Minimum Wage Increase Would Hurt the People It’s Meant to Help

Dec 5, 2013

Protesters organized by the Service Employees International Union (SEIU) outside of restaurant in Los Angeles, California.

If you went out to lunch today, you might have noticed “grassroots” protesters trying to put lumps of coal in employers’ stockings.  USA Today reports on these stunts engineered by the SEIU:

In Washington, D.C., dozens of people carried signs and marched while singing "Jingle bells, jingle bells, jingle all the way, it's no fun, to survive, on low low low low pay."

In New York City, about 100 protesters blew whistles and beat drums as they marched into a McDonald's chanting "We can't survive on $7.25."

And in Detroit, more than 100 workers picketed outside two McDonald's restaurants, singing "Hey hey, ho ho, $7.40 has got to go!"

One-day labor walkouts were planned at fast-food restaurants in 100 cities Thursday, with protests in scores more cities and towns across the nation. Organizers, actually a loose-knit group of labor advocates mostly led by the Service Employees International Union, are pressing for an increase in the federal minimum wage, higher wages in the industry, and the right to unionize without management reprisals.

The protestors (and their union allies) ignore the fact that, according to the Heritage Foundation’s James Sherk and John Ligon, “Over two-thirds of workers starting out at the minimum wage earn more than that a year later.” But inconvenient details like that don’t matter when giant puppets are involved.

Here's another inconvenient fact: Raising the minimum wage would push businesses to make adverse personnel decisions--including halting entry-level hiring, scaling back on training, cutting work hours, and automating parts of the business--that would hurt the people a wage hike is intended to help, according to a poll from the U.S. Chamber and the International Franchise Association.

It found that 68% of franchise businesses are likely to make personnel decisions if the minimum wage were raised to $9 an hour, and 50% of non-franchises businesses said they would likely do the same. If the minimum wage were raised to a “living wage” of $15 an hour, 86% of franchises businesses and 72% of non-franchise businesses said they would likely make personnel decisions.

In a statement, IFA President & CEO Steve Caldeira said:

Proponents of mandated living wages set at $15 an hour ignore the fact that this policy will jeopardize opportunities for entry-level workers to gain the skills they need to move up the employment ladder. Such a drastic move will hurt the very people the policy was originally intended to help.

Randy Johnson, U.S. Chamber senior vice president of Labor, Immigration, and Employee Benefits added:

Companies pay competitive wages and invest in training so their employees can bring more value to their business and take home more money. Our survey shows unequivocally that the result of mandating a higher minimum wage will be employers making various decisions that will reduce economic opportunities for low-skilled employees.

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