Does Minimum Wage Increase Help Or Hurt The Appraisal Business?

[J Grant]

So ... what you and ucbruin don't know why they closed January 12, 2019 is ...

In late June 2018, Massachusetts Gov. Charlie Baker signed a bill that will progressively raise the state standard minimum wage from $11 an hour to $15 an hour, beginning in 2019.

It is a business decision to know every year the minimum wage increases. If you were losing money paying workers at $11 an hour, you lose more money at $12 an hour, at $13, at $14, at $15.

No brainer, shut the business down.

Fine , you know that ONE restaurant in MA closed after that bill was signed.. what about all the rest? Do you know if another business re opened in that restaurant's place?

Funny thing is so many restaurant and businesses failed in past years with no min wage hike, how do you explain that?

 

[DTB]

I'm not answering for JG....
I recognize the difference....

Gov regulations are part of doing business....

...and governmental regulations cause businesses to close up shop too.

Are you putting it on the record that you are in favor of increased governmental regulations?

 

[Randolph Kinney]

Fine , you know that ONE restaurant in MA closed after that bill was signed.. what about all the rest? Do you know if another business re opened in that restaurant's place?

There have been a number of businesses that have failed in states with increases in minimum wage, particularly retail and restaurants. What happened to all those workers? I am sure they could get minimum wage jobs somewhere, don't you?

Could Papa Gino’s be the tip of the iceberg lettuce when it comes to the state’s new minimum-wage rules?

The pizza chain’s parent company in Dedham filed for Chapter 11 bankruptcy today after suddenly closing 47 Papa Gino’s pizzerias and 45 D’Angelo sandwich shops, terminating some 1,100 employees in the process. Chief financial officer Corey Wendland pointed to one big reason for his company’s need for more dough: minimum-wage increases across many of its markets, combined with higher health insurance expenses.

 

[Randolph Kinney]

But it’s not all roses and sunshine when higher wages come from government fiat. Consider a business with seven minimum wage workers. Doubling those wages will cost the small-business owner an extra $122,000 per year.

To cover those expenses, a business operating on the typical 10 percent profit margin would have to boost annual sales by $1.2 million — a near impossibility for most small businesses.

To pay higher hourly wages without running in the red, most businesses will have to raise prices (which can lower business volume) or cut costs. The latter is done through layoffs, reducing workers’ hours or benefits, raising prices, or forgoing investments in the business.

This is not just economic theory. It’s already playing out in places that have “gone big” on minimum wages.

A $15 minimum wage essentially drives out all jobs that don’t produce at least $35,000 per year — the annual cost of a minimum wage worker including wages and federal taxes.

https://www.heritage.org/jobs-and-labor/commentary/15-minimum-wage-bad-news-low-income-workers

 

[Randolph Kinney]

One chain axing jobs is Red Robin, which hopes to save about $8 million this year by eliminating busboys at each of its 570 restaurants, the company said Monday. Additionally, the chain already eliminated so-called expediters — who plate the food in the kitchen — which gave them a cost savings of nearly $10 million last year.

Popular fast food chain, Wendy’s, has also seen the impact of the wage hike phenomenon. Wendy’s Chief Operating Officer Bob Wright stated that the company experienced a 5 percent wage inflation and they expect wages to rise at least four percent in 2017. When addressing possible options to accommodate the rising costs of business and inflation, he presented the current solution at hand: eliminate 31 hours of labor each week. In other words, lower workers’ hours, eliminate jobs, and decrease take-home pay.

Here's the bigger picture: the more repetitive and script-driven your job is, the more it's threatened by the advancement of technology, due to the rising cost of human labor. This is not a sci-fi horror story about the rise of the machines; it’s real life. In order to supplement the hours lost, Wendy’s transitioned to self-serve kiosks, at approximately 16 percent of their locations.

https://www.washingtonexaminer.com/...inimum-wage-hikes-put-millennial-jobs-at-risk

Seems like fast food is coping very well with increasing minimum wage. Workers are not benefiting with full time jobs with benefits.

 

[DTB]

A $15 minimum wage essentially drives out all jobs that don’t produce at least $35,000 per year — the annual cost of a minimum wage worker including wages and federal taxes.

In a production environment, we would only hire that person if they could produce 2X their cost. On top of their cost we had risk of overhead and the risk of not getting paid along with not every hour being maximally productive.

 

[Deleted member 128537]

The reality of wage increases is seen every time I go to a check out in Walmart. There’s only about 3 live checkers. Everything else is done by the consumer on the self check kiosks. Even when you take into consideration the mistakes by the consumer at the self checkouts and the probability it is easy to steal at these self check outs it still makes sense for Walmart to eliminate human checkers.

Anyone who thinks that wages don’t affect business profit, business practices, and business viability lives in a different universe. It does ALL the time.

Why did car production moved out of Michigan? It was largely the high union wages. Where are those manufacturers now? Mexico or in lower wage states. Detroit is a skeleton of what it used to be.

It sounds so morally high-minded to increase the minimum wage. But we have to understand that most of the people earning those wages are entry level low skilled workers like teenagers on their first job. So I always ask, “Is it better for a teenager to have a job at $10 per hour or not have a job when that job pays $15 per hour?”

My first job was for 50 cents an hour (reveals my age). At the time I was 14. Was it low. Yep. But I got all kinds of work experience, and when I applied for a job that paid more ($1.35 per hour) at the time I had no problem getting hired. I had job experience and good references. Sometimes in this world not everything is ideal.

 

[DTB]

It sounds so morally high-minded to increase the minimum wage. But we have to understand that most of the people earning those wages are entry level low skilled workers like teenagers on their first job. So I always ask, “Is it better for a teenager to have a job at $10 per hour or not have a job when that job pays $15 per hour?”

This is never misunderstood by anyone who has ever created a business and hired people.

 

[ucbruin]

It's not a moral high ground issue....

Pros and cons of each side....

Yet so many people here whine about AMCs fees....
And about the appraisers who accept full appraisals for less than what the whiners charge....
The whiners complain these appraisers can only compete reports at low fees because they're all Skippy's....

Those appraisers are trying to gain valuable experience so they too can find better paying gigs....

Right?

 

[Randolph Kinney]

MINIMUM WAGE HIKES WOULD LEAD TO FEWER JOBS, MORE MACHINES

DURHAM, N.C. — Chief financial officers in the U.S. say a hike in the minimum wage to $10 to $15 an hour (from the current federal standard of $7.25) would result in immediate layoffs and significantly curtail future hiring at firms that would be affected by these wage hikes.

These are just some of the findings of the latest Duke University/CFO Magazine Global Business Outlook Survey, which concluded September 5. The survey has been conducted for 74 consecutive quarters and spans the globe, making it the world’s longest running and most comprehensive research on senior finance executives.

The results presented below are for U.S. firms unless otherwise noted. IMPACT OF MINIMUM WAGE HIKE

https://www.cfosurvey.org/press-release/minimum-wage-hikes-would-lead-to-fewer-jobs-more-machines/

Relative to residential real estate appraisers, the push to lower cost is there and can be seen with automation, relaxed regulations that allows unlicensed appraisers or hybrid valuations, and raising the de minimus to $400,000.

Asking the government to protect your job is not the answer. Putting banks at risk is.