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California’s minimum wage hike hurts the workers it claims to support

thedailyposting.comBy thedailyposting.comApril 4, 2024No Comments

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Recently, on my way to visit my parents in Oregon, I had a layover at the Minneapolis-St. Paul Airport, so I stopped at McDonald’s for a quick bite. Rather than being greeted by a human cashier, we ordered and paid in a hall lined with self-service kiosks.

States and cities that artificially raise the cost of workers by raising minimum wages will likely see significantly more machines and fewer human workers.

“The government seems stuck in this mode of fixing things that don’t need to be fixed,” said Brian Wesbury, chief economist at First Trust Advisors. “This disrupts the market, and companies try to find ways around this, because wages are not based on the market. And today, with robotics and computers, you can do that.” So you end up hurting people. ”

Automations like ordering screens at the Minneapolis airport are efficient, but they are emblematic of what happens when governments distort markets with heavy-handed regulatory approaches.

The city of Minneapolis requires large employers to pay a minimum wage of $15.57 an hour (more than twice the federal minimum wage of $7.25), which will apply to all businesses starting this summer. Although the airport is technically not part of any city, there is no doubt that its employers are forced to offer comparable wages to attract workers.

Screens have been installed at McDonald's at the Minneapolis-St. Paul Airport.

High wages also have other effects. Minneapolis residents will soon be unable to hail an Uber or Lyft even if they want to. Both companies will leave town in May after the ultra-liberal city council (several of the 13 council members declare themselves socialists) overrides the mayor’s veto and applies a minimum wage to drivers. Both companies said the mandate was making their operations in the city unsustainable.

So in order to raise drivers’ wages, the city council will effectively eliminate thousands of jobs, leaving many without access to transport.

As Democratic Mayor Jacob Frey said in an interview, “If you lose your job, a raise doesn’t really help you.”

Good job, Minneapolis.

California raises minimum wage, employers lay off employees

Then there’s California. It was supposed to be an April Fool’s joke, but a law went into effect on April 1st that requires fast food workers at major chains to earn $20 an hour.

Democratic Gov. Gavin Newsom signed the law last year. It is clear that companies are not satisfied because it negatively affects their profits.

Biden’s new rules could cost you your job:Biden advocates for women, but his new regulations will take away the jobs women want

Newsom made a similar admission when he tried to give legal loopholes to his friend Greg Flynn, who runs a Panera Bread franchise in California. Flynn was a big donor to Newsom, who had requested an exemption from the bizarre law for restaurants that “manufacture their bread on-site.”

NFC Championship Game: California Governor Gavin Newsom watches the San Francisco 49ers vs. Detroit Lions at Levi's Stadium on January 28, 2024 in Santa Clara, California.

After a justifiable uproar that Flynn was receiving special treatment, he said he would comply with the pay increase.

No wonder restaurants started planning layoffs even before the new minimum wage became a reality. For example, Pizza Hut announced it would cut more than 1,000 delivery jobs. Many more are following suit.

As any economist could have predicted, these companies are being forced to cut workers, shorten hours, and raise prices. This is what happens when the government intervenes in the private market.

It’s hard to see how this will benefit anyone in the long term. Minimum wage jobs have traditionally existed to give people an entryway into the world of work, but government-led wage hikes deprive less experienced workers of that opportunity.

And this latest government intervention ignores the fact that workers have more options than ever before.

“The market is very competitive and unemployment is very low, so if you’re disappointed in your job, whether it’s culture, pay or working conditions, you can move,” Wesbury said.

Less work for the same salary? Welcome to Barney’s world.

You can always count on Congress’ resident socialist, Vermont Sen. Bernie Sanders, to come up with some really outlandish (and expensive) ideas. He has consistently pushed for “free college,” student loan forgiveness, and a higher minimum wage.

Employers need to speak up.Biden’s overtime pay plan is not what the economy needs most

Sanders also said Americans are entitled to a 32-hour work week. Employers would have to continue paying workers the same wages and benefits they would receive for 40 hours of work. And he didn’t just think about it, he introduced a bill.

I have to say it sounds pretty good.

Bernie Sanders, U.S. Sen. and Chairman of the Health, Education, Labor and Pensions Committee, speaks during a press conference with labor leaders to announce the federal minimum wage, May 4, 2023, at the U.S. Capitol in Washington, D.C. state, Vermont).  .

Unfortunately, in the real world, companies have to make adjustments to cover this lavish new employee benefit. Employers must hire more workers or they will lose productivity, and as a result, consumers will face higher prices. Other unintended consequences will certainly occur.

Bottom line: The private sector works best when government gets out of the way. That’s a lesson liberals never learn.

Ingrid Jack is a columnist for USA TODAY. Contact us at ijacques@usatoday.com or X (formerly Twitter: @).Ingrid Jacks



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