Seattle today passed a bill that will raise the minimum wage to $15/hour. $30,000 a year.
The proponents want a “livable wage.” The problem is that money isn’t free. It doesn’t grow on trees.
The talking points are that the business owners are all part of the 1% and this is the working class getting their due.
The truth is that most businesses are small businesses. Small businesses that work hard to stay solvent. Most business owners I know aren’t “rich.” They might be doing well enough, but they aren’t all living high on the hog in their mansions.
The money tree doesn’t exist. You can’t just pay people more if the money isn’t there to pay them.
So, what’s going to happen here?
Where it’s cost effective we’ll see minimum wage jobs get more automation. We’ve already seen things like the self checkout in grocery stores. We’ll start seeing more similar jobs get “upgraded” to machines. The machine might be more expensive in the short term, but now you can justify the costs.
For places that can’t get automated, you’ll see fewer people doing more jobs. Where you had a dishwasher you might have the bus boy double as the dish guy. Or more sharing of responsibilities between employees. (i.e. worse service)
If that’s not possible the costs will just get passed down the line to the end customer.
Let’s keep playing this out.
So if you’re low on the totem pole, you’ll likely see your job eliminated and you’ll go on unemployment. To top it off, the things you buy will start getting more expensive. Oh, and your rent will go up too since the property management company has to pay its people too.
Eventually though, the rents might go down again as you move somewhere that will hire you.
Just as the right seems to play fast and loose with trying to forget about science, the left is equally to blame in terms of trying to ignore the hundreds of years of economics as well.