Unintended yet predictable consequences: Minnesota restaurant adds ‘minimum wage fee’
We reported something similar taking place in Washington not too long ago. This is the minimum wage in action, folks. Remember, nothing occurs in a vacuum. Whenever the government mandates that businesses pay more for employees, something must happen. That extra money must come from somewhere.
From a hilariously biased Minnesota CBS affiliate:
People eating at a Stillwater restaurant Tuesday noticed a new fee added to their bill.
Owners of the Oasis Cafe are charging a 35 cent minimum wage fee. They say it’s to offset the cost of an increased minimum wage for tipped employees.
Customers have mixed reviews about the new fee.
For some, the thought of charging customers this fee sent them to social media to vent.
“You’re essentially blaming customers for the increase when you charge for it the way you do,” one customer wrote on Facebook.
Another said: “It’s Oasis way of blaming our government for trying to set a fair living wage. It is political grandstanding.”
Oasis owners fired back on Facebook, saying: “Thumbing my nose at the law change, you’re right. Part of my thinking was to shine a light on this matter, which I truly believe is in the best interest of both my business and employees.”
Read the Rest (video at the link)
Again, nothing happens in a vacuum, or, as Thomas Sowell would say, “There’s no such thing as a free lunch.”
For those of you who are still a little confused on why the minimum wage literally hurts those it claims to help, here are some videos:
And it’s not just true for minimum wage, it’s true for virtually everything the government does. Whenever the government tries to do something to “help”, regardless of how well intentioned, it generally makes it and/or something else worse. This is a basic axiom.
Four Reasons NOT to Raise the Minimum Wage
The debate over minimum wage continues to rage across the country. But, would raising the minimum wage actually harm the very people it is purportedly designed to help?
Research shows that businesses would respond to the increased costs by reducing employment, particularly for low-skilled workers. Some businesses may even pass the higher costs on to consumers. Despite the hope of proponents, raising the minimum wage would do little, if anything, to decrease poverty.
Here are four reasons NOT to raise the minimum wage….
It Would Result In Job Loss
Evidence of job losses have been found since the earliest imposition of the minimum wage
- The first 25-cent minimum wage in 1938 resulted in significant job losses.
- Minimum wage increases recently imposed in American Samoa resulted in economic effects so pronounced that President Obama signed into law a bill postponing them.
- A 2006 review of more than 100 minimum wage studies by David Neumark and William Wascher found that about two-thirds found negative employment effects.
- In 2010, Joseph Sabia and Richard Burkhauser estimated: “nearly 1.3 million jobs will be lost if the federal minimum wage is increased to $9.50 per hour.”
It Would Hurt Low-Skilled Workers
Evidence shows minimum wage increases disproportionally hurt the people they’re supposed to help
- The 2006 Neumark and Wascher review found the literature “as largely solidifying the conventional view that minimum wages reduce employment among low-skilled workers.”
- A 2012 analysis of the New York State minimum wage increase from $5.15 to $6.75 per hour found a “20.2 to 21.8 percent reduction in the employment of younger less-educated individuals.”
- A 2010 analysis by Michael J. Hicks found: “the latest round of minimum wage increases” account “for roughly 550,000 fewer part-time jobs,” including “roughly 310,000 fewer teenagers working part-time.”
It Would Have Little Effect On Reducing Poverty
Evidence suggests that minimum wage increases don’t reduce poverty
- In the previous federal minimum wage increase from $5.15 to $7.25, only 15 percent of the workers who were expected to gain from it lived in poor households, according to a 2012 review by Mark Wilson. If the minimum were today raised to $9.50, only 11 percent of workers who would gain live in poor households.
- The 2012 Wilson review noted: “Since 1995, eight studies have examined the income and poverty effects of minimum wage increases, and all but one have found that past minimum wage hikes had no effect on poverty.”
- The 2012 Wilson review noted: “One recent academic study found that both state and federal minimum wage increases between 2003 and 2007 had no effect on state poverty rates.”
It May Result In Higher Prices For Consumers
The costs of minimum wage increases must be paid by someone
- The 2012 Wilson review noted: A 2004 “review of more than 20 minimum wage studies looking at price effects found that a 10 percent increase in the U.S. minimum wage raises food prices by up to 4 percent.”
- A 2007 study from the Federal Reserve Bank of Chicago found that restaurant prices increase in response to minimum wage increases.
Anonymous asked: Okay, I don't personally believe in many of the things that are on your blog, especially with the "homeless spikes" and being against raising minimum wage. 1. How is putting spikes anywhere helping the homeless? We should be trying to get them off the street not sweeping them under the rug. 2. The economy works by giving people enough money to spend on goods and services so that or can be put back into the economy. Raising minimum wage would actually be beneficial as more people can buy things.
Oh wow. You really have no idea how the real world works, do you? Ok, lemme break it down a bit:
1. The spikes are not to help the homeless. They are to help the property owner who has invested what would probably amount to their entire life’s fortune in their business/building. They are there to discourage anyone, not just the homeless, from loitering and damaging the property. There are countless programs, charities and shelters for the homeless in particular, so the spikes are really an excuse to bitch. Instead of complaining about a private property owner protecting his investment, how about you put your money and time where your mouth is and volunteer/donate to a homeless shelter or food kitchen. It would go a lot farther than your phony internet activism that feeds and houses exactly zero people.
2. You could not be more wrong about the economy. Wages are a by product of the economy, not it’s engine. Think of it like this: You are making paper clips. After you factor in manufacturing costs, overhead, labor costs and the like, you can sell your paper clips for .10¢ a piece. Now let’s say some government official comes and tells you that you have to raise your labor costs from $8/hr to $15/hr. This raise is not due to increased efficiency, but just some arbitrary increase because it makes people feel better and can get a politician re-elected. What do you think happens? Do you, as a manufacturer, eat the extra cost? You already only make a paltry 10-15% per sale. No, what you do is raise the price per paper clip to .20¢. Of course, the wage increase is not for paper clip manufacturers alone, so EVERYTHING goes up in cost. .99¢ hamburgers? Now $2. $3 gallon of milk? Now $6. What this wage increase does is simply raise prices for EVERYTHING.
What good is doubling your income if everything doubles in price? You “purchasing power” does not increase in the long run when you arbitrarily raise the minimum wage. Production, profit and efficiency mandate what wages are. Not the other way around.
My mother is looking for a job right now. Thank God for low paying jobs that can get her by until she finds a better one. Screw minimum wage BS.