[ April 19, 2024 ]
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Of course. Raising the minimum wage just raises an employer’s expenses, resulting in layoffs. This is just more evidence of how leftist policies are destructive to the economy and hurt the people. If it weren’t for the enemedia’s relentless propaganda, this would be obvious to everyone.
“Harvard Study Finds Restaurants More Likely to Close, Less Likely to Open After Wage Hikes,” by Sam Dorman, Washington Free Beacon, April 27, 2017:
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A Harvard University study found that raising the minimum wage increased the likelihood that restaurants, especially of lower quality, would close and made it less likely that new restaurants would open.
The study “Survival of the Fittest: The Impact of the Minimum Wage on Firm Exit,” conducted by Dara Lee Luca and Michael Luca, studied 35,173 restaurants in the San Francisco Bay area over the course of eight years (2008-2016). Luca and Luca saw 30 percent of these restaurants close, and claimed to “find suggestive evidence that higher minimum wage increases restaurant exit.”
Poorer-quality restaurants were hit the hardest after minimum wage hikes, the College Fix reported on Tuesday. Yelp data provided researchers with information on restaurants’ perceived quality, with users rating restaurants on a scale of one to five stars.
Restaurants with median ratings (3.5 stars) on Yelp were 4-1o percent more likely to leave with every $1 increase in the wage, and 24 percent more likely to leave with every 10 percent increase in the wage. Higher minimum wages also seemed to deter restaurants from opening, with 4-6 percent fewer restaurants entering the market after a $1 wage increase.
Other studies produced “mixed results” regarding minimum wage’s impact on firm entry. For example, one study showed about a 14 percent increase in firms’ entry with a 10 percent increase in the minimum wage.
Luca and Luca argued the study helped “shed light on the likely impact of minimum wage increases on existing businesses.” The study came out just before Congressional Democrats proposed raising the federal minimum wage to $15 per hour on Wednesday.
Democrats’ nearly $8 hike – from $7.25 per hour – outsized the wage increases Luca and Luca studied, suggesting that, if successful, the $15 proposal could have much bigger impacts on restaurants nationwide.
The Bay Area contains 101 cities and experienced 21 changes to the minimum wage during the 2008-2016 timeframe. 15 of the 41 U.S. cities and counties that raised their minimum wage ordinances above the federal minimum since 2012 were in the Bay Area.
Luca and Luca focused on wage changes in 11 cities, none of which raised their wage above $13 per hour. California’s statewide minimum wage rose from $8 at the beginning of the study’s timeframe to $10 at the end.
The Raise the Wage Act of 2017, according to the Washington Post, would gradually raise the minimum wage until it reached $15 per hour in 2024. It would immediately hike the wage to $9.25 if passed….
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30 Comments
6 years ago
Anyone with a functional brain could have made this argument without spending large amounts for Harvard to analyze.
6 years ago
Reply to
john53
Never accuse a professor of having a functional brain. The school of hard knocks is a far more potent education system.
6 years ago
Wanna` bet that frosted those lefties to admit this?
6 years ago
Reply to
Ron Cole
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6 years ago
This issue of a minimum wage is a symptom of a socialist command economy, even when it’s applied by Conservative administrations. Last February the Governor of the Bank of England spoke of 15 million British workers jobs vanishing over the next few years due to automation Nothing is more likely to ensure he’s right than the UK minimum going up to £10/hr by 2020.
Nearly three years ago, I coined the following phrase, ” Adversity is the Propellant for Human Advancement “.
When an idle person is compensated for the consequences of his idleness by being paid more than he’s worth, his job will vanish quickly along with his prospects and moral. The fact that his own future depends upon his application will escape him, there will always be a left wing politician ready to blame others.
Globalisation is driving jobs away from Western societies, it’s intended to do that, a minimum wage too high will ensure more automation for the many in Western countries and well paid jobs for the few { who design the robots }.
6 years ago
Reply to
Poppey
Exactly. At every mass loss of jobs, big business pays for reports that blame it on high wages. Big business has been fighting against increasig the meager $7 minimum non-living wage to a living wage.
6 years ago
Reply to
Poppey
Poppey,
That’s a very astute observation, and hardly ever mentioned by those who come to understand your view of adversity!
In the case of minimum wage, there are three things going on:
(1.) the minimum wage is being used to leverage an unnecessary increase in misery by driving lesser restaurants (…and actually “eateries” of all types…) from the market, making it likely only the “upscale” places favored by the Elite Set™ will survive;
(2.) it acts as a “filter” to keep those who The Elite Set™ consider “undesirables” (i.e., anyone and everyone not part of their cliche) from opening and/or expanding eateries.
The reason they would care about members of the hoi-paloi going into food service is that it’s a fairly common path taken “from shoestring to empire”… meaning One can start w/minimal material resources and personal skill, leveraging and multiplying those through diligence, care, and plain-old hard work (including long hours) and within a decade you’ll be able to separate your personal/starting resources from the seed used to start the eatery– while expanding those original, personal materiel resourses manyfold– double your business resources, whether by expansion of the current eatery space or purchasing another of the franchise, or by increasing the number of eateries of your own… doubling or even tripling locations;
(3.) It is a form of redistribution; not just of money, but adversity!
Think of that a moment!
it redistributes adversity!
It does this by taking the responsibility of hard work towards the goal of self-improvement off the employee, changing it to a “rent-seeking” situation for said employee, and moving the “volition of necessity effort”™ to the employer.
The employee no longer has the necessity of choosing to better himself… he’s comfortable where he is; the employer no longer has a choice of rewarding employees who display a desire to better himself… he’s compelled, u der threat, by The State to pauper himself on behalf of his employees via remunerations both deserved and undeserved.
They both have been robbed! Robbed of their ability to do Good Works and “nudged” into a situation that spiritually and mentally stagnates them AND the binding ties between them.
There really is a necessity for the challenge of adversity in Life! It keeps us from becoming the equivalent of “hothouse” plants who would, at the first real chill night, shrivel and die off!
Oh! I see it’s time to leave for Church! I’ll have to end here…
Have a great Sunday, everyone!
– Gordon
6 years ago
Harvard managed to figure this out all by themselves. Naw. Had to have outside help.
6 years ago
Bullshitt, how many minimum wage employees does harvard have on its brilliant research staff?
6 years ago
Reply to
Mahou Shoujo
None, I believe. They start out trying their best to get “tenure” so they cannot be fired. Has NOTHING to do with their skills. That’s why they teach “human values studies” instead of real world knowledge.
D
6 years ago
That used to be covered in Econ 1a 🙂
6 years ago
Reply to
AlgorithmicAnalyst
But they did not cover it well enough, students were brainwashed into believing they were worth more than they were, and now we have uneducated dummies with college graduation certificates – for participating.
6 years ago
Psssst, business always pass the cost of doing business to the customer. You want higher cost? Hire (yes higher) expensive people.
6 years ago
Reply to
Alleged Comment
No, not always. More people earn more money, more people buy things, more products are sold, more money is made. This minimum has been forced on us by big business that does not want to pay a living wage and so they had the government set a low, non-living wage that allows them to get away with it.
6 years ago
This is part of the globalist propaganda that will tailspin working people into serfdom. When the rich cry poor because they have to pay acceptable wages because they want to only exploit workers and pay themselves ridiculously and try to con the masses into feeling sorry for them for only being wealthy instead of uber wealthy. Minumum wage and minimal benefits got our country out of poverty. The wealthy are working on creating a serfdom society by making healthcare and owning a home only for the wealthy. The income gap is only going to get wider and wider if we let them drive up the costs of healthcare only to make healthcare insurance agency shareholders eat up all the money that should go to healthcare and providers of care, and drive up real estate costs so high that only the wealthy can afford and drive down wages for workers and increasing the cost of higher education. Every year the middle class of America is shrinking and life expectancy rate is now going down and will plummet soon. Our only hope is to make all health insurance non-profit again, make billionaires and multi-millionaires pay fair wages and quit letting foriegn investors buy up all our companies and real estate. The exploitation of American workers is going back to the way it was 100 years ago.
6 years ago
Reply to
Amerihiker
By the “rich” are you taking about Trump or the humanity traitors of the globalist New Order? The problem with healthcare is that someone has to pay for it and in countries where being a health practitioner enables becoming a millionaire within a couple of years, it is much higher. There is a current investment strategy in place for doctors in the west(especially pathology, radiology etc. and specialty groups) to be bought out then re-employed by multinational corporations in all taxpayer healthcare subsidized nations and that will simply increase the cost in the long run. I can see where your ideals lie and I do not disagree with them but pragmatism rules WRT healthcare & it requires money. The invasion of the west by muslims just snowballs ALL costs from social security( 2nd and later generation have extremely high unemployment figure, almost equal that of the current first generation which varies but up to 90% in places), healthcare and the supremacist “cultural” needs. Once the Turks made good Germans but now 4th generation Turks are radicalized by oil bought mosques and madrassas and have lost the work ethic possessed by their ancestors and are almost as bad as the new arrivals. If socialism means sharia law which seems to be the aim in the west of the left, do they realize that once it happens they will be the first to go? Although having talked to so many I can see 90% “discovering” religion to stay alive and enable them to actually physically hurt those who disagree with them as opposed to online bullying. Socialism is a wonderful ideal but none of its practitioners are all that altruistic, the USSR proved that.
6 years ago
Minimum wages have historically impacted inflation. The first minimum wage, in 1938, was twenty five cents. Within ten years, prices had jumped to 200%, and by 1960, the minimum wage was increased 400% to compensate. Within ten years, prices had again jumped an additional 200%, and the minimum wage has been since pushing the envelope to the point that in a mere sixty years, the price of a car, for example, has risen over one thousand percent. People sixty and seventy years old can remember buying hamburgers for five cents, with better quality burgers running a mere fifteen cents. Take the cheapest hamburger today, and figure the percentage of price increase from when the minimum wage was $1 an hour to what it is today. A five cent Three Musketeers candy bar is now how much, and where it was three inches long, an inch wide and three quarters of an inch high, what do you get for your money today? Is the value worth the increase of minimum wage?
6 years ago
REALLY!!
Are you kidding me?? I knew this long ago when thoughts of raising minimum wage was in debate. And Harvard comes to this conclusion now???
Oh that Ivy league……….
6 years ago
The increases in minimum wage in Kalifornistan are forcing business owners in the Fast Food Industry to seek alternatives to no skill and increasingly costly employees.
The self service ordering kiosks are already being installed, each one of which can replace multiple employees.
The kiosks make for faster ordering and fewer mistakes being made by replacing the idiot behind the counter who is incapable of paying attention or making correct change with a system where the customer places and verifies their order and receives the correct change every time.
Everybody benefits, except the unskilled labor that has now been automated out of a job and the tax collectors who no longer gets a rake-off from the minimum wage employees paycheck, either directly or through the surcharges employers are forced to pay.
An additional benefit for the business owner is they will depreciate the cost of the equipment, which helps to improve their balance sheet.
6 years ago
Reply to
Public_Citizen
Raising the minimum wage to a liveable one incrementally would not have made much noise. But raising it a whopping $15 over night creates chaos and allows big business to put out all kinds of excuses why we should keep the low non-living wage we’ve had for decades which increases their profits. This whole minimum wage thing is a dog and pony. There should either be no minimum wage at all or there should be a living wage – one for small mom and pop stores and one for big business.
6 years ago
Reply to
marlene
My friend, you have already fallen into the liberal/regressive mind-trap by linking a ~minimum~ wage with a ~liveable~ wage.
A ~minimum~ wage has never, and will never be a “liveable” wage. When wages at the bottom end rise prices quickly follow and generally rise higher and faster than any legislated wage rate can keep up with.
This is particularly true when you add the burden of “dependents”, which is the case for too many low/no skill workers who haven’t advanced themselves beyond being worth the minimum to an employer.
When mandatory wage rates rise beyond the economic value of a person they don’t just become unemployed, they become unemployable.
Do you know that most Union Contracts are linked to the Statutory Minimum Wage and that is the unspoken reason why unions always advocate for these statutory increases? It has little to do with compassion for the workers making these wages and everything to do with being able to raise Union Dues.
6 years ago
Reply to
marlene
The knee jerk leftist/regressive reaction of somebody with no facts, a limited vocabulary, and no debating skills.
6 years ago
Reply to
Public_Citizen
There was no need to read your comment after the first “regressive reaction” of a pompous ass with no class and a limited range of intellectual thinking.
6 years ago
Reply to
marlene
Have a nice [vapid] life.
You apparently have nothing of value to contribute to any philosophical discussion so I’ll say bye bye.
don’t bother to respond because I won’t see it – you have earned a place on my [very short] list of people who are a complete waste of space and therefore Blocked.
6 years ago
Bullsh*t! If you’re going to have a minimum wage at all it should be a living wage. Big business have been paying for reports like this one from Harvard for decades. They support a low minimum wage so they don’t have to pay more! It’s not what it seems and no amount of fancy economic twisting can make it so.
6 years ago
With the money the last president spent (the entire presidential line from 1st through Bush plus some!!) we could have given every single family 1 million dollars…with money left over to put towards the budget!! Now you wanna talk about a crazy idea to boost the economy? That would have done much more then anything any liberal idiot screaming about minimum wage could ever do!!
IN all seriousness though, when has a liberal prog ever done anything to actually help the poor? They can’t have them coming up out of poverty…who would ever vote for them? Oh, that’s right, the illegal onslaught of borders crossers was their answer to all ‘their’ problems. *smh. Gads what an embarassment all the way around!!
6 years ago
I can’t believe anyone could live on $7.25 an hour working 35 to 40 hours a week, which is a normal working week – not unless everything is very cheap in the U.S.
In Australia the minimum wage is approximately $17.92 an hour, and there have been moves very recently to increase it. And Canada has just started a UBI experiment in which people are paid about $16,400 per year (plus $6,000 if with a disability) with no strings attached.
There seems to be something wrong to me when such a wealthy country as the United States has so much poverty. If people were paid more then they could stimulate the economy because their extra pay would go into buying more food and goods and services but as Marshall Brain writes in “Manna” a book about coming automation, most people in the United States will soon become warehoused because they won’t be needed to make the economy work. But then where will businesses get money – the wealthy don’t eat more than the poor and there is a limit to how much any human being can consume? When this happens, not only will half the population be warehoused, but the economy will be in decline just at the point in history when productivity is at its highest. What kind of economic sense does that make???
