OPINION:
Everyone wants a raise, but only a few of us expect to get it by government edict. Some workers at the bottom of the payroll will see a larger paycheck — if they don’t get a pink slip first. It can get cold in the real world because despite all the government can do there’s still no free lunch.
The dreamers on the left who have no interest in how the world actually works have recast efforts to raise the minimum wage as a campaign for “a living wage.” Raising wages by government edict has become a theme of the Democratic 2016 presidential campaign. Hillary Clinton, the candidate the party is resigned to crowning, wants a $12 an hour federal minimum wage and cheers local efforts in Los Angeles and New York City to boost the minimum to $15 an hour. Bernie Sanders, the Democratic Socialist, goes Hillary one bad idea better, and demands a $15 minimum from coast to coast.
The consequences of economics by dreams have arrived in Seattle, where the city council approved a $15 an hour minimum wage last year. A study published the other day by the American Enterprise Institute finds that economics by edict doesn’t work like the dreamers said it would. The state of Washington added 5,800 restaurant jobs between January and September, an increase of 6.6 percent, but Seattle lost 700, a decline of 0.5 percent.
The bad news is likely to worsen: Only an increase to $11 an hour is in effect so far, with another $4 increase to be imposed in 2017. “Perhaps Seattle’s restaurant employment will recover,” the study concludes, “or perhaps it will continue to suffer from the upcoming full 58 percent increase in labor costs for the city’s restaurants that will be phased in during the coming years — time will tell. What we know for sure is that there are now 700 Seattle area restaurant workers who were employed in January who are no longer employed today …”
Undeterred, other Democratic strongholds are imposing $15 an hour living wage rules, including Los Angeles and New York City. Democrats get a kick out of giving away other people’s money, particularly the money of small-business owners who must hire workers who haven’t learned enough yet to climb off the bottom rung of the economic ladder.
In the abstract, most Americans agree with them. When President Obama last year urged Congress to raise the minimum wage from $7.25 to $10.10, 7 of 10 Americans answering a Reason-Rupe poll said it was a good idea. When the hypothetical was changed to include consideration of the real-world costs — that employers might have to lay off workers — support dropped to 38 percent.
The nonpartisan Congressional Budget Office studied the likely effects of the president’s $10.10 minimum wage proposal and forecast nationwide losses of 500,000 jobs. It’s basic arithmetic: Unless an restaurateur can come up with more cash for the raises, those at the end of the pay line won’t get anything at all. Hillary is free to share her ample assets with whomever she pleases, and merely the interest on the hundreds of millions of dollars she and Bill have socked away in their foundation, would cheer up many in the jobless line. Bernie could chip in something from his generous Senate pay and privileges. But forcing small businesses to do that will only doom hundreds of thousands to the ranks of the unemployed. It’s Economics 101.
Please read our comment policy before commenting.