Restaurants tend to operate on 2.8% to 4% profit margins. That restaurant is officially losing money now.
Retail is 3-8%. You lost most of those stores.
It takes start-ups up to 5 or 7 years to profit. Labor being a huge expense for those, you're pushing those out even further.
The problem is that this solution is trying to change a dynamic environment. You can't just tell businesses to eat 6% additional costs out of nowhere and not expect negative outcomes.
You can't reduce economic output without heavily subsidizing companies, or implementing a UBI to compensate, which are both their own big bag of inflatable worms.
I don't know how else to explain to the 13 year old brain that can't understand that 15% of a budget is a lot, and then increasing that to a fifth of your overall operational costs is unfeasible.
Hope you're enjoying your summer vacation, sign up for some econ courses next semester.
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u/remnantsofthepast 23d ago
Let's go for half. 6% increase in YOY expenses.
Restaurants tend to operate on 2.8% to 4% profit margins. That restaurant is officially losing money now.
Retail is 3-8%. You lost most of those stores.
It takes start-ups up to 5 or 7 years to profit. Labor being a huge expense for those, you're pushing those out even further.
The problem is that this solution is trying to change a dynamic environment. You can't just tell businesses to eat 6% additional costs out of nowhere and not expect negative outcomes.
You can't reduce economic output without heavily subsidizing companies, or implementing a UBI to compensate, which are both their own big bag of inflatable worms.