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Old 10-25-2023, 11:08 PM
 
22 posts, read 21,556 times
Reputation: 21

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It seems as though wage price spiral effect is already appearing within Chicago. The first headline about it was the new tipped wage law for restaurant waitstaff. Formerly the tipped wage was $9 and training was $15.80. The new law in effect has now increased the $9 tipped hourly wage to match the minimum $15.80 wage. I don't see this helping restaurants at all; especially the lower price point restaurants such as IHOP, Buffalo Wild Wings etc. If a restaurant isn't doing enough volume, then they're basically still paying waitstaff $15.80 to stand around.

The next indicator of a wage price spiral is the minimum in and of itself. It was $15.40, but is now $15.80. .40 isn't much, but when you have thousands of workers vn being paid minimum wage in businesses that are struggling. It's not just restaurant as a whole that is slowing but mall traffic is down, which equates to clothing stores not being profitable and operating at a loss.
How much higher will the minimum wage increase to?


Thoughts?
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Old 10-30-2023, 07:26 PM
 
Location: Chicago
3,924 posts, read 6,836,808 times
Reputation: 5491
I suggest you go read the other existing thread about the restaurant subject. There has been plenty of discussion about how bad it could be and who ends up winning in the end.

A counterpoint to your argument is that owners can increase the price of food to account for people no longer needing to tip thus making owners more money in the long run and giving the staff less since they can no longer make more than minimum wage. I can't say I have an opinion either way except that it's likely somewhere in between those two extremes. It might just be that waiting becomes a minimum wage job like working at McDonalds is typically referred to as. I'm sure some people will still tip, but many more won't. When you think about it nobody tips in Europe yet they have successful and thriving restaurant industry. As far as I know they have no issues forgoing tips and finding employees to work. It will certainly be an adjustment for everyone.

A wage price spiral is not going to occur in my opinion. The minimum wage still is not high. Inflation has been higher than 10% within the past year. Minimum wage has not kept up with inflation over the past 2 decades. Now inflation outpaces a majority of peoples wage hikes. Nothing is going to "spiral", if anything it will need to "catch up".
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Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

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