Posted on 03/07/2021 10:52:02 AM PST by Impala64ssa
Increasing the minimum wage to $15 an hour has resulted in exactly what critics have predicted: A loss of low-skilled jobs and, according to a recent study, increased prices for the goods and services provided by companies that employ low-skilled workers.
Brad Polumbo reported at the Foundation for Economic Education on a recent study from Princeton economist Orley C. Ashenfelter and Czech economist Štěpán Jurajda, which found that minimum wage hikes led to much higher menu prices at McDonalds.
“They found a ‘full or near-full price pass-through of minimum-wage-induced higher costs of labor.’ In English, this means that by vastly increasing production costs, minimum wage hikes resulted in an equivalent increase in menu prices,” Polumbo reported.
Polumbo further explained:
Supporters of hiking the minimum wage point to workers’ nominal wages and argue, correctly, that some workers would see higher numbers on their checks every week. However, nominal figures aren’t actually what matter. A worker’s real income and standard of living is best measured by the purchasing power of their wages.
If a McDonald’s cashier’s take-home pay increases 20% after a minimum wage hike, but the prices for the food and other things they spend their wages on increase by a similar amount, they aren’t actually any better off.
This would happen throughout the economy, not just in fast food.
Increased prices on goods and services are just one consequence of a minimum wage hike, Polumbo pointed out. The nonpartisan Congressional Budget Office estimated that an increased minimum wage would lead to 1.4 million lost jobs. Examples in major cities that have enacted an higher minimum wage have backed up this estimation, with a New York City survey finding restaurant job losses in the Big Apple. Those job losses occurred before the hike was made official, but at the time it was well known the minimum wage would be increased, which the survey determined caused restaurant owners to react in preparation. Survey respondents also said they could continue cutting jobs and hours because of the policy.
Seattle, Washington has become ground zero for studying the minimum wage hike, after it was enacted during an economic boom in the city. Multiple studies, including one from the National Bureau of Economic Research, found that “low-wage workers lost more than $2 in forgone employment opportunities for every $1 gained from higher hourly wages.” As Paul Mosimann reported for The Daily Wire, the study also found that “the lost income associated with the hour deductions of low-wage employees was greater than the wage increases, which resulted in a net loss of $74 a month for each employee.”
The Heritage Foundation also reported that a minimum wage hike would lead to higher childcare costs as well.
“Childcare costs would increase by an average of 21 percent—an extra $3,728 per year for two children—and up to 43 percent, or more than $6,000, in some states,” Heritage found. “The impacts would be greatest in lower-cost areas; in Louisiana, Oklahoma, and Mississippi, costs would surge between 37 percent and 43 percent.”
In the lead up to congress’ vote on another coronavirus relief bill, President Joe Biden backed away from supporting an increase in the minimum wage in the bill.
“Thank you Captain Obvious! Does this study mean there really is no such thing as a free lunch? WOODA THUNK IT?!? How much taxpayer’s $$$$ funded this study?”
Gee, you think? Oh, that’s right common sense no longer exits in Washington, DC.
The disturbing thing is that it took ‘a study’ to figure this out.
The market is taking care of itself.
In my area, the local burger stand and a local taco stand have hiring signs saying that their starting wage is $14 to $16 an hour.
In the big box stores both Target and Costco are paying a minimum wage of $16.00 an hour.
In all those shops prices remain competitive.
“The rich get richer and the poor get poorer. In the meantime, in between time, ain’t we got fun!”
“If a McDonald’s cashier’s take-home pay increases 20% after a minimum wage hike, but the prices for the food and other things they spend their wages on increase by a similar amount, they aren’t actually any better off.”
That statement is not necessarily true. The 20% wage hike will result in more taxes. They may be WORSE off with a 20% hike due to the extra tax.
It’s pure libtard genius. Hey AOC, I’ll have one of those 20.00 screwdrivers, NOT!
I was promised Unicorn urine would magically fix this.
“That statement is not necessarily true. The 20% wage hike will result in more taxes. They may be WORSE off with a 20% hike due to the extra tax.”
At your job, do you regularly refuse 20 percent pay hikes?
Do you decline job offers that would pay 20 percent more than your current job?
Of course they had to raise their prices, and
that means, we go there less.
All I know is that my McDonald’s App $2.00 Sandwich Daly Deal went up to $3.00 last Monday.
They also limited the choices. I always ordered the most Expensive Burger on the List, a made fresh Double Deluxe Quarter Pounder with Cheese. Now it’s gone.
No more $1.00 Whopper Wednesdays at Burger King either.
As a seasoned Citizen, I now join the Women and Children hit hardest demographic.
Oh the humanity. #;^)
I will pay the freight that keeps me below a certain level.
Stop being racists! (/liberal)
More Buffoonery from the Left.
Look this is simple any business can only offer a salary they can afford.
Chain stores have more leeway than the Mom and Pop stores neighborhood’s need.
Why should the Fed’s force a business to offer what they believe in?
Minimum wage has nothing to do with starting salaries, experience does....
“I will pay the freight that keeps me below a certain level.”
Don’t sell yourself short.
Take the pay hike, take the promotion, take the better job offer.
Target is $15 for sales floor guys. I know, my bud works for Target in HR. They recently got rid of the people who started in December and made them seasonal in case the hero pay’ salary kicks in LA county raising salaries another $5 per hour.
Can anyone advise how dollar stores like Dollar Tree makes money?
Costco, Target and the local burger joints paying $16 an hour will set the pace for all businesses.
Keep up with Costco or die.
Also, you can get grass-fed hamburger and make an 8-oz patty (much larger than even a Big Mac) at home with maybe a potato roll and save money yet again.
The last time I went into a McDonalds a lone person at the counter (where previously there would be 3 or 4 employees) wouldn’t take my order - he directed me to this row of kiosks to place my order. His new “co-workers” - and they don’t call in sick, smoke pot, etc....
Every increase in the minimum wage creates more of these “workers” - and less of the human kind.
I’ve also noticed a lot of the deals (2 for $x, or 3 for $y) have disappeared in both fast-food places and convenience stores around me; this is the gradual inflation (while they insist there is none).
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