The artificial minimum wage increase is not only costing jobs, the recipients don’t want it because it costs them their welfare benefits. A year after Seattle raised their minimum wage, workers are asking for fewer hours because they discovered certain welfare programs will cut them off.
Instead of providing workers with a more livable wage and helping them get off public assistance, employees are working less to keep their subsidies for food, housing, child care et al.
Under the new wage, the Washington state stats indicate that few are moving off welfare. Western Washington is booming yet In March 130,851 people were enrolled in the Basic Food program and by April, the caseload dropped to only 130,376. Prices continue to rise, however.
Restaurants are tacking on a 15% surcharge to cover the higher wages and tips are going down. Kitchen workers are making more than servers who are seeing a pay cut, according to Fox News.
Other cities and states are phasing in the $15 minimum wage including LA, San Francisco and probably New York.
One San Francisco book store, Comix Experience, has started to sell graphic novel club subscriptions to meet the payroll. The owner might have to close the store down if he doesn’t sell enough.
National Review Online published an article positing the idea that “artificial wage increases imposed by law take on the role of welfare benefits transferring income from potentially disfavored groups to politically favored ones.”
Instead of taxing individuals and businesses and creating new welfare, the statists disguise welfare as wages. The beauty of this for them is the increases don’t show up as government taxes or spending.
All of this results in higher prices and demand goes down. Politicians can’t break the law of supply and demand.
The government then has to step in again and try to prevent the prices from going up with regulations, bullying corporations, or by preventing free trade.
Progressives support the minimum wage even though the Congressional Budget Office estimates that a $15 an hour minimum wage puts 3.3 million Americans out of work, though Jonathan Meer and Jeremy West of Texas A&M put the number at 6.6 million. Jeffrey Clemens and Michael Wither’s estimate for the National Bureau of Economic Research puts the number of lost jobs at 16.8 million.
When jobs disappear, government statists try to control the economy with subsidies and fines, Kevin Williamson writes at National Review Online.
Sally Smith, the CEO of Buffalo Wild Wings told CNN Money that restaurants will avoid hiring teens at $15 an hour because it’s too costly for inexperienced workers. This will hurt teens who are already hurting for jobs.
“It’s important to remind people that the restaurant industry trains a lot of people. Restaurants are often where a person gets their first job. They get it in high school or college,” Smith said. “So a $15 minimum wage could have an impact on youth employment.”
Smith said some of their franchises are already refusing to hire anyone under the age of 21. Older workers don’t need as much training.
Dunkin Donuts and McDonald’s find the raise to $15 an hour is “outrageous” and franchise owners are very nervous.
Higher prices are coming as one way to keep these businesses afloat. Some businesses are thriving despite the increase.
Los Angeles union officials are fighting to be exempted from the minimum wage after demanding it for everyone else. It’s part of the irony of the whole thing.
McDonald’s self-service kiosks are doing well and are replacing cashiers though they are still hurting. They’ve been a particular target of the union protesters.
Most of the fast-food protests are driven by SEIU and the AFL-CIO. The protesters are often paid and don’t necessarily work for McDonald’s. It’s a very contrived operation and it’s not grassroots in any way.
The free market approach is always the way to go. Jobs are created by thriving businesses not by government manipulation and regulation.