Lifting the Minimum wage: A disaster in real life.

By Owen Jennings

The theory is that the low paid need help, so forcing employers to pay more is a logical and low cost way to make life easier for them. The cost to the taxpayer is minimal ? just regulate businesses and demand they pay more to their lowest paid employees.

The practice is different. Many businesses cannot afford to pay more so they simply lay off low paid workers. The outcome is a disaster for the low paid ? loss of income, loss of opportunity to climb the ladder, loss of dignity ? and more pain for the taxpayers who have to pick up the tabs in welfare payments.

You would expect the socialists would have learnt by now. There have been numerous examples of forced minimum wage increases causing unemployment among the most vulnerable ? the lowest paid employees. But socialist governments do not want to ?learn?. They want to feel good and receive plaudits from the voters who don?t know any different. It?s now called virtue signalling and ideologically driven regulating.

Here is the latest example of minimum wage increases causing chaos among the vulnerable.

  • The State of New York, a viper?s nest of socialist do-gooders, raised the minimum wage to US$15 an hour.
  • 75% of restaurants/food outlets cut work hours of their low paid staff to offset the minimum wage increase
  • 75% say they expect to make further cuts this year
  • More than a third of the city?s full-service restaurants eliminated jobs in 2018, and nearly half expect to cut jobs this year
  • Half of the city?s limited-service, or fast-food, restaurants surveyed reported cutting jobs in 2018, and more than half said they will eliminate positions in 2019.
  • If the $15 standard were in force state-wide in 2020, it would cause the loss of 45,031 jobs
  • If a $15 minimum wage were required nationwide in 2020, the job losses would be 2 million
  • In just the last three months of last year, 4,000 workers lost jobs at full-service restaurants
  • The publicity around job losses, especially among the lowest paid, has upset the socialist elite. How dare employers act logically to protect their businesses.

Their answer has been to draft a new regulation making it harder to dismiss staff. All that will achieve is work for lawyers, fewer jobs, fewer young people taken on and poorer service.

The other unintended but rational result is more automation. Fast food outlets are replacing staff with technology that is impersonal and often frustrating but avoids the grief caused by regulators.

Bureau of Labor Statistics
Investor?s Business Daily
Center of the American Experiment
New York City Hospitality Alliance
University of Michigan-Flint