“But at least we raised the wage!”
Action, meet reaction.
Last night I took my wife and our two young grandchildren to Applebee’s. It went great — our 4 and 2 year old charges were more decorous than half the patrons.
But I digress. Here’s what caught my attention: Applebee’s is testing a new ordering policy — using the technology that is rapidly becoming prominent in fast food restaurants. Every table had an online electronic tablet, with the menu, ordering and payment process built in. One can place the order and have the busboy bring your food.
For now, one can still use a waiter for service, but obviously the plan is to reduce or eliminate that service. That makes PARTICULARLY good sense in California, which is rapidly becoming the home of the $15 minimum wage. Moreover, California is one of only 7 states that requires “tip” employees to be paid a FULL minimum wage IN ADDITION TO all tips collected. That can make a meal too pricey — reducing the number of times patrons choose to dine out.
California’s minimum wage is currently $9 per hour and will rise to $10 in January. Here in Los Angeles, the minimum wage has been $15 dollars since June, and there is pressure to make that the statewide minimum.
The upshot? Expect to see more and more restaurants going to electronic ordering and payment systems, and more and more waiters and waitresses out of work, as progressive social justice warriors and the pols who appease them make it impossible to do business in the once-Golden State. Again, for those didn’t learn this in school, math wins:
Labor is a cost, because the business owner has to provide wages and, often, benefits that cost him more money. When a government mandate increases that cost, the business owner has three choices: pass the cost along to the customer, who may decide it’s too much and stop shopping there; cut employee hours and stop hiring to save on labor costs, thus costing potential jobs and putting a burden on workers still employed; and, finally, just decide it’s not worth it anymore and close up shop. In the low-margin bookseller business, Borderlands’ owner chose the last course as the only one viable.
San Francisco’s Borderlands bookstore chose to close its doors because it could no longer make enough money to make staying in business worthwhile. Applebee’s (and I’m sure other restaurants and fast-food establishments) are looking to cut back on labor hours in order to balance the increased cost of labor. In each case, employees have lost jobs as a consequence of government interference in the labor-management relationship. It’s only going to get worse, too as long as statists in government continue to act as if the laws of economics will bend to their will and that their actions have no consequences.
It must be nice in their fantasy world; it’s a shame others have to suffer because of those fantasies.