Minimum-Wage Hikes: A Feel-Good Lie That Destroys Jobs And Minority Kids’ Futures

May 14, 2017 by

Minimum Wage: Once again, another city self-righteously imposes a minimum-wage hike on private employers. And once again, it finds out it’s a business- and job-killer — and only boosts pay for a handful of people. This time it’s the Big Apple, New York, that’s discovering the ugly truth. But don’t feel left out: Your town may be next.

In “Minimum-Wage Boost Squeezes New York City Restaurants,” the Wall Street Journal notes that restaurants “are being pinched” by the increase in the minimum from $9 an hour to $11 an hour at the start of this year. Sure, that doesn’t sound like much, but it’s in fact a 22% increase on restaurants’ most basic employee costs.

And guess what? $11 an hour becomes $13 an hour at the end of this year, another 18% rise.

“In the five months since the $11 hourly wage took effect,” the Journal said, “several well-known restaurants have closed or announced plans to do so.” And more closures are on the way.

It’s true that, as minimum-wage proponents claim, New York is unlikely to suffer horribly from recent minimum-wage hikes. With the boom on Wall Street in recent years, the restaurant industry right now is mostly doing fine.

Moreover, wages in New York are already high, so the actual impact will be limited in terms of the number of employees affected. Prized workers at many restaurants often make much more than the minimum calls for.

Even so, it will have an impact. For one, prices are bound to go up. Many people will suddenly find once-affordable restaurants to be out of their financial reach. Business will suffer.

And what happens, inevitably, when a bigger slowdown comes, maybe with a downturn on Wall Street? There will be mass layoffs at the bottom of the income rung — that is, workers with the least training and education, mostly minorities. Their productivity will no longer exceed the cost of their labor and they will lose their jobs.

And it won’t just be in New York.

As CNN reported late last year, 21 states and 22 cities passed minimum-wage hikes that went into effect this year. Among the largest were Arizona, Maine and the cities that make up Silicon Valley, all slated for hikes in the minimum of 20% or more.

Without a shred of evidence, CNN asserts that “millions of  the lowest-wage workers across the country will get a raise.”

Maybe, but not likely.

Breitbart News explains why, using Seattle’s recent minimum-wage hike as an example.

“A study of the effect of minimum-wage policies on restaurant employment revealed that minimum-wage policies hinder job creation,” wrote Breitbart’s Tom Ciccotta. “After Seattle increased the city’s minimum wage from $11 to $15, they saw a drop in overall jobs in the restaurant industry. At the same time, the state of Washington, whose minimum wage remains at $11, saw consistent job creation in the restaurant industry, adding 6,200 jobs over the same time.”

Those who lose their jobs, as in Seattle, don’t “get a raise,” as CNN claims. They get the boot. Big restaurant chains have a different response: Faced with growing minimum-wage pressure, burger-chain Wendy’s this year announced plans to install self-ordering kiosks in 1,000 stores in an effort to cut its labor costs in a highly-competitive fast-food market.

Hundreds if not thousands will lose their jobs, and hundreds more will never get a chance to even have a job. And other chains, including McDonald’s, are following suit.

The Congressional Budget Office in 2014 estimated that merely raising the minimum wage nationally from the current $7.25 an hour to $10.10 an hour last year, and letting it grow with inflation, would kill 1 million jobs.

As we have noted before, and as columnist Larry Elder noted just this week, one of the largest studies done of minimum-wage hikes suggests few benefits at all. David Neumark of the University of California, Irvine, looked at more than 100 academic studies going back 20 years. As Elder points out, 85% of those studies found that “minimum-wage laws destroy jobs, causing workers to lose jobs and/or hours or causing businesses to shut down.”

The truth is, a minimum-wage hike is always sold as a compassionate move by left-wing politicians, who pretend to be doing low-paid minority workers a big favor. But they aren’t. In fact, they’re levying a punishing tax on unskilled labor that lands hardest on minorities and those with few skills or training. It’s progressive moral preening at its worst, hurting most those they pretend to help.


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Source: Minimum-Wage Hikes: A Feel-Good Lie That Destroys Jobs And Minority Kids’ Futures | Stock News & Stock Market Analysis – IBD

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