The restaurant and bar industry has always been notoriously tough. Most fail. Competition is fierce. Successful owners have to hustle to get top line revenue and maintain cost discipline down to individual shifts and boxes of napkins.

My opinion is that the US has an oversupply of restaurants. It’s fundamentally a luxury service. People have come to expect to eat out often at rock bottom prices. We have even bent our labor laws ($2.13) to perpetuate the current market equilibrium.

I think when people mention ideas like taking a hit to business profit margins vs the new boiler plate "it will increase consumer costs" they're typically not talking about Bill's Steak House down the street, they're talking about businesses with massive profit margins that are ruling over larger and generalized markets, at least that's what I read.

With that said the resutraunt labor rate is a bit misleading because businesses are required to pay the standard minimum wage or more in some areas. $2.13 is only what's paid if $2.13 + total tips average out to more or above what the person would earn at minimum wage. This means it's returaunt goers subsidizing business labor expenses. Now, one could argue if that's good/not or if the minimum wage is too low and I'd agree with them but the whole $2.13 or whatever figure touted around is misleading, it's absolutely not that low and if it is, it's illegal and wage theft.

> Or, here’s a radical idea, companies could reduce their profit margins and shareholder returns.

> But we all know those shareholders would quickly fall into poverty if their returns reduced.

That isn't true. Investors will simply move their capital over to other things with better returns. So restaurants will simply close down if they aren't worth running and no one is going to fund them.

> Equally if that’s not possible, the company should fold. We shouldn’t prop up companies with cheap labor, that’s just forcing the poorest in society to provide corporate well fare, and basically the same excuse that was given for preventing the abolishment of slavery.

That is the likely result. Or the companies will invest in automation to make (automated) labor costs predictable. More likely, services that are easier to automate will survive while those that aren't will not.

> More likely, services that are easier to automate will survive while those that aren't will not.

This seems like the most likely thing to happen, and there will probably be many more of the later than the former.

None of this though is obvious to me that will lead to broad based wage increases wrt cost of living out side of those exposed to sectors that are going to become increasing automated and we'll continue to see downward trend in LFP from those exposed to the later.

There is a fear that automation is becoming more affordable, and that eventually most jobs at the low end of the economy will be gone. It is not like technology is standing still here, the problem is what will we do with our labor surplus after that happens (something like a UBI will really be needed or society is in deep trouble).

> There is a fear that automation is becoming more affordable

From whom? Not from me… i welcome it and understand that the incentives are in place to drive this, just like it really always has (like you said: "It is not like technology is standing still here").

> and that eventually most jobs at the low end of the economy will be gone.

Probably true in general, eventually at least.

> (something like a UBI will really be needed.

With our current form of governance (centralized, easily corruptible, lack of provenance/accountability in the decision making chain of bureaucracy, tendency to be opaque from the public) and resource allocation, this is untenable.

> the problem is what will we do with our labor surplus after that happens

And this cannot be a top down thing, if it is, expect heavy resistance when things start to go sideways.

> or society is in deep trouble)

This likely true imo, I think things need to get worse before they get better.

If a peaceful solution through our governments can’t be found, either the poor people will revolt and somehow nationalize the robots, or the capitalists will use the robots eliminate the poor people whose labor they don’t need anymore. Either is a dystopian future that is more likely than most think.

> If a peaceful solution through our existing forms of centralized governments can’t be found, either some people will revolt while most sit to the side and just follow/or killed and somehow those who survive will do something else like people have always have

FTFY, I'm personally not interested in "binning" the future into simple extremes, and the odds of it being anything else than what is encompassed by either:

> nationalize the robots, or the capitalists will use the robots eliminate the poor people whose labor they don’t need anymore

are very high imo.

> basically the same excuse that was given for preventing the abolishment of slavery.

Histrionic sophistry alert

If 5% of your revenue is profit (a very healthy number), and half your costs are labor, an 11% hike in labor costs will wipe out all your profits. Corporate profit margins are smaller than most people think, and labor is usually their largest cost.

That really depends on how “expenses” are counted and deducted.

I'm counting 5% EBIT, to simplify things, so 47.5% of revenues go back out the door as wages.

> basically the same excuse that was given for preventing the abolishment of slavery.

Any point you may have had was lost right here.