On certain issues, leftist harping is especially odious. One is the minimum wage.
Anyone who has met a payroll knows that, when higher wages are simply dictated from on high, then employees (or hours or salaries) must be cut back elsewhere – assuming the business can survive at all. It’s math. We’ve seen it before,
- with Starbucks. Or,
- with the rise of automated ordering at fast-food restaurants. Or,
- with that San Francisco bookstore that was destroyed by a minimum wage increase it had supported.
Leftists like to deny math and other facts of business and economics. What makes it odious is, they’re also smug about it. It isn’t just their ignorance; it’s their aggressive pride in staying ignorant.
San Francisco’s higher minimum wage is causing an increasing number of restaurants to go out of business even before it is fully phased in, a new study by the Harvard Business School found.
The closings were concentrated among struggling, lower-rated restaurants. The higher minimum also caused fewer new restaurants to open, it found.
“We provide suggestive evidence that higher minimum wage increases overall exit rates among restaurants, where a $1 increase in the minimum wage leads to approximately a 4 to 10 percent increase in the likelihood of exit,” report Dara Lee and Michael Luca, authors of “Survival of the Fittest: The Impact of the Minimum Wage on Firm Exit.” The study used as a case study San Francisco, which has an estimated 6,000 restaurants in the Bay Area and is ratcheting up its minimum wage.
So, Nancy Pelosi and her fellow limousine-socialists are looking at fewer restaurant selections for themselves – and more unemployed people. Do they understand that? Or even notice it?
There is only one time when the minimum wage doesn’t hurt employment: When it’s low enough, in real terms, to be ineffectual. For example, if we have a period of inflation – and no minimum wage increases – then its real value will go down, and employers can afford to hire the low-end workers again. But the higher the minimum wage is, in real terms: the more low-end workers can’t get work.