Employment AND Revenue UP with $15 NYC Min Wage


I’ve said before that the issue of the minimum
wage is a complicated issue. I’ve been asked before, would a $15 minimum
wage nationally be good or bad for the economy? And the truth is that a lot of the answer
depends on where you are measuring, whether it’s good or bad for the economy. And I’ve said this before, um, you know, we
could stick to talking points on this show and do black and white stuff. Like everything is either very good or very
bad. It’s all good or all bad. That’s not the reality. Okay? So when we think about a $15 minimum wage
in lower cost of living places where a $15 minimum wage might be doubling the prevailing
minimum wage, there could be negative effects in some ways in terms of the destabilizing
effect that that could have on the local job market, et cetera. That’s a reality. On the other hand, in high cost of living
places, a $15 minimum wage may not even be enough, number one. And number two is unlikely to hurt the economy
relative to how much it will help people afford their day to day lives and inject more money
into the wallets of workers. So we’ve got to be thoughtful here. There are some who say raising the minimum
wage has no negative impact period. That’s not true. I mean that’s just not true in all cases. Of course, there are people on the other side
who say any increase to the minimum wage causes layoffs, it causes business closures. It will blow up the cost of everything because
businesses will just raise prices in order to account for that. But of course, that also isn’t true today. We have a new case study from New York city. New York city raised the minimum wage to $15
an hour a year ago. The restaurant industry, which is one of the
ones that is often the focus, uh, of minimum wage increases. The restaurant industry is doing really well
in New York city. Despite this, New York city restaurants have
seen increased revenue and they’ve also seen increased employment. Now, the way they’ve done it is that prices
have gone up slightly at New York city restaurants, detractors of the minimum wage will immediately
say, Whoa, Whoa, Whoa. You raise prices. Customers will stop going out to eat. The businesses will fail. They’ll have to fire everybody, and the minimum
wage increase will backfire, hasn’t happened. And you know why? Prices don’t have to go up very much. Imagine that the minimum wage goes up, for
example, 8% uh, and imagine that restaurants account for that by increasing food prices
by 8%. Now more than likely, they wouldn’t because
the labor costs are only part of what it costs to run a restaurant. So an 8% increase in wages would not even
require an 8% increase in prices. But okay, imagine that wages go up 8% food
prices go up 8% a $10 burger becomes a $10 and 80 cents. Now, I’m not going to write that off as nothing,
but for most people, you’re not going to go out to eat a different number of times because
the burger goes from $10 to $10 and 80 cents. This is the reality. I don’t want to be insensitive. I don’t, I’m not ignoring that. 80 cents on a $10 meal can be meaningful to
many people, but the reality is that for the most part, you’re not going to drastically
change your habits if your burger goes from $10 to $10 and 80 cents but on the other side
of the ledger, everybody who works at the restaurant and gets a raise because of that
minimum wage increase now has more money to go out to other restaurants and to patronize
other businesses where they live. That is hugely stimulative to the economy
overall. Now, there’s no question that if the New York
city economy starts to fail, because it’s been a strong economy in New York city for
the last year, if the New York city economy starts to fail, it will be bad for lots of
people. It’ll be bad for restaurants. It’ll be bad for their workers, but in the
economic environment in New York city of the last year, the minimum wage increase has been
a very, very positive thing. Now, there are also trickle up effects to
having better paid workers other than just they have money to spend at local businesses. They are happier, they have a higher standard
of living and thus are providing better service, which is good for the businesses. They may be able to afford living closer to
work because they can afford it, or having a more reliable car to get to work becomes
economically within reach, which makes them more reliable workers and helps the business. So it’s really important to think about these
changes systemically rather than myopically. This is not to pretend that the minimum wage
can be increased endlessly, but no one is proposing that this is a very common red herring
on the right where they’ll say, listen, if $15 an hour is better than 10 why not make
the minimum wage $25 an hour or $100 an hour or $200 an hour? Then everybody will just have tons of money,
right? Liberals will hold on a second. $100 an hour is not an equilibrium wage. $100 an hour is not a wage. That is the logical living wage based on the
cost of living of any particular place in the United States of America. It is a distraction and it’s really important
not to fall for it. So my sort of view on the left discussing
minimum wage increases is number one, don’t let them set the talking points that we have
to argue against with stupid stuff like, uh, make the minimum wage $100 an hour if you
just want people to make more money, that’s stupid that that’s not even worth discussing. But let’s not be the ones that pretend that
there is not another side to the ledger. A minimum wage increases have effects. They have trickle up effects and they have
trickled down effects. We don’t have to pretend that there’s no risk
to a minimum wage increase to be able to justify it as the right policy in many cases and in
many instances. That’s the approach. I think that the left should have and the
more informed we are a about studies case studies like the one we see in New York city,
the better we will be able to defend the policies that we want to see. Let’s take a quick break. Make sure to give the David Pakman show like on Facebook at facebook.com/david pattern
show, very quick break and back with much more right afterwards

Leave a Reply

Leave a Reply

Your email address will not be published. Required fields are marked *

Copyright © 2019 Toneatronic. All rights reserved.