Increasing Minimum Wage Killing Jobs
Posted by Steve Markowitz on May 17, 2016
Discussions relating to raising the minimum wage inevitably include to the issue of “fairness”. Those in favor of raising it point out that the minimum wage is not a “fair wage”. Once this emotional claim is made, those who oppose increasing in the minimum wage are pegged as unenlightened and against allowing the lowest wage earners the opportunity to make a reasonable living. Economic realities tell a different story.
Wendy’s is a large fast food chain with approximately 6,000 restaurants nationwide. They have historically started employees at the minimum wage. They recently announced steps to offset the cost increase due to the increased minimum wage and it is not good for workers.
According to Investors Business Daily, Wendy’s is replacing many of its order takers with an automatic kiosk system. This action should surprise no one with a basic understanding of economics. Not only does the new minimum wage increase the cost the labor, but with government inflicted artificially low interest rates, the cost of capital has decreased. This decreases the cost of capital equipment at the same time the new minimum wage will increase the cost the labor. Wendy’s response to the increased minimum wage will be duplicated by many in the service industry across the Country.
The political elitists who are behind the increased minimum wage will not be negatively impacted by the coming loss of lower paid jobs in America. Their political positions could even improve with the additional votes they likely will receive from those who believe the increased minimum wage helps the working poor. Further, with more Americans being unemployed these same political elitists can then offer handouts in exchange for future votes. It’s a nice, but unholy, gig if you can get it.
There is another group of crony capitalists who will benefit from the increased minimum wage. Large corporations who do not employee lower paid American workers will benefit by the increased wage pressures placed on upstart competitors who might try to make a better mousetrap.