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Cleveland minimum wage debate

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From the rumor mill:

 

1. Lucky's grocery store may not happen. Instead the entire block bounded by Clifton, West 117th, Lake and West 116th may become housing instead. However this may be a Plan B in case the city's  $15 minimum wage becomes law. Dave's supermarkets are making similar threats, that it has put on hold all expansion plans pending the outcome of the minimum wage proposal.

 

2. Clifton Diner isn't going into the closed PNC bank at Clifton and West 115th. The current owner wants $500,000 for the property. It will take nearly $500,000 to turn the bank into a restaurant including removing the vault. Instead, Clifton Diner is looking at the first floor of the Clifton Medical Building which also has the Huntington Bank branch at Clifton and Hird in Lakewood.

 

Cleveland City Council voted down the $15/hour minimum wage the other day, although this may not be the end of the $15/hour debate . What specific threats are Dave's making?  This is troubling.  Also, we saw a supermarket pull out of the Van Aken development plan but for other reasons.  Is this a pattern or merely coincidence?

 

Debate away!


"Most of us have been conditioned to regard military combat as exciting and glamorous -- an opportunity for men to prove their competence and courage. Since armies are legal, we feel that war is acceptable; in general, nobody feels that that war is criminal or that accepting it is a criminal attitude. In fact, we have been brainwashed. War is neither glamorous nor attractive. It is monstrous. Its very nature is one of tragedy and suffering" --Dalai Lama

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Regardless of how one feels about the current minimum wage in Cleveland, any increase in Cleveland's minimum wage (or the state's), should be in correlation to the cost of living in this area. Moving to the same $15 rate as pricey Seattle - when even a $1 or $2/hour would be meaningful to those on the lower end of the CLE earnings scale - would seem to be a mistake of epic proportions for those in support of this idea.

 

This would be the kind of move that not only could drive out small retailers, who can't afford it, and keep others from coming in, but could lead larger retailers like Walmart at Steelyard (who are, more importantly, large employers of entry level workers) to simply say "the heck with this" and close up and move on, on principle alone (because they can...) - leaving hundreds of people out of work. Careful what you wish for, activists (read: bullies).

 

 

 

 

 

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Here are a few articles on how the $15/hour wage has impacted Seattle so far.

 

http://www.investors.com/politics/commentary/the-bitter-lesson-from-seattles-minimum-wage-hike/

 

http://www.newsmax.com/Finance/MeganMcArdle/minimum-wage-experiment-pay/2016/08/12/id/743314/

 

http://nypost.com/2016/03/12/how-the-15-wage-is-already-killing-seattle-jobs/

 

Just remember, Seattle's $15/hour wage is not in full effect yet; will not be until 2017. Yet, even with the $1.00+ increase already, the impact is not good per a study done.

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The $15 minimum wage in Cleveland is a moot issue. It is against the Constitution in Ohio for a city council to pass an ordinance requiring a $15 minimum wage for the area as the wage is regulated by the state. They were debating this issue in Cincinnati a few months back before the state stepped in and said that you can pass whatever ordinance you want regarding minimum wage in Cincinnati but it will not be deemed valid as all matters dealing with minimum wage are governed at the State level.

 

When they passed the amendment back in 2006 to raise the wage and peg it to inflation, it also took whatever say the local municipalities had in the matter and rested it solely with the state.

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How can this happen anyway?  How can citizens that are ignorant to economic consequences force the city council to consider raising the minimum wage?  How can it forced to be on a ballot to be voted on?  Whatever law governs this needs to be repealed immediately.

 

And yes, I am totally against raising the minimum wage to this extreme.  It will be an economic disaster.  How much do you think a Big Mac is going to cost and how many people are going to lose jobs and how many businesses are going to go out of business?

 

This will cause massive inflation and in five years $15 will be equivalent to today's minimum wage in terms of purchasing power.  And the wages for the middle class are not going to keep up with inflation, so everyone is going to be worse off.  And the middle class will shrink.

 

People in favor of this just have their blinders on and are not thinking about the economic impacts that this will have.  And they can spin it all they want, but it is an economic disaster.

 

And, I do have a MBA with a major in economics, so I do have some credibility.

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As one of thee leaders of the movement said...They are not against businesses " but just because you struggled, doesn't mean everyone else has to...".. Unreal.

 

I have heard the state is the only place a minimum wage can be set, and trust the state will ensure this is the case, ibut those in favor of the $15 wage will seemingly exploit every avenue they can to try and push this. Worries me.

 

Also of concern, the Michigan man who has been trying to get strict rules in place for part time workers (guaranteeing weekly hours, etc, if I recall) who found out about the $15 wage and apparent ease of getting things like this passed or at least considered in CLE council and is now turning his sights towards us vs other places he has tried. Ugh.

 

 

 

 

 

 

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How can this happen anyway?  How can citizens that are ignorant to economic consequences force the city council to consider raising the minimum wage?  How can it forced to be on a ballot to be voted on?  Whatever law governs this needs to be repealed immediately.

 

And yes, I am totally against raising the minimum wage to this extreme.  It will be an economic disaster.  How much do you think a Big Mac is going to cost and how many people are going to lose jobs and how many businesses are going to go out of business?

 

This will cause massive inflation and in five years $15 will be equivalent to today's minimum wage in terms of purchasing power.  And the wages for the middle class are not going to keep up with inflation, so everyone is going to be worse off.  And the middle class will shrink.

 

People in favor of this just have their blinders on and are not thinking about the economic impacts that this will have.  And they can spin it all they want, but it is an economic disaster.

 

And, I do have a MBA with a major in economics, so I do have some credibility.

 

I don't believe that last line for a second.  You clearly don't understand how labor cost relates to inflation.  There could be many downsides to the minimum wage increase, and many upsides as well but 100% inflation in 5 years will not be one of them.

 

Let's look at your Big Mac.  If that Big Mac costs $5 http://www.economist.com/content/big-mac-index and the labor costs is in line with industry standard (25-30%, toward the low end for fast food http://smallbusiness.chron.com/common-food-labor-cost-percentages-14700.html ) then that is $1.25 labor cost on that Big Mac.  Even if we assume that all that labor cost in that Big Mac is people making the $8/hr min wage then you are going to increase the labor cost of the Big Mac to $2.34.  That makes that $5 Big Mac into a  $6.09 Big Mac.

 

That's all worst case- managers, supervisors, employees with experience, etc are already making over $8/hr already, so the actual increase in labor cost won't be as high as above.  Also, not all of that extra labor cost will be passed direct to consumer.  Some will be eaten by ownership and some will be made up from increased efficiency.  Finally, let us not forget that there should also be more Big Macs sold when those same employees act as consumers with more income to spend. 

 

For those minimum wage workers earning $8/hour they have to work .625 hours to earn that $5 Big Mac.  With a raise to $15/hour they have to work .406 hours to afford that $6.09 Big Mac.  Clearly they've come out ahead.

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How can this happen anyway?  How can citizens that are ignorant to economic consequences force the city council to consider raising the minimum wage?  How can it forced to be on a ballot to be voted on?  Whatever law governs this needs to be repealed immediately.

 

And yes, I am totally against raising the minimum wage to this extreme.  It will be an economic disaster.  How much do you think a Big Mac is going to cost and how many people are going to lose jobs and how many businesses are going to go out of business?

 

This will cause massive inflation and in five years $15 will be equivalent to today's minimum wage in terms of purchasing power.  And the wages for the middle class are not going to keep up with inflation, so everyone is going to be worse off.  And the middle class will shrink.

 

People in favor of this just have their blinders on and are not thinking about the economic impacts that this will have.  And they can spin it all they want, but it is an economic disaster.

 

And, I do have a MBA with a major in economics, so I do have some credibility.

 

I don't believe that last line for a second.  You clearly don't understand how labor cost relates to inflation.  There could be many downsides to the minimum wage increase, and many upsides as well but 100% inflation in 5 years will not be one of them.

 

Let's look at your Big Mac.  If that Big Mac costs $5 http://www.economist.com/content/big-mac-index and the labor costs is in line with industry standard (25-30%, toward the low end for fast food http://smallbusiness.chron.com/common-food-labor-cost-percentages-14700.html ) then that is $1.25 labor cost on that Big Mac.  Even if we assume that all that labor cost in that Big Mac is people making the $8/hr min wage then you are going to increase the labor cost of the Big Mac to $2.34.  That makes that $5 Big Mac into a  $6.09 Big Mac.

 

That's all worst case- managers, supervisors, employees with experience, etc are already making over $8/hr already, so the actual increase in labor cost won't be as high as above.  Also, not all of that extra labor cost will be passed direct to consumer.  Some will be eaten by ownership and some will be made up from increased efficiency.  Finally, let us not forget that there should also be more Big Macs sold when those same employees act as consumers with more income to spend. 

 

For those minimum wage workers earning $8/hour they have to work .625 hours to earn that $5 Big Mac.  With a raise to $15/hour they have to work .406 hours to afford that $6.09 Big Mac.  Clearly they've come out ahead.

 

Even though I completely disagree with your point on the minimum wage. As far as what Cleveland city council wants to do, it is a complete waste of time because they do not have authority to do it. So all this arguing is moot.

 

Now if you want to have this at the state level, I am happy to offer you examples of why your logic is incorrect.

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^Whether or not this is all moot would be up to the Ohio Supreme Court, interpreting the Ohio Constitution, particularly the home rule amendment.  Just because the State says something is not within the local home rule authority does not make it true. 

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I believe there is already case law out there on this issue. Not dealing with minimum wage specifically but dealing with the issue of local rights v state rights. I would not find it a winning battle especially given the current composition of the Supreme Court

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The current composition of the Supreme Court is heavily republican, which (in theory) would be more favorable to local rule.

 

There is a ton of jurisprudence out there on local home rule in Ohio.  I'm just not sure there is on the specific issue of minimum wage.  I was simply responding to your comment re Cincy that "the state stepped in and said...."  The Attorney General may have rendered an opinion, but those opinions are merely advisory in nature, not binding authority.  The ultimate decision rests with the courts.  The "State" can't simply say what is home rule and what is not.  That would run contrary to the entire intent of the home rule amendment.

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How can this happen anyway?  How can citizens that are ignorant to economic consequences force the city council to consider raising the minimum wage?  How can it forced to be on a ballot to be voted on?  Whatever law governs this needs to be repealed immediately.

 

And yes, I am totally against raising the minimum wage to this extreme.  It will be an economic disaster.  How much do you think a Big Mac is going to cost and how many people are going to lose jobs and how many businesses are going to go out of business?

 

This will cause massive inflation and in five years $15 will be equivalent to today's minimum wage in terms of purchasing power.  And the wages for the middle class are not going to keep up with inflation, so everyone is going to be worse off.  And the middle class will shrink.

 

People in favor of this just have their blinders on and are not thinking about the economic impacts that this will have.  And they can spin it all they want, but it is an economic disaster.

 

And, I do have a MBA with a major in economics, so I do have some credibility.

 

I don't believe that last line for a second.  You clearly don't understand how labor cost relates to inflation.  There could be many downsides to the minimum wage increase, and many upsides as well but 100% inflation in 5 years will not be one of them.

 

Let's look at your Big Mac.  If that Big Mac costs $5 http://www.economist.com/content/big-mac-index and the labor costs is in line with industry standard (25-30%, toward the low end for fast food http://smallbusiness.chron.com/common-food-labor-cost-percentages-14700.html ) then that is $1.25 labor cost on that Big Mac.  Even if we assume that all that labor cost in that Big Mac is people making the $8/hr min wage then you are going to increase the labor cost of the Big Mac to $2.34.  That makes that $5 Big Mac into a  $6.09 Big Mac.

 

That's all worst case- managers, supervisors, employees with experience, etc are already making over $8/hr already, so the actual increase in labor cost won't be as high as above.  Also, not all of that extra labor cost will be passed direct to consumer.  Some will be eaten by ownership and some will be made up from increased efficiency.  Finally, let us not forget that there should also be more Big Macs sold when those same employees act as consumers with more income to spend. 

 

For those minimum wage workers earning $8/hour they have to work .625 hours to earn that $5 Big Mac.  With a raise to $15/hour they have to work .406 hours to afford that $6.09 Big Mac.  Clearly they've come out ahead.

 

I never said that inflation will go up 100%.  Where are you reading this.

 

But, I will guarantee that the cost of the Big Mac will be MORE than $6.09.  You have your blinders on and are forgetting about the cost of the food which is going to go up too.  Shipping and handling are going to go up.  This is a domino effect.

 

And the profit margins for most companies is very small, so there are not going to be any companies that are going to eat the labor increases if they want to remain in business.  Companies will have to lay off workers or increase prices.  And many companies will just go out of business.

 

Minimum wage earners may be better off, but anyone who is currently in the middle class will not.  Their wage increases are not going to keep up with inflation. 

 

You can keep spinning this however you want, but it is not good for the majority of the country and is another policy that will restrict economic growth.

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The current composition of the Supreme Court is heavily republican, which (in theory) would be more favorable to local rule.

 

There is a ton of jurisprudence out there on local home rule in Ohio.  I'm just not sure there is on the specific issue of minimum wage.  I was simply responding to your comment re Cincy that "the state stepped in and said...."  The Attorney General may have rendered an opinion, but those opinions are merely advisory in nature, not binding authority.  The ultimate decision rests with the courts.  The "State" can't simply say what is home rule and what is not.  That would run contrary to the entire intent of the home rule amendment.

 

You are right on the extent of home rule issues but again there are always multiple conflicts of legal theories at play here. If it were pure home rule I would tend to agree with you. As far as the advisory opinion of the State, it was enough to cause Cincy to drop the issue.

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I never said that inflation will go up 100%.  Where are you reading this.

 

 

This will cause massive inflation and in five years $15 will be equivalent to today's minimum wage in terms of purchasing power. 

 

OK, not exactly 100% inflation, but pretty close.

 

But, I will guarantee that the cost of the Big Mac will be MORE than $6.09.  You have your blinders on and are forgetting about the cost of the food which is going to go up too.  Shipping and handling are going to go up.  This is a domino effect.

 

What's the labor cost percentage of the raw ingredients?  Of the shipping and handling?  What's your prediction for the price of that Big Mac?

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I was very reluctant to get involved with a political forum as I knew I would get in a heated debate.  But, I am very passionate about this issue and decided to post my views.

 

I am done with any political discussions.

 

But, this just shows how divided the country is for solving issues and problems.  It is more divided at this time than any time in its history with the exception of the Civil War.  No wonder why nothing gets done in Washington.

 

The democrats are much more radical (liberal) than they were 20 years ago when Bill Clinton was president.  I am not sure how it got to that point except that Obama is the most liberal and political president ever and the party seems to have adopted his views.

 

Our political leaders need to be more centric to be able to compromise on the issues.  We should not elect politicians that are not in the middle and that applies to both parties.  Otherwise, we get this stagnation from both sides.  It is our fault for electing these people.

 

I am very, very concerned with the direction and future of the country.  It is not heading in the right direction.

 

No one really answered my original question about how this can happen.  How can laws be made by citizens who are ignorant to the cause and effect and only have their self interest in mind?  The lawmakers should be the only ones to make laws.  The city of Cleveland is going to pay dearly for this nonsense.

 

I have said my peace and I am not responding to any replies posted and I am not going to even look at any other political forums.

 

Have at this!

 

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OK, buddy.  You're the one who started out saying everyone who was for the increase is being ignorant and beating your chest about your credibility.  You then made a stupid argument which I refuted with some basic math and economics.  I'd genuinely be curious to some real analysis of the effects of a minimum wage increase, not hysterics.  For the record, I believe it is a bad idea to raise the minimum wage in the City only, though not for any of the reasons you mentioned.

 

As for how it can happen, we live in a democracy.  The vast majority of the functions of our democracy are handled through representatives, some through direct democracy- i.e. initiatives.  You or I may not agree with any specific initiative, but I for one am sure glad they are there as a check on legislative inertia and I accept their validity.

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But, this just shows how divided the country is for solving issues and problems.  It is more divided at this time than any time in its history with the exception of the Civil War.  No wonder why nothing gets done in Washington.

 

Complete and utter B.S.  This is just the spoon fed line coming from the so-called "anti-establishment" media.  More divided than any time except the Civil War?  Ha!  We live in a Constitutional Republic with a constant push/pull from various factions.  The New Deal was more divisive than anything we've done in the past 8 years.  So was women's suffrage.  The Civil Rights era was 10x more divisive. 

 

But all this is really nothing to crow about.  Cleveland won't pass a $15/hr minimum wage.  It's not going to happen. 

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This issue is being driven by a Union that has publicly said that it's members all already make more than $15.00 per hour.  Why then would they be pushing this issue, because I'm betting all of their contracts stipulate that their members pay will be a certain percentage above minimum wage.  Higher wages might mean higher dues.  I have lots of acquaintances that have decided to move to Northeast Ohio because the cost of living is so favorable.  Some have been willing to take a lower wage to move here.  If something like this issue passed, Cleveland loses one of its competitive advantages.

 

The fact of the matter is that businesses will reduce the number of people working or the number of hours people work.  They will also look at other areas where they can implement technology to replace labor.  An increase of anything more than 10% each year will have very obvious effects for the workforce.

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Hey X,

This piece in Cleveland.com fired me up about this again.

 

Everything I pointed out, this article agreed with and backs me up.  And Cleveland.com is about as a liberal media outlet as you can get.

 

From Cleveland.com

#3 - Higher minimum wages are likely to increase prices

 

Over time, the increase in the wage will most likely lead to an increase in the costs of goods and services, the study predicts.

 

"Those cost increases will be felt by everyone, but particularly minimum wage earners,"  it says. "Any increase in the price of the goods and services they buy on a regular basis will eat into their higher wages, diminishing the boost they get from a minimum wage hike."

.

http://www.cleveland.com/metro/index.ssf/2016/10/new_study_warns_of_job_losses.html#incart_river_index

 

And you are supposed to be Global Moderator that should know how to be diplomatic.  What a joke!  You beat me up and I was right after all.

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Looking back at what was said, it's pretty clear we were debating the amount of inflation it would produce.  You claimed it would cancel out the wage growth entirely.  I said that was economically illiterate, especially coming from someone claiming to have an economics background.  That article is just stating the obvious (that there will be some level of inflation) which we both have agreed on, without making any real solid and specific projections that would be helpful.

 

And sorry, I didn't know you'd be so delicate when when answered in the same manner you started the conversation with. I'll remember to treat you more gently in the future.  Wouldn't want you to take your ball and go home again.

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^Democrats may have a blind spot on the minimum wage like most Republicans have a blind spot on tax cuts.  There is a point of diminishing returns for both and it must be recognized, debated, and understood before policy is enacted.  To Seattle's defense, they were in uncharted waters at $13 per hour and were way out there with $15.  Nothing like that had been tried before so all most economists could do was give opinion.  Regardless, this seems to show that the policy may need to be adjusted.  We'll see how Democrats respond.  Hopefully they respond faster than Kansas Republicans did when their tax cuts were proven to not produce the intended results.

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Yet more incite into why a $15.00/hr minimum wage hurts many of whom it is suppose to help.

 

NYC loses 1K restaurants, Applebee's fires 1k w/$15 min. wage

The $15 minimum wage that Leftist politicians pushed through in Seattle and New York City has taken a major toll on many businesses, with the Big Apple losing a devastating 1,000 restaurants – while the popular chain Applebee’s had to fire more than 1,000 servers to accommodate the liberal minimum wage hike there.

Restaurant owners, waiters and waitresses are not the only ones hurt by the progressive policy......

 

https://www.onenewsnow.com/business/2017/07/16/nyc-loses-1k-restaurants-applebees-fires-1k-w-15-min-wage

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Yet more incite into why a $15.00/hr minimum wage hurts many of whom it is suppose to help.

 

NYC loses 1K restaurants, Applebee's fires 1k w/$15 min. wage

The $15 minimum wage that Leftist politicians pushed through in Seattle and New York City has taken a major toll on many businesses, with the Big Apple losing a devastating 1,000 restaurants while the popular chain Applebees had to fire more than 1,000 servers to accommodate the liberal minimum wage hike there.

Restaurant owners, waiters and waitresses are not the only ones hurt by the progressive policy......

 

https://www.onenewsnow.com/business/2017/07/16/nyc-loses-1k-restaurants-applebees-fires-1k-w-15-min-wage

 

Wow... it was worth it to them, to fire 1000 workers, all of whom are probably going to win an unemployment claim.

 

I think it's fair to say at this point - even Democrats realize that even though it's well-intended, it just doesn't work. It just ends up disproportionately hurting certain cities and companies.

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You know what? On second though, Applebees was probably looking for a reason to fire a bunch of servers. They have those touch-screens at the tables, now, where you can order your food and pay for your meal right there. It seems like they literally just need someone to bring the food to the customer's table (a food runner.) They're probably firing servers left and right, everywhere.

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Everyone is talking about it though and everyone seems to agree that it isn't working. The news is everywhere. Both cities are losing a bunch of jobs. They always refer to restaurant job losses though and the restaurant industry is rapidly changing right now, anyway. POS systems are at tables - it's a new wave of McDonaldization where more work is put on the consumer (before, it was stuff like getting your own drink at the pop machine while you were waiting on your food) which allows them to cut labor. Since customers at places like Applebees place the order themselves, they also can't scam the place and get free food by claiming that their order was wrong. They're responsible for their own order.  In addition to those fancy POS systems, big restaurant corporations can also afford robotics in their kitchen, to replace cooks. I've seen on YouTube, a robot flipping burgers with precision.

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^ Everyone i stalking about it based on flawed studies.  The Seattle story was horribly flawed but that's the purpose of propaganda.  Get everyone to talk about your "information" as if it is the truth.

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I would take it with a grain of salt:

 

Notes: OneNewsNow is a news and opinion website with a very strong Christian Right bias.  OneNewsNow publishes unscientific news stories and does not source to legitimate sources.

 

https://mediabiasfactcheck.com/onenewsnow/

 

I could tell it was one of those dumb ones by how often the terms "liberal", "Democrat" and "progressive" were used as swear words.

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Everyone is talking about it though and everyone seems to agree that it isn't working. The news is everywhere. Both cities are losing a bunch of jobs. They always refer to restaurant job losses though and the restaurant industry is rapidly changing right now, anyway. POS systems are at tables - it's a new wave of McDonaldization where more work is put on the consumer (before, it was stuff like getting your own drink at the pop machine while you were waiting on your food) which allows them to cut labor. In addition to those fancy POS systems, big restaurant corporations can also afford robotics in their kitchen, to replace cooks. I've seen on YouTube, a robot flipping burgers with precision.

 

The main problem in the chain restaurant industry is, once again, Hipsters.

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I would take it with a grain of salt:

 

Notes: OneNewsNow is a news and opinion website with a very strong Christian Right bias.  OneNewsNow publishes unscientific news stories and does not source to legitimate sources.

 

https://mediabiasfactcheck.com/onenewsnow/

 

And CNN, MSNBC, ABC, Huffington Post, and on, and on, are the source we should all believe in? No way.  I will put my news trust in OneNewsNow over any liberal, biased site any day.

 

And if you don't want to except this news from OneNewsNow, then check the story out on http://nypost.com/2017/06/22/restaurant-workers-feeling-the-pinch-in-new-york/

 

 

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I would take it with a grain of salt:

 

Notes: OneNewsNow is a news and opinion website with a very strong Christian Right bias.  OneNewsNow publishes unscientific news stories and does not source to legitimate sources.

 

https://mediabiasfactcheck.com/onenewsnow/

 

And CNN, MSNBC, ABC, Huffington Post, and on, and on, are the source we should all believe in? No way.  I will put my news trust in OneNewsNow over any liberal, biased site any day.

 

And if you don't want to except this news from OneNewsNow, then check the story out on http://nypost.com/2017/06/22/restaurant-workers-feeling-the-pinch-in-new-york/

 

 

 

 

So is there a filter that we can add to these normal, non-trick-old-ladies-in-the-name-of-Jesus sites to make it more trustable? Like one that adds the word Liberal to everything you don't like?

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I would take it with a grain of salt:

 

Notes: OneNewsNow is a news and opinion website with a very strong Christian Right bias.  OneNewsNow publishes unscientific news stories and does not source to legitimate sources.

 

https://mediabiasfactcheck.com/onenewsnow/

 

And CNN, MSNBC, ABC, Huffington Post, and on, and on, are the source we should all believe in? No way.  I will put my news trust in OneNewsNow over any liberal, biased site any day.

 

And if you don't want to except this news from OneNewsNow, then check the story out on http://nypost.com/2017/06/22/restaurant-workers-feeling-the-pinch-in-new-york/

 

 

 

The NYP article sites research from the Employment Policies Institute.  I would like to see their full report and raw data.

 

The Employment Policies Institute (EPI) is one of several front groups created by Berman & Co., a Washington, DC public affairs firm owned by Rick Berman, who lobbies for the restaurant, hotel, alcoholic beverage and tobacco industries.

 

http://www.sourcewatch.org/index.php/Employment_Policies_Institute

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