San Francisco Raises Minimum Wage 14%, Guess How Chipotle Responded?
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For some odd reason you just can’t seem to get it through the left’s thick skull that raising the minimum wage isn’t going to make poor people wealthier or stimulate the local economy.
They never listen to reason, nor do they pay attention to statistics that clearly demonstrate hiking the minimum wage usually spells economic disaster and increases poverty.
Take what Chipotle is doing in San Francisco for example, a city that recently raised the minimum wage by 14 percent.
In order to make up for the extra business expense of paying their employees a higher wage, they’ve had to offset the cost by raising their prices.
From an equity research report issued to investors by global investment banking and wealth management firm William Blair on Chipotle Mexican Grill, Inc. (NYSE: CMG) – “Price Increases Have Begun Early in Third Quarter” (received privately):• In our weekly survey of ten of Chipotle’s markets, we found the company implemented price increases in half of the surveyed markets this week—San Francisco, Denver, Minneapolis, Chicago, and Orlando. In most markets, the price increases have been limited to beef and average about 4% on barbacoa and steak, toward the lower end of management’s expectation for a 4% to 6% price increase on beef.• San Francisco, however, saw across-the-board price increases averaging over 10%, including 10% increases on chicken, carnitas (pork), sofritas (tofu), and vegetarian entrees along with a 14% increase on steak and barbacoa.We believe the outsized San Francisco price hike was likely because of increased minimum wages (which rose by 14% from $10.74 per hour to $12.25 on May 1) as well as scheduled minimum wage increases in future years (to $13 next year, $14 in 2017, and $15 in 2018).
Liberals seem to think money just magically appears in a business owner’s hands, dropped in big, brown sacks marked with a dollar sign on them by unicorns and pixie fairies, and the reason these people don’t pay employees is to horde their treasure like Smaug from The Hobbit.
Sorry to destroy your fantasy world, Mr. Liberal, but that isn’t how this works.
You see, businesses rely on profit to survive. Much of the money a company makes goes toward paying the cost of keeping the doors open, leaving a small percentage for the owner to pocket as personal income.
If you raise the minimum wage, you’re adding to the cost of running the business, leaving less money to keep the company open, and less for the owner to live on.
In order to make up for the loss in revenue, a business either has to fire employees, raise prices — like Chipotle — or both.
Companies no longer have the extra cash flow to expand and create new jobs, and since many cut back on staff, unemployment explodes like an atom bomb, not to mention the cost of living increases, which defeats the whole purpose of raising the minimum wage to begin with.
I’m not at all a math person, and even I understand how this all works.
What will it take for liberals to finally grasp these basic, fundamental principles of economics?
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