This article was published by The McAlvany Intelligence Advisor on Friday, January 22, 2016:  

The economic law specifically referred to here is this: when the price or cost of something increases, the demand for it drops.

Much more elegant is this from Investopedia:

The law of demand states that, if all other factors remain equal, the higher the price of a good, the less people will demand that good. In other words, the higher the price, the lower the quantity demanded.


The amount of a good that buyers purchase at a higher price is less because as the price of a good goes up, so does the opportunity cost of buying that good. As a result, people will naturally avoid buying a product that will force them to forgo the consumption of something else they value more.

What if the “good” is a man’s wages? What if progressives have never read the rule? Result: what’s happening in six cities that recently raised the minimum wage. In those six cities, employment in low-skilled is flat or declining, thus depriving the very people progressives say they want to help through the benefits of an increased wage. Instead, many of those they say they want to help are instead enjoying the benefits of a minimum wage of zero.

In Chicago, job gains in the leisure and hospitality sector have slumped to a five-year low after implementation last July of a mandated boost in the minimum wage to $10 an hour. Employment increased just 1.1 percent from September through November, half the rate in 2014.

In the Bay Area, job growth also hit a five-year low after the San Francisco and Oakland city councils mandated an increase in the minimum wage last spring. Hiring in the leisure and hospitality sector has averaged 5 percent a year, right up until implementation of the increase in the minimum wage. It now is running at less than half that – 2.2 percent – while employment in the rest of the state’s leisure sector (outside the reach of progressives in San Francisco) grew by 4.9 percent.

In Los Angeles, job growth in LA’s accommodation industry went negative after the minimum wage was increased to $15.37 an hour. As Jeb Graham noted in Investors Business Daily, “After growing by 3% or more [over] the prior three years, Los Angeles County accommodation industry employment fell by an average of 3%, or 1,300 jobs, versus a year earlier….”

In Seattle, Progressives hiked the minimum wage from $9.47 to $11 an hour last April, and restaurant job gains fell below 2% for the first time since 2010. This is half the pace of the prior three years.

The data backing up these claims is tentative, wrote Graham, and therefore it is premature to blame job losses on higher minimum wages. And yet, a perfect “test case” exists in Washington, DC. The Bureau of Labor Statistics (BLS) runs the employment numbers for the district proper as well as for the MSA, including Virginia and Maryland where minimum wage laws are much lower. Mark Perry, an economist with the American Enterprise Institute, crunched those numbers (along with graphs – see source below), and concluded:

At the same time that suburban restaurants last year increased staffing levels by nearly 5,000 new positions, employment at the District’s restaurants contracted by more than 200 jobs. (Emphasis added)

Proof that progressives live in a dream world of their own making (or perhaps they’re heeding another law that says that those who will not read have no advantage over those who cannot read) comes from the Seattle city website:

Citywide minimum wage laws offer local governments a powerful tool for helping low-income workers and families in their communities. Such measures also have significant on businesses and how they operate.

The author of that homily at least got it half right. Governments have no such “powerful tool” to help low-income workers and their families, but they certainly have the power for make a “significant on businesses” and whether or not those businesses can now afford to hire new workers, or not.

Sources: Supply and Demand explained Data Show These 6 Big Cities Aren’t Faring Well After Minimum Wage Hikes 6 Big Cities See Hiring Fade After Minimum Wage Hikes

Mark Perry: Early evidence suggests that DC’s minimum wage law is having a negative effect on the city’s restaurant employment

The New American: The Spread of Socialism in Seattle

The New American: Seattle’s Coming $15 Minimum Wage


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