COLLAGE OF CONSEQUENCES – Before and after $15 per hour minimum wage increase.
Washington Policy Center by Erin Shannon
As fast food employers in the state of New York brace for that state’s impending $15 wage mandate, one business owner succinctly explained what the high wage will mean for her business and her employees:
It really is going to come to less people. What I envision is cutting labor, hiring less people, having less people per shift.”
The owner of three Tropical Smoothie Cafes on Long Island said she simply cannot afford a $15 wage for all of her employees. She already raised her prices to offset the recent increase in New York’s state minimum wage (from $7.25 to $8.75 with an increase to $9 scheduled at the end of the year). She fears yet another price increase will drive customers away. So she says she will likely offset the newest wage hike by relying on fewer workers (all of whom are high school and college students).
According to one economist though, higher food costs at fast food establishments is exactly what consumers can expect. The former chief economist for the U.S. Department of Labor, Diana Furchtgott-Roth, estimates the $15 minimum wage will lead to a 22% increase in fast food prices. As Furchtgott-Roth put it:
To assume that prices would not increase with a 66 percent labor price hike is economic naïveté.
This means that consumers would not visit fast-food establishment as frequently. Small, local establishments are more likely to close if the minimum wage is increased. More low-skill Americans would be out of work. People would buy less of the higher-priced services. Low-income people would have to pay more for fast-food. That is why raising the fast-food minimum wage is not cost-free to New York. Supersizing a wage is not as simple as supersizing a hamburger.”
The reality is most businesses will try a combination of price increases and cost-cutting measures to offset the higher wage….
I find it hard to believe that people earning less than $15.00 per hour fell for the propaganda espoused by labor unions and other social justice freaks who when it is all said and done, will be the only winners in this deal.
At the same time, going from $8 or $9 per hour to 15.00 per hour in New York State is meaningless when one takes into consideration the high taxes.
Furthermore, if they cannot afford to feed their families or make the rent now, it will be even worse when the $15 per hour minimum wage rate goes into effect.
A one bedroom apartment in Brooklyn starts at about $1500 per month, in Manhattan $2400 to $3000 a month and higher. While many of those demanding a minimum wage hike are dependent upon government subsidies to cover their rent, none of them has taken into consideration the consequences of their demands, i.e., the termination of those government subsidies.
Of course, one could work two of three jobs as the rest of us did in order to pay our bills and provide for our families rather than depend upon unions and the government dependency dragging one further down the road to serfdom.
The fallout is going to be interesting.