Maybe it dates back to when college leftists were busy ignoring drug laws. Now that they’re grown and in positions of power those old habits just won’t go away. But I’m not talking about drugs. I’m talking about ignoring the law.
Today the laws leftist Democrats have the most trouble with are those of economics. I guess when an entire party considers the word “profit” to be an epithet it stands to reason supply and demand and the market would not get much respect among policymakers.
I written before about the unintended consequences of arbitrary minimum wage laws passed by posturing politicians. As the starting wage goes up, in spite of market conditions, the demand for the higher paid workers goes down. In addition, the pressure on the bottom line of increased wages without increases productivity is often so acute the business goes out of business.
And that’s what we are seeing in Seattle, Wash., where a new minimum wage law that will over time raise starting pay to $15 per hour takes effect on April Fools Day (a fitting choice in more ways than one).
The Washington Policy Center writes, “As the implementation date for Seattle’s strict $15 per hour minimum wage law approaches, the city is experiencing a rising trend in restaurant closures. The tough new law goes into effect April 1st.
The closings have occurred across the city, from Grub in the upscale Queen Anne Hill neighborhood, to Little Uncle in gritty Pioneer Square, to the Boat Street Cafe on Western Avenue near the waterfront.”
The economics of running a restaurant are tough. "Top Chef" may look glamorous, but the reality is restaurants operate on a razor thin profit margin of about 4 percent, less than even grocery stores. A big chunk of restaurant earnings, 36 percent, goes to paying labor costs. A jump in the minimum wage means a plunge in profit.
To make up for the increased expense, restaurants could raise prices, use cheaper ingredients, or drastically cut back on the number of employees, all of which serve to drive off customers and start the business death spiral.
The SeaTac airport district is “benefiting” from politician’s concern about low wages and already has the $15 per hour minimum. And again the Washington Policy Center finds the result is negative for those the law was meant to help.
“Employees earning the new wage say they have lost benefits such as 401(k), paid holidays, paid vacation, free food, free parking and overtime hours.”
Customers are feeling the pinch, too. One flyer found a $6.93 “living wage surcharge” tacked on to his $84.00 parking bill. The Center points out the upcharge amounts to an 8.25 percent tax.
All of this is unpleasant and unnecessary. Evidently the pre–$15 per hour wage jobs were just fine, because people accepted the wage. But now the intended beneficiaries of the arbitrary minimum wage are discovering that when you lose your job, the minimum wage is zero.
Michael Reagan is the son of President Ronald Reagan. He is president of The Reagan Legacy Foundation and chairman of the League of American Voters. Mike is an in-demand speaker with Premiere. Read more reports from Michael Reagan — Go Here Now.