At the beginning of 2019, some New Yorkers were excited for the minimum wage to jump from $13.50 to $15 an hour. However, the enthusiasm for that higher wage dropped as workers are now experiencing the impact of artificial wage increases on their wallets and job security.
According to TheBlaze, “Restaurants are raising prices to adjust for the higher salaries they must pay workers. But, they’re increasingly worried about discouraging customers with too high of prices.”
The artificial inflation of the minimum wage means that employers will have to pick up the tab to meet the expectations of the new law. When employers are forced by the government to increase the wage, they have to raise the prices on products and services at a rate inconsistent with consumer demand.
Because of this, employees are making “more money” but the prices of products and services around them will have to increase as well. All this means is that the cost of labor and products/services may look higher on face value, but the overall problem is that nothing is solved by this artificial intervention into the marketplace, where consumers and producers determine the price of goods and services based off the basic principles of supply and demand.
Jazz Saw at HotAir summed up this whole debacle perfectly, stating none “of this required a Ouija Board to figure out. If the government artificially drives up labor costs, the restaurants (who always operate on very thin margins) were going to have to make up for the surge in costs someplace. They could either fire some of the staff, reduce the hours they work, or raise prices. Usually, it was going to be some combination of all of them. But you can only operate a business with a skeleton crew for so long.”
Over time the full effects of the minimum wage increase will show the full effects of the government intervention, but for now, employees are beginning to worry as to whether they’ll even be able to keep their job as the market surrounding them becomes more difficult to live in.
This drastic campaign to raise the minimum wage has been around for several years across the nation, but in 2017 (several years after a bill passed in the city council) the city of Seattle which was one of the first metropolitan cities to raise the wage to $15 an hour, began to see the harmful ramifications of such a decision as the people they intended to help began to lose hours on the clock, and some even their jobs. Immediately certain larger businesses left the city and the state entirely where the minimum wage was lower, leaving many Seattle residents unemployed in a city where the rise in costs made life more difficult than before.
While the intentions of a law may be for the good of man, the unintended consequences prove that intervention in a market dictated by the laws of supply and demand show the lesser of us will always be the first to drown in a flood of good intentions.