January 16, 2016

QUESTION ASKED AND ANSWERED: “Can D.C. afford a $15/hour minimum wage?”, the left-leaning Brookings Institute asked in July.

Yesterday’s Washington Post article headlined “District leaders furious Walmart breaking promise to build stores in poor neighborhoods” is a succinct response:

Evans said that, behind closed doors, Walmart officials were more frank about the reasons the company was downsizing. He said the company cited the District’s rising minimum wage, now at $11.50 an hour and possibly going to $15 an hour if a proposed ballot measure is successful in November. He also said a proposal for legislation requiring D.C. employers to pay into a fund for family and medical leave for employees, and another effort to require a minimum amount of hours for hourly workers were compounding costs and concerns for the retailer.

“They were saying, ‘How are we going to run the three stores we have, let alone build two more?’ ” Evans said.

“The optics of this are horrible; they are not going to build the stores east of the river, in largely African American neighborhoods? That’s horrible; you can’t do that,” Evans said. “A deal’s a deal.”

As Tim Worstall responds at Forbes,“Obviously, the people who brokered the deal aren’t happy about this. Yet those same people are the very people that passed the laws that Walmart, informally at least, is saying have led to the change of mind. It is, obviously, always nice to see the biter bit, someone hoist on their own petard. But the people who will lose out from this are the consumers of those poorer areas of the capital. And the reason they’ll lose out is because the politicians have been loading costs onto Walmart by insisting upon higher wages in several different ways.”Additionally, Worstall notes that “Higher minimum wages mean fewer jobs as companies that would have expanded do not. And note again that not only do the workers not gain those higher wages the consumers also lose out on their benefits.”

Plus a reminder that “The correct minimum wage is, as it always has been, $0 per hour, as once even the New York Times knew.”

Why, it’s as if minimum wage laws were designed by the original “Progressives” to hurt low-skilled workers, not help them.

Related: Early evidence suggests that DC’s minimum wage law is also having a negative effect on the city’s restaurant employment.