Minimum wage boost already killing jobs

Minimum wage boost already killing jobs

minimum wage, taylor jones, cagle, May 8, 2014California’s minimum wage jumped to $9 an hour from $8 on July 1, and further will rise to $10 in 2016. People who still have minimum-wage jobs are enjoying a raise.

But the imposition is slamming others. Watchdog.com reported:

In a survey of 163 restaurant owners in San Jose, 66 percent said they raised their prices, 45 percent reduced employee hours, and 42 percent reduced staff, EPI stated.

This survey seems to oppose the findings that states that have increased the minimum wage gained a bump in job growth, according to data the Labor Department released Friday.

I’ve noticed the increases myself at a restaurant I go to every now and then in Anaheim. In July, prices jumped about 20 percent. I always set a certain amount in my budget to spend in this and other restaurants, so I was surprised at having to pay $5 more. Next time, I’ll just order $5 less food. Unlike the government, I can’t pay for higher expenses by raising taxes.

I guess First Lady Michelle Obama would say that’s good because I need to lose weight. But it means less business for the restaurant.

Future minimum-wage increases also look to hurt. The Chronicle reported:

Oakland’s Youth Employment Partnership spends roughly $1.8 million a year to give 800 hard-to-employ teens steady minimum-wage jobs that keep them away from vice and encourage them to appreciate a hard day’s work.

But the nonprofit could be forced to cut the jobs it offers by 30 percent next year if Oakland voters approve a plan in November to raise the city’s minimum wage from $9 to $12.25 an hour starting March 1, its executive director said.

Ultimately, raising the minimum-wage just means more automation. Computer power, still following Moore’s Law, doubles every 12 to 18 months. So computers and robots will just keep getting better and cheaper. IBM just developed a new chip that, according to the New York Times, “functions like a brain.”

Finally, here’s a video showing a computer replacing fast-food cashiers. “It’s time to give America a raise” is the slogan President Obama and others are using to push for higher minimum wages. A more apt slogan would be : It’s time to give America a pink slip.

17 comments

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  1. Michael
    Michael 11 August, 2014, 12:46

    Increase in prices, reduced customer expenditures. Increase in wage costs reduced hours. Perhaps San Jose city leadership need to sit through some more common core math.

    Reply this comment
  2. T Mind of Ted Your God
    T Mind of Ted Your God 11 August, 2014, 13:34

    LOL– keep the poor down! Keep wages dirt low!

    Vote Repub in 2014!

    Reply this comment
  3. S Moderation Douglas
    S Moderation Douglas 11 August, 2014, 14:06

    A “survey of restaurant owners” by EPI.

    (Rick) Berman and Co. is a public affairs firm that represents tobacco, hotels, taverns, restaurants, etc., etc., etc.

    Employment Policies Institute….(not to be confused with Economic Policies Institute) is a tax exempt foundation with the stated mission of studying public policy issues related to employment growth and promote entry level employment.

    Its Executive Director is……Rick Berman. The Employment Policies Institute has no employees of its own, according to New York Times. The Institute PAYS Berman & company for all its research and services.

    Non profit PAYS restaurant lobbyist for research on minimum wage employment.

    Hmmmmm.

    Since it’s a 501c3 group, you could probably send a donation. Its the same address as Berman and Co. (They do have a separate phone line)

    Don’t worry about that IRS investigation. Berman’s firm said they abide by the law and have been cleared by the IRS.

    Who you gonna believe???

    Reply this comment
  4. Queeg
    Queeg 11 August, 2014, 15:25

    Comrades…you forget all those disappearing choices in product and services beside jobs helping starters, the disabled and the chronically poor.

    Instead of five burger choices……you may have two choices…..and…….you do the order on a handwritten recycled ticket, pick up order, fill your own drink, bus your table.

    Cutting choices cuts inventory costs, ordering and storing space costs, utilities and labor……

    Just like in Venezuela, Bolivia and Cuba…..efficiency Comrades…..and good for the enviro and cuts obesity….and other thingees too.

    Reply this comment
  5. S Moderation Douglas
    S Moderation Douglas 11 August, 2014, 15:39

    San Jose Mecury News 3/12/14

    “This week marks the one-year anniversary of the implementation of the $10 minimum wage in San Jose.”

    “A year later, it is clear that raising San Jose’s minimum wage has been an incredible success. The data shows that under San Jose’s minimum wage, unemployment was reduced, the number of businesses grew, the number of minimum wage jobs expanded, average employee hours remained constant and the economy was stimulated.”

    Reply this comment
  6. bob
    bob 11 August, 2014, 20:13

    So all that was due to the minimum wage raise being a huge success, eh Doglass?

    Why not raise the minimum wage to $14 an hour then?

    How do you know that if the wage had stayed the same business growth would have been even greater with the number of minimum wage jobs rising much more?

    The fact is that you can’t repeal the laws of economics. Unless the price of labor is perfectly inelastic which it isn’t, raising its price results in less demand.

    Whoever you are quoting at the SJ Merc is an economic illiterate.

    Reply this comment
  7. S Moderation Douglas
    S Moderation Douglas 11 August, 2014, 20:40

    I thought I had “replied” to my own post (how pathetic does that sound?) It apparently didn’t post.

    The quote: ” Correlation does not imply causation.”

    I agree. That was an opinion piece and the author implied the increase in jobs and business was a result of the minimum wage increase. One can’t reasonably make that assumption without a LOT more data.

    BUT!!

    San Jose employment and business DID increase, even with the higher minimum wage, so it’s maybe not as disastrous as EPI suggests.

    Reply this comment
  8. Queeg
    Queeg 11 August, 2014, 22:15

    Comrades…..someone please check the background of the article writer. He was related to Bagdad Bob?
    Faux wages via minimum wages or union bought jobs are only viable if productivity increases….people are like machines…raising productivity is difficult even in the short run.

    Reply this comment
  9. T Mind of Ted Your God
    T Mind of Ted Your God 12 August, 2014, 06:27

    Bagdad Bob! I forgot about that troll!

    Reply this comment
  10. Bill Gore
    Bill Gore 12 August, 2014, 08:20

    Let’s get kinda truthy here: Nobody ‘lives’ on the income from a minimum wage job. Got it? Everyone that punches in at MickyDy’s, to serve toxic greasy pink slime and sawdust to the bloated sickly diabetic lumpenproletariat is getting a smorgasborg of benefits for the working ‘poor’, including SNAP WIC cash assistance free medical dental rent assistance Earned Income Tax Credit etc etc etc….If they are not getting these benefits they are homeless. Raising the minimum wage reduces the SUBSIDY that is flowing through to the corporate income statement. Additionally, real inflation adjusted wages for the working class have been stagnant since the 1970’s for crying out loud while the share of income and assets acruing to the top 1% has exploded…Make business actually PAY for their labor force. Crazy concept. I own/manage a professional services business, I need smart hardworking independent people to get things done. I do NOT need dispirited slaves who cant read or write their own name……

    Reply this comment
    • Fred Mangels
      Fred Mangels 12 August, 2014, 13:32

      ” I do NOT need dispirited slaves who cant read or write their own name –“.

      So you don’t want to pay $14.00 an hour for that sort of worker? Imagine that. Raising the minimum wage for those sort of workers does nothing to improve their reading or writing.

      Bottom line is, this is only a temporary raise for some workers. When the minimum wage goes up, everybody else’s wages are eventually raised to compensate. It doesn’t take long before minimum wage workers are back to square one. There will always be workers at the bottom of the pay scale.

      Reply this comment
  11. Bill Gore
    Bill Gore 12 August, 2014, 08:42

    Further musings: our anglo-american business culture is addicted to high volume/low margin/low quality production. Our business culture HATES paying for labor (unless it’s the ‘work’ of the mafiosi ‘elite’ corporate reptoids, then the sky’s the limit.) and is always chasing the quick buck, the quicker the better. So like locusts we americans move across the globe, seeking the rock bottom cheapest labor and raw materials, all for the further disgusting enrichment of the tiny financial elite. We neglect our own people, eat our own seed corn, throw sand in the face of the next generation. The problem with slave systems is there is no long term sustainability. Real wealth creation requires real innovation and a real lifting up of the greatest number of people. Example: the Ruhr Valley in Germany was a major textile manufacturing center 150 years ago. Guess what: right now it is STILL a major center of textile production, but instead of bulk cotton cloth it is the region the world turns to for the most advanced high tech textiles. Factory workers in this area are like PhD’s in America.

    Reply this comment
  12. Queeg
    Queeg 12 August, 2014, 08:43

    Ah….so well spoken…will cut this out and put it on the outside lunch spot wall for comrades…there is someone out there who cares! Trouble is that reading thingee….eh?

    Reply this comment
  13. John Humbert
    John Humbert 12 August, 2014, 13:51

    This is nothing new. If you pay attention, as most people who do a good job of household supply do, you know that every hike in the minimum wage causes an increase in prices. Usually more than one.

    When talk starts about raising the minimum wage, prices increase, in anticipation of a potential increase in the cost of doing business. When the minimum wage is increased, there tends to be a second increase in prices along with a loss of jobs. Workers are told they have to increase production to cover their raise in wages.

    Usually, within a year there is a third price increase based on a supposed increase cost of doing business which usually is not backed up by the numbers, and a decline in profits due to a lack of sales.

    Reply this comment
  14. Queeg
    Queeg 12 August, 2014, 18:33

    A muddled but interesting journey.

    At a bed and breakfast two gals did rooms and common area, a combined total of eight part time hours, and they provided morning breakfast for guests.

    The minimum wage went up. Decisions to be made.

    The owner discontinued weekday breakfast saving one person’s labor of 4 hours plus food costs, utilities, supplies.

    The owner got a pay raise- An employee lost 80 hrs per month compensation.

    Business did not fall off, accordingly.

    This is how you price services….when your back is against the wall.

    Reply this comment

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