Monday, March 28, 2016

Any economist worth their salt will tell you an increase in the minimum wage is not an effective solution for fighting poverty. Raising the minimum wage doesn’t do much more than change the behavior of employers in order to have to work around what can often be a difficult requirement, particularly for the service industry.

The state of California is going to raise the statewide minimum wage to $15 an hour and sure enough, businesses are already having to make moves to help themselves. And, here is who gets affected:

  1. Consumers – Restaurants in California are already under pressure to trim their menus as a result. Consumers are also going to face higher prices. The costs have to be recouped by the businesses who are already operating on razor thin margins.
  2. Staffs/workers – Some will win as they will find they will get more hours because their employer had to lay off other staff. However, those who get laid off will lose. Other employees that will lose are teenagers. Employers are going to be more selective about who they hire. Teenagers with no experience, many of whom are get food service jobs as their first jobs, will find themselves shut out.
  3. The community – Many businesses will find it will be easier to take their business elsewhere and all that does is remove a source of revenue from the state of CA.

Minimum wage jobs are supposed to be a starting point, but with the hike to $15, there will be fewer opportunities. Again, liberals are hurting the very people they profess to want to help.

What do you think? Will this work out for CA?

H/T: LA Times

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