• Tag Archives minimum wage

  • NYC Fast-Food Workers Stunned Some Are Being Fired after $15 Minimum Wage Hike

    Posted on by Azrael Comment

    When supporters of minimum wage increases argued that entry-level workers were not getting paid enough to support their families, experts warned that forcing employers to increase the wages for unskilled workers would produce unintended consequences. Now that critics of the law were proven right and workers are getting fired, proponents are doubling down.

    Critics hoped that minimum wage supporters would finally understand that employers should be able to negotiate wages with workers freely, but those suffering the consequences seem blind to reality.

    Will they ever realize that their push for a minimum wage hike is why they are out of a job?

    According to a recent New York Times piece, workers who supported and helped to push for the minimum wage increase in New York City are now being fired—and for unfair reasons, they claim.

    But how could anyone call these firings unfair when employers are being forced to raise everybody’s wage?

    Serving as ground zero for the $15 minimum wage battle, New York City saw its fast-food workers also serve as the subjects in an experiment that completely ignored the laws of economics.

    After protests and rallies demanding a higher minimum wage and different proposals regarding scheduling procedures, workers got what they wanted. But now that they are being fired, they are organizing to, once again, ask the city to change the law so they are protected from “unfair” firings.

    Hoping the city will apply some job security to their minimum wage positions, workers think this change would finally make things right. After all, all it takes is a law and life will be perfect, right?

    But as economists have explained, it takes money to increase the minimum wage.

    For a company to offer a higher wage to an employee, it must first be able to afford the hike.

    For companies, paying entry-level, unskilled workers the same they would pay a manager or a seasoned employee doesn’t make any sense—not because employers aren’t compassionate but because they would have to pull in more money to afford these high wages.

    When governments force them to pay unskilled workers more, they necessarily have to cut costs somewhere to avoid losing money. After all, the goal is staying open and profitable. If the employer is losing money, he or she can’t pay anyone anything.

    The way they find to cut costs is to cut the number of employees on payroll. And precisely because labor laws are already so suffocating, employers must use other excuses to fire employees, as “I can’t afford paying you and hundreds of others the minimum wage” is not enough of an excuse.

    Of course, workers who fought for the minimum wage increase feel they are being unfairly targeted. But the reality is that what’s missing is some basic understanding of economics, which would help them realize that simply increasing the minimum wage by decree does nothing but limit the labor market, hurting the unskilled and the poor more than any other groups.

    As The New York Times explained, it’s unfortunate that labor unions are often the first to push and mobilize workers for minimum wage pushes.

    Union bosses will use bad reasoning and unsound economics to persuade workers to join them, and all because they want more people to join their ranks and pay their union dues. Unfortunately, those who join the union masses are the ones now suffering the backlash. And what’s worse, now that workers are mobilizing once again to push for more job “protections” from lawmakers, we’ll see even more unexpected consequences.

    In no time, all fast-food joints across New York City will use nothing but self-serving kiosks and robots (yes, robots!). Otherwise, they will all have to shut down completely because they simply won’t be able to afford to follow the city’s law.

    Now, the laws of economics, on the other hand, those are impossible to go around.

    This article was reprinted from the American Institute for Economic Research.

    Chloe Anagnos


    Chloe Anagnos

    Chloe Anagnos is a professional writer, digital strategist, and marketer. Although a millennial, she’s never accepted a participation trophy.

    This article was originally published on FEE.org. Read the original article.



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  • California’s Typhus Surge Is Linked to Fleas, Feces, and Bad Economic Policies

    Posted on by Azrael Comment

    Typhus is on the rise in Los Angeles, with its epicenter in downtown, where the city’s sanitation officials are struggling to respond to the nearly two thousand “cleanup requests” they get from locals every month.

    Like San Francisco, LA is struggling to clean up city streets of human waste—specifically feces—due to a lack of public restrooms and a growing homeless population.

    There was an average of 700 requests in the area in the spring of 2016, but officials now claim they receive about 1,900 cleanup calls per month thanks to the number of growing homeless camps. But the growing homelessness and sanitation nightmares have led to yet another crisis: a rise in flea-borne typhus.

    Between July and September, county officials identified at least nine typhus cases that originated in downtown. At least six of the infected were homeless, but central LA isn’t the only place at risk.

    Officials in the city of Pasadena, also located in Los Angeles County, claim 20 residents had typhus fever this year. Typhus cases have also been registered in Long Beach and Willowbrook.

    As the number of cases continues to rise, the Los Angeles County Board of Supervisors feels pressured to act. They recently voted on a pilot program to fight the illness in homeless encampments by adding more cleanup efforts, introducing more mobile showers, offering the homeless housing, and distributing hand sanitizer and flea repellent for people and pets.

    The crisis, which has already made 64 victims this year alone, has deeper roots. At least, that’s what 5th District Supervisor Kathryn Barger appears to claim.

    “When I drive through parts of my district and I see the living conditions on the street, it reminds me of a third-world country,” Barger said.

    Perhaps the fact that California falls behind every single state in the country when it comes to fiscal, regulatory, tax, and economic policies—much like many “third-world” countries—has something to do with the current conditions residents are now forced to grapple with.

    As the Cato Institute’s Freedom Index reveals, California’s suffocating regulatory environment has a series of very real and heartbreaking consequences.

    When it comes to land-use freedom, for instance, cities like Los Angeles have restrictive rules regarding housing supply and rent control, keeping builders from developing affordable housing and helping to artificially increase the cost of housing across the board.

    But bad housing policies are not the only cause of growing homelessness in Los Angeles. The state’s labor laws add insult to injury by making it difficult for employers to help those in need. With high minimum wage laws, no right-to-work policies in place, mandated short-term disability insurance, and prohibiting consensual noncompete agreements, job creation in California is dramatically held back, and the poor and low-skilled are unable to break into the labor market.

    In addition, occupational licensing also keeps entrepreneurs from entering the market due to the extensive cost associated with obtaining the mandated training and certification to perform simple services.

    With state lawmakers being so eager to get involved in every single affair, from banning straws to keeping residents on a budget from using scooters, it’s hard to see how these rules could be repealed—or at least reformed—anytime soon.

    As the founder and president of the Future of Freedom Foundation Jacob G. Hornberger explained, the root causes of homelessness in most major urban centers across the US are both minimum wage laws and zoning, two policies that are not only in effect in California but that have been revamped and strengthened again and again over the years.

    With California residents once again helping progressives stay in power in the region, we know these policies are not going anywhere. If anything, they will continue to receive widespread support from the newly-elected governor.

    For the time being, there might not be a government-backed solution to Los Angeles’ typhus outbreak, but if the city’s and state’s politicians really want to end homelessness, then repealing zoning and minimum wage laws would be a great start.

    Source: California’s Typhus Surge Is Linked to Fleas, Feces, and Bad Economic Policies – Foundation for Economic Education


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  • Politicians Are Well Aware of the Harms of the Minimum Wage

    Posted on by Azrael Comment

    Recently, I came across a rather interesting news report. Republican lawmakers in the US are proposing that the minimum salary firms must pay to their foreign workers, arriving on H1-B visas, be raised from $60,000 to $90,000. This move was backed by large corporations such as Facebook, Microsoft, and Oracle as well as by unions.

    Edging Out the Competition

    Why are unions and large corporations supporting this measure? Did American workers suddenly decide to show solidarity with their Asian brethren? Did the CEOs of Microsoft, Facebook, and other large corporations deeply introspect and decide to be compassionate towards the less fortunate foreign workers?

    Not at all. Large corporations such as Microsoft and Facebook would like to get rid of competition. Their smaller competitors cannot afford to pay the kind of enormous salaries that Microsoft and Facebook do. Therefore, they hire cheaper workers from India. It is also a good deal for the Indian software engineers since even small firms in the US tend to pay better than firms in Bangalore.

    By raising the minimum salary requirement, Microsoft, Facebook, and others wish to raise the labor costs of their competitors. While labor would also become more expensive for large corporations, they can absorb the cost, and the benefit of eliminating competition more than makes up for it.

    The unions, of course, have a similar incentive. If workers from India and China are not competing with them, they get to demand higher salaries. And politicians understand all of this. In fact, the explicit aim of this legislation is to keep down the number of foreign workers. From the news report itself:

    A California congressman, backed by U.S. technology companies, is pushing for the House to consider legislation that would narrow the number of eligible candidates for H-1B visas that are awarded to highly skilled foreign workers.  

    Stop Feigning Ignorance

    It isn’t as though only Republicans understand the ill effects of the minimum wage. The Democrats are opposing this move, saying that it should be viewed in the larger context of immigration. Clearly, politicians across party lines understand that minimum wage laws create unemployment and, in this case, immigration obstacles.

    To all politicians who advocate raising the minimum wage saying that it helps workers, I have a question. Why is it that minimum wage laws do not create unemployment for fast food workers but do so for immigrant workers from India? I won’t hold my breath waiting for an answer.

    The plain fact is that minimum wage laws, whether for fast food workers or for migrant ones, are just crony capitalism. I know it, politicians know it, and after reading this article, hopefully everyone knows it.


    Jairaj Devadiga

    Jairaj Devadiga is an economist who illustrates the importance of property rights and freedom through some interesting real-world cases. When he is not doing research, he enjoys reading about medicine, astronomy, computers, and law among other things. Readers may email him at jairajdevadiga@gmail.com with questions, suggestions, feedback etc.

    This article was originally published on FEE.org. Read the original article.




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