Liberals in cities like New York and Seattle seemed to move mountains to raise the minimum wage in their areas. And they got exactly what they asked for. The minimum wage in New York is now $15.
But as a result, the city has begun to suffer. Now, hundreds of lower-wage workers are being fired or let go for what appears to be no reason at all.
In fact, the reports of those being “unfairly” fired are getting so bad that in New York city council members are proposing new laws that would change how and when people can be fired. Adrienne Adams and Brad Lander have introduced the “Just Cause” Legislation that would prohibit employers from firing their employees for anything other than “misconduct or failure to do the job.”
Lander said, “Too many fast-food workers have been fired without a just cause, without a warning, without even any notice. And if you can be fired simply on the whim of an angry boss or a disgruntled customer’s complaint, then you’re far more vulnerable to harassment or abuse.”
And while we certainly think their effort to make employers do right by their employees is commendable, it certainly isn’t the root of the problem.
You see, for far too many of these employers, it isn’t that they are simply unhappy with their workers or even being unfair. Instead, the problem is that they can no longer afford to pay their workers. It’s either the workers go, or their business does.
Take the area of Seattle, for instance, where the minimum wage is set to hit $15 next year. For restaurant owners, they now have to pay their employees a much higher price. But where does the extra money to do so come from?
Added labor costs mean their menu prices have to go up. But consumers in the area don’t want to have to pay more for the same thing they were getting before. This drives consumers away, threatening the entire business.
Already many food establishments have closed their doors due to the increased cost of operations.
Seattle chef Matt Dillion closed his restaurant this year, saying, “In order to buy great products and pay a great wage that people can live on in our city… the math just doesn’t work.” And he adds, “There’s gonna be a reckoning, big time. I don’t think it’s gonna be pretty.”
And by the looks of it, it’s nearly here.
Restaurant workers loved the idea of getting paid more on the hour, but they now realize it costs them their jobs, their livelihoods, and their paychecks.
And in New York, the problem is just as bad, if not worse. One New York restaurant chief executive told the New York Times, “Ultimately I’m a fan of making our employees’ lives better, but some of these rules make it really, really challenging for us to operate.”
He, like many others, may eventually decide to pack up and move to cities or states that don’t have quite the requirements that New York and Seattle do.
However, that won’t be possible either if we get someone like Vermont Senator Bernie Sanders in the White House. The current Democratic Party frontrunner has already promised that he would raise the federal minimum wage to $15.
And he isn’t the only candidate to suggest a hike in the federal minimum wage. Billionaire Tom Steyer would up it to $22 an hour, according to FOX Business.
That means every state, city, and county will be facing these same issues.
It will force businesses everywhere to choose between their workers or their livelihoods. And as the Congressional Budget Office has concluded, either is a lose/lose situation.
“By boosting the income of low-wage workers who keep their jobs, a higher minimum wage raises their families’ real income, lifting some of those families out of poverty. However, income falls for some families because other workers lose their jobs and business owners must absorb at least some of the higher costs of labor. For those reasons, the net effect of a minimum-wage increase is to reduce average family income.”
These people, who wanted more on the hour and demanded it, obviously didn’t think this through very well. If they had, they would have realized that raising the minimum wage only works when the entire community can afford to absorb the extra costs of doing so. And now they are paying the price for their ignorance.