California Gov. Jerry Brown signed a new $15/hour minimum wage law that’s set to go into effect by 2022. The politics of the minimum wage issue is fraught with misinformation. Of course, liberal logic on this issue revolves around the axiom that the more you make, the better off you’ll be concerning your standard of living. That’s partially true. More money means a greater chance of improving your standard of living, but there’s this thing called taxation. Yes, it’s the liberal solution to all of society’s ills.
As it turns out, the bump in pay for these minimum wage workers isn’t going to amount to much. The increase in overhead for the employer will go through the roof, which means layoffs, reduced hours, or both. Seattle has a $15/hour minimum wage set to be phased in by 2018. The results have hardly been positive. Workers in the city are actually asking for fewer hours in order to keep welfare benefits. If a raise in wages was meant to help combat poverty, it’s a failure on that front.
This week, Fox News’ Neil Cavuto had Naquasia Legrand, a “Fight for $15” leader, on his show to discuss California’s new minimum wage laws. Legrand, of course, thought it was great that this happened; as it would increase the amount of money she earns in order to inject that back into the economy. Cavuto aptly noted that the increased overhead is going to force an establishment, like McDonald’s, to raise their prices on certain items. For some families, a $1.50-2.00 increase in price is a big deal.
Legrand noted that the price of the Big Mac has already gone up, but she hasn’t seen a bump in her salary. Cavuto then turned to probably the biggest threat to these workers, which is the elimination of their job category completely via electronic kiosks and other forms of self-service that allows customers to order without going through a cashier. Legrand countered by saying that no one wants to come into the McDonald’s to use a machine to order. The problem is that other franchises are doing it–and spending big money to get there. In 2014, Panera doled out $42 million to have electronic kiosks, along with mobile ordering, at all of their locations within the next three years. CNN reported that the franchise has no plans to cut jobs, but experts say this is an unavoidable byproduct. They added that Chili’s and Applebee’s place tablets on their tables for ordering. As it turns out, pushing for a bigger minimum wage could make these workers, like Legrand, obsolete at an accelerated rate. Let’s face it; the robots are taking over.
Now, without a doubt, this interview wasn’t nearly as bad as Cavuto’s interview with Keely Mullen, a student who wanted free college -- and had no clue what she was talking about concerning how we, as a country, would pay for it. Soaking the rich isn’t logical, moral, or proper economic policy to entertain this progressive pipe dream of free higher education. Cavuto mentioned that if we were to confiscate all the wealth from the top 1 percent, it could only subsidize one American entitlement program for a year. Mullen said she didn’t believe that. The whole interview was a shambles.
In this case, Cavuto actually agrees with Legrand that there should be a hike in the minimum wage, but doubling the federal rate to $15, as they're doing in California, is a bit “abrupt.” In 2013 alone, minimum wage hikes were responsible for gutting over 700,000 jobs.