Why the ‘Fight for 15’ Could Blow Up in the Faces of the Poor

By | 2017-07-02T21:04:40+00:00 June 29th, 2017|
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Nobody deserves a minimum wage. Everyone deserves a fair wage. But what’s “fair” depends on a whole host of factors, not least of which is the health of the economy.

Labor activists for several years have been clamoring for an across-the-board $15-an-hour minimum wage. “Fight for 15” has won key victories in big cities, including Los Angeles, San Francisco, Seattle and Washington, D.C. Governor Jerry Brown last year signed legislation that would raise California’s minimum wage—now $10.50 an hour—to $15 by 2022.

The chief claim for the $15 wage is that it would raise living standards for millions of workers in the retail and food-service industries. But that may not be true. The market may not be able to bear it.

For example, has the drive toward $15 really helped workers in San Francisco, where the minimum goes to $14 on Saturday? Since the city began phasing in its ordinance in 2014, locals have been shocked to discover the law of unintended consequences.

Business owners have found themselves raising prices, slashing hours, or shutting down altogether. More than 60 Bay Area restaurants have closed since September. A working paper released earlier this year by Harvard Business School researchers suggests that as higher wages are phased in, more restaurants are likely to close and fewer new ones will open.

It just makes sense. When higher labor costs meet tight profit margins, a business owner will either cut labor cuts or shut down.

Ah, but anecdotes are not data.

Read the rest at the Sacramento Bee

About the Author:

Ben Boychuk
Ben Boychuk is managing editor of American Greatness. He is a regular columnist for the Sacramento Bee, a former weekly syndicated columnist with Tribune Media, and a veteran of several publications, including Investor's Business Daily and the Claremont Review of Books. He lives in California.