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Seattle, Washington currently boasts the highest-in-the-country minimum wage where workers employed by “large employers” must be paid $13 per hour. Last year, a city mandate raised that wage from $11 per hour to $13. This was the second wage increase in less than one year and on Monday, we learned that elected officials in Seattle may have gone too far in the latest social engineering experiment.
New research, conducted by economists at the University of Washington, shows that the $13 minimum wage has led to “steep declines in employment for low-wage workers and a drop in hours for those who kept their jobs. Crucially, the negative impact of lost jobs and hours more than offset the benefits of higher wages – on average, low-wage workers earned $125 per month less because of the higher wage.” Imagine that.
One of the authors of the study went on to say that “The goal of this policy was to deliver higher incomes to people who were struggling to make ends meet in the city. You’ve got to watch out because at some point you run the risk of harming the people you set out to help.”
Yet the Seattle City Council has got nothing on the radicals who run Minneapolis city government. The Minneapolis city council will vote on Friday, June 30th at 9:30 am to increase the city’s minimum wage to $10.00 starting on July 1, 2018. By July 1, 2022, every worker in Minneapolis will be paid at least $15 per hour as voted on by the current Minneapolis City Council. One of their stated reasons for doing so is to help Minneapolis employees deal with “rising inflation” which, had any of them bothered to look, has been at 1.2% in 2016 and 0% in 2015. It is also important to note that every person who works at least two hours in any workweek while in the city of Minneapolis will be considered a Minneapolis employee and subject to these ever-increasing minimum wages.
Even left-leaning economists like Jaren Bernstein with the liberal Center on Budget and Policy Priorities stated that “literature shows that moderate minimum wage increases seem to consistently have their intended effects, [but] you have to admit that the increases that we’re now contemplating go beyond moderate.”
This report was released on top of news from San Francisco, an early adopter of a $15 minimum wage. San Francisco is currently experiencing “a restaurant die-off” that many attribute to the dramatic wage increase soon to take effect in that area. Restaurants typically have a very small profit margin and a huge increase in their cost of doing business appears to have driven many fine dining establishments out of business.
A recent study in San Francisco found that “ever $1 hike in the minimum wage brings a 14 percent increase in the likelihood of a 3.5-star restaurant on Yelp! closing.” Restaurant owners in San Diego say their minimum wage hike is “pushing them to the brink” as well.
Yet it’s unlikely that any actual facts will deter efforts by the radicals in Minneapolis city hall. My advice? Make dinner reservations now for all of your favorite city eateries. Get it done now and hope that suburban Hennepin County communities begin a recruitment campaign as soon as possible for your favorites. This city council seems determine to drive Minneapolis headfirst as fast as it can into an economic abyss. This is just their latest step towards that goal.
Posted on Wed, June 28, 2017
by Annette Meeks