Minimum wage mandates equal no jobs

www.americanthinker.com

Among economists, there’s a venerable axiom: the minimum wage is always zero. Unfortunately, Democrat politicians, fixated on income redistribution, have hit on the idea of raising the minimum wage to a living wage. The result everywhere they’ve mandated this empty-headed idea has been eliminating minimum wage jobs in favor of automation and dramatically reducing the hours of remaining workers. Instead of raising workers’ wages, many workers have no wages, and those remaining, due to reduced hours, experience no raise.

This has nothing to do with greedy capitalists. Minimum wage jobs have never been intended to pay a living wage capable of supporting even the worker, let alone a family. They’re entry-level positions for people, for the most part, with no work experience or qualifications. They provide on-the-job training and acculturation to the world of work, where beginning workers learn how to be on time and other adult responsibilities.

Even though wages are low compared to those paid qualified workers in higher-margin jobs, there is—or at least there used to be—competition among minimum-wage businesses to attract the best workers. The free market, as always, reflects reality. A burger business operates on a very slim profit margin. They’ll have 25 jobs at $10.00 per hour, but only eight at $15.00 per hour.

Graphic: X Post

It’s not like this hasn’t been widely known for a very long time, but The People’s Republic of Minnesota isn’t restrained by such trifles as economic reality:

A new Federal Reserve Bank of Minneapolis study is handing conservatives fresh ammunition in the minimum wage fight, with critics mocking the findings as obvious after researchers linked $15 wage hikes to job losses and reduced hours in Minneapolis and St. Paul. [skip]
Advertisement

The working paper found that the phased minimum wage increases in Minneapolis and St. Paul were associated with a decline in employment, along with reduced hours for some workers that could complicate ongoing national pushes for higher wage mandates.

As with all such mandates, this one is self-defeating:

The debate comes as progressive leaders continue to advocate for increasing the federal minimum wage to address rising living costs. First passed in 2017, the Minneapolis Municipal Minimum Wage Ordinance was established to increase the minimum wage in phases to eventually meet $15 per hour by July 2024. Minneapolis’ minimum wage rose to $16.37 for all employers on Jan. 1, while neighboring St. Paul’s rate rose to $16.37 for large businesses as part of phased wage increase.

“Progressive leaders.” There’s an oxymoron. $16.37 per hour amounts to $654.80 for a 40-hour workweek before taxes, and $2619. 20 per month, again, in before-tax wages. But in most states, minimum-wage workers don’t get to work 40 hours per week because that invokes other pay mandates businesses can’t afford. As always, a high minimum wage sounds good except for the reality that at 20 hours per week. It’s only $327.40, or $1309.60 per month, and zero if there are no jobs at that wage.

Graphic: X Post

The Minneapolis Fed analysis found the wage hikes increased hourly pay but reduced available jobs and hours, with researchers estimating that Minneapolis lost 5,425 jobs and St. Paul lost 3,797 jobs between 2017 and 2021 because of the minimum wage increases.

The restaurant sector was hit especially hard, according to the report. Full-service restaurant jobs fell nearly 36% in Minneapolis and nearly 20% in St. Paul between 2018 and 2023, according to the Fed data cited by the Minnesota Star Tribune.

"We demonstrate that establishments with larger exposure of their labor costs to the minimum wage experienced larger increases in their wage and larger declines in their jobs, hours, and wage bill," economists stated.

Restaurants of any kind are particularly hit by minimum wage mandates. Operating on very small profit margins, their choices are: few workers, automation, and inevitably, raising prices, which reduces the number of customers and drives restaurants out of business.

At Chronicles Magazine, Mark Judge reviews a new book about wages and work in the grocery industry, where profit margins run from 1-3%:

In the year of our Lord 2026 it is immoral to pay a worker in the United States $7.25 an hour, which is the national minimum wage. Just as the natural law tells us that abortion is wrong and that trans “women” are, in fact, men pretending to be something they are not, the law “written on the human heart” knows that underpaying workers is wrong.

Indeed, it is, but Democrats ignore reality in favor of what “ought to be,” in their perfect, socialist utopia. Minimum-wage businesses have to compete with other minimum-wage businesses for good employees, and as always, people wanting higher wages need to do what’s necessary to make their labor more valuable.

Become a subscriber and get our weekly, Friday newsletter with unique content from our editors. These essays alone are worth the cost of the subscription.

Mike McDaniel is a USAF veteran, classically trained musician, Japanese and European fencer, lifelong athlete, firearm instructor, retired police officer, and high school and college English teacher. He is a published author and blogger. His home blog is Stately McDaniel Manor.