by Ali Meyer • Washington Free Beacon
California is projected to have a $15 statewide minimum wage by 2022. Economists project this will lead to a loss of 400,000 jobs, according to a report from the Employment Policies Institute.
Currently, the federal minimum wage is $7.25. California’s is $10.50, which is one of the highest minimum wages in the United States. California’s intent to raise it to $15 by 2022 will create the largest gap between a state minimum wage and the federal wage in U.S. history.
“One might argue that a higher minimum wage is justified in California because of its relatively high cost of living compared to the typical state,” the report says. “On the other hand, one might be concerned about whether the higher minimum wage in California causes job loss for low skilled workers, and whether the effects differ in the cities where the cost of living and wages are relatively high as compared to rural areas or less expensive cities.”
California has consistently raised the minimum wage since 2001, even higher than what was mandated by federal law. The study finds that this increase has led to a decline in employment.
By Erielle Davidson • The Federalist
Harvard Business School recently released a working paper titled “Survival of the Fittest: The Impact of the Minimum Wage on Firm Exit,” discussing the effects of minimum wage policies on companies’ survival. For those with any shred of economic understanding, the results were predictably dismal.
The paper focused specifically upon the restaurant industry in San Francisco, using data from the review platform Yelp to track the activity and performance of individual restaurants. Researchers Dara Lee Luca and Michael Luca discovered that a $1 increase in the minimum wage leads to approximately a 4 to 10 percent increase in the likelihood of any given restaurant exiting the industry entirely. In economic terms, minimum wage hikes quicken a restaurant’s “shutdown” point. Continue reading
by Bill McMorris • Washington Free Beacon
Restaurants in the nation’s capital experienced their worst hiring period in 15 years, fueling speculation that wage hikes are reducing employment opportunities.
Employment in the food service industry fell in Washington, D.C. even as it continued to increase in the region. Restaurants shed 1,400 jobs in the first six months of 2016, a three percent decrease and the largest loss of jobs since the 2001 recession, according to an analysis from American Enterprise Institute scholar Mark Perry.
The steep drop was isolated to D.C. Neighboring suburbs in Virginia and Maryland added nearly 3,000 jobs over the same period, a 1.6 percent increase in hiring. Continue reading
37 percent of businesses say they would increase the price of goods
Thirty percent of businesses said they would eliminate jobs if the minimum wage were increased to $15 an hour, according to a survey from Express Employment Professionals.
The survey asked 390 businesses in the United States and Canada what effect the increase in the minimum wage would have on their operations.
Thirty-seven percent of businesses said they would increase the price of goods, 30 percent of businesses said they would eliminate positions, and 20 percent of businesses said they would increase other wages in the company.
A majority of the businesses surveyed, 82 percent, said they do not pay the current minimum wage for some positions while 18 percent of respondents said they do.
“A $15 minimum wage has certainly become a political hot topic,” said Bob Funk, CEO of Express Employment Professionals. “There’s no doubt it makes for a good talking point, but the real question is whether it makes good economic sense.”
“While some workers will see a raise, which is good news, this survey shows that there are clear negative consequences for raising the wage to $15,” said Funk, who was also a former chairman of the Federal Reserve Bank of Kansas City. “Policymakers should always keep in mind the unintended consequences of their actions.”
by Larry Elder • Townhall
Fourteen to one, in favor.
That was the Los Angeles City Council vote to raise, over the next five years, the city’s minimum wage from $9 an hour to $15. Of course, as Investor’s Business Daily tells us, the $15 per hour really is closer to $20.
Investor’s Business Daily says: “Once all the nonwage costs are added, including payroll taxes, paid sick leave and the big one — ObamaCare’s employer mandate — minimum compensation for a full-time worker could rise as high as $19.28 an hour by 2020, an IBD analysis finds. That would amount to a jump of $10.67, or 124 percent, since June 2014.” Continue reading
by Thomas Sowell • Pittsburgh Tribune-Review
While we talk about democracy and equal rights, we seem increasingly to let both private and government decisions be determined by mob rule. There is nothing democratic about mob rule. It means that some people’s votes are to be overruled by other people’s disruptions, harassments and threats.
The latest examples are the mobs in the streets in cities across the country, demanding that employers pay a minimum wage of $15 an hour, or else that the government makes them do so by law. Some of the more gullible observers think the issue is whether what some people are making now is “a living wage.” This misconstrues the whole point of hiring someone to do work. Those who are being hired are paid for the value of the work they do.
If their work is really worth more than what their employer is paying them, all they have to do is quit and go work for some other employer, who will pay them what their work is really worth. If they can’t find any other employer who will pay them more, then what makes them think their work is worth more?
As for a “living wage,” the employer is not hiring people in order to acquire dependents and become their meal ticket. He is hiring them for what they produce. Continue reading
The article below discusses the push in Illinois to raise the minimum wage to $10 and hour. While we cannot endorse each point made in the article, it does a good job of describing the absurdity of solving current job growth and economic growth problems by focusing on the minimum wage. In North Dakota where there is an economic and energy boom, there is rapid economic growth and full employment. Kids working at McDonalds can earn up to $15 an hour. This was done not be raising the minimum wage, but instead, by the free-market creating jobs and thus, driving wages higher through natural natural means. The article makes some excellent points. Enjoy!
Beyond the minimum wage
Gov. Pat Quinn wants to raise the minimum wage in Illinois to at least $10 an hour. Some of the Republican challengers to Quinn have danced clumsily around the issue. Our concern is that this narrow focus on a small shift in wages for a small number of workers misses the real point of debate.
Illinois is desperate for jobs of all kinds. This state has the fourth highest unemployment rate in the nation and, according to a recent, credible survey, the worst prospects for job growth. Unemployment is significantly higher than the state average in communities such as Rockford, Kankakee, Decatur and Danville. It is desperately high in some of Chicago’s poorest neighborhoods. Continue reading
Words seem to carry far more weight than facts among those liberals who argue as if rent control laws actually control rents and gun control laws actually control guns.
It does no good to point out to them that the two American cities where rent control laws have existed longest and strongest — New York and San Francisco — are also the two cities with the highest average rents.
Nor does it make a dent on them when you point out evidence, from both sides of the Atlantic, that tightening gun control laws does not reduce gun crimes, including murder. It is not uncommon for gun crimes to rise when gun control laws are tightened. Apparently armed criminals prefer unarmed victims. Continue reading
As Barack Obama scrambles to eviscerate key sections of his own signature health care law, he and other Democrats are trying to shift voters’ focus to another issue — income inequality.
Unfortunately, the solutions they advocate are pitifully inadequate or painfully perverse.
Start with the minimum wage, which some Democrats see as an election-winning wedge issue in 2014.
True, raising the minimum wage polls well. But does anybody really care much about it? Few minimum-wage earners are heads of households; many more are teenagers earning spare cash. Continue reading
by George F. Will
Liberals’ love of recycling extends to their ideas, one of which illustrates the miniaturization of Barack Obama’s presidency. He fervently favors a minor measure that would have mostly small, mostly injurious effects on a small number of people. Nevertheless, raising the minimum hourly wage for the 23rd time since 1938, from today’s $7.25 to $10.10, is a nifty idea, if:
If government is good at setting prices. Government — subsidizer of Solyndra, operator of the ethanol program, creator of HealthCare.gov — uses minimum-wage laws to set the price for the labor of workers who are apt to add only small value to the economy. Continue reading
With Democrats cratering in the polls over their collapsing health care law, they are trying to pivot to the only part of their policy agenda that still enjoys broad public support: the minimum wage. But their advocacy and its popularity rest on the incorrect belief that a significant number of families live on the minimum wage. Instead, the primary impact would be to exacerbate a crisis of youth unemployment spurred largely by the last minimum wage increase.
A recent analysis by Ben Gitis of the American Action Forum found that just 1.9 percent of all wage and salary earners make the minimum wage or less. Just 0.3 percent of people in families with incomes below the poverty line make the minimum wage or less — and just 1.5 percent make less than $10.10, the level that Democrats have suggested for the next hike. Applying the most recent academic research, Gitis also found that such an increase would reduce employment by more than two million jobs. Continue reading
If you offer people something that is too good to be true, you will always find takers. Ask Bernie Madoff. Or ask Barack Obama. He recently proposed an increase in the minimum wage — an idea that suits the natural predilections of many people enough to distract them from the unsentimental and unwelcome logic of economics.
One poll found that 63 percent of Americans favor raising the federal floor from the current $7.25 to $10.10, as the president recommends doing over two years. The reasons are obvious. Wages have stagnated, low-income Americans are getting a smaller share of national income and many working people are stuck in poverty despite their best efforts. A higher minimum wage is the obvious solution.
Obvious, but wrong. The proposal rests on the assumption that the government can decree the price of a commodity — in this case, labor — in defiance of the dictates of the market, without ill effects. But that view requires a heroic suspension of disbelief. Continue reading
Political crusades for raising the minimum wage are back again. Advocates of minimum wage laws often give themselves credit for being more “compassionate” towards “the poor.” But they seldom bother to check what are the actual consequences of such laws.
One of the simplest and most fundamental economic principles is that people tend to buy more when the price is lower and less when the price is higher. Yet advocates of minimum wage laws seem to think that the government can raise the price of labor without reducing the amount of labor that will be hired. Continue reading
In early 2011, the Senate Judiciary Committee held a hearing on the constitutionality of ObamaCare (né the Affordable Care Act of 2009). One would think that the time for such a hearing might be before passage of the act, but that is the way we do things around here, and besides, that is not the point of this column, which (as you can see from the title), is about the minimum wage.
The point derives from an exchange between Utah’s freshman (very fresh at the time, only a day or two old) Senator Mike Lee and Walter Dellinger, heavyweight lawyer, professor of constitutional law at Duke University, Assistant Solicitor General, presidential legal adviser, and then Acting Solicitor General in the Clinton Administration. In the course of the exchange, Lee wondered why, if the Interstate Commerce Clause would support a requirement for everyone to buy insurance, it wouldn’t support a requirement that every citizen buy (if not actually consume) three servings of leafy green vegetables every day. (That was in the heady days when supporters of ObamaCare still thought it was a regulation, before Chief Justice Roberts discovered that it was actually a tax.) Continue reading