Having governments set minimum wages is bad for the economy but varying them by state at least makes some sense, economist Peter Morici told Newsmax TV.
During an appearance on "Newsmax Now," Morici told host Bill Tucker he is no fan of the federal or state governments telling employers how much they must pay their workers.
"I think it's a bad thing for the federal or the state governments to be involved in setting minimum wages," Morici said. "However, if we're going to have a minimum wage, then having some variation by state makes sense.
"Now, whether that can be done by the federal government taking into consideration cost of living or by state governments acting independently is another thing. But what we are observing now is blue states jacking up their minimum wage to the point that businesses simply have to either close or dramatically reduce the amount of labor that they're using."
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The current federal minimum wage is $7.25. Forty states and municipalities instituted wage hikes last week, including Washington state — which now mandates that business pay their workers at least $11.50 per hour.
"The cost of labor in a restaurant can be as much as the third of the cost of the meal, and pushing up the cost of labor to about $25 an hour, which is what they're doing up there [in New York], is certainly going to lead to many fewer jobs — and don't kid yourself, it's not going to lead to more demand for restaurant booths by those people turning around and buying it," Morici said.
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