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Minimum Wage Fever Threatens Both Prosperity and Liberty

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David Coulombe participates in a march and rally for $15 minimum wage in Boston, Massachusetts April 14, 2015. REUTERS/Brian Snyder

The Los Angeles City Council has voted to raise the city’s minimum wage from $9 to $15 an hour, ordering sharp raises every year between now and 2020.

A New York Times editorial insists that business leaders need not worry, despite the fact that they’ll have to pay all their least skilled workers $48 more for every day they come to work. “The added cost of higher wages is offset by savings from lower labor turnover and higher productivity,” wrote the Times.

In other words, they suggest that journalists and politicians know more about getting the most from workers than the job creators who actually employ them—and have the right to impose their decisions on businesses that are already struggling. This radical move in the nation’s second largest city is not only a threat to prosperity but a threat to liberty—imposing the economic judgment of politicians on private businesses that may not agree.

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  1. Rex Thornhill  •  May 29, 2015 at 2:59 pm

    And what happens with those workers who have been employed and have worked up to a higher salary? My current employee was a shift manager at McDonald’s prior to coming to work for me. After 3 years she was making 11.30/hr as a shift manager. You can’t let the new hires make more than her, so all salaries will have to go up. This will be a huge burden on all businesses.

    • Ray Thornhill  •  May 29, 2015 at 5:21 pm

      This is why companies are relocating from California to Texas.

      • John Tobias  •  May 29, 2015 at 6:32 pm

        …And coincidentally, Ray, this happens to be why I happened to write to a friend of mine yesterday, saying that I (a west coaster all of my life) was contemplating moving down to the Lone Star State, recognizing that it, more than any otherplace in the lower 48, seems to have the where withal to break away from the United States of America and become a seperate Republic unto itself, and the population that might well make this happen. Are people going to have NO escape left to them if it is otherwise? Frankly, I doubt there will be any place to go, unless Texas (or maybe Montana) proves to be it!

    • carpe diem36  •  May 29, 2015 at 5:57 pm

      this of course in only one of the problems with the minimum wage increase.
      No employer will hire an in experienced young worker who requires training so this will kill the future employment of the very people minimum wage was created to help.
      One other things that this raise will cause is for all products and services to become more expensive so those who hoped to be helped will certainly not be, when their wages go up and all the things they buy will also go up by the same percentage, so this will cause nothing but tremendous inflation when if things are not forced from the top inflation and wages will go up natuarlly rather than artificially.

  2. Rob Welch  •  May 29, 2015 at 3:52 pm

    THE LEFT SEEMS TO BE INCAPABLE OF SEEING PAST THEIR NOSES WHEN IT COMES TO SOME OF THEIR EXTREMELY SHORTSIGHTED DECISION MAKING LAWS . IT IS OBVIOUS THAT MOST ON THE LEFT HAVE NEVER RUN AN ENTERPRISE EXCEPT FOR ONE WHICH IS THEIR OWN FINANCIAL PROMOTION.
    BY THE PEOPLE AND FOR THE PEOPLE, WHY IS THAT SO HARD TO UNDERSTAND?

    • Keith  •  May 29, 2015 at 6:32 pm

      It’s not hard to understand. They want to undo those foundations. That’s what progressivism is. Ultimately it’s fascism. Not necessarily goose-stepping or gas-chamber Naziism, but it is totalitarian nonetheless.

  3. Larry Hilliard  •  May 29, 2015 at 4:02 pm

    Well, this summer there will be a robotic McDonalds in Phoenix. Unions pushed wages to the point that there were no televisions built here in the US. I saw a poster the other day where in Denmark(?) the people are very happy with the minimum wage at $20/hr and you only work 33 hours/week, college and other things are free. But that wage and limited number of hours you can work means that you are only making $35K a year. Want to buy a house and raise a family on that? I have to believe that if you have a business and have to pay your unskilled labor the higher wages, that you would have to cut back on what you pay the skilled worker. So, maybe in addition to a minimum wage there ought to be a maximum wage of say $25/hr… regardless of how skilled you are???

  4. Greg Rose  •  May 29, 2015 at 4:04 pm

    And you know who will pay for these higher wages – the consumers and residents of the city of course. Businesses will have to raise their prices. Or they might move or threaten to move. If they threaten to move, don’t you think the city might offer them tax breaks to stay? And of course if they give tax breaks to the businesses then they will have to raise taxes on the residents to compensate – whoops! there goes all the additional income the new minimum wage was supposed to create for the workers!

    • carpe diem36  •  May 29, 2015 at 6:00 pm

      Do you see Detroit in our future???

      • Marlin  •  May 29, 2015 at 7:49 pm

        I have lived in Michigan, Florida and Pennsylvania and now have retired back in Michigan. I lived and worked in the Detroit area for almost 40 years all the while watching it’s decline. The problem with Detroit was the continued Democrat run politics for the last 53 years. Some were so racist ( Young and Kilpatrick) and corrupt that they stole billions from the citizens and forced bankruptcy on the once great city. All the time they blamed the Republicans and whitey for their problems. Coleman Young even told white investors to get out and stay north of 8 Mile Road, so they did. Take a look at Google earth and see all the vacant land that once housed working families, its a shame.

      • Sean Flynn  •  Jun 4, 2015 at 7:49 am

        Admittedly, Detroit has had some pretty awful political leaders – all Democrats – govern as mayor over the last half century.

        But will you admit that cities like San Francisco, Boston, and Pittsburgh (also run nearly exclusively by Democrats over the same time period) have prospered and flourished in a post-industrial world?

        It’s not the party, it’s the people

        Had Detroit had a Thomas Menino running it for 20+ years, do you think it would have been in the same shape today? Or, more likely, a hell of a lot better?

    • Keith  •  May 29, 2015 at 6:30 pm

      Wow. Never thought of that scenario. I really need to get the hell out of Hell-A.

  5. ML Banner  •  May 29, 2015 at 4:15 pm

    There will also be an incremental relative increase in the overall cost of everything in the city.

    It’s the biggest logical miss-step made by all economic liberals who assume that all markets are static (remember if a CEO makes more money, it must mean he’s taking away from the little guy?), but misses the logical step that all costs (for all products & services in the city) will increase an equivalent amount, thus negating the MW induced increase in pay.

    And let’s not forget that because the city’s market is dynamic and not static, businesses will move out of the city to avoid this extra “tax”, thus destroying the city’s already diminishing job market.

    It is a loose-loose for everyone, except the unions of course, who will exclude themselves out at the last minute of having to comply with the MW law.

    • Steve  •  May 29, 2015 at 8:17 pm

      I agree with your comments but please spell lose correctly next time.

  6. Allen Unruh  •  May 29, 2015 at 6:18 pm

    It’s a lot easier to vote for a raise rather than earn one. Now all we have to do is pass a law regarding minimum effort. This is Marxism pure and simple and socialism only works in two places: Heaven where they don’t need it and hell where they already have it. In fact, if we socialized the Sahara Dessert in two years we’d be importing sand. The people this effects are hurt the most because their minimum wage will be ZERO!

  7. Keith  •  May 29, 2015 at 6:27 pm

    Umm… wasn’t this done already? Under the FDR admin? All this does is knock up inflation. It is brain-dead policy from people who swear to themselves as gods that they’re wiser than the rest of us neanderthals.

  8. Reb Bacchus  •  May 29, 2015 at 7:12 pm

    The real problem is that $15 per hour will not bring a worker into the middle class. What they should do is make it between $150-$200 per hour which will let the unskilled worker have a decent lifestyle. Who is to say that a hamburger cook is worth less than trial lawyer. Of course we might also need to put price controls on stuff or companies might raise their prices… and on other people’s wages because skilled workers might try to gouge us by demanding more than us!

    Now that I think about the real solution would be to appoint a non-partisan board of experts to set prices and wages. That would be fair to everyone. I mean in any rational system valuable workers like lawn service guys would be payed more than professional athletes and musicians, and especially folks like actors who contribute nothing to society, all those “life’s lottery winners” should be paid minimum wage. Especially actors, who when you analyze it, are nothing but skilled liars and probably should be paid less than minimum wage because we don’t want to reward liars. An added benefit would be that all the thousands of people who want to be in the movies and on TV, can be, if actors are paid less than minimum wage the companies that make the movies and TV shows could afford to hire people like my welfare-queen sister-in-law who thinks she has talent. If we do the same for professional sports, it would allow so many more people, like my son, (a wide receiver who never should have been cut by his high school football team. I mean at 5’3″ and 415 pounds he was a little slow but he really had an impact one the poor kids who tackled him) to participate… except for professional Texas teams that I like. That would make Jerry happy, and I might start to catch up on my betting debts. Next are prostitues, who charge me way too much, and should be forced to be sub-minimum wage workers… I don’t care what anyone says, people who are breaking the law shouldn’t be making more than me. We can rationalize it by saying their tips will make up the differance… not that I ever tip.

    Now if everyone would just email their polititians and demand they make my suggestions law we would have a fair country. It would probably be a good idea to make me chairman of the group since it’s my idea and I know I’ll be fair since I don’t have any prejudices, why most of my best friends make minimum wage!

  9. Marshall Dedrick  •  May 29, 2015 at 7:49 pm

    I am already being taxed out of my residence due to the excesses of government and the public sectors unending thirst for my cash. At least when McDonalds has to charge $5 for a hamburger I can say “no” and cook at home unless of course ground beef is now $150 per pound. What the minimum wage pin-heads do not understand is that in order to pay a $15 per hour wage, the individual being paid must produce enough revenue to cover their cost plus all the other costs associated with their employment plus overhead, insurance and let’s not forget profit. At a gross profit of $0.02 per hamburger a typical McDonalds worker would have to cook, present and serve 750 hamburgers per hour JUST so the business breaks even on the hourly wage. Good luck with that.

    • richard reinhofer  •  May 30, 2015 at 8:36 am

      What everyone on this post is missing is other countries have much higher minimum wages + mandatory benefits and they do just fine. German car manufacturers pay their employees more than $50 an hour and they are kicking our butts.

      What everyone naysayer is admitting is they don’t believe Americans can’t compete with other countries. So we’re not that exceptional?

  10. Michael Williamson  •  May 30, 2015 at 10:51 am

    The not so dirty little secret is that as workers “earn” more money, the government’s take is higher via taxes. Follow the money. It is being laundered through the low skilled worker, as usual. This in turn will ultimately be passed on through higher prices down to the consumer. Everything will adjust accordingly as a result of this wage inflation. Just as the average person can not afford to take the family to a sporting event due to the over priced “employees” of the franchise, which was a result of some consensus that the owners were making too much money, those $15.00 per hour hamburglars won’t be able to eat at like establishments.

    We should all be outraged that this is, in reality, government’s sneaky little way to get into everyone’s pocket. Connect the dots: lower skilled workers earn more money so they are endeared to the party that is responsible and continue to vote them into power, tax coffers get fuller, wage inflation takes place, tax coffers get fuller, government debt is paid with inflated dollars. It really is a win, win, win for the liberals in government, the liberals in government, the liberals in government.

  11. Linda  •  Jun 2, 2015 at 6:27 pm

    the politicians are just looking for votes but I doubt that they’ll get them when these people protesting lose their jobs because the job creators can’t keep them and pay the others a higher wage. The protesters will only be concerned with getting a job and at a higher wage there’ll be even less jobs.

  12. Sean Flynn  •  Jun 4, 2015 at 8:00 am

    Germany, until very recently, did not have a minimum wage law during the entire post WW2 era. Over a period of 60+ years it built itself up from the rubble to be a world-class economy with some of the highest paid workers on earth.

    France, Italy, Spain, and other European nations have had high minimum wage laws and made it difficult for employers to fire workers (and, as a result, reluctant to hire workers). Much higher rates of unemployment exist in those countries. There’s absolutely no reason why France should have a higher unemployment rate than Germany, but it regularly does.

    Increasing minimum wages also contributes to inflation, something that was once the biggest political issue in the land (early 1970s to early 1980s) but has long been forgotten.

    When South Carolina mandates high minimum wages jobs (I know, impossible) will those Mercedes jobs flee the state and return to Germany?

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