Nonsequitur: A Minimum Wage Big Mac Attack

September 15, 2014

With the President, Congressional Democrats and unions pushing for a minimum wage hike of more than 100% (from $7.25/hr to $15/hr), it’s probably a good idea to think about the consequences of such a drastic increase. Since a majority of fast food workers start at minimum wage and make an average of $9.04/hr., that industry would be significantly affected.

The Heritage Foundation has released a study on the effects of the suggested wage hike. The findings are summarized in this graphic:

Click for full study

Click for full study

In case you missed that third bar, there will be a 36% decline in work hours. That means employers will be forced to reduce hours for existing workers, either by cutting employee’s work hours or by laying off workers. Most likely, the only new employees added will be minimum wage workers replacing more experienced, more expensive workers.

I think it may be time for a modest minimum wage hike, but the drastic hike suggested by the Left would have strongly negative effects on the economy (and not just the fast food industry).

As Thomas Sowell puts it:

Whatever the good intentions behind minimum wage laws, what matters are the actual consequences.”


One Response to “Nonsequitur: A Minimum Wage Big Mac Attack”

  1. […] What happens when you raise minimum wage? Well, the economy doesn’t collapse. But a so-called “livable wage” doesn’t result in the poor being able to buy more stuff. Bigger companies simply raise prices, use cheaper parts for their products (that means more jobs moving overseas) or reduce services. Small companies can do a little of this, but mostly they just reduce worker overhead. That means reducing hours or reducing workers. […]

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