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Pizza Hut franchises in California lay off all delivery drivers ahead of $20 minimum wage increase
(www.sfchronicle.com)
this post was submitted on 26 Dec 2023
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Customer still pays the raised wage price, but a new company gets injected as a middle man. That’s the true American dream. Same income for the business, but another layer of corporations cleans up instead of the people actually making the work happen.
They should create incentive by taxing the shit out of businesses and offering tax breaks for actually offering living wages and benefits to their employees. If the “correct” answer in capitalism is to find the cheapest solution, make it expensive to make choices that are a detriment to the community the business operates in.
I think this is a novel idea and an interesting thought experiment.
If we passed this federally, I think it's most likely we see an outsourcing - to ourselves. With the market floor raised so high across the board, distortionary effects would then kick in and what I posit we'd see is a shitload of both business and consumer flight to rural areas.
Prices for rent, obviously, would go through the fuckin roof. This would cause a mass exodus to surrounding areas, but I think business investment would actually beat them, because if you're paying 60k/year anyway, you may as well put your facility in the cheapest possible location.
Businesses are already shifting toward being physically close to their suppliers/major logistics hubs, to save cost elsewhere, so big "shipping towns" (which are, essentially, a few big wholesale distributors and nothing else) could see massive investment.
What's weird for me is that this may actually help our housing situation in the medium term, as explosive growth in these areas even out demand hotspots.
Idk about high raises in labor market floors to predict much beyond that, but it's something I'll definitely check out.
These aren't completely pie-in-the-sky proposals, either. Simply tying maximum compensation for publicly owned companies would start this kind of a chain rolling, in a smaller way, I think. Labor prices would jump ludicrously just from the amount of low-skill labor employed by major companies.
Inflation would be bonkers and you can't raise interest rates too fast or you basically nuke your economy, so how this plays out for the average joe is anyone's guess. Fun to think about tho