This article was published by The McAlvany Intelligence Advisor on Wednesday, January 3, 2018:
That salute to Seattle’s progressivism was published in 2014, and little has changed in the city council’s ideology. It now boasts a minimum wage of $15.45 an hour, with predictable effects: total wages paid to lower-income people has gone down, not up. A study just released by the National Bureau of Economic Research (NBER) explained:
This paper evaluates the wage, employment, and hours effects of the first and second phase-in of the Seattle Minimum Wage Ordinance, which raised the minimum wage from $9.47 to as much as $11 per hour in 2015 and to as much as $13 per hour in 2016.
Using a variety of methods to analyze employment in all sectors paying below a specified real hourly rate, we conclude that the second wage increase to $13 reduced hours worked in low-wage jobs by around 9 percent, while hourly wages in such jobs increased by around 3 percent.
Consequently, total payroll fell for such jobs, implying that the minimum wage ordinance lowered low-wage employees’ earnings by an average of $125 per month in 2016. (emphasis added)
Put another way: the higher the minimum wage mandated by union-controlled politicians (the Fight for 15 campaign is spearheaded by the Service Employees International Union) and air-headed progressives like those on Seattle’s city council, the less those lower paid people are being paid.
Politicians in 18 states know they are dealing with deadly Nightshade when they pass, or allow to pass, minimum wage legislation. They know that administered in strong doses it will kill small businesses, so instead it is gradually insinuated into the economy over time. That’s why such laws are called “progressive.”
Through new legislation, successful ballot measures, or inflation adjustments built in to previous statutes, some 4.5 million people should see increases in their paychecks in the New Year. Ten of those states – Maine, Vermont, Washington, Michigan, New York, Rhode Island, California, Colorado, Arizona, and Hawaii – are seeing increases as the result of legislative or ballot measures. The other eight – Alaska, Florida, Minnesota, Missouri, Montana, New Jersey, Ohio, and South Dakota – will see so-called “automatic” increases in their minimum wage laws in 2018.
Most new minimum wage legislation is phased in through gradual increases, declaring boldly the hypocritical claim that such increases won’t affect employment. It’s like feeding Nightshade to a victim in such small doses that he doesn’t even notice – until he’s dead.
Most statist economists who try to justify minimum wage laws forget to mention the best (worst) example of just how they kill jobs. Writing for the Mises Institute, scholar/historian Chris Calton noted:
By the 1960s, many African-Americans were employed as farmers — at least partly due to this being one of the few remaining fields of work that was not yet subject to wage regulations. This changed in 1967, when the government extended the minimum wage laws to American farmers as part of the “War on Poverty.” Black farmers who were accustomed to making a modest $3.50 per day were now legally required to be paid $1.00 per hour — a tremendous increase in wages.
The effect of this law was immediate and undeniable. An estimated 25,000 farm workers were put out of work in the Mississippi Delta region alone … the federal minimum wage destroyed their ability to earn a living….
Black migration out of these farmlands occurred by the thousands; the New York Timesin 1968 called it the “Negro Exodus.”
The staged-in minimum wage increases scheduled for 2018 declare loudly the hypocrisy of those laws that claim to be necessary for the improvement of peoples’ standard of living. If the increases were applied all at once rather than a drop at a time, the victim – business owners who employ people – would simply close up shop and move away to friendlier and more enlightened climes. After all, 32 states didn’t raise their minimum wages in 2018.
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Sources:
Mic.com: Seattle Is Doing What No Other City in America Has Done published November 2014
Background on the deadly poisonous plant Nightshade
Huffington Post: Minimum Wage Raises Coming To 18 States On New Year’s Day
Background on Minimum Wages in general
FastCompany.com: Minimum wage increases just went into effect for these 18 states
TheHill.com: Minimum wage hikes in 18 states set for New Year
Mises.org: The Racist History of Minimum Wage Laws
Forbes: The $15 Minimum Wage Movement Is Winning, And That’s Bad News For Cashiers
Forbes: Seattle Reveals The Ugly Truth About The $15 Minimum Wage Movement
NBER.org: Minimum Wage Increases, Wages, and Low-Wage Employment: Evidence from Seattle – revised October 2017
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