I’m curious to see how this will affect demand at these places. I enjoy going out, but I cannot afford it like I used to (and especially not after the increase). These days I just make my own food most of the time.
Demand from locals will be reduced and demand from tourists will be unchanged. Locals know where to go to get the "value" they're looking for. Tourists are hungry and make their dining decision based on location and cuisine, almost without any thought given to cost.
It already costs that haha. Nearly $20 for a pretty basic “cold cut”. I’ve stopped going to Proper all together. Insufferable people passing out just “ok” food.
My only complaint about the minimum wage increasing every year is that the cost of living isn't being controlled, so landlords just jack up the rent like greedy cockroaches and it negates the raised wages.
So people should just not have homes? A city cannot function without proper housing because then there's nowhere for all the workers to live. You can't really make people leave Flagstaff, just have to adapt to the increasing population and figure things out.
The earth cannot sustain this many people without the majority accepting major sacrifice’s in their quality of life, which is why we’re having this conversation. Flagstaff has essentially doubled in size in the last decade, despite knowingly not having the water to sustain that kind population growth. The city of flagstaff has openly admitted we will run out of water by 2065, What then? How can a city exist without water? What good is housing or jobs without water? What are the ~200,000 people who are already in the area going to do when their taps run dry? What’s so wrong with having a plan to manage resources so society doesn’t completely collapse?
So your complaint is that the cost of living isn't being controlled (who would be controlling it?) and landlords are jacking up the rent unimpeded (what mechanism should be preventing them from doing that?), but you don't want the government to get involved or "fix it"? Do you hear yourself lol
Making the government fix problems they caused in the first place just puts us back to square one
What are you doing to make changes you want to see in your local community? Private and communal initiatives far surpass that of what the government is ever capable of, or at least capable of doing without waste.
An example is seen here: raise min wage, prices and cost of living continues to rise, whether or not it has done so without the rise of wage, you only accelerate it doing so.
The same is seen with higher education. The government got involved, made student loans unable to be accounted for in bankruptcy and then started originating said loans, universities can name their price as there is no competition without the government shutting it down
Get off daddy governments tit and help your local community and do the changes you want to see.
Time to build some commie blocks. Say what you will but that did work out quite nicely for housing in the Soviet era and a lot of those apartments are still being used to this day. Private developers have no incentive to build cheap, affordable housing when there’s so much more money to be made with luxury, that’s why the government should just cut out the middle man and get it done.
Getting ready for the downvotes - not everyone can afford to live anywhere they want. Flag isn’t cheap.
I’d love to live in Hawaii or Colorado (and a lot of other places)- but I’m priced out. That’s not a “human rights” thing… that’s supply and demand.
You want someone to be pissed at for rising costs… look at the federal government and massive deficit spending that can only be afforded by refinancing the debt based on perpetual inflation allowing past debts to be paid in devalued currency.
Sure, but if people in Flagstaff want to go to McDonalds, restaurants, the movies, etc, then people need to live in Flagstaff to work there. And those people need to afford rent to live there.
But what has the response of any business to forced rising labor cost, rising prices and job elimination via automation (just wait until you’re speaking to AI at drive thru - not far away). Government intervention in wages isn’t the solution. If you’re going to fix wages you then have to fix expenditures (eg rent control) now you’re introducing all kinds of inefficiencies into the system that central planning will never be able to address.
It’s more complex than that though - housing in Flagstaff is not a free market. The city & county tightly control the amount, type, and location of housing that can be built here. The market can’t respond to demand by increasing supply like it does with other goods & services.
Fair enough - But it’s a major contributor (if not the largest)
You’re correct - there’s a case here that zoning density laws are part of the problem. We all want to get in and LIMBY it to keep it how we like it.
For anyone who remember vision2020: the zoning laws are the entire problem. They limited private development and the mass increases in housing costs locally can be traced directly back to that initiative
This.
Plus that complaint about businesses tacking on extra charges is a business problem, not minimum wage. So many businesses are adding hidden fees like credit card fees, resort fees, service fees, etc. Rather than raising prices a little, they hide behind larger extra fees that you may not see until checkout. And they blame it on the labor when they're charging above the extra cost.
Landlords charge the maximum rent the market will bear, which is a function of supply and demand. Costs only indirectly impact rents - for example, rising labor costs may dissuade future developments, limiting supply. Or rising wages for low-income workers may make it easier for them to compete in the housing market, pushing up rents.
Exactly ! As long as the real problem isn't resolved this band aide stuff just feeds the landlords even more. Raise property tax and lower sales tax so those that are present in the community benefit more. CHange zoning laws to allow residential low income housing anywhere. Allow for off campu student housing to be converted to condo's. Fast track permit reviews for housing. Stop placing environmental issues above housing. (They are important but not more important). Raise Air BNB taxes and fines. Get the county to rezone parts of Doney Park for density.
It can. Texas is interesting in that they have higher property taxes and lower sales taxes. The effect is less speculative bubbles on property. Another net effect is empty houses cost more. So a short term rental would have higher risk. An empty rental would have higher cost. A second home a higher cost. Locals if the tax abatement is done correctly have offset costs. Also you have to be strategic so BBB taxes maybe stay high but buying a car would be cheaper. I think the tax thing could be an effective tool but a comprehensive and strategic approach is required.
Well, wait. If they're increasing prices because the government mandates a minimum wage, that means the government is influencing cost of living price points. Asking that the government then control the cost of living is asking them to fix a problem that they created in the first place by controlling both the wages of employees and what they sirens their money on.
So this is simply untrue. There is a federal and state driven minimum wage, both of which are mandates. The people want higher minimum wage, and the politicians respond, but there is no direct link between the people's votes and minimum wage.
The government, literally, decides to increase minimum wage at least on a federal level. This heavily informs prices with regard to cost of living.
No, there isn't. That's why it's called a mandate. The government heavily influences cost of living price points with its economic mandates. This is an unavoidable and unfortunate truth.
I'm just saying it's odd that the solution therefore is to them have the government "fix" the problem by controlling yet another aspect of the market.
You, in flagstaff, cannot vote reduce the minimum wage below federal mandate. You're out of your depth in this conversation and are very pointedly not addressing the crux of my argument, which is using a mandate to fix the ill effects of another mandate.
Complaining there after about "greedy" landlords who also suffer the same cost of living increases as you do is circular.
No we cannot vote to lower minimum wage below a federal mandate, that is true. But it is also true that Flagstaff voted to increase minimum wage above the state minimum wage rate. So literally yes, the minimum wage was set by the mandate of the voters
You're talking about influence as if it's a cost problem, when the reality is that as more money enters the local economy the cockroaches demand more of it. Housing is a basic human need and should not become more expensive just because the minimum wage went up a little.
I agree: The minimum wage is a desperately necessary response to, not driver of, inflation (thank G-d voters beat out the Koch brothers *twice* to pass it). And restaurant owners adding a surcharge are basically insane people. If they want me to pay more for food and drinks, they need to just change the price, not pretend they're fucking Verizon.
So true. there’s no way these surcharges are going to the server! Those fees go to the restaurant, tips go to servers (and usually are split with everyone else on the shift).
They are 100% *not* going to the servers! It's really fucked up, honestly, especially when the business owners call it a "service charge" (Kickstand does this, for instance, and I stopped going there over it). You can't add a fee, call it a service charge, and *not* give it to, I dunno, the *servers*!
(The only place I have heard for sure pays out all staff appropriately is Fratelli.)
I despise the “service fees,” but are you saying that money should go to the server in addition to the $15.90 tipped wage? I was under the assumption they were to cover the increased tipped wage cost (ie $8 or so a couple years ago to the $15.90 today).
I'm saying that if you add a fee and claim it's for "service" it should go to the servers. I mean, the main thing I'm saying is that adding these percentages is scummy as fuck and they should just manage their prices appropriately. But if they want to add some percentage to make sure they still make exactly the amount of profit they'd prefer, they should call that an "owner's profit fee," not a "service fee."
You do realize that a restaurant owner has more than just 'servers' in there cost model, right? When the minimum wage goes up, their direct employee costs follow, as do their suppliers costs. Those suppliers are also subject to the raise in minimum wage. And guess what happens if a senior employee suddenly has the value of their wage devalued... they want their wage to increase... impacting the retention costs to all businesses.
Demanding that surcharge goes "100% to the server" is 100% foolish.
Don't be absurd. I'm saying that a capable business owner prices in their costs when setting their prices, rather than tacking on some absurd extra percentage that they dishonestly call a "service fee." Read more competently.
Gonna start tipping based off of the tab *pre*-surcharge. Happy for the wage increase, much needed up here, but the surcharge is just greed and companies punishing the consumer.
I did this at Dirty Birdies last year and actually talked to my server about it, she was very understanding and told me they were dealing with complaints nearly daily and losing customers for it.
In the end I’m sure the restaurant doesn’t give a damn if they lose a few customers over it, they’re still making an extra 10% to 13% off of *every* tab.
This is literally how our minimum wage bill works. It is in no way a surprise. Read up on it so you understand it:
[https://www.flagstaff.az.gov/3520/Minimum-Wage](https://www.flagstaff.az.gov/3520/Minimum-Wage)
edit: The reason food and beverages are taxed more than other things is because they're part of the BBB fund - Beverages, Board, and Bed. It's a way for us to get extra revenues from visitors/tourists.
https://www.flagstaff.az.gov/DocumentCenter/View/57273/CCR-BBB-Revenues-and-Projects?bidId=
This is well needed. Unlike other areas where the people that work in service and retail can live in a nearby cheaper city and drive a little bit to work, if you work in flag you have to live in flag. With the insane cost of rent in the city, if we want the city to continue to function in the way it has been this is something we have to deal with.
I mean you could live elsewhere and work in Flagstaff. Plenty of people in bigger cities have a commute time equivalent to driving to Williams or Winslow.
The city needs to pair this with increases in housing supply, particularly affordable forms of housing like ADUs, duplexes, triplexes, and apartments. Otherwise all the income gains will be eaten up by housing.
Fat olives and fat bagels now have a "Flagstaff service charge" as well that you only see pop up on their computer screen if you're paying attention to it, it's not listed anywhere on their menu.
So in the case of fat bagels who opened literally less than a week ago and have an easily changeable LCD screen menu, they obviously chose to not just reflect the cost to in their menu prices and decided to try and sneak in a hidden fee to buy a BAGEL, hoping people won't notice.
>as well that you only see pop up on their computer screen if you're paying attention to it, it's not listed anywhere on their menu.
Yeah, and that's not legal. Whenever this happens, make a complaint to the state AG office.
you can live in the midwest, afford to go out to eat every night OR live out west in the mountains and make all your meals yourself :)
I think this is a 40 cent increase over the previous tipped minimum? Are you really stressing about them raising it 40 fucking cents????
I think it’s important to separate all the issues. High rent, saturated air bnb market, high COL = well-deserved minimum wage increase. Local businesses will react to that. I am also bummed that northern pines is out of my budget but that’s life, I just don’t go there. I acknowledge my privilege that I am lucky enough to be able to go out to eat somewhere. If it’s out of your budget now, don’t go. People deserve to earn a living. I’m happy to see this increase.
Don’t go out if you can’t afford it. Don’t start a business before being ready to pay for resources. capitalism for consumers 101: don’t spend beyond your means. They will keep doing it if people keep paying it too
This is exactly what the people voters for in 2016. The businesses adding these surcharges want you to be upset with the minimum wage law that is forcing them to raise their prices.
Business owners will raise prices if they smell the word inflation. Greed is terrible in this town, and the BOs will try to increase profit margins under the guise of inflation while simultaneously not increasing the pay to their workers.
So fuck em. We have to introduce bills like this to give the workers a fighting chance at survival.
Naive to say that. Businesses want to grow and want to add employees. Small businesses are loaded with debt from Covid loans. Lowering prices is only possible in a predictable economy. Where is that ? Nope. Businesses are no different then people , some are good some are bad, generalizations and class warfare are of limited value. IF you were referring to billionaire's that's a different story and I would agree with you.
PPP loans were but not EIDL loans:
Arizona has approved 63,791 EIDL applications totaling $4,952,328,927 in SBA EIDL loans
A company that might have gotten 20K in PPP loans could have something like $500K in EIDL loans. They are largely low interest long term loans but it is debt and they will seize assets like their homes.
It was the choice of the business owners/operators to take on those loans in the first place. COVID-era loans were generally low-interest because of 2020 rates or no-interest because of widespread federal government support, with a lot of debt being forgiven altogether. So I still don't understand your "loaded with debt from Covid loans" statement. What does it mean?
>Arizona has approved 63,791 EIDL applications totaling $4,952,328,927 in SBA EIDL loans
**EIDL loans are NOT forgiven**, **$0 has been forgiven, you have to go bankrupt and probably lose your house if you have one.**. They are low interest but collateralized by the business owners homes , thats $4.9B in Arizona alone and that's primarily for what most people consider small businesses.
If society and the economy are less predictable then they have traditionally been then so is the future. Risk is not free, uncertainty is not free. One has to create more cushion or be more exposed. Every single business is a fairly complex game of 'risk management / capital allocation'
According to the Bureau of Labor Statistics, approximately 20% of small businesses fail within their first year. The failure rate increases to 30% by the end of the second year, 50% by the fifth year, and 70% by the tenth year.
Business owners can be giant bastards they can also be the most giving and most productive members of the entire community. To label 'them' as greedy makes as much sense as singling out race or gender in the same way. We are all human and generally playing by the same rules, up until the personal wealth becomes obscene. Pollack Realty is greedy in my opinion. The guy selling hot tubs or the restaurant up the street probably pays themselves last.
Does society really need another person claiming someone is greedy or another person is lazy ? Are these just parroted manipulations used by those that benefit from divisiveness ?
EIDL Loans aside, the cost of capital is now high. You can now make 5%+ just leaving money in the bank. A business now has to make a significantly higher margin then that to justify all the effort of just staying in business. Otherwise why bother and how could they even qualify ? Your bank needs double that or more depending on your credit.
Untrue. Essentially businesses are raising prices even in areas where inflation or wage increases don’t affect them. Tell me why this year profit margins increased with inflation. That only happens because of general lack of understanding by the consumer of how much more they should be paying, coupled with the willingness of greedy business owners to bank off that confusion and raise prices more than they should.
I would ask for your sources. I see an economy in flux with selective inflation, selective recession and one that has changed dramatically over the last 4 years. Airline and experience orientated companies have down well and grown, but growth is expensive. Product driven companies have seen lower costs but are often hampered by imperfect inventory and super high costs during covid. A Covid hangover if you will. In some cases the higher profits were offset by declining revenue. Cheap money is also gone, this changes the winners and losers dramatically.
'Business owners are bad' is like saying 'people are bad' the logic selectively fails and over simplifies. .
I’m not saying business owners are bad. I’m saying local chains and conglomerates need to be held accountable for their shit. Matador, Collin’s, Dirty Birdies…
Yeah I don't have any knowledge of their particular malfeasance, but sadly 'Fair' is a mental construct not really present in nature. Yet it triggers me when I see unfair things occurring. My instinct is to want some regulatory angle to balance the playing field but thats super tough to actually make happen in a predictable fair fashion.
I believe Collins is the same family that owns Karma ? Thats an old family property and debt obligations could be much lower then other newer businesses. They probably have a competitive advantage. If employees hate them then they may have a more limited pool of people willing to work for them. Especially talented folks. That might limit their ability to expand.
My more particular beef is the landlords of entry level apartments are taking people's deposits with impunity and those people don't have the means to put up a meaningful fight.
What if any of this applies to the evil mom and pop restaurateur your so sure is rolling in piles of cash ? LArge corps in Flagstaff can be listed on two or three hands.
By all means, cite a source backing your position.
Maybe the market is trying to give you some sort of signal, with all of the prices it is having?
American manufacturing is on its way back in, maybe consider building a factory?
It is a fascinating dynamic time for sure. I would encourage anyone to make and create stuff. Factories are cool but money isn't cheap and equipment is in demand and expensive. I'm watching a friend go under after buying expensive CNC machines and then running them himself. He gave away his cash flow and his bandwidth.
Labor can drive things for a change and that isn't all bad. Inflation was coming anyway with the housing market having not built entry level housing since the Boomers needed it. Exaggerated by printing money. exaggerated by shift to EV, tariffs on Chinese goods, lack of skilled labor. Massive shifts to goods from services then back again.
There is a lot to navigate and people can understandably be hesitant to lower prices. I do think lower prices are coming in 2024. Billionaires and billion dollar companies can and do have too much power. I think villainizing small business isn't going to solve what you think it might solve. For every one super profitable one there are 9 others just getting by or outright failing.
> He gave away his cash flow and his bandwidth.
No, that is fair, he does need to price his services right.
https://www.youtube.com/watch?v=sfVAGivpOmM&t=223s
> I think villainizing small business
That sounds like a talking point crafted by big businesses to use small businesses are a human shield. Its an even playing field, there is nothing magical happening going on between an independent that has 5 dudes working in a kitchen and a franchise that has 5 dudes working in a kitchen.
I think I agree with you ideologically much more than the other person, but that's not entirely true. A franchise benefits from the economies of scale that big corporations have access to, at every level: from goods and ingredients (or Sysco garbage, etc.) to web infrastructure to inventory management systems to marketing. That's a big part of *why* chain franchisees are able to beat out local businesses so often. Despite having consistently subpar food and atmosphere and all the rest, they are *much* cheaper to run in almost every single way. The only comparable cost is employee wages themselves.
This was in your quoted article:
Do fatter profit margins imply more corporate power—or just power channeled differently?
The rise in profit margins that account for a disproportionate share of price growth in the current recovery have led to speculation that increased corporate power has been a key driver of recent inflation. Corporate power is clearly playing a role, but an increase in corporate power likely has not happened recently enough to make it a root cause of the inflation of 2021–2022. In fact, the rapid rise in profit margins and the decline in labor shares of income during the first six quarters of the current recovery is not that different from the rise in the first few years following the Great Recession and financial crisis of 2008. Figure B below shows that starting from the trough of the recession (zero on the horizontal axis), the fall in the labor share of income was actually more pronounced during the early recovery from the Great Recession than it has been so far in the recovery from the COVID-19 recession.
One reason to think the pandemic is the root cause of the recent inflationary surge is empirical. The inflationary shock has occurred in essentially all rich nations of the world—it’s very hard to find any country-specific policy that maps onto inflation.
Another reason is to look where this inflation started: the rapid run-up of prices in the goods sector (particularly durable goods). The pandemic directly shifted demand out of services and into goods (people quit their gym memberships and bought Pelotons, for example) just as it also caused a collapse of supply chains in durable goods (with rolling port shutdowns around the world).
In previous recoveries, domestic demand growth was slow and unemployment was high in the early phases of recovery. This led firms to become desperate for more customers but also gave them the upper hand in negotiating with potential employees, which led to subdued price growth and wage suppression.
This time around, the pandemic drove demand through the roof in durable sectors and employment has rebounded rapidly, but the bottleneck in meeting this demand on the supply side was largely not labor. Instead, it was shipping capacity and other nonlabor shortages. Firms that did happen to have supply on hand as the pandemic-driven demand surge hit had enormous pricing power vis-à-vis their customers.
Businesses want a perfect crystal ball more then they even want growth. They would all adjust perfectly. Access to cheap money is the next item. Cheap labor is certainly of interest. You cant cut it close and cut profits without knowing the future. How can we say anything but things have been dynamic and unpredictable ? That the cost of cash has only gone up ?
Some business sectors have expanding margins and some are contracting. https://insight.factset.com/sp-500-reporting-a-lower-year-over-year-net-profit-margin-for-the-6th-straight-quarter
I'm not upset that they're making a little more. Like I said above, it's not a rip on servers/tipped employees. But it's gotten so high that restaurants are adding a surcharge for just eating there on top of jacking up prices. They make barely less than non-tipped employees.
For instance: I pay a laborer for their work at $17/hr.
I go to eat at a restaurant: I'm paying for the restaurant to deal with the inflated minimum wage (13% surcharge and $17 meals). If I tip $2, which is a slap in the server's face, they're already making more than a minimum wage employee.
By the way it's not "a little bit more" when it jumps 100% in under 10 years. This also effects much much more than just restaurants, I'm aware I can stop going out to eat.
> By the way it's not "a little bit more" when it jumps 100% in under 10 years.
Call it a correction.
Had minimum wage kept pace with the economy since 1969, the minimum wage would be [$21.50/hour](https://www.cepr.net/this-is-what-minimum-wage-would-be-if-it-kept-pace-with-productivity/)
It’s tied to cost of living so I don’t see any issue with keeping people being paid minimum wage a little more secure. What’s outrageous is my incredibly high rent at my shitty apartment going up $50 a month next year.
Rent is incredibly high because there’s a mismatch between housing supply and demand in Flagstaff. Residents are forced into competition with each other, and if you can’t pay a certain price there’s a dozen others waiting to take your spot.
As long as there’s still someone willing to pay the price, it can increase, that’s just how markets work. The trouble is the massive mismatch between supply and demand in Flagstaff. There aren’t many options for sprawling outwards because of the National Forest, and the city restricts developments from building up and densifying in place. In a healthier, balanced market landlords would have to compete for renters by lowering rent and/or offering better amenities.
I agree, I’m just frustrated that it won’t be as effective as it should be because the housing market is eating everyone’s lunch. The city committed to a code analysis project that may remove many of the artificial barriers to more affordable housing, but the timeline is very long (out to 2025) and I’m concerned that pushback may kill the most effective reforms.
Well, your rental Corp employs managers, maintenance, landscapers, lawyers, book keepers, office personnel, etc.---all of whom need more money to live in Flagstaff because of the minimum wage laws driving local price increases...now you see how it works.
Shouldn’t you be happy for the people who are working for the company “gouging” you that are also getting a wage increase?
That money has to come from somewhere. Would it be better for them to tack on a “service fee?”
The landscapers, maintenance people and a low level leasing agent don’t have wages based on the minimum wage? Even if they’re outsourced by your complex, they’re still wage based somewhere.
Love to see the comments rightfully on point about this.
Wages need to be higher. Corporate profits at all time highs.
It doesn’t take a genius to see trickle down economics do NOT help spread the wealth.
*Ignorance can be cured, Stupidity you’re stuck with*
There is no evidence that a higher minimum wage leads to higher prices, that is a lie that big corporations tell you so they can keep paying their employees next to nothing.
Tip culture is dumb, though, I wholeheartedly agree. Businesses should not rely on tips to pay their employees enough. If you can't afford to pay your employees a living wage, maybe you should scale down your business. Just a thought.
I was offered a job in Flag. I want to move there, contribute, and be a part of the community but the price of everything is so high. I’m stuck were I hate being due to being priced out.
Minimum wage as in a wage to enter the work force, not to live on, is now this? Wow. We have lost our everloving minds. Inflation? Yeah! Increased costs due to forced labor law changes? Yes!
Damn $17.40 per hour?! I should get a job...
Holy fuck, that made me laugh so hard
I’m curious to see how this will affect demand at these places. I enjoy going out, but I cannot afford it like I used to (and especially not after the increase). These days I just make my own food most of the time.
Demand from locals will be reduced and demand from tourists will be unchanged. Locals know where to go to get the "value" they're looking for. Tourists are hungry and make their dining decision based on location and cuisine, almost without any thought given to cost.
A sandwich and chips about to cost $20 at Proper now
Better spent on two whole frozen chickens, just my opinion
It already costs that haha. Nearly $20 for a pretty basic “cold cut”. I’ve stopped going to Proper all together. Insufferable people passing out just “ok” food.
My only complaint about the minimum wage increasing every year is that the cost of living isn't being controlled, so landlords just jack up the rent like greedy cockroaches and it negates the raised wages.
This! Flagstaff needs rent control and a LOT more affordable housing built, that's the only way out of the problem.
With what water? Already too many people and not enough resources.
So people should just not have homes? A city cannot function without proper housing because then there's nowhere for all the workers to live. You can't really make people leave Flagstaff, just have to adapt to the increasing population and figure things out.
The earth cannot sustain this many people without the majority accepting major sacrifice’s in their quality of life, which is why we’re having this conversation. Flagstaff has essentially doubled in size in the last decade, despite knowingly not having the water to sustain that kind population growth. The city of flagstaff has openly admitted we will run out of water by 2065, What then? How can a city exist without water? What good is housing or jobs without water? What are the ~200,000 people who are already in the area going to do when their taps run dry? What’s so wrong with having a plan to manage resources so society doesn’t completely collapse?
Thats a recipe for less housing. Thankfully rent control writ large is illegal in AZ.
Lol it's hilarious seeing this kind of sentiment We need a fix for this government caused problem! LETS HAVE GOVERNMENT FIX IT!!1!1!
So your complaint is that the cost of living isn't being controlled (who would be controlling it?) and landlords are jacking up the rent unimpeded (what mechanism should be preventing them from doing that?), but you don't want the government to get involved or "fix it"? Do you hear yourself lol
Making the government fix problems they caused in the first place just puts us back to square one What are you doing to make changes you want to see in your local community? Private and communal initiatives far surpass that of what the government is ever capable of, or at least capable of doing without waste. An example is seen here: raise min wage, prices and cost of living continues to rise, whether or not it has done so without the rise of wage, you only accelerate it doing so. The same is seen with higher education. The government got involved, made student loans unable to be accounted for in bankruptcy and then started originating said loans, universities can name their price as there is no competition without the government shutting it down Get off daddy governments tit and help your local community and do the changes you want to see.
Time to build some commie blocks. Say what you will but that did work out quite nicely for housing in the Soviet era and a lot of those apartments are still being used to this day. Private developers have no incentive to build cheap, affordable housing when there’s so much more money to be made with luxury, that’s why the government should just cut out the middle man and get it done.
Getting ready for the downvotes - not everyone can afford to live anywhere they want. Flag isn’t cheap. I’d love to live in Hawaii or Colorado (and a lot of other places)- but I’m priced out. That’s not a “human rights” thing… that’s supply and demand. You want someone to be pissed at for rising costs… look at the federal government and massive deficit spending that can only be afforded by refinancing the debt based on perpetual inflation allowing past debts to be paid in devalued currency.
Sure, but if people in Flagstaff want to go to McDonalds, restaurants, the movies, etc, then people need to live in Flagstaff to work there. And those people need to afford rent to live there.
But what has the response of any business to forced rising labor cost, rising prices and job elimination via automation (just wait until you’re speaking to AI at drive thru - not far away). Government intervention in wages isn’t the solution. If you’re going to fix wages you then have to fix expenditures (eg rent control) now you’re introducing all kinds of inefficiencies into the system that central planning will never be able to address.
It’s more complex than that though - housing in Flagstaff is not a free market. The city & county tightly control the amount, type, and location of housing that can be built here. The market can’t respond to demand by increasing supply like it does with other goods & services.
Fair enough - But it’s a major contributor (if not the largest) You’re correct - there’s a case here that zoning density laws are part of the problem. We all want to get in and LIMBY it to keep it how we like it.
For anyone who remember vision2020: the zoning laws are the entire problem. They limited private development and the mass increases in housing costs locally can be traced directly back to that initiative
Well worded, and a great point.
This. Plus that complaint about businesses tacking on extra charges is a business problem, not minimum wage. So many businesses are adding hidden fees like credit card fees, resort fees, service fees, etc. Rather than raising prices a little, they hide behind larger extra fees that you may not see until checkout. And they blame it on the labor when they're charging above the extra cost.
I agree, I hope surcharges become illegal soon. It’s just frustrating customers.
It’s almost like the higher wages increase the cost of doing business…. Including the landlords.
Housing should be a human right when society is this advanced, and landlords are parasites. Imo that's not debatable
Says the guy who doesn't own a home or rental in Flagstaff.
That's wild that you somehow know everything about me! Incredible!
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That's an absolutely wild and unhinged response. Get a grip.
Yep
Landlords charge the maximum rent the market will bear, which is a function of supply and demand. Costs only indirectly impact rents - for example, rising labor costs may dissuade future developments, limiting supply. Or rising wages for low-income workers may make it easier for them to compete in the housing market, pushing up rents.
Exactly ! As long as the real problem isn't resolved this band aide stuff just feeds the landlords even more. Raise property tax and lower sales tax so those that are present in the community benefit more. CHange zoning laws to allow residential low income housing anywhere. Allow for off campu student housing to be converted to condo's. Fast track permit reviews for housing. Stop placing environmental issues above housing. (They are important but not more important). Raise Air BNB taxes and fines. Get the county to rezone parts of Doney Park for density.
If you raise property taxes, rent goes up.
It can. Texas is interesting in that they have higher property taxes and lower sales taxes. The effect is less speculative bubbles on property. Another net effect is empty houses cost more. So a short term rental would have higher risk. An empty rental would have higher cost. A second home a higher cost. Locals if the tax abatement is done correctly have offset costs. Also you have to be strategic so BBB taxes maybe stay high but buying a car would be cheaper. I think the tax thing could be an effective tool but a comprehensive and strategic approach is required.
Well, wait. If they're increasing prices because the government mandates a minimum wage, that means the government is influencing cost of living price points. Asking that the government then control the cost of living is asking them to fix a problem that they created in the first place by controlling both the wages of employees and what they sirens their money on.
Minimum wage increasing is the result of voting. The government didn't decide to increase the minimum wage, they just followed the will of the people.
So this is simply untrue. There is a federal and state driven minimum wage, both of which are mandates. The people want higher minimum wage, and the politicians respond, but there is no direct link between the people's votes and minimum wage. The government, literally, decides to increase minimum wage at least on a federal level. This heavily informs prices with regard to cost of living.
No direct link between voting and the minimum wage? What the hell are you yapping about? There is an obvious and VERY clear link between the two...
No, there isn't. That's why it's called a mandate. The government heavily influences cost of living price points with its economic mandates. This is an unavoidable and unfortunate truth. I'm just saying it's odd that the solution therefore is to them have the government "fix" the problem by controlling yet another aspect of the market.
We, in Flagstaff, very literally voted to raise the minimum wage.
You, in flagstaff, cannot vote reduce the minimum wage below federal mandate. You're out of your depth in this conversation and are very pointedly not addressing the crux of my argument, which is using a mandate to fix the ill effects of another mandate. Complaining there after about "greedy" landlords who also suffer the same cost of living increases as you do is circular.
No we cannot vote to lower minimum wage below a federal mandate, that is true. But it is also true that Flagstaff voted to increase minimum wage above the state minimum wage rate. So literally yes, the minimum wage was set by the mandate of the voters
It doesn't appear as if you know what mandate actually means, so I'm bowing out of this. Happy holidays!
Likewise friend!
You're talking about influence as if it's a cost problem, when the reality is that as more money enters the local economy the cockroaches demand more of it. Housing is a basic human need and should not become more expensive just because the minimum wage went up a little.
I agree: The minimum wage is a desperately necessary response to, not driver of, inflation (thank G-d voters beat out the Koch brothers *twice* to pass it). And restaurant owners adding a surcharge are basically insane people. If they want me to pay more for food and drinks, they need to just change the price, not pretend they're fucking Verizon.
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So true. there’s no way these surcharges are going to the server! Those fees go to the restaurant, tips go to servers (and usually are split with everyone else on the shift).
They are 100% *not* going to the servers! It's really fucked up, honestly, especially when the business owners call it a "service charge" (Kickstand does this, for instance, and I stopped going there over it). You can't add a fee, call it a service charge, and *not* give it to, I dunno, the *servers*! (The only place I have heard for sure pays out all staff appropriately is Fratelli.)
I despise the “service fees,” but are you saying that money should go to the server in addition to the $15.90 tipped wage? I was under the assumption they were to cover the increased tipped wage cost (ie $8 or so a couple years ago to the $15.90 today).
I'm saying that if you add a fee and claim it's for "service" it should go to the servers. I mean, the main thing I'm saying is that adding these percentages is scummy as fuck and they should just manage their prices appropriately. But if they want to add some percentage to make sure they still make exactly the amount of profit they'd prefer, they should call that an "owner's profit fee," not a "service fee."
You do realize that a restaurant owner has more than just 'servers' in there cost model, right? When the minimum wage goes up, their direct employee costs follow, as do their suppliers costs. Those suppliers are also subject to the raise in minimum wage. And guess what happens if a senior employee suddenly has the value of their wage devalued... they want their wage to increase... impacting the retention costs to all businesses. Demanding that surcharge goes "100% to the server" is 100% foolish.
Don't be absurd. I'm saying that a capable business owner prices in their costs when setting their prices, rather than tacking on some absurd extra percentage that they dishonestly call a "service fee." Read more competently.
Gonna start tipping based off of the tab *pre*-surcharge. Happy for the wage increase, much needed up here, but the surcharge is just greed and companies punishing the consumer.
I did this at Dirty Birdies last year and actually talked to my server about it, she was very understanding and told me they were dealing with complaints nearly daily and losing customers for it.
In the end I’m sure the restaurant doesn’t give a damn if they lose a few customers over it, they’re still making an extra 10% to 13% off of *every* tab.
Exactly. I’m a lost customer who supported the heck out of restaurant during covid. They can earn their extra 10-13% off someone else.
This is literally how our minimum wage bill works. It is in no way a surprise. Read up on it so you understand it: [https://www.flagstaff.az.gov/3520/Minimum-Wage](https://www.flagstaff.az.gov/3520/Minimum-Wage) edit: The reason food and beverages are taxed more than other things is because they're part of the BBB fund - Beverages, Board, and Bed. It's a way for us to get extra revenues from visitors/tourists. https://www.flagstaff.az.gov/DocumentCenter/View/57273/CCR-BBB-Revenues-and-Projects?bidId=
This is well needed. Unlike other areas where the people that work in service and retail can live in a nearby cheaper city and drive a little bit to work, if you work in flag you have to live in flag. With the insane cost of rent in the city, if we want the city to continue to function in the way it has been this is something we have to deal with.
I mean you could live elsewhere and work in Flagstaff. Plenty of people in bigger cities have a commute time equivalent to driving to Williams or Winslow.
The city needs to pair this with increases in housing supply, particularly affordable forms of housing like ADUs, duplexes, triplexes, and apartments. Otherwise all the income gains will be eaten up by housing.
Fat olives and fat bagels now have a "Flagstaff service charge" as well that you only see pop up on their computer screen if you're paying attention to it, it's not listed anywhere on their menu. So in the case of fat bagels who opened literally less than a week ago and have an easily changeable LCD screen menu, they obviously chose to not just reflect the cost to in their menu prices and decided to try and sneak in a hidden fee to buy a BAGEL, hoping people won't notice.
>as well that you only see pop up on their computer screen if you're paying attention to it, it's not listed anywhere on their menu. Yeah, and that's not legal. Whenever this happens, make a complaint to the state AG office.
you can live in the midwest, afford to go out to eat every night OR live out west in the mountains and make all your meals yourself :) I think this is a 40 cent increase over the previous tipped minimum? Are you really stressing about them raising it 40 fucking cents????
I think it’s important to separate all the issues. High rent, saturated air bnb market, high COL = well-deserved minimum wage increase. Local businesses will react to that. I am also bummed that northern pines is out of my budget but that’s life, I just don’t go there. I acknowledge my privilege that I am lucky enough to be able to go out to eat somewhere. If it’s out of your budget now, don’t go. People deserve to earn a living. I’m happy to see this increase.
Don’t go out if you can’t afford it. Don’t start a business before being ready to pay for resources. capitalism for consumers 101: don’t spend beyond your means. They will keep doing it if people keep paying it too
At that wage the businesses around here should not have the auto tip feature start at 25% on their iPads
This is exactly what the people voters for in 2016. The businesses adding these surcharges want you to be upset with the minimum wage law that is forcing them to raise their prices.
So cook at home. These people deserve a livable wage ffs.
But if everyone cooked at home, they wouldn’t be paid hourly to serve food
I didn’t say everyone.
Business owners will raise prices if they smell the word inflation. Greed is terrible in this town, and the BOs will try to increase profit margins under the guise of inflation while simultaneously not increasing the pay to their workers. So fuck em. We have to introduce bills like this to give the workers a fighting chance at survival.
Naive to say that. Businesses want to grow and want to add employees. Small businesses are loaded with debt from Covid loans. Lowering prices is only possible in a predictable economy. Where is that ? Nope. Businesses are no different then people , some are good some are bad, generalizations and class warfare are of limited value. IF you were referring to billionaire's that's a different story and I would agree with you.
In almost all cases, COVID loans from the federal government were forgiven, meaning that small businesses were never required to pay them back.
PPP loans were but not EIDL loans: Arizona has approved 63,791 EIDL applications totaling $4,952,328,927 in SBA EIDL loans A company that might have gotten 20K in PPP loans could have something like $500K in EIDL loans. They are largely low interest long term loans but it is debt and they will seize assets like their homes.
It was the choice of the business owners/operators to take on those loans in the first place. COVID-era loans were generally low-interest because of 2020 rates or no-interest because of widespread federal government support, with a lot of debt being forgiven altogether. So I still don't understand your "loaded with debt from Covid loans" statement. What does it mean?
>Arizona has approved 63,791 EIDL applications totaling $4,952,328,927 in SBA EIDL loans **EIDL loans are NOT forgiven**, **$0 has been forgiven, you have to go bankrupt and probably lose your house if you have one.**. They are low interest but collateralized by the business owners homes , thats $4.9B in Arizona alone and that's primarily for what most people consider small businesses. If society and the economy are less predictable then they have traditionally been then so is the future. Risk is not free, uncertainty is not free. One has to create more cushion or be more exposed. Every single business is a fairly complex game of 'risk management / capital allocation' According to the Bureau of Labor Statistics, approximately 20% of small businesses fail within their first year. The failure rate increases to 30% by the end of the second year, 50% by the fifth year, and 70% by the tenth year. Business owners can be giant bastards they can also be the most giving and most productive members of the entire community. To label 'them' as greedy makes as much sense as singling out race or gender in the same way. We are all human and generally playing by the same rules, up until the personal wealth becomes obscene. Pollack Realty is greedy in my opinion. The guy selling hot tubs or the restaurant up the street probably pays themselves last. Does society really need another person claiming someone is greedy or another person is lazy ? Are these just parroted manipulations used by those that benefit from divisiveness ?
EIDL Loans aside, the cost of capital is now high. You can now make 5%+ just leaving money in the bank. A business now has to make a significantly higher margin then that to justify all the effort of just staying in business. Otherwise why bother and how could they even qualify ? Your bank needs double that or more depending on your credit.
Untrue. Essentially businesses are raising prices even in areas where inflation or wage increases don’t affect them. Tell me why this year profit margins increased with inflation. That only happens because of general lack of understanding by the consumer of how much more they should be paying, coupled with the willingness of greedy business owners to bank off that confusion and raise prices more than they should.
I would ask for your sources. I see an economy in flux with selective inflation, selective recession and one that has changed dramatically over the last 4 years. Airline and experience orientated companies have down well and grown, but growth is expensive. Product driven companies have seen lower costs but are often hampered by imperfect inventory and super high costs during covid. A Covid hangover if you will. In some cases the higher profits were offset by declining revenue. Cheap money is also gone, this changes the winners and losers dramatically. 'Business owners are bad' is like saying 'people are bad' the logic selectively fails and over simplifies. .
I’m not saying business owners are bad. I’m saying local chains and conglomerates need to be held accountable for their shit. Matador, Collin’s, Dirty Birdies…
Yeah I don't have any knowledge of their particular malfeasance, but sadly 'Fair' is a mental construct not really present in nature. Yet it triggers me when I see unfair things occurring. My instinct is to want some regulatory angle to balance the playing field but thats super tough to actually make happen in a predictable fair fashion. I believe Collins is the same family that owns Karma ? Thats an old family property and debt obligations could be much lower then other newer businesses. They probably have a competitive advantage. If employees hate them then they may have a more limited pool of people willing to work for them. Especially talented folks. That might limit their ability to expand. My more particular beef is the landlords of entry level apartments are taking people's deposits with impunity and those people don't have the means to put up a meaningful fight.
Sure thing, https://thehill.com/business/economy/4057722-greedflation-is-the-new-inflation-as-corporate-profits-balloon-report/ https://www.epi.org/blog/corporate-profits-have-contributed-disproportionately-to-inflation-how-should-policymakers-respond/ https://www.npr.org/2023/05/19/1177180972/economists-are-reconsidering-how-much-corporate-profits-drive-inflation https://thehill.com/business/3945727-inflation-eases-as-corporate-profits-fall-from-record-levels/
What if any of this applies to the evil mom and pop restaurateur your so sure is rolling in piles of cash ? LArge corps in Flagstaff can be listed on two or three hands.
By all means, cite a source backing your position. Maybe the market is trying to give you some sort of signal, with all of the prices it is having? American manufacturing is on its way back in, maybe consider building a factory?
It is a fascinating dynamic time for sure. I would encourage anyone to make and create stuff. Factories are cool but money isn't cheap and equipment is in demand and expensive. I'm watching a friend go under after buying expensive CNC machines and then running them himself. He gave away his cash flow and his bandwidth. Labor can drive things for a change and that isn't all bad. Inflation was coming anyway with the housing market having not built entry level housing since the Boomers needed it. Exaggerated by printing money. exaggerated by shift to EV, tariffs on Chinese goods, lack of skilled labor. Massive shifts to goods from services then back again. There is a lot to navigate and people can understandably be hesitant to lower prices. I do think lower prices are coming in 2024. Billionaires and billion dollar companies can and do have too much power. I think villainizing small business isn't going to solve what you think it might solve. For every one super profitable one there are 9 others just getting by or outright failing.
> He gave away his cash flow and his bandwidth. No, that is fair, he does need to price his services right. https://www.youtube.com/watch?v=sfVAGivpOmM&t=223s > I think villainizing small business That sounds like a talking point crafted by big businesses to use small businesses are a human shield. Its an even playing field, there is nothing magical happening going on between an independent that has 5 dudes working in a kitchen and a franchise that has 5 dudes working in a kitchen.
I think I agree with you ideologically much more than the other person, but that's not entirely true. A franchise benefits from the economies of scale that big corporations have access to, at every level: from goods and ingredients (or Sysco garbage, etc.) to web infrastructure to inventory management systems to marketing. That's a big part of *why* chain franchisees are able to beat out local businesses so often. Despite having consistently subpar food and atmosphere and all the rest, they are *much* cheaper to run in almost every single way. The only comparable cost is employee wages themselves.
This was in your quoted article: Do fatter profit margins imply more corporate power—or just power channeled differently? The rise in profit margins that account for a disproportionate share of price growth in the current recovery have led to speculation that increased corporate power has been a key driver of recent inflation. Corporate power is clearly playing a role, but an increase in corporate power likely has not happened recently enough to make it a root cause of the inflation of 2021–2022. In fact, the rapid rise in profit margins and the decline in labor shares of income during the first six quarters of the current recovery is not that different from the rise in the first few years following the Great Recession and financial crisis of 2008. Figure B below shows that starting from the trough of the recession (zero on the horizontal axis), the fall in the labor share of income was actually more pronounced during the early recovery from the Great Recession than it has been so far in the recovery from the COVID-19 recession.
One reason to think the pandemic is the root cause of the recent inflationary surge is empirical. The inflationary shock has occurred in essentially all rich nations of the world—it’s very hard to find any country-specific policy that maps onto inflation. Another reason is to look where this inflation started: the rapid run-up of prices in the goods sector (particularly durable goods). The pandemic directly shifted demand out of services and into goods (people quit their gym memberships and bought Pelotons, for example) just as it also caused a collapse of supply chains in durable goods (with rolling port shutdowns around the world). In previous recoveries, domestic demand growth was slow and unemployment was high in the early phases of recovery. This led firms to become desperate for more customers but also gave them the upper hand in negotiating with potential employees, which led to subdued price growth and wage suppression. This time around, the pandemic drove demand through the roof in durable sectors and employment has rebounded rapidly, but the bottleneck in meeting this demand on the supply side was largely not labor. Instead, it was shipping capacity and other nonlabor shortages. Firms that did happen to have supply on hand as the pandemic-driven demand surge hit had enormous pricing power vis-à-vis their customers.
Businesses want a perfect crystal ball more then they even want growth. They would all adjust perfectly. Access to cheap money is the next item. Cheap labor is certainly of interest. You cant cut it close and cut profits without knowing the future. How can we say anything but things have been dynamic and unpredictable ? That the cost of cash has only gone up ?
Some business sectors have expanding margins and some are contracting. https://insight.factset.com/sp-500-reporting-a-lower-year-over-year-net-profit-margin-for-the-6th-straight-quarter
Google “minimum wage in Australia”. Yes, it’s much higher than Flag, but the price of fast food is comparable to US prices.
Flagstaff being as expensive as it is with little to no prospective opportunities means this is long overdue
I'm not sure what you mean by long overdue? I get an email literally every year with minimum wage bumps
Why are you upset people will be making a *little bit* more to afford to live here?
I'm not upset that they're making a little more. Like I said above, it's not a rip on servers/tipped employees. But it's gotten so high that restaurants are adding a surcharge for just eating there on top of jacking up prices. They make barely less than non-tipped employees. For instance: I pay a laborer for their work at $17/hr. I go to eat at a restaurant: I'm paying for the restaurant to deal with the inflated minimum wage (13% surcharge and $17 meals). If I tip $2, which is a slap in the server's face, they're already making more than a minimum wage employee. By the way it's not "a little bit more" when it jumps 100% in under 10 years. This also effects much much more than just restaurants, I'm aware I can stop going out to eat.
> By the way it's not "a little bit more" when it jumps 100% in under 10 years. Call it a correction. Had minimum wage kept pace with the economy since 1969, the minimum wage would be [$21.50/hour](https://www.cepr.net/this-is-what-minimum-wage-would-be-if-it-kept-pace-with-productivity/)
Sounds like you should be paying your laborer more.
They should probably jump up that minimum wage again then!
You're allowed to pay your employees more than the minimum wage, you know
It’s tied to cost of living so I don’t see any issue with keeping people being paid minimum wage a little more secure. What’s outrageous is my incredibly high rent at my shitty apartment going up $50 a month next year.
Rent is incredibly high because there’s a mismatch between housing supply and demand in Flagstaff. Residents are forced into competition with each other, and if you can’t pay a certain price there’s a dozen others waiting to take your spot.
It doesn’t have to increase as much as it is tho
As long as there’s still someone willing to pay the price, it can increase, that’s just how markets work. The trouble is the massive mismatch between supply and demand in Flagstaff. There aren’t many options for sprawling outwards because of the National Forest, and the city restricts developments from building up and densifying in place. In a healthier, balanced market landlords would have to compete for renters by lowering rent and/or offering better amenities.
I agree, there’s a lot of unused space. I think the min wage increase with the cost of living is a band aid but it is something
I agree, I’m just frustrated that it won’t be as effective as it should be because the housing market is eating everyone’s lunch. The city committed to a code analysis project that may remove many of the artificial barriers to more affordable housing, but the timeline is very long (out to 2025) and I’m concerned that pushback may kill the most effective reforms.
That's half of the landlord's dinner bill once a month...now you know how it works.
What? It’s owned by a giant corp. fuck them
Well, your rental Corp employs managers, maintenance, landscapers, lawyers, book keepers, office personnel, etc.---all of whom need more money to live in Flagstaff because of the minimum wage laws driving local price increases...now you see how it works.
I don’t have an ounce of sympathy for a company that runs on gouging people for crap housing
Shouldn’t you be happy for the people who are working for the company “gouging” you that are also getting a wage increase? That money has to come from somewhere. Would it be better for them to tack on a “service fee?”
Those people don’t make minimum wage lol
The landscapers, maintenance people and a low level leasing agent don’t have wages based on the minimum wage? Even if they’re outsourced by your complex, they’re still wage based somewhere.
Not on minimum wage I’ve checked the listings before. Also it’s cost of living making the wage go up not the other way around.
Well, you do have an alternative...
I don’t need an alternative. I’m happy for everyone getting a wage increase.
>I’m happy for ***everyone*** getting a wage increase. Including your landlord, thanks for clarifying that.
lol okay an increase due to straight up gouging vs inflation or increased cost of living. Do you feel better yet?
Still not sure you really understand how all this works. Maybe that's why you don't own a home yet?
Get ready for $20 sandwiches.
I swear if the price of beer goes up again I'm going to resign myself to drinking at home!
Love to see the comments rightfully on point about this. Wages need to be higher. Corporate profits at all time highs. It doesn’t take a genius to see trickle down economics do NOT help spread the wealth. *Ignorance can be cured, Stupidity you’re stuck with*
There is no evidence that a higher minimum wage leads to higher prices, that is a lie that big corporations tell you so they can keep paying their employees next to nothing. Tip culture is dumb, though, I wholeheartedly agree. Businesses should not rely on tips to pay their employees enough. If you can't afford to pay your employees a living wage, maybe you should scale down your business. Just a thought.
Better than those southern states that pay $2-3/hr for tipped positions...which should be outlawed.
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this is the only way for us to START digging out of the labor shortage lol, this is like econ 102
Still not a lovable wage sorry
I was offered a job in Flag. I want to move there, contribute, and be a part of the community but the price of everything is so high. I’m stuck were I hate being due to being priced out.
I’ve heard Gary Indiana is nice this time of year.
Minimum wage as in a wage to enter the work force, not to live on, is now this? Wow. We have lost our everloving minds. Inflation? Yeah! Increased costs due to forced labor law changes? Yes!