That’s a nice thought, but obviously you would see massive price hikes at restaurants and stores, and it’s likely that consumers would patronize them less. Macroeconomics rarely have such simple solutions. SF already leads the nation in raising the minimum wage. Tech businesses are a bad compare because the revenue per employee is typically much higher than the service industry.
> That’s a nice thought, but obviously you would see massive price hikes at restaurants and stores, and it’s likely that consumers would patronize them less.
I dunno about the last part. I personally perceive service and food around here to be incredibly cheap (compared to rent and wages for the sort of work I do) - There is, of course a demand curve, and raising prices will somewhat lower demand for the more optional kinds of service work, but we don't really know where that demand curve goes; personally, you'd have to double prices before I changed my consumption of locally produced services other than uber much at all.
Right now, my perception is that area stores and restaurants are massively understaffed and open very limited hours, presumably because they aren't charging enough to pay enough to hire enough people.
>Tech businesses are a bad compare because the revenue per employee is typically much higher than the service industry.
That was kind of my point. right now, local services are under-priced compared to tech worker wages and compared to rent. Of course, this is going to result in dramatically lower revenue per employee than if they charged a lot more.
A lot of the tech industry is also 1 on 1 service stuff. Depending on the day, my own work is more than half 1 on 1 kind of work that "doesn't scale" - but I still get paid a lot because the people I'm helping are valuable. Same principle applies to other kinds of support staff. If you support someone more valuable... you usually get paid more.
> you'd have to double prices before I changed my consumption of locally produced services other than uber much at all.
So you’d pay $26 per cocktail and $68 for a pork chop, but $15 is too expensive for an Uber. I find that hard to believe.
Even if true, you are not representative of SF consumers. A Harvard study notes, “higher minimum wages increase overall exit rates for restaurants. Higher minimum wages also reduce the rate at which new restaurants open by 4-6% per $1 increase in the minimum.”[1]
(I don't think anyone in my income tax bracket is giving up uber when drinking. I'm mostly talking about uber-as-commute rides, which is a minority of uber riders, but is over-represented in number of rides, just 'cause most of us go to work a lot more often than we go out drinking. The uber as drunk taxi business is pretty safe. The uber as commuting tool business is rather more vulnerable.)
>So you’d pay $26 per cocktail and $68 for a pork chop, but $15 is too expensive for an Uber. I find that hard to believe.
I take uber to work every day. My boss is paying for a parking spot at work, my apartment is paying for a parking spot at home, so uber is competing with me, you know, buying a honda. Most of the infrastructure; most of the expensive part of owning a cheap car already exists and is being paid for regardless of my car ownership status.
Right now, Uber to work is usually unshared, as I'm usually in a hurry, and thats usually more than $10, less than $15. (the ride home is usually under $5, as it's the shared service.) - When I need to haul things, I rent a car or use a service. right now I'm already paying a reasonably high premium to sit in the back and read vs. owning and driving that honda. Would I pay twice that for an everyday commute? probably not.
I work at a place that prepares free (and really quite good) food for me three times a day, so I mostly only eat out on the weekends; I eat out a lot less than I use uber. A lot less, as sometimes I even cook for myself on the weekends (It's... kind of novel, after getting fed all week.)
Of course, even at 3x the price, I'd still use uber when I go drinking... it's just that I don't do that very often compared to how often I use uber to get to where I need to go every day.
(as another aside, I seem to have a higher threshold for cocktail prices than most people and a lower threshold for food prices than most people, I mean, compared with others with similar 'entertainment budget' - I think this is partly an awareness on my part of how expensive alcohol is in performance degradation... but also just personal preference. I really enjoy a good cocktail, and feel that there's a pretty big difference in enjoyment between a really good cocktail and a meh cocktail.)
>Even if true, you are not representative of SF consumers.
I... don't think my situation is that unusual for silicon valley customers. Most homes and most jobs come with free parking, (making the 'tipping point' for using uber much closer than in areas without abundant parking) and a smaller (but still large) number of jobs come with free food. (meaning we eat out less, and therefore can spend more when we do... also, I think, that we demand better food when we eat out. eating at IHOP is super disappointing after getting fed much better food every day as a simple reward for showing up to work before 10:30)
> local services are under-priced compared to tech worker wages
Okay, but if you 'fixed' that, then local services would be over-priced compared to non-tech-worker wages. Then where would non-tech-workers get haircuts or cognitive behavioral therapy?
The argument I'm putting forth is that raising the costs (and pay) for service work, if that could be done without raising the rent, would be a net positive for said service workers, just 'cause they spend a disproportionately large percentage of their income on rent (compared to tech workers) -
But they're still going to have really long commutes because they can't find housing near where they live unless they outbid software engineers, which would raise the rent. And then the software companies will just have to raise salaries to beat them and more money will go toward the landlords.
If you have a mostly-fixed supply and you subsidize buying that supply, you just raise the price. In order to increase the number of people who are able to live their jobs, you need to change the physical structure of area near their jobs to have more housing.
You can't turn money into housing by just adding money. Only construction can do that.
I was responding to the objection that even if we were building unlimited new housing, the new stuff would be unaffordable to those on the bottom. And one solution to that is to pay them more relative to those on the top.
I think it's obvious to people who don't own or live in rent controlled places that we need more housing overall. I was just responding to the fair objection that more housing, by itself, isn't enough to house people who are massively underpaid.
