6-11-14 – Minimum Wage Hikes Killing Jobs

Posted by Rob Roper


Photo Credit Bruce Parker, Watchdog.org

Vermont governor Peter Shumlin signed a new law into effect that will raise Vermont’s minimum wage to $10.50 by 2018, and

$9.15 by January 1, 2015. Shumlin’s support a minimum wage increase spiked after Barack Obama began pushing a $10.10 minimum wage at the national level. Though Congress balked at the measure, widely understood as a job killer, the president used his executive authority to mandate higher wages and benefits for federal contract workers.

Some of those contracts go to fast food outlets servicing military bases, and the initial consequences are predictable. The Military Times reports that McDonalds and “a name-brand sandwich eatery and a name-brand pizza parlor” are starting to close these locations.

As the Military Times notes, “The wage hikes are good news for the many military spouses and veterans who work for these contractors — but only if the concessionaires continue to operate.” (Yeah, that’s the real kicker. As we’ve pointed out before, the real minimum wage is zero.) And, “‘At the end of the day, there will be fewer jobs,’ said [an] industry source. ‘And for [the contractors] who stick it out, there will be higher costs and the customers will pay more.’”

An article in the Wall Street Journal cites several of Bureau of Labor Statistics numbers on what the government-manufactured increased cost of hiring people has led to, including:

  • In February the Bureau of Labor Statistics (BLS) recorded the lowest percentage of 16- to 19-year-olds working or actively looking for work (32.9%) since the bureau started tracking the data in 1948. The BLS recorded the second-lowest labor-participation rate for this group in April (33.2%) and the third-lowest in January (33.3%). May’s rate was the sixth lowest (33.8%).
  • Over the past two years, the BLS has recorded some of the worst labor participation rates for 20- to 24-year-olds since 1973, when the Vietnam War was beginning to wind down. In August 2012, the 69.7% rate was the lowest since ’73. The second-lowest (70%) came in March last year. This year, the third-lowest rate came in April (70.2%). May’s rate was a still-miserable 71%.

Bruce Parker of Vermont Watchdog covered Shumlin’s bill signing ceremony, which was held at Red Hen Café Bakery, whose owner enthusiastically supports the measure. But, as Parker points out, the bakery is unaffected by the new law – just like most people who are in favor of a government-mandated minimum wage. Feels good – just so long as it hits the other guy in the wallet and not you.

– Rob Roper is president of the Ethan Allen Institute


{ 1 comment… read it below or add one }

jim bulmer June 14, 2014 at 1:08 pm

Not to worry. Those whose businesses which cannot aford to pay the new minimum wage will simply lay off workers or more likely go out of business. Either way, it’s a win, win for the Dems.


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