So I see this article on the LA Times site about the $15 minimum wage and they open with:
The people who stand to benefit most from minimum wage hikes across California are low-income adults, most of them household breadwinners, according to an analysis by UC Berkeley’s Center for Labor Research and Education.
A law proposed by Gov. Jerry Brown would gradually lift the statewide minimum wage from its current $10 to $15 an hour by 2023. About 800,000 workers were already promised raises to $15 in several cities that passed their own minimum wage hikes, including Los Angeles, San Francisco and Santa Monica.
Unfortunately the people (low income adult household breadwinners) they say will benefit will only benefit in the short term. Artificially raising wages will lead to unemployment of those people are trying to help. Doing things to help the economy will better serve everyone. Reduce strangling regulations on businesses so they can have the time to make upgrades to their business and improve services. I fail to understand why people don’t understand how harmful this minimum wage increase will be – either prices will go up making it difficult for low income people to buy goods and services and/or businesses won’t be able to afford to hire people or will lay people off.
Let’s say you own a frozen yogurt store and you net $50K per year as your net income. You have two employees that you pay $7.50 per hour and each works 30 hours per week. They both make $11,250/year, so you’re paying $22,500/year in wages. Now the government comes along and says you have to pay $15/hour. If you continue as before, your wage expense is now $45,000, making your net income as the owner is now $27,500. What can you do?
- close the business
- lay off one employee
- double the price of the yogurt