Free Markets, Free People

An update of a couple of topics we’ve been following

First, the University of Missouri, where the SJWs, with the help of a professor who didn’t think much of the 1st Amendment and was fine with committing battery to deny it, is having a rough year.  Consequences from this bit of nonsense have really hit the bottom line:

Following a drop in students applying for housing, the University of Missouri will not be placing students in two dorms for the fall 2016 semester.

Mizzou will be closing the Respect and Excellence halls (ironic names, given the circumstances) in order to utilize dorm space “in the most efficient manner” to keep costs down.

In March, the university announced that it saw a sharp drop in admissions for the coming school year, and will have 1,500 fewer students. This will lead to a $32 million budget shortfall for the school, prompting the need to close the dorms in order to save money.

“Dear university community,” wrote interim chancellor Hank Foley in an email to the school back in March. “I am writing to you today to confirm that we project a very significant budget shortfall due to an unexpected sharp decline in first-year enrollments and student retention this coming fall. I wish I had better news.”

You see, those who are looking for a college have alternatives.  And when they see a college or university that they perceive, right or wrong, to be out of control, they are likely to take their business elsewhere.  Afterall, they’re paying the bill.  So, take note all you institutions of higher learning who tend to fold like a wet paper box when a few students protest, you too may end up closing a couple of dorms if it goes the way of Mizzou.  Fair warning.

Oh, and speaking of alternatives, New York government has decided to be “wonderful” with other people’s money and has hiked the minimum wage to $15 (over a time period).  That’s double the wage of today.  White Castle, an NY institution, isn’t taking that well since it will have a very heavy impact on their profitability (they make a 1 to 2% profit after expenses, including labor).  White Castle’s CEO says there are few alternatives.  If it was about price increases only, they’d have to increase their prices by 50%.  He’s pretty sure that’s a no-go because of competition for dining out dollars.  So, what’s he left with?

In the hyper-competitive restaurant industry, margins are slim — Richardson says that, in a typical year, White Castle hopes to achieve a net profit of between 1 and 2 percent — and if labor costs go up, many restaurants will turn toward labor-cost-cutting automation or business models that don’t require many employees. That means a lot of kids won’t get that first job. After decades of baggage check-in kiosks at airports, ATMs, and self-check-out lines at the supermarket, is it really so hard to imagine automation replacing the kid behind the counter at burger joints?

And what is lost to more young, inexperienced and thereby low-wage workers?

“We know that Millennials aren’t thinking they’ll stay at White Castle for 30 years,” Richardson says. “We view it as the start of the path. That’s true if you stay at White Castle or move on to something else. The skills you gain, you can take to the next role: learning how to apply for and get a job, learning how to show up, learning a work ethic, making a paycheck, and having fun.”

But this is about more than wages — White Castle has offered benefits and retirement programs for decades. It’s about the opportunity to work, to take the first step up the ladder of life, to get started.

“Out-of-work kids who don’t have an opportunity to work get in trouble. We want to offer kids jobs, offer kids work,” Richardson says. “There’s dignity in that.”

Somehow, though, the concept of starter jobs that pay low wages (and with the minimum wage, it’s usually more than they are worth) has become lost in all of this and we see government stepping in to make them “career” jobs for some idiotic and economically unsound reason. The result is predictable, although it will likely be hidden. You won’t see numbers because the numbers in question are those who are never hired because the wage floor is too high. And they’re going to be the “out-of-work” kids who don’t get that first chance to experience a job and what it takes to succeed.

Instead an alternative will do the work. A kiosk will greet the customer, takes his order and money and do so at a price point well below a $15 an hour worker. This isn’t rocket science and the math isn’t hard at all – $15 times 0 hours equals what?

~McQ

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32 Responses to An update of a couple of topics we’ve been following

  • I saw a story about a high school football player who was ranked in the top ten in the nation.
    He dropped Mizzou from his possible list of colleges sayin … “Those folks are crazy”

    • I had it a bit wrong, but not that far off …

      Sci Martin, a 3-star defensive end and the No. 42 player in Louisiana, told SEC Country he has removed Mizzou from his top five. That narrows his list down to LSU, TCU, Utah and Oklahoma.

      Martin, who leads the New Orleans area in sacks this season, said he wanted no part of what’s taking place in Columbia, Mo.

      “Their campus is going out of control,”
      Martin said Wednesday night.

      Martin said Missouri was “pretty high” on his list. He previously said he liked the Tigers’ coaching staff and how he fit in their defensive scheme.

      Because of what’s going on, Missouri will no longer receive consideration.

  • You see, those who are looking for a college have alternatives. And when they see a college or university that they perceive, right or wrong, to be out of control, they are likely to take their business elsewhere.

    Clearly this signifies the need for Sanders to be elected president so that college tuition is not dependent on things like markets. /snark

    “Out-of-work kids who don’t have an opportunity to work get in trouble. We want to offer kids jobs, offer kids work,” Richardson says. “There’s dignity in that.”

    Stopping the exploitation of children for labor is a great cause for raising the minimum wage to $15. /doublesnark

  • A kiosk will greet the customer, takes his order and money and do so at a price point well below a $15 an hour worker. This isn’t rocket science and the math isn’t hard at all – $15 times 0 hours equals what

    My bet is you will see frozen supermarket Big Mac before 2020. And they won’t be put together here, either.

    They will riot in response. They will pretend to not understand that the product they make isn’t worth the price point their wages force it to. It will be an evil corporate conspiracy.

  • In March, the university announced that it saw a sharp drop in admissions for the coming school year, and will have 1,500 fewer students. This will lead to a $32 million budget shortfall for the school, …

    $32 million / 1500 = $21,333 being spent by *someone* per (alleged) student. Is *any* university really worth that kind of money?

  • Somehow, though, the concept of starter jobs that pay low wages …

    Oddly, the same culture which looks with disdain at the idea of a “starter job” has invented — and approves — the idea of a “starter marriage”.

  • The answer to both of these problems is clearly going to require MORE GOVERNMENT!
    I don’t see why that’s so hard to figure out.
    Hrmmmmm.
    You know, I thought I was snarking, but I just realized I’m not.
    These are big enough problems for someone to demand we “do something!”.

    The State of Missouri will probably try to “do something” that will involve everything except the obvious answer of getting the campus back under control.
    It will probably involve subsidies to new students to go to Mizzou to encourage enrollment, which of course will come from money that comes from?
    Yeah, you know.
    and
    New York state will probably try to “do something” that will involve providing a subsidy to companies to cover the wage differences so they can make sure those young kids get their shot at working, which of course will be made up of funds that will come from?
    Yeah, you know.

    And then there’s Bernie, and Hillary, and whoever/whatever the GOP Ruling class goes along with when they give Bernie/Hillary whatever it is they want in 2017 (because the GOP is going down in flames, no matter who they pick at this point)
    It’s going to be interesting in the way a house fire or car wreck is.

    Look around you, everywhere you see state run projects, and you’ll see the people who run government spending someone else’s money like there’s no end to it.
    Causing and and then ‘fixing’ problems.
    I’ll be very much surprised if these two cases work out differently because what used to be obvious stupidity that should be painfully rewarded in job loss and firing of the people responsible instead will become a reason to spend even MORE of other people’s money.

    Government, the only business that get’s raises/bonuses, more people, bigger budgets and more control for royally F*ing things up.

    • While on the topic of Bernie Sanders …

      I can’t remember any politician who is as economically illiterate than Bernie. The man seems honest, but his stupidity is boundless.

      A simple examination of his “free college” plan reveals that he is trying to screw retirees and future retirees.
      Of course, he doesn’t see it that way. He is going to tax Wall Street.
      The man simply doesn’t realize that corporation never get taxed .. they pass it along to their customers (or go out of business).
      And who are the bulk of holders of the money that washes about on Wall Street ? Pension and retirement plans.
      When the financial transaction tax starts, all the holdings of these plans will begin to devalue as the government steals .. err .. takes it’s “share”.

      • Consider though that Bernie isn’t alone – he can’t elect himself, meaning the boundless stupidity is really quite widespread, we’ve divorced too many people from the reality of where government’s money actually comes from.
        Bernie’s co-equal consul Hillary shows the boundless stupidity extends to voting for her because she has lady parts and in spite of the fact they really don’t like her or trust her all that much.

        • I’m really surprised that Paul Krugman, while taking Bernie to task, managed to completely miss this aspect of Bernie’s shortcomings.

      • Anyone who can talk the upside of Communist breadlines is a flipping Marxist and isn’t just a bumbling fool. He’s putting on a front to get things closer to the Marxist utopia. by easing us into it.

        Even tempering himself he’s too obvious and unless Hillary is taken out by the Justice Dept or something similar, he won’t be going anywhere

  • I think White Castle has underestimated the damage that the $15 minimum will do to their competitors.
    In the end, they will simply raise prices and lose an employee per shift. That’s one that won’t get a job.
    Overall, the damage will be across the board and the next President … or the most convenient Republican … will get blamed.

    • The demand curve isn’t that inelastic. If it was do you think the McDonald’s would be #1 with their menu. Doubling prices will be devastating to the whole industry.

      • The Federal Reserve has spent the last 8 years fighting a deflationary economy, so the Left’s solution is to create inflation from the bottom up.

        • 8 years ago my Big Mac meal was cheaper. I don’t know what is defined as deflationary. At one time highly volatile things like gas were excluded from assessments especially when they are creatures onto themselves. I think the price drop of gas is being fully leveraged to make that claim among other things.

          And the article implies 2x wages = 2x burger prices. That may be exaggerate and maybe not, because a lot of payroll tax, workman’s comp, etc gets added on top of that wage doubling. There’s probably a feedback loop on the cost impact of the loss of customers in that they lose purchasing leverage with the beef supplier for example when they purchase 30% less beef which drives up prices and loses them more customers which repeats in a recursive way to some new and higher price point than the original cost impact caused. But a $10 dollar Big Mac meal overnight is the end of MacDonalds. And that’s less than a doubling, if you don’t know.

  • Bwaahahahahah – go check out Koskinen’s testimony on fraudulent use of Social Security numbers and tell me we actually still have a sane/functioning national government.

    • Good Lord. The almighty dollar is more important than enforcing the law.

      • The logic behind his answer boggles my mind
        Right off the top of my head I can think of a couple three dozen questions that the little twerp needs to be made to answer.

        And these illegal filers – how many get refunds? He’d probably rather not answer that, the IRS paid $5.8 billion in fraudulent claims last year. BILL-YUN. Thank God those illegal filers are paying their taxes!
        And these illegal filers – assuming we DO benefit from them paying taxes and they’re not getting back what they put in – how are the FICA payments for the REAL SSID owner impacted?
        And how likely is it that we’re keeping all their dough? I mean – am I supposed to believe these fraudulent filers are all in salaried jobs and they’re paying more than they’ll get back?
        What happens when the REAL holder of the SSID files their taxes? What happens to the real SSID owner if the illegal’s income is reported and NO with-holding was done for the income because the illegal version claimed a pantload of deductions?
        Are these regular LEGAL citizens supposed to deal with the Social Security administration – let me tell you first hand how THAT will work for most of them.
        You don’t suppose they’ll be getting crosswise with the IRS and the SSA trying to explain they’re working in a Denver Wal-Mart, but NOT working simultaneously in Texas mowing lawns?
        Do you think maybe they’ll have to hire tax attorneys to represent them, or will most of them throw up their hands and pay whatever fines are due?
        I’m sure the IRS and SSA will believe them when they just tell them that other income is not theirs. I’m sure, that, will, happen.
        But probably not before the lien on their property or the seizure of their bank accounts, because the IRS doesn’t have to worry about due process and conviction prior to enacting their punishments.

        Yeah, Koskinen, that smarmy little weasel.
        He’s sitting answering questions for a bunch of other weasels in Washington Weasel Kabuki theater.
        It’s not sincere anyway – Congress will piss away time and money ‘investigating’ and will do NOTHING to the IRS or to Koskinen.

  • Back on the minimum topic however – California minimum wage increases – where the unions managed to make sure their members don’t get the increase….to encourage business owners to unionize their shops.

    Just – wow. The minimum wage club used to increase union membership by making it advantageous for businesses to avoid the wage increase by going union.
    Win win for the union, more members, more unions shops, more dues to buy more politicians to keep the law working for them and more bargaining power for the future.

    Talk about the fable of the scorpion and the frog waiting to happen.

  • “A kiosk will greet the customer, takes his order and money and do so at a price point well below a $15 an hour worker.”

    Already happening in my area. There are a couple of chain convenience stores/gas stations where a kiosk shows you the menu selections and takes your order. The gasoline is already completely self-service. Except in New Jersey, where it is illegal to pour your own gasoline.

    I have always read that tuition only covered part of the cost of education. If true, this should leave Mizzou with some sort of surplus. At least according to the Accounting I learned in collitch.

    • I have always read that tuition only covered part of the cost of education.

      I am assuming that the $21K loss per registered (alleged) student isn’t merely the tuition, but rather also includes whatever funding they receive from tax monies based on enrollments.

    • One would think more people would logically consume more stuff that needs to be payed for by the school and now that there are fewer people there should be lower consumption.
      Fewer students on campus should also result in lower expenses of consumable items that the school is covering (and marking up no doubt) through tuition – less food, fewer books to be stocked, less electricity, water, lower campus maintenance costs, etc.
      One would also think that 1500 people less might result in the need for somewhat fewer ‘educators’ as well, if that’s what one wants to call Melissa Click.
      Chances are cafeteria staffing will be reduced, you can bet.

  • Students thinking of going to Missou can go to Ohio State instead.

    • I’d like to think that university administrators across the nation would look at the comparison of Missou to Ohio State, look at the outcomes, and proactively develop their policy and strategy to shut down any group of crybullies as soon as they poke their ridiculous heads up.

      But I’m going to go out on a limb and predict that some of them will not, either because they’re committed leftists themselves and implicitly believe in “no enemies on the left”, or they’re just stupid. A lot of the university administrators I’ve met have been in that second category. It surprised me at first, but now I rather expect that any random university administrator probably doesn’t have much on the ball. I’ve met smart ones, but they are a minority.

  • More turds from California – UC Berkley plans to cut jobs after the minimum wage law went into effect – note the number of staffers at UC.
    Note the saving they anticipate – 500 jobs = $50,000,000 –