Tag Archives: minimum wage laws

Why Not Make the Minimum Wage $150 Per Hour? by PF Whalen

Posted on February 24, 2021 | Leave a comment

A real humanitarian would say why not $10,000 an hour, but we’ll start with PF Whalen’s modest proposal. From PF Whalen at bluestateconservative.com:

The periodic debate regarding raising the minimum wage has resurfaced once again, only this time the argument is connected to the larger discussion surrounding a sprawling, $1.9 trillion COVID relief bill; for some inexplicable reason. In the bill unveiled by House Democrats last Friday, if passed, the minimum wage would increase incrementally from the current $7.25 per hour to $9.50 per hour this year, and eventually escalate to $15 per hour by 2025. Prominent Democrats across the board have supported the idea, including President Joe Biden.

If we deep-dive the issue in trying to understand its full impact, we can learn a great deal about the pros and cons of increasing the minimum wage; particularly with the cons. But there are two pieces of information that are difficult to come by. How, specifically, did we arrive at the number of $15? And, based on the Democrats’ reluctance to acknowledge the negative impacts of a minimum wage increase, why don’t we just add a zero to the number and increase the minimum wage to $150 per hour?

Sen. Bernie Sanders (I-VT) was the first influential public figure to float the idea of a $15 minimum wage, having proposed the idea all the way back in 2015. Sanders’ plan pointed out his perceived benefits for those who are being paid the minimum wage. Beneficiaries would see an improved standard of living; the burden on taxpayers from food stamps and Medicaid would be reduced; and an increase in available income would spur economic growth. It sounds like a wonderful plan.

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Minimum wage? Self-service pays $0 per hour…with absolutely no benefits, by Ethel C. Fenig

Posted on February 7, 2021 | Leave a comment

Make your customers do what employees used to do, it’s a lot cheaper. From Ethel C. Fenig at americanthinker.com:

As Parker Beauregard proved once again yesterday, when preening politicians force businesses, in this case grocery store workers in Long Beach, Calif., to pay their workers higher wages — for the workers’ own good, of course — the workers lose.

Indeed, just about everyone loses.  Except the politicians.

In this case, the grocery store workers lost their jobs.  The residents in the neighborhoods where these grocery stores were located lost the convenience of having reliable, well stocked grocery stores serving a wide variety of fresh food close by.  The city lost the tax revenue the stores generated.  The residents of the city will lose money or services because the city will have to charge higher taxes or reduce services to compensate for lost tax revenue.  The remaining stores will increase prices to cover their increased labor costs.

Indeed, so the only winners will be the politicians, who will pat themselves on the back as they compliment themselves for their own wonderfulness.

Something similar is occurring in my city, hundreds of miles from Long Beach, Calif.  When the minimum wage increased, a local grocery chain, Target, Home Depot, and a number of other stores reduced the number of full-service checkout lanes and 10 items or fewer checkout lanes while greatly expanding the self-checkout lanes.  Boom!  Many of the cashiers lost their jobs!  The baggers, many of whom were (warning: P.C. speak ahead) developmentally delayed and were placed in these jobs through a coordinated effort with the company, neighboring schools, and social workers, lost their jobs.  Instead, now, with multiple closed-circuit cameras overhead, one worker, enjoying newly increased pay, supervises the multiple terminals, watching as shoppers scan, bag, and pay for their items, helping out when necessary.

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Wages War, by John Stossel

Posted on July 24, 2019 | Leave a comment

It’s been said over and over again: minimum wage laws price the lowest skilled workers out of the labor market. That never stops such laws from being enacted. From John Stossel at townhall.com:

Sen. Bernie Sanders’ presidential campaign was just disrupted by campaign workers demanding the same $15 per hour that Sanders demands the government force all employers to pay.

It serves him right.

Years ago, the activist group ACORN faced the same problem. After fighting for a higher minimum wage, it tried to convince a judge it should be granted an exception when paying its own workers, since it was involved in such important and productive work.

Government telling employers what to pay people creates nasty side effects.

Five years ago, Seattle won fame by becoming the first American city to mandate a $15 per hour minimum.

“Fifteen in Seattle is just a beginning. We have an entire world to win! Solidarity!” vowed City Councilmember Kshama Sawant.

New York state and many cities followed in Seattle’s footsteps.

But now the results from Seattle are in:

Some people who already had jobs are being paid more. They’re the winners under the new law.

But the losers are needier people: people who are looking for jobs.

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$15 Minimum Wage Imploding; Tight Labor Market Better Path to Higher Income, by Joe Guzzardi

Posted on April 3, 2019 | Leave a comment

The consequences of higher-than-market minimum wages are everywhere and always tragically predictable. From Joe Guzzardi at theburningplatform.com:

Raising and sustaining higher wages for American workers is impossible as long as the labor pool keeps expanding. Serious discussion about lasting improvements to the lives of the 40 million Americans stuck in low-paying jobs has to include an equally thoughtful discussion about limiting immigration.

While many in Congress and private sector economists embrace raising the $7.25 federal minimum wage where it’s been frozen in place for a decade, few speak out about reducing immigration as a permanent income-boosting cure. The academic exercise is basic – the more available workers, the better for employers. Conversely, tighten the labor pool, then advantage shifts to workers and job seekers.

Recently, the House Education and Labor Committee passed the Raise the Wage Act which would, if it became law, gradually raise the federal minimum wage over five years to $15 an hour. So far, six states – California, Illinois, Maryland, Massachusetts, New Jersey and New York – and the District of Columbia have adopted $15 as their minimum wage. Although not enough data is available to make a final conclusion about the $15 wage’s broad effects, Georgetown University public policy professor and former Clinton administration Labor Department economist Harry Holzer predicts significant job losses that would hurt low-skilled, less-educated minority employees who would resort to accepting cash off the books, and thereby forfeit any benefits they may have had.

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As Expected $15 Minimum Wage Hurting Workers, by Sarah Cowgill

Posted on March 16, 2019 | 2 comments

Requiring employers to pay employees more than they’re worth has consequences. Who knew, besides anyone who knows anything about economics? From Sarah Cowgill at libertynation.com:

The move to make flipping burgers and shoehorning fries into a lucrative career has been a national debate pitting hourly workers against the businesses that employ them. Granted, doubling the entry-level wage seems ideal for those struggling to survive. However, as more states and municipalities force the issue through legislation or ballot initiatives, the downside risk becomes increasingly, and painfully, obvious.

It’s a bite that the Big Apple is experiencing firsthand as the minimum wage increased 15% on Jan. 1, and employees who rely on tip wages to eke out a living are salving their dashed hopes of gaining ground because restaurant owners are slashing hours and, in many cases, abolishing hospitality positions altogether.

Well, that didn’t take long at all.

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Working for Tips, by John Stossel

Posted on August 1, 2018 | Leave a comment

Most people pushing for higher minimum wages for restaurant workers have never worked in a restaurant and know nothing about the business. From John Stossell at downhill.com:

Union protestors and celebrity advocates have decided that waiters’ tips aren’t big enough.

They are upset that in 43 states, tipped workers can be paid a lower minimum wage, as low as $2.13 an hour.

Not fair! say celebrities like Jane Fonda, who recorded commercials saying, “That’s barely enough to buy a large cup of coffee!”

As usual, those who want the government to decide that workers must be paid more insist that “women and minorities” are hurt by the market.

But waitress Alcieli Felipe is a minority and a woman. She says the celebrities and politicians should butt out.

Thanks to tips, Felipe says in my new internet video, she makes “$25 an hour. By the end of the year, $48,000 to $50,000.”

She understands that if government raises the minimum, “It’ll be harder for restaurants to keep the same amount of employees … (T)he busboy will be cut.”

She’s right.

Minimum wage laws don’t just raise salaries without cost. If they did, why not set the minimum at $100 an hour?

Every time a minimum is raised, somebody loses something. “In the (San Francisco) Bay Area, you’ve got a 14 percent increase in restaurant closures for each dollar increase in the minimum wage,” says Michael Saltsman of the Employment Policy Institute.

Activists are unmoved. “The problem with tips is that they’re very inconsistent,” University of Buffalo law professor Nicole Hallett told me. Hallett is one of those activist professors who gets students to join her in “social justice” protests.

“I simply don’t believe that increasing the minimum wage for tipped workers will lead to a reduction in the restaurant workforce,” she said. “Studies have shown that restaurants have been able to bear those costs.”

I pointed out that last time New York raised its minimum, the city lost 270 restaurants.

“Restaurants always close,” she replied.

“Restaurants don’t always close,” responds Saltsman. “Yeah, there’s turnover in the industry, but what we’re doing now to an industry where there’s low profit margins, jacking up restaurant closures … Something’s not right.”

The media rarely focus on those closings. We can’t interview people who are never hired; we don’t know who they are. Instead, activists lead reporters to workers who talk about struggling to pay rent.

To continue reading: Working for Tips

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$15 Minimum Wage

Posted on March 9, 2018 | Leave a comment

Unintended consequences, anyone? From Jim Quinn at theburningplatform.com:

We stopped in a McDonalds on the way to Breckenridge for a bathroom break. It had two of these self ordering machines. You order, pay, and pickup. Easy peasy. The boobs who think they deserve $15 per hour as a counter person are in for a surprise. Their $9 an hour job is going to be obsolete. 

https://www.theburningplatform.com/2018/03/09/15-minimum-wage-2/

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Minimum Wage Cruelty, by Walter E. Williams

Posted on July 12, 2017 | 2 comments

Virtue signalling, preening, and patting themselves on the back, proponents of minimum wages rarely give a thought to those who lose their jobs. From Walter E. Williams at lewrockwell.com:

There are political movements to push the federal minimum hourly wage to $15. Raising the minimum wage has popular support among Americans. Their reasons include fighting poverty, preventing worker exploitation and providing a living wage. For the most part, the intentions behind the support for raising the minimum wage are decent. But when we evaluate public policy, the effect of the policy is far more important than intentions. So let’s examine the effects of increases in minimum wages.

The average wage for a cashier is around $10 an hour, about $21,000 a year. That’s no great shakes, but it’s an honest job for full- or part-time workers and retirees wanting to earn some extra cash. In anticipation of a $15-an-hour wage becoming federal law, many firms are beginning the automation process to economize on their labor usage.

Panera Bread, a counter-serve cafe chain, anticipates replacing most of its cashiers with kiosks. McDonald’s is rolling out self-service kiosks that allow customers to order and pay for their food without ever having to interact with a human. Momentum Machines has developed a meat-flipping robot, which can turn out 360 hamburgers an hour. These and other measures are direct responses to rising labor costs and expectations of higher minimum wages.

Here’s my question to supporters of higher minimum wages: How compassionate is it to create legislation that destroys an earning opportunity? Again, making $21,000 a year as a cashier is no great shakes, but it’s better than going on welfare, needing unemployment compensation or idleness. Why would anybody work for $21,000 a year if he had a higher-paying alternative? Obviously, the $21,000-a-year job is his best-known opportunity. How compassionate is it to call for a government policy that destroys a person’s best opportunity? I say it’s cruel.

To continue reading: Minimum Wage Cruelty

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The Minimum Wage — Science Strikes Back, by Paul Jacob

Posted on July 2, 2017 | 1 comment

The headline should have said, “Reality Strikes Back,” because minimum wage laws having nothing to do with science. However, as with the outcome of certain scientific demonstrations, the outcomes of minimum wage laws are known before they’re enacted. From Paul Jacob at townhall.com:

It should shock no one: denying unskilled workers the opportunity to sell their labor for less ends up disadvantaging those unskilled workers against better-skilled ones.

That’s precisely what standard economic theory predicts. It’s what common sense should tell you.

And it’s what a major new study — with access to more data sets than ever before — says does happen. Minimum wage laws put workers at the lowest rung of the economic ladder out of work.

But, but . . . I hear the sputtering: minimum wage laws are nearly everywhere, and sure are popular.

Well, not every popular idea about policy is good. Or bad.

So how do we tell the difference?

One way is evidence.

The modern administrative state was promoted heavily by social scientists who thought that piecemeal social engineering should be tested. A few even thought that the older experiment in limited-government federal republicanism gave Americans a near-ideal testing ground: “the laboratoriesof democracy.”

Which is why the new study is so interesting. Activists and politicians have been pushing big increases in the minimum wage in cities around the country. Seattle, Washington, has been one of those, establishing an $11.00/hour legal minimum in April of 2015, then raising that minimum by two dollars in 2016. The City of Seattle commissioned a study of “the wage, employment, and hours effects of the first and second phase-in of the Seattle Minimum Wage Ordinance,” and it shows clear results.

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Seattle Min Wage Hikes Crushing The Poor: 6,700 Jobs Lost, Annual Wages Down $1,500 – UofW Study, by Tyler Durden

Posted on June 26, 2017 | 1 comment

If you increase the price of a good or service, including labor, you reduce the demand. From Tyler Durden at zerohedge.com:

Just last week we noted that McDonalds launched plans to replace 2,500 human cashiers with digital kiosks like the ones below (see: McDonalds Is Replacing 2,500 Human Cashiers With Digital Kiosks: Here Is Its Math):

Of course, no matter how much anecdotal and/or hard evidence is presented to liberals on the negative consequences on higher minimum wages they simply can’t be convinced it’s a bad idea.  Somehow, the basic economic concept that raising the price of good (i.e. wages) would somehow destroy demand (i.e. employment levels) for that good just does not compute in the minds of progressives.

Never the less, below is yet another study from economists at the University of Washington that reveals some fairly startling takeaways about Seattle’s minimum wage.  Per the chart below, minimum wages in Seattle increased from $11 in 2015 to $13 in 2016 and $15 in 2017 for large employers.

To our total shock, the study found that higher minimum wages caused a 9.4% reduction to total hours worked by low-skilled workers, or roughly 14 million hours per year.  Given that a full-time employee works 2,080 hours per year, that’s equivalent to just over 6,700 full-time equivalents who have lost their jobs, just in the city of Seattle, courtesy of moronic politicians who don’t seem to grasp basic mathematical concepts.

Our preferred estimates suggest that the Seattle Minimum Wage Ordinance caused hours worked by low-skilled workers (i.e., those earning under $19 per hour) to fall by 9.4% during the three quarters when the minimum wage was $13 per hour, resulting in a loss of 3.5 million hours worked per calendar quarter. Alternative estimates show the number of low-wage jobs declined by 6.8%, which represents a loss of more than 5,000 jobs. These estimates are robust to cutoffs other than $19.45  A 3.1% increase in wages in jobs that paid less than $19 coupled with a 9.4% loss in hours yields a labor demand elasticity of roughly -3.0, and this large elasticity estimate is robust to other cutoffs.

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