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by
Rick Moran

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May 4, 2014 - 10:33 am

I love this quote from Slate’s business and economics correspondent Jordan Wessmann: “Any plan that makes hiring a worker more expensive than in France should be cause for concern.”

Weissmann is referring to the idea of creating a $15 an hour minimum wage in Seattle. The issue has found support with business and labor leaders as well as well as some city council members. Nearby Sea Tac has already raised its minimum wage to $15 an hour, but that community contains the Seattle airport and the increase affects only 1600 workers.

Weissmann is skeptical — as are some other experts who support an increase in the minimum wage:

We know that businesses in high-wage countries are especially eager to replace workers with software. Fast-food restaurants in Europe, for instance, have been some of the earliest adopters of labor saving technologies like digital kiosks where customers can order. Those innovations are already beginning to make headway in the United States. But by passing a $15 minimum, Seattle would risk speeding the process up within its city limits.

Don’t take my word for it. Listen to Arindrajit Dube, the University of Massachusetts at Amherst economist who is perhaps the foremost advocate for the idea that minimum wage increases don’t kill jobs. “Would I be concerned about possible job losses if there were a $15 minimum wage in the restaurant industry, yes, I’d be concerned,” he told the New York Times in December. “There are concerns that it might lead to the substitution of automation for workers.”

The move is especially risky for a single city, where businesses can easily choose to open or relocate in the suburbs. That fear convinced Washington, D.C. to coordinate its own recent minimum wage increase with some of its surrounding counties. Seattle isn’t taking any such precaution. (Again, SeaTac is barely a city.)

To his credit, Murray’s is trying to implement the idea gradually. Under his proposal, businesses would have between three and seven years to phase in the new minimum, depending on their size and whether employees get health care coverage or tips. Through 2024, some businesses will also be able to count $3 worth of tips or benefits toward the $15 total. By introducing the change over time, the city will give businesses leeway to adjust, if they can.

If they can’t, however, the impact could be vast. Researchers at the University of Washington have estimated that 102,000 workers in Seattle make $15 or less, meaning they would be directly affected by the hike. Murray is running his experiment with a quarter of his city’s workforce.

What happens when you totally disconnect the value of labor from the cost of production? Nothing good. Would people be willing to spend $8-9 on a burger? Not as often as they do now. The whole idea has a kind of surreal detachment to it — as if the normal laws of supply and demand don’t apply and liberals can, simply because their hearts are in the right place, make everything add up in the end.

It’s silly, of course. And perhaps the “experiment” should be tried just to prove how idiotic it is.

Rick Moran is PJ Media's Chicago editor and Blog editor at The American Thinker. He is also host of the"RINO Hour of Power" on Blog Talk Radio. His own blog is Right Wing Nut House.

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Top Rated Comments   
Just Do It! As we go from Let It Burn to Start the Fire, California's $25 minimum wage proposal, and Seattle's coming $15 minimum wage; a brushfire or two in areas that while technically part of the United States are not part of America can only be a good thing. Leftist urban areas need to suffer the way that Conservative rural areas have.

Subotai Bahadur
28 weeks ago
28 weeks ago Link To Comment
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All Comments   (20)
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$15? Pikers. It should be 15*10^8, now that's a living wage. If the dumb economist from UMass thinks the minimum wage does not kill jobs, then why stop at $15? But of course, the minimum wage does kill jobs. You notice the sky high black unemploment rates and low participation rates? Many of them are out of a job because the value of their marginal product is below the minimum. But don't let facts get in the way of Leftists who think they're doing good.
28 weeks ago
28 weeks ago Link To Comment
"The whole idea has a kind of surreal detachment to it — as if the normal laws of supply and demand don’t apply and liberals can, simply because their hearts are in the right place, make everything add up in the end."

That pretty much sums up liberal mindset, regardless of the issue. Facts don't matter, history doesn't matter, reality doesn't matter.

Dealing with tyrants? The track record of appeasement doesn't matter.
Dealing with taxes? The laws of economics don't matter.
Purpose and role of government? Human nature doesn't matter.

No matter the issue, no matter the subject, for any "problem" that needs to be solved, the only thing that matters is the they have good intentions, and that means that it will work out well. Ipso facto.

And if you don't agree, you are just ignorant, mean, stupid, and racist.

28 weeks ago
28 weeks ago Link To Comment
I make about 2.5 federal minimum now, $10 over the minimum.
If the feds raise the minimum to $10.10, my pay has to go to $20 to keep the margin or $25 to keep the ratio. Neither is likely, so instead I take a relative pay cut.
And in fact I'll take a real pay cut because the pressure on low-end wages will affect things I buy and things I do.
Raising the minimum to $15 is obviously even worse.
This leaves out the tax consequences involved.
The inflationary nature of tampering with wages is dreadful. If you want to improve the standard of living for people with low incomes, the right way is to get the chains off of the producers so they can come up with lower-cost goods and services.
One example is "affordable housing." If you make "decent" housing's baseline too high, you push its cost above "affordable" automatically.
28 weeks ago
28 weeks ago Link To Comment
This internal contradiction of liberal reasoning is classic! Arindrajit Dube, the University of Massachusetts at Amherst economist who is perhaps the foremost advocate for the idea that minimum wage increases don’t kill jobs is worried that the increase will lead to substitution of automation for workers!

This is as rich as Sotomayor's concern that not allowing University of Michigan to racially discriminate is racial discrimination.
28 weeks ago
28 weeks ago Link To Comment
I am thinking CAPITALIST OPPORTUNITY here. Let the law pass. Open up a Temporary Staffing Company (TSC) in a suburb. Sign up businesses to have all of their workers as Temps from TCS. Since the the temps are employed out of the city, pay them the mandated federal minimum wage, and charge the Seattle company 15% to manage their hiring. Since you take care of their paychecks, this may be not as expensive as it sounds at first, as you are reducing the client's overhead.

Socialism causes the problem, capitalism solves the problem.
28 weeks ago
28 weeks ago Link To Comment
Weissmann is referring to the idea of creating a $15 an hour minimum wage in Seattle. The issue has found support with business and labor leaders as well as well as some city council members.
-------------------------------------------------

Well of course business is (publicly) OK with this idea. If they spoke out against it they'd be skewered on the barbs of public opinion.

Working stiffs are going to need that pay raise if the Loon Gov. Jay Inslee gets his $1.17 per gallon gas tax he's begging for. Its for greehouse gas emissions control don't cha know?

God I wish I could move to another state...

28 weeks ago
28 weeks ago Link To Comment
Sticking one's head in a 400F oven is idiocy as well. Should we try that to prove its efficacy...
28 weeks ago
28 weeks ago Link To Comment
I recommend a one million dollar a year minimum wage - just for looking out the window and going back to sleep. Okay? Happy now? hahaha. Commies are such weirdos.
28 weeks ago
28 weeks ago Link To Comment
And perhaps the “experiment” should be tried just to prove how idiotic it is.

If it fails, and it surely will, Republicans and evil capitalists will be blamed. The solution will be to double down on wages, and punish the bastards responsible.
28 weeks ago
28 weeks ago Link To Comment
all cost at every business would increase-therefor there would not be that great of a gain for an individual
28 weeks ago
28 weeks ago Link To Comment
You're right, except almost no individuals would actually gain. But the "progressives" would find one and put that one on TV. They'd have to walk past twenty who had suffered to find that one who benefited, but that's okay with them.
28 weeks ago
28 weeks ago Link To Comment
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