So, we need to raise the minimum wage to $15/hour, we're told. Several cities have already done so. The claim is, this has no real impact on unemployment. Somehow, in the magical world of leftist economics, doubling the cost of something will not change how much of that something people buy. Balderdash and other comments. If you double the price of a unit of labor will, employers will find a way to purchase fewer units of labor.
Maybe that won't mean the current employees lose their jobs. It may well mean that when they leave - and young people are notoriously fickle on that score - it is a lot less likely someone will be hired to replace them. It does mean that people trying to get a job will have a much harder time.
And it means that some businesses that are close to the margin may well have to close or move outside city limits. An iconic San Francisco comic book shop is trying a different approach, but it is not yet clear whether it will work or not. Other stores in Seattle and San Francisco have closed already. McDonald's is ratcheting up its move to automated kiosks, getting rid of the folks who take your order and your cash. Stores that found people resistant to self-check-outs have instead moved to improve the technology and overcome that resistance rather than increase the number of human cashiers.
Since June 2014, the labor force participation rate of youths in the U.S. has gone from 43.2% to 36.7%. That is the percentage of 16-19 year olds looking for or holding a job is 6.5% less than it was a year ago. This is the only reason the youth unemployment rate has declined from 21.4% to 15.7% - that and a reduction in the overall population of 16-19 year olds by 15.5%. Black youth unemployment, despite similar finagling with the root numbers, still hoovers just shy of 32%.
But, of course, this has nothing to do with the high cost of hiring young people foisted on businesses by the well meaning, but economically ignorant.
In an article found on Fox News, we also learn that there are other issues beyond the ones listed above. The working poor are screwed over by the higher wage, caught between means-tested benefits and increased means. Now I'm all for getting people off the welfare rolls onto payrolls. I also think our welfare support is far more generous than it has to be. But I can certainly sympathize with someone who, for example, works at a restaurant for $480/week, plus welfare benefits which would more than double that, complaining that an extra $120/week will cost them over $300/week in benefits.
While those numbers I give are just for comparison, it turns out, this is just the sort of thing happening to many marginal employees in the Seattle area who are now trying to cut their hours in order to protect their benefits.
Maybe we should just back off and let the market set the pay scales?
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