A Little Math and Economics – Doubling Fast Food Wages, and so on

Fast Food Labor Costs

Labor costs are generally 30% of gross income.

Average Income Percentage Spent on Food

Average family spends 11% of their income on food. 45% of that is on eating out. We’ll generalize that to fast food.

11% x 45% = 5%

Typical family seen inflation: 5% x 30% = 1.5%

So, according to the math going around, the average family would see 1.5% inflation do to a doubling of fast food workers’ wages.

But, that’s not how things work. (supply is ultimately related directly to labor), but he is somewhat right. Costs would probably go up, but not by 30%. First, sudden dramatic hikes in price can have a negative marketing affect, and restaurants would be hurt more by families compensating by eating out less, than seeing profit margins shrink. So, price increases and, perhaps, portion size reduction will gradually take place, but initially at the lowest rate owners can afford. The other gradual change will be expectations in higher productivity, ie, reduction in the work force. Which, will only take place at the rate that new equipment and greater workplace discipline can be implemented.

So, let’s say that restraunt X has a 20% profit margin, and requires 5% to make the owner feel happy enough (actual productivity increases will be financed). So…
(0.3+0.8)/0.95 – 1.0 = 16% increase in cost (perhaps offset by other measures as well.
Now that 1.5% becomes 0.8%. Which is likely too optimistic. Nevertheless, the point being, owners will temporarily compensate with lower margins (or even negative).

But, there are other affects. McDonalds just became more desirable employment than Starbucks. That, of course, doesn’t stand. Most jobs that payed more than fast food, and had higher labor standards, will necessarily raise their wages. The wages of the next guy up the chain will be similarly affected. And so on. With each iteration the change being smaller. Likewise causing inflation elsewhere, but small in comparison to wage increases for the average wage earner, non-owner.

The main point being, such an action would, in effect, be a massive downward redistribution of wealth. Those at the bottom would see their income increase dramatically. Not double, since they will class out of some income assistance programs, but dramatic still. The impact would be a net positive, not just in social justice terms, but in real economic terms in an economic climate drug down by lack in aggregate demand. By either doubling fast food wages, or better yet, doubling minimum wage, wealth distribution would shift in the direction of the economic classes that spend the entirety of their paychecks (and much of that on goods and services), and away from the class that has been creating bubble economies by massive shifts of excess capital (or, sitting on massive reserves). Which, in turn, would have a greater impact on increasing employment than higher wages will have on decreasing employment (household consumption makes up the lion’s share of the US economy).

Of course that all would be whittled away with time. Which is why minimum wage has never been tied to inflation (or better, productivity).

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She Got Drehered

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My sister died. Payday, bitches! Lolz!
-Rod “Muzhik” Dreher

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Red Egg Review

MIRACLE CURES AND OTHER TOOLS OF EXPLOITATION

The day the Affordable Care Act passed, my family breathed a collective sigh of relief. It’s hard to find anyone with an expensive chronic condition who was not joyous on that occasion. The regulations it brought forth ended such things as lifetime limits, dropping coverage on the sick, denial of coverage for preexisting conditions, sex-biased pricing and so forth. Even so, the ACA is a through and through neoliberal piece of legislation, expanding and delineating a market with the barest of regulation…
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If you haven’t read it yet, check out my article over at Red Egg Review. Read the others while you’re at it.

Between this project and life, largely the later, I’ve let this blog go dormant. I’m currently weighing whether I want to get back into blogging. We’ll see.

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Liberal Revenge Porn

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February 1, 2013 · 11:19 pm

Happy Nativity

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December 24, 2012 · 9:51 am

Orthodox Luddism

I was in the company of one of the monastic brothers from Moni Petra who had served as our guide throughout the day as we walked through the narrow lanes of the city in the shopping district as the warm Spring evening settled in. And insofar as we had, by then, been in a monastic environment for a few days, we were not the least chatty as the sacred hesychia of the monastery had begun to do its work. At one point, my brother turns to me and remarks; “you are uncomfortable here, father, yes?” And I had to admit that I was in the sense that the surreal aspect of modern life playing out around us stood in such stark contrast to the grounded reality of work and prayer in the monastery.

This observation led to a quiet discussion about the nature and trajectory of modern life and the yawning chasm opening up between the Church and the world as the very fabric of human society itself unravels around us. At one point, our conversation must have veered into matters technological as my brother relayed the gist of a conversation which had occurred in the monastery between Geronda Dionysios and the brotherhood wherein Geronda likened the Internet with the Apocolyptic image of “Babylon” written of by St. John the Theologian. Exegetes may bicker over the precise meaning of this image of Babylon but Geronda’s point surely stood on its own merits. The internet presents a very real problem for society today and I have come to believe that it is time to challenge the medium itself as corrupt and as a corrupting influence quite apart from any consideration about content.

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Affected spirituality, Star Trek, Hesychastism, Luddism, quiet insightful monks, misunderstood/misrepresented philosophy, this blog farewell at Again and Again in Peace has it all. It’s almost as bad as Dreher’s musings on Paris. What is it about American Orthodoxy that makes so many of us think that the most right wing, Luddite or just plain strange is a representation of the highest form of piety?

I love that he decides to use the Internet to announce that the Internet is Babylon, evil in its very essence, and that he, supposedly, won’t make any further use of it, or whatever. Perhaps he should have taken a page from Wendell Barry’s book, and learned to be consistent on the matter. That might have been better than doing something like committing a grievous sin, just to announce his intent to no longer sin grievously in said manner. Again. Is he trying to use a medium that is inherently corrupt and corrupting, despite the content, to uncorrupt his readers? Does he desire one last hurrah, one last wallowing in seediness and filth? Perhaps he just needs a little bit of “look at me.” Probably all of the above.

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Distributism, Wendell Berry, and so forth

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