The residents of Seattle are waking up to a new normal they had not anticipated. Seattle is leading the nation in implementing the new $15 an hour minimum wage. Rather than implementing the new wage incrementally as the law allowed, they took the big dive to make all the minimum wage workers “happy” all at once.
The Democratic leadership of the city thought it would be a great idea. Unfortunately, they did not take into consideration the impact of unintended consequences. What unintended consequences you may ask?
Many of the minimum wage workers in the city lost their jobs. Of those who did not lose their jobs, they quickly discovered many of the companies they worked for cut their other benefits. This included the free meals some companies once provided and the loss of 401(k) retirement funding. When those employees who were working at lower wages did the math, they quickly discovered the increase of their wage to $15 an hour actually cost them more money.
Another ugly unintended consequence of the minimum wage increase was the closing of many restaurants. Restaurant owners, many of whom had been in business for decades, suddenly shut their doors. Who could blame them? What the leftist leadership failed to realize is that the average profit margin in the restaurant business is only four percent. When the government mandated an unprecedented increase in their cost of doing business, many of the restaurant owners had no options. After all, who could stay in business operating at a loss month after month? Now, more residents are unemployed because of the closings and the public has less choice in dining out.
Consequently, all of the former restaurant employees are out looking for work at the other restaurants – other companies that will have to pay them the $15 an hour minimum wage. Which of course, they cannot afford. This of course, leads to higher overall unemployment in the city.
The liberal Democrats of Seattle really did not think this through. Unfortunately, this is something that is happening on a national scale as well as in local areas.
The Liberals have grave misconceptions with what drives the big economic machine. They honestly believe the way to increase tax revenue this is by hiking taxes. They also believe the only way to end poverty is by increasing the minimum wage.
Well, they have made their bed and they are going to have to live with it.
The leaders of Seattle are about to discover their action of increasing the minimum wage will do nothing to decrease poverty, but rather it will increase the unemployment of many citizens. Thereby, increasing overall poverty.
Another consequence of minimum skilled workers demanding $15 as a minimum wage is the increase in technology research. It started quite some time ago with self-check out kiosks at grocery stores and hardware stores. It is a minimal stretch of the imagination to see automation taking your order in a fast food store. McDonald’s is currently testing the process in 300 stores around the nation. This will probably not bode well for some workers, at which point, they will be out looking for new jobs.
Jobs, which more than likely, will not be there because no one will be able to afford to pay a minimum wage of $15 per hour.
Working for less than $10 an hour is not a career path. A minimum wage position is not meant to be kept year after year. Yet, many of today’s workers report they are “trapped” in their situations. If they are trapped, as they claim, they are trapped by their own choosing. Anyone who admits to being trapped in a minimum wage job is basically saying they are not capable of better.
If the strikers have their way and force businesses to pay $15 an hour for minimum wage, the consequences will be dire in many ways. The top two unintended consequences will be the layoffs of many and a 38 percent increase in product prices. What kind of an effect do you think that will on the economy?
Many who find themselves in a minimum wage position are there for a reason. Typically, they are high school students saving money for college. Some are college students working part time through school. Others may be transitioning from one job to another.
Many who feel trapped in minimum wage jobs are trapped because they have minimum education, they have minimum enthusiasm, they have minimum skills, they have minimum interest in making the company better, and they have minimum interest in making themselves better. In other words, it is about their attitude. If a person is “minimum” and is doing nothing to better themselves, the result is predictable.
The minimum wage position was never meant to be a career path. Up until this century, it was always a position for learning the essential skills needed for working in the economy and moving into career positions with higher salaries.