retail news in context, analysis with attitude

Regarding the vote by the Los Angeles City Council to increase its minimum wage from $9 to $15 per hour by 2020, one MNB user wrote:

I think LA has seen the writing on the wall, and that by 2020 there will be plenty of other States/Cities at the $15 minimum.

In some ways doesn’t this declaration allow businesses to better plan for the future in LA? Forecasting increased costs and deciding what steps to take in advance to offset those costs might just put LA businesses in a stronger position in the future. Businesses that can’t afford this will do the same thing that businesses did in the recession—switch to paying employees as “contractors.” In other words, no health benefits, and no guarantee of steady work—but still in LA, where they have sun, earth and atmosphere, and when you’ve got that, you’ve got weather!

From MNB reader Tom Herman:

First of all, I love LA too.  The weather is great and the peeps are wonderful.  I’m more of a libertarian and really don’t believe in a minimum wage, but that ship has left the dock years ago.  Switzerland doesn’t have a minimum wage and they are one of the richest countries in the world.  Why stop at $15, let’s just go all the way to $30 and everyone will be swimming in the dough.  It will be utopia!

No offense, but that often seems to be the go-to response to an increased minimum wage - if it is $15, then why not $30, or $300 ... as if this reinforces the absurdity of an increased minimum wage. This strikes me as bogus.

I understand the argument against an increased minimum wage, and can understand why we might want a different level in a rural Iowa community than in New York or Los Angeles. But I also think that because the economy has changed in some sweeping and fundamental ways, we need to find ways for people who work hard at full-time jobs to make enough money to feed and house their families. I think this will be good for the culture and for the economy.

From another reader:

That means an average price for a hamburger in Los Angeles will be more than $15.00 in 5 years. That sounds ridiculous to me. Businesses can’t absorb a 67% increase in the cost of labor without offsetting it with higher priced products and services. It will kill their profit margins, especially in those businesses that are labor intense. It will be very interesting to see how Wall Street reacts.

I think there are a lot of different places in Los Angeles serving hamburgers, so that "average price" prediction is a little ambiguous.

But I'll tell you this. I'll bet you dinner at In-N-Out for you and three friends and/or family members that in 2020 burgers at that chain won't be anywhere close to $15 apiece...they may be a buck or so more than they are now, but that'll be made up for by high traffic and a motivated, productive workforce.

MNB took note the other day of anAssociated Press report that the World Trade Organization (WTO) has rejected a final appeal by the US government of an earlier ruling that prohibited country of origin labeling (COOL) of meat sold in the US. The ruling says that any such labels will have to be dropped on the grounds that they put livestock from other countries, including Mexico and Canada, at a competitive disadvantage.

MNB reader Bob Warzecha responded:

We read the entire ruling (to ascertain the effects on US companies) and this is basically how the WTO ruled: Canadian and Mexican ranchers ship their livestock to the US for “processing”.  In order to fulfill COOL these livestock have to be segregated from US livestock and processed separately after the facility has been cleaned post US livestock processing.   This has made the cost of Canadian and Mexican livestock much higher than US livestock.  This higher cost, the WTO contends, is a “hidden tariff” which is prohibited under treaties such as NAFTA.  So COOL on meat products have to be eliminated or modified or US beef and pork will be hit with a tariff to match the “hidden tariff” which will make meat products higher for all consumers everywhere.

From another reader:

I like knowing where my food and non-food purchases come from.

I was curious about the “recent report released by the International Food Information Council (IFIC) Foundation [that] shows that only 15 percent of consumers use COOL labels, which has declined considerably from 26 percent in 2014."  Any idea as to why the big decline?

Is it because people really don’t care?  Or is it, at least in part, because of people like me?  I don’t look at the COOL labels in the grocery-store, meat department.  That’s because I don’t shop in the meat department.  I buy beef by the quarter from a local, organic rancher.  When I don’t have his beef in my freezer, I buy from a local, old-fashion butcher shop.  He is very open about who he buys his beef from.  He even has a detailed brochure with information about the ranch and how the cattle are raised and fed.

In the seafood section, I definitely look for the labels.  If I don’t like what I see, I have beef for dinner.

And another:

Since when did the United States become subordinate to the WTO?

I can understand an independent arbiter like the WTO on tariffs and the like, but this action seems to be a bit of a stretch.

I think it probably has to do with signing a treaty and trying to be a responsible member of the international community. Or something like that.
KC's View: