On February 18, 2019, Caleb Summate writes on The Libertarian Republic:
Some New Yorkers are quite upset by the recent raise of the minimum wage in the state to $15, which has resulted in restaurants all over the city raising their prices, according to the New York Post.
The minimum wage in the city has been raised from $13 and 13.50 in some places to $15 at the beginning of 2019. The people who rely on fast food restaurants for their daily lunches have been vocal in their disappointment with the wage hike as it has resulted in restaurants raising their prices.
“It’s obnoxious – kind of a slap in the face,” Starbucks patron Edward Beck told the Post. “Another increase and I won’t come back.”
Five Guys fan Marlon Henry, 43, is already changing his lunch plans thanks to heightened prices. “I was just telling my buddy these fries are expensive,” says the fire alarm inspector, who lives in Queens. Employees of the chain’s West 48th Street and Sixth Avenue location tell The Post that the fries have only increased by 10 cents since the new year, but that the price for burgers has gone up by $1. It’s all too much for Henry, who says he’ll go to other fast food spots to get his fix: “I won’t come back here.”
Restaurants have had to raise their prices in order to adjust to the new salary they must pay their workers, but fear that the price increase will result in a decrease in business.
“[Restaurants] feel they’re getting to a point where the customer might reject the higher prices, choose a different way to eat out, or eat their own food,” said Melissa Fleischut, president and CEO of the New York State Restaurant Association.
To make matters worse, the minor changes implemented in New York City aren’t enough to make up for the rising cost of the minimum wage. Jon Bloostein, the founder of a Manhattan chain restaurant, said there need to be more changes by businesses to afford the raise – but they were given very little time to adjust.
“It’s too much too fast,” said Jeremy Merrin, founder of the Havana Central restaurant in Times Square. “The shock of raising [the wage] at that rate in that short time – you just can’t catch your breath.”
As Jazz Saw wrote for Hot Air, this was all painfully predictable:
“None of this required an Ouija Board to figure out. If the government artificially drives up labor costs, the restaurants (who always operate on very thin margins) were going to have to make up for that surge in costs someplace. They could either fire some of the staff, reduce the hours they work, or raise prices. Usually, it was going to be some combination of all of them. But you can only operate a business with a skeleton crew for so long.”
Setting a minimum wage is always counter-productive to economic growth as these videos from Prager Univerisity beautifully explain.
When it comes to the anticipated sweet taste of success with a higher minimum wage, New Yorkers are finding that reality bites.
Gary Reber Comments:
Unfortunately the effects of minimum wage hikes are not short term. They are an endless cycle. The call is to raise the minimum wage to increase purchasing power. Corporations and business do not pay expenses, they merely roll them into their prices to cover them. Once that has been done, increased prices consume the increased minimum wage and consumers that were impacted are right back in the same economic position.
There are ONLY five ways to deal with forcing a 2X minimum wage increase: 1) raises prices on the products and services offered by the employer/OWNER(s) of the business impacted, which are passed onto the business’ customers, 2) further reduce non-human marginal costs of producing such as the cost of materials, etc. 3) save labor by reducing the number of people employed or employ part time labor to avoid paying benefit costs, 4) replace human workers with non-human workers such as machines, robotics, computerization, etc. and 5) reduce profitability of the business
Paying people less than the market wage rate is unjust. That’s obvious. It’s practically the definition of injustice, to pay people less than the market rate, or to withhold pay. Stop and think about it. An employer is buying someone’s labor. If labor is worth X per day at the market rate, but an employer is forced to pay 2X per day, isn’t the employer being cheated? People tend to want to do things in the most efficient way possible, and get as much as possible for the least amount of effort or cost.
Doing more with less comes naturally if you work for yourself, or you own whatever is doing the work, e.g., capital. You want as much as you can get for as little cost or effort as possible. No one is harmed, because you bear the cost, whether high or low. You benefit, because you pay.
The wage system distorts this natural tendency, a virtue, into something vicious, that is, a vice. A worker who has only his or her labor to sell is going to want as much as he or she possibly can get for it. Naturally, he or she are also going to want to give as little as he or she can get away with.
If he or she was the only one involved, there would be no problem. Unfortunately, there is the person who is buying the labor, and the people who are buying the good or service that the labor, in part, is being used to produce. If the worker has power, the employer pays more. If the worker does not have power, the employer will pay less. Wages will be just only in the rare instance in which the propertied employer and propertyless worker have equal power.
The only way out is to give workers a stake in keeping costs low so that the natural tendency to do more with less works in favor of everybody, not against them. An aggressive program of expanded capital ownership, such as proposed in the Capital Homestead Act, is therefore not only consistent with nature, it is in everybody’s best interest, morally and economically.
Support the enactment of the proposed Capital Homestead Act (aka Economic Democracy Act and Economic Empowerment Act) athttp://www.cesj.org/learn/capital-homesteading/, http://www.cesj.org/…/capital-homestead-act-a-plan-for-get…/, http://www.cesj.org/…/capita…/capital-homestead-act-summary/ andhttp://www.cesj.org/learn/capital-homesteading/ch-vehicles/. And The Capital Homestead Act brochure, pdf print version athttp://www.cesj.org/…/uploads/2014/11/C-CHAflyer_1018101.pdf and Capital Homestead Accounts (CHAs) at http://www.cesj.org/…/ch-v…/capital-homestead-accounts-chas/
