Tags: Minimum Wage | pay | economy | obama

The Problem Isn't the Minimum Wage; Obama Economy Doesn't Produce Good-Paying Jobs

The Problem Isn't the Minimum Wage; Obama Economy Doesn't Produce Good-Paying Jobs
(Dollar Photo Club)

By    |   Thursday, 22 October 2015 07:07 AM

We’ve always known that many actors are rabid supports of President Barack Obama and the Democrats and usually support their programs. 

So I was surprised by a Wall Street Journal item that noted that Los Angeles theater actors, of all people, are asking that the minimum wage be lifted for local theaters.

The issue surrounds an Actors Equity mandate that theaters with fewer than 100 seats must pay union members at least nine dollars an hour. This high overhead cost is causing some theaters to close, depriving younger actors of venues to hone their craft. So they are actually suing their own union.

What a promising development. Young actors, like young workers everywhere, need to be able to initially work at even low paying jobs to get the experience and training to move to higher paying jobs.

There is a realization that when employers are forced to pay higher wages, they become less profitable, and are forced to cut hours, reduce employment, or in many cases, just go out of business.

Remember how fast-food workers raged a war to lift minimum wage? 

Well, it conjures up that old maxim: Be careful what you ask for.

If we stay in California, specifically San Francisco, which recently boosted the minimum wage to $15 an hour, the aftershocks are being felt by small businesses everywhere.

The poster child is Borderlands Books, a popular science fiction/fantasy specialty bookstore, which has been forced to close due to the minimum wage. The boost in the mandatory minimum wage caused Borderlands’ payroll to increase about 39 percent, raising their total operating expenses by 18 percent. It would be impossible to stay in business without raising their prices to the point where they would lose customers.

Our last California visit rests with fast-food restaurants. 

Berkeley, California, is reviewing a labor panel’s recommendation to hike the lowest pay to $19 an hour – the highest minimum salary in the nation. There is not a franchise anywhere that can afford this. So fast-food franchises are getting creative.

Automated kiosks in fast-food restaurants are gradually replacing low wage staffers who take food orders. Unions now must explain to their newly minted workers why they are losing their jobs. Kiosks are even replacing unionized public sector employees in progressive California. 
And it’s not just on the service side.  It’s also being implemented in the cooking area.  A company called Momentum Machines has built a robot that can slice toppings like tomatoes and pickles immediately before it places the slice onto a burger, creating a fresher burger. The robot is more consistent, more sanitary, and can produce 360 hamburgers per hour. That's one burger every 10 seconds.
But fast-food franchises are fighting back with more than robot workers. Franchisees in Seattle are suing over the city’s minimum wage laws. And for good reason.
There continues to be a faulty proposition that since franchisees are part of larger companies, they can afford to absorb higher salaries. In fact, they are really just mom and pop businesses.

Yet, Seattle’s rationale for the minimum salary ordinance aimed at franchisees is that franchises are treated as large businesses because “they receive the benefits of being associated with the larger franchisor network of many more than 500 employees. As a result, franchises have distinct advantages over the typical independent small business — training, product development, and marketing support — to name just a few."

This is nonsense. A fast-food franchise is like any small business. They have to pay for products at a certain price and then sell it at a price to make a profit. But overhead, like salaries hits them as hard as any business. Singling out fast-food franchisees is disingenuous at best, and biased at worst.

According to a poll of quick-service operators in New York State by the Employment Policies Institute, 22 percent said a $15 minimum would force them to shut their doors and nearly half said they’d be forced to cut employee hours.

The handwriting is on the wall for low salary workers. A 2014 report by the non-partisan Congressional Budget Office, predicted that Obama's call to raise the federal minimum wage could cause 500,000 lost jobs.

But a 2014 study by the American Action Forum comes up with unemployment figures that dwarf those of the CBO. It estimates that a $15-per-hour minimum wage could mean the loss of 6.6 million jobs.

Forcing companies to adopt a minimum wage is counterproductive to creating jobs. 

People keep losing sight that minimum-wage jobs like those in fast food were never intended to raise a family. They are a stepping stone to give younger workers hands-on work experience where they can learn skills that can be transferred to other better-paying jobs.

The problem isn't the minimum wage. The problem is the Obama economy doesn't produce good-paying jobs. Obama’s jobs policy can be described as a race to the bottom.

Reality has set in among workers and communities that while raising the minimum wage sounds good on paper, in practice it can hurt all of us.

The howling of the minimum-wage mantra of progressives is a poor man’s substitute for the kind of economic policies that will keep us prosperous, strong and safe.

© 2020 Newsmax Finance. All rights reserved.

1Like our page
The howling of the minimum-wage mantra of progressives is a poor man’s substitute for the kind of economic policies that will keep us prosperous, strong and safe.
Minimum Wage, pay, economy, obama
Thursday, 22 October 2015 07:07 AM
Newsmax Media, Inc.
Newsmax TV Live

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

© Newsmax Media, Inc.
All Rights Reserved