Garcetti shows why minimum wage kills jobs

18 Sep, 2014 by John Seiler

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In backing a higher minimum wage for his city, Los Angeles Mayor Eric Garcetti inadvertently explained how it would kill jobs. From the Times:

“Garcetti pitched his plan to gradually boost the minimum wage across the city, critics argued that businesses might move to nearby cities to pay workers less.

“Now Garcetti is trying to persuade those neighboring cities to increase their minimum wages as well — and some are showing interest.”

But if those cities nearby to L.A. increase their minimum wage to L.A.’s level, then the businesses will just move further out, such as to Orange County — a place where no city except maybe Laguna Beach is likely to raise its minimum wage above the current state level of $9 per hour (rising to $10 in 2016).

But if that somehow did happen, then the businesses would move to other states — or other countries. Or they would find ways to automate their businesses. Or just go out of business.

Although people who keep their jobs obviously benefit from a higher minimum wage, many people will lose their jobs — and go on welfare paid for by taxpayers. So the minimum wage turns taxpayers with jobs into welfare recipients without jobs.

Californians should thank Mayor Garcetti for explaining that.