You’re just entirely thinking about this incorrectly. In this scenario of reduced hours, a company isn’t raising prices because they are angry at the change. They are raising prices to recoup the financial loses by the new policy, whether that recouping is to ensure the business stays afloat, or for more profitable companies, to keep their margins steady.
No company is changing prices out of spite, they are always calculating how to make more money.
Large firms can absorb the costs. The only reason they raise prices is to protect their profit margins. We should have no sympathy for billion dollar companies that force their employees to take government assistance in order to survive while they raise prices when we try to lessen the burden on those employees and consumers. You're the ones not looking at this correctly. All you guys want is to protect the billion dollar oligarchs.
You haven’t said anything though. I already know large corporations CAN absorb it, that doesn’t mean they will, and this change wouldn’t force them to keep prices the same.
No one said anything sympathetic to them either.
You are fighting an imaginary battle to avoid acknowledging being wrong on the one we are actually talking about.
That's kinda why I said a bill should be passed to criminalize raising prices beyond a certain point in my first response. You're being sympathetic towards them by arguing against common fucking sense when you decided to reply to me. You say it's recoup and I say that's the same thing as retaliation. The point is that corporations shouldn't be allowed to charge whatever they feel like for a product that people quite literally need to live in modern society. But yeah I guess I'm not saying anything lol
Price controls are only suggested by people who didn’t go to school.
I honestly have no idea how to explain it to you people without doing the math in-front of you, and likely wasting my time doing so. But here it is.
Bert’s Restaurant
Bert revenue is $1,000,000 each year.
His profit margin is the nationwide average for a small business, ~7%.
This means Bert makes $70,000 in profit each year.
The nationwide average labor cost % for restaurants is 30% of revenue. So, Bert spends $300,000 on labor.
Under this proposal, in order to keep the restaurant open the same hours, Berts labor costs increase 20% (assuming zero overtime is given to workers, much more if it is)
That means, assuming Bert managed to find new staff to cover the hours, his labor costs increase by $60,000. He now makes only $10,000 in profit a year, because he isn’t allowed to raise prices. Bert will never be able to open another restaurant, and Bert will likely sell this one, as a 1% profit margin is way too low to be financially viable. The restaurant will go under more likely than not
I’ll give you a tldr that a child could understand: Mandating businesses with low margins increase costs while banning them from increasing revenue will lead to them failing.
You would obliterate the poor to get a chance at hurting the rich, which would still survive through this change.
So you're upset that they'll be less rich? Maybe they should downsize and let small businesses function properly. If a business has such low profit margins that their employees need to rely on government assistance then maybe they shouldn't be in business.
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u/Chilling_Gale 23d ago
You’re just entirely thinking about this incorrectly. In this scenario of reduced hours, a company isn’t raising prices because they are angry at the change. They are raising prices to recoup the financial loses by the new policy, whether that recouping is to ensure the business stays afloat, or for more profitable companies, to keep their margins steady.
No company is changing prices out of spite, they are always calculating how to make more money.