The Boston Globe bewailed the closing of Roxbury’s Dudley Dough, a pizza joint “based on a premise of economic justice and healthy food.”
It was a restaurant founded on the principle of fair-wages, associated with a nonprofit.
Launched in 2015, the fair-wage pizza shop will close at the end of the year, according to Bing Broderick, executive director for the nonprofit Haley House, which oversees the shop. While popular, the shop is not breaking even financially, which has put stress on the wider nonprofit organization.
While the Globe article focused on where the employees will go, and what the patrons liked about the shop (for some employees, the food was “too healthy”), they totally whiffed on the main point of why the restaurant failed.
Pitched as “pizza with purpose,” the restaurant offered above-average pay as well as culinary and leadership training.
The loss of Dudley Dough means more than losing a pizza parlor to Roxbury regulars. They say they’re losing a community resource in the heart of Dudley Square and a singular business based on a premise of economic justice and healthy food. Launched in 2015, the fair-wage pizza shop will close at the end of the year, according to Bing Broderick, executive director for the nonprofit Haley House, which oversees the shop.
It’s very simple, you see. A “fair-wage” pizza joint paying above-average cannot sell an expensive enough product to stay in business. As long as there’s a non-profit pumping money in, it can stay open forever. But even with Patriots owner Robert Kraft throwing $100,000 at the restaurant, the losses mounted. The Globe quoted one of the employees: “I don’t think anyone is looking at it as a failure.” Of course it’s a failure, as a business. “It’s an experiment,” he continued, lauding skills and community benefits.
As an experiment, Dudley Dough succeeded. The hypothesis was: can a business survive paying a “fair-wage” salary (based on the needs of the employees rather than the skills they bring and the labor cost equation of the business’ requirements) to produce a rather low-skilled menu (pizza and wings) in a previously down-and-out, but now growing hip part of Boston?
The answer was a resounding: No.
Thus, the premise of “economic justice and healthy food” was disproved.
It’s been disproved in Seattle. It’s being disproved in San Francisco. The economics of socialism requires money from somewhere else, because as an economic engine, socialism is a failure. Businesses must generate a profit–a return on capital investment. Once the capital is gone, the owner, in this case a nonprofit, must close the money-losing venture because there’s no more cash to fund it.
This is true with every example, and even in a price-controlled, state-owned, socialist economy (like Venezuela), we see how it scales up. Just like Dudley Dough, Venezuela has proven the same hypothesis to be false. The experiment will yield the same result, every time. It’s completely repeatable.
There’s a word in science for a proven, repeatable hypothesis: it’s call a “law.” Dudley Pizza was a nice project, and a good way to feed people with charity donations, but as an economic venture, it was doomed from the beginning. We should not lament its passing.
A ‘very credible’ new study on Seattle’s $15 minimum wage has bad news for liberals – The Washington Post
A series of studies have provided fodder for both sides of the debate on raising the federal minimum wage. (Daron Taylor/The Washington Post) When Seattle officials voted three years ago to incrementally boost the city’s minimum wage up to $15 an hour, they’d hoped to improve the lives of low-income workers. The city is gradually increasing the hourly minimum to $15 over several years.
On July 1st, San Francisco’s minimum wage will increase from $13 to $14. One year after that, the Golden City will fulfill its promise of a $15 floor. By 2022, the state of California will have raised its minimum from the current $10 rate to $15.
According to a study published last week by the Harvard Business School, “Survival of the Fittest: The Impact of the Minimum Wage on Firm Exit,” “a $1 increase in the minimum wage [in the San Francisco Bay Area] leads to an approximate 14 percent increase in the likelihood of exit [from the industry] for the median 3.5-star restaurant.” The study utilized Yelp, a website on which customers review restaurants and businesses, when defining its one-to-five-star rating scale.