Democrats have long fought for the minimum wage hike, claiming it’s necessary in the fight against income inequality.
While states like California have paved the way for so-called “progressive” ideas like raising the minimum wage, they have clearly failed to think through the logical consequences of these policies.
In California’s case, that could turn out to be a costly mistake.
A report published Thursday by the Employment Policies Institute warned of an upcoming economic disaster in California, estimating that the state could lose almost half a million jobs by 2022, when the $15 minimum wage is to be fully implemented.
The study analyzed data from California beginning in the 1990s, when the state began to deviate from the federal standard minimum wage.
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Over the past three decades, economists found that for every 10 percent increase in the state’s minimum wage, 5 percent of jobs have been lost.
Based on California’s history, experts estimated that the state would lose approximately 400,000 jobs by 2022 when the $15 per hour wage is implemented.
The report asserted that retail and food service industries would be hit the hardest, with almost half of all job losses coming from those industries.
While the study acknowledged that businesses could respond to higher wages in ways that could have varying effects, one point that could not be disputed was the fact that the rising wage has “depressed employment opportunities in the most heavily-impacted industries.”
Last year, California Governor Jerry Brown signed legislation that would see an increase in the minimum wage beginning Jan. 1. The wage will increase to $11 per hour for companies with 26 employees or more. The wage will continue to increase $1 per year through 2022.
“This is about economic justice, it’s about people, it’s about creating a little, tiny balance in a system that every day becomes more unbalanced,” he said of the bill, according to the Los Angeles Times.
Sadly, Brown and his liberal buddies have yet to actually see the real economic justice that will result from forcing companies to pay workers a $15 minimum wage.
It is never wise to make business decisions based on emotions rather than logic. It may feel good to raise the minimum wage, but the long-term effects hurt more people than they help.
The problem is that a higher minimum wage means rising costs in other significant areas. Businesses raise the cost of goods and services to offset the burden of paying workers more — or they fire the workers because the burden is too great on the business.
It’s not rocket science.
As we have already seen, businesses will do what they need to do to stay afloat, and that never seems to work out well for people who need jobs.
In five years, California will have an economic crisis on its hands, and it can blame its leftist leadership for that.
H/T The Daily Wire
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via Conservative Tribune
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