Merriam-Webster defines weapon as follows: something used to injure, defeat, or destroy. Based on that definition, I can say the Left has weaponized the minimum wage.
Evidence is mounting that the drastic minimum wage hikes so popular now among progressives are destroying businesses and jobs in the restaurant industry. In the news this month: a paper by two Harvard researchers who used Yelp data in their analysis of the effects of a rising minimum wage on restaurants of varying tiers of quality.
Guess what: the rising wage led to an increased rate of restaurant closures, with lower quality restaurants hit the hardest.
San Diego is one of the cities that has mandated a high minimum wage, now at $11.50 per hour. Thousands of restaurant workers have seen a raise as a result. But thousands of others became unemployed and unemployable at that wage, as restaurants struggled to keep their doors open.
“Yes, we have raised menu prices. Yes, we’re going to raise them again,” said Jim Phillips, general manager of Studio Diner in Kearny Mesa, who has nonetheless cut staffing from 71 to 65 employees and needs to shed seven more. He’s studying changes like eliminating bussers and greeters, and requiring servers to also clear dishes in smaller sections while keeping an eye on the entrance to help customers.
Phillips said Tuesday that San Diego’s wage mandate, which includes sick leave, was just the latest in a series of legislative moves that increased his operating costs.
These “legislative moves” have a perverse effect: they make it illegal to employ someone whose skill and performance is not sufficient to justify the high wage. In other words, the would-be do-gooders are hurting the very people they most want to help.
In San Francisco the minimum wage hike did away with the tip credit, as does the ill-advised Maine law recently voted in at the ballot box.
The city’s minimum wage is currently $13 an hour, compared with California’s rate of $10.50 and the federal rate of $7.25. The city’s rate is set to increase to $14 in July and again to $15 next year. That rate, unlike federal law, does not include an exception for tipped employees.
Guess who doesn’t like that? The tipped employees, of course. Most of them are seeing a pay cut instead of a pay increase. And the restaurants that tried a new, no-tipping model are now “ditching the switch.”
So, one of the main tactics cited for dealing with the higher cost of employing people is not panning out. For lots of restaurant operators, failure is the only option.
“We provide suggestive evidence that [a] higher minimum wage increases overall exit rates among restaurants, where a $1 increase in the minimum wage leads to approximately a 4 to 10 percent increase in the likelihood of exit,” report Dara Lee and Michael Luca, authors of the Harvard paper.
What they’re saying is, increasing the minimum wage leads to more restaurant failures. But not just any restaurant failures: Yelp data shows that the restaurants that fail tend to be the same ones that low-wage earners would patronize. So much for the progressives’ argument that “with more money in their pockets, workers will spend more at coffee shops and restaurants.” FALSE!
The Maine People’s Alliance is a socialist organization that deploys activists all over the state in an effort to steer Maine into Venezuelan-style waters. They’re the ones that pushed the $12 minimum wage referendum in our state. Based on what’s unfolding in California, we have plenty of reason to expect Maine jobs and businesses will be destroyed under the new mandated minimum wage, and fewer restaurants will open.
The scheme initiated by the Maine People’s Alliance and the Maine Democratic Party is destructive. They have weaponized the minimum wage.