election. Hall says if she considers any new locations before then, they will be outside the city limits.

In other words, when progressivism meets economic reality, guess which wins? You would think a successful businesswoman like Hall would have seen this coming. Maybe she thought she’d get a waiver from Obama.

And pay special attention to her comment about “going it alone.” As minimum wage increases are applied and then have the same effect in various places, there will be more and more calls from the fairness crowd to apply these laws statewide and even nationwide, to make sure business owners can’t just move to a friendlier jurisdiction, which would be “unfair.” The minimum wage thus becomes a wedge issue in an attack on local control, federalism, and jurisdictional competition, things progressive just hate, because their favored policies usually fail.

Meanwhile, I want to thank Seattle for volunteering to be a case study on the foolishness of government control of wages.

via Adrian Moore

(Crossposted at Sister Toldjah)


Greedy Politicians Get their Comeuppance as Taxpayers Escape

May 3, 2014

Phineas Fahrquar:

First it was Toyota here in California fleeing to Texas, and now Pfizer want to reincorporate in the UK. Both are perfect illustrations of the insanity of statist tax policy: legislators think they can take as much as they want, and the “marks” will keep on paying. But, eventually, the marks have had enough and simply leave, thus leaving the greedy, foolish legislator with nothing.

Originally posted on International Liberty:

If you’re a regular reader, you already know I’m a big supporter of tax competition and tax havens.

Here’s the premise: Politicians almost always are focused on their next election and this encourages them to pursue policies that are designed to maximize votes and power within that short time horizon. Unfortunately, this often results in very short-sighted and misguided fiscal policies that burden the economy, such as class-warfare tax policy and counterproductive government spending.

So we need some sort of countervailing force that will make such policies less attractive to the political class. We don’t have anything that inhibits wasteful spending,* but we do have something that discourages politicians from class-warfare tax policy. Tax competition and tax havens give taxpayers some ability to escape extortionate tax policies.

Now we have a couple of new – and very high-profile – examples of this process.

First, a big American drug company…

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Fleeing California: Toyota takes its business (and its jobs) to Texas

April 28, 2014

Moving

Oh, man, this is just a gut punch to the Southern California economy:

Toyota Motor Corp. plans to move large numbers of jobs from its sales and marketing headquarters in Torrance to suburban Dallas, according to a person familiar with the automaker’s plans.

The move, creating a new North American headquarters, would put management of Toyota’s U.S. business close to where it builds most cars for this market.

North American Chief Executive Jim Lentz is expected to brief employees Monday, said the person, who was not authorized to speak publicly. Toyota declined to detail its plans. About 5,300 people work at Toyota’s Torrance complex. It is unclear how many workers will be asked to move to Texas. The move is expected to take several years.

I don’t know how many will move to Texas, but I bet several thousand won’t. And that doesn’t even address the ripple effects in the region’s economy, all sorts of support businesses that would lose the revenue spent by those employees — restaurants, dry cleaners, janitorial companies, you name it. Those people won’t be heading for Texas; they’ll be stuck here. And it’s going to hurt.

Toyota originally came to LA in the late 1950s, and staying here made sense for them for a long time, in spite of increasingly burdensome taxes and regulations. After all, most of their cars entered the US through the huge Port Of Los Angeles, so it made sense to have the North American HQ nearby.

But, with the passage of time, Toyota, like so many foreign car manufacturers, built more and more of their cars here in the US, mostly choosing to construct their facilities in business-friendly Southern states… such as Texas. The last auto manufacturing plant in California, coincidentally Toyota’s, closed in 2010. Eventually, economic logic (1) lead the company to decide that the cost of living and business in California wasn’t worth staying in California, not when their manufacturing operations had all shifted to Texas and nearby states.

As Dale Buss writes at Forbes. After talking about the structural shift in Toyota’s business, he looks at the once-Golden State:

Besides, California’s business climate is becoming an even bigger downer. California has become infamous with business executives and owners there not only for high tax rates and complex taxing schemes but also for overzealous regulations and regulators that have managed to stifle the entrepreneurial energy of thousands of companies.

Even Hollywood movie studios have been souring about producing flicks in California, increasingly reckoning that the sweet tax breaks and assistance packages now offered by so many other states offset the legacy advantages and ideal production climate in California.

About the only vast remaining pocket of dynamism in the California economy is Silicon Valley, where the mastery of the global digital economy by companies ranging from Google to Hewlett-Packard has become so complete that they have been able to succeed despite the home-state business landscape.

In the annual Chief Executive magazine “Best States / Worst States” ranking that surveys CEOs for their opinions, Texas has been holding on to the No. 1 spot for a while; California seems permanently relegated to No. 50.

As Automotive News put it, “Despite the deep, creative talent pool in greater Los Angeles, doing business in California has become more expensive for companies and their workers.” Bestplaces.net said that the cost of living for employees is 39 percent higher in Torrance than in Plano, and housing costs are 63 percent lower in Plano.

Thus, over the last 10 years, the Lone Star State has stolen so many jobs from the paragon of the Pacific Coast that Toyota’s reported move should come as no big surprise.

No, it’s no surprise, but it is maddening because it is a largely self-inflicted wound. Business flight has been going on for a few years, now, and, no, “Green jobs” just aren’t going to fill the gap. Heck, a businessman even set up a consulting firm to help companies “abandon ship.”

Losing Toyota should be a loud, blaring alarm for Governor Brown and the progressive oligarchs who dominate our legislature, for it’s their policies, piling on regulations and taxes year after year, decade after decade, that have made it nearly impossible to build a business here. (Just read this “Dear California” letter from a small businesswoman who’d had enough.) And for those companies that had been successful, the incentive to move finally grows too great to resist. But they won’t learn, not until it gets much worse. Like all good oligarchs, they’re isolated in their ivory tower of safe seats and unaccountability (2).

Keep watch at the I-10 crossing into Arizona: pretty soon, a lot of those taillights you see  heading East are going to be on the back of Toyotas.

And they ain’t coming back.

Footnote:
(1) Something progressives should acquaint themselves with, sometime.
(2) And, before anyone else can say it, yes, that’s our fault as voters.

(Crossposted at Sister Toldjah)


Financial Bureaucrats on Easy Street, with Consumers and Taxpayers Paying the Bill

April 23, 2014

Phineas Fahrquar:

Guess who’s getting rich on Wall St.: federal regulators.

Originally posted on International Liberty:

I’ve complained many times about government intervention in the financial sector.

The financial and housing crisis, for instance, was largely a consequence of the Federal Reserve’s easy-money policy, combined with the system of corrupt subsidies put in place by Fannie Mae and Freddie Mac.

But there’s another government-imposed cost that burdens the financial sector.

Writing for the Wall Street Journal, Paul Kupiec of the American Enterprise Institute reveals some very sobering – and disturbing – data on pay levels for both the financial industry and its regulators.

Most banks in this country are small businesses and pay employees modest salaries. The Bureau of Labor Statistics reports that the average annual salary of a bank employee was $49,540 in 2012, not much higher than the average annual across all occupations, $45,790.

In other words, there are some very well paid people working for big banks, but most employees in…

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