Posts Tagged ‘minimum wage’

Wage and hour roundup

If they choose our dues, low pay’s OK

“Labor leaders, who were among the strongest supporters of the citywide [$15 and indexing] minimum wage increase approved last week by the Los Angeles City Council, are advocating last-minute changes to the law that could create an exemption for companies with unionized workforces.” [Los Angeles Times] What’s more, these union “escape” clauses keep coming up in minimum wage statutes, as the U.S. Chamber has documented in a lengthy report. It’s almost as if these campaigns are run for unions’ benefit rather than that of their ostensible beneficiaries!

Related: Tim Sandefur, 2011, on a Los Angeles ordinance

that forces businesses that buy grocery stores to retain certain employees on their payroll for three months, even though they don’t want to. There’s an exception in the law for companies that have a collective bargaining agreement with a union. Thus the ordinance is little more than a tax on non-union employers — a restriction that exists for no other reason than to make it more expensive to operate a non-union grocery store.

Minimum wage roundup

Study: minimum wage hurt employment, earnings, mobility for low-skill workers

“We find that this period’s binding minimum wage increases reduced low-skilled individuals’ average monthly incomes. Relative to low-skilled workers in unbound states, targeted workers’ average incomes fell by $100 over the first year and by an additional $50 over the following 2 years.” Workers with college education were pushed in part toward work without pay, such as internships, while workers with lower educational attainments simply experienced more joblessness. [Jeffrey Clemens and Michael Wither, Cato Research Briefs in Economic Policy, March]

Related: “Raise the Wage Act Is More Rhetoric than Reality” [James Dorn, Cato] “Promises Made, Promises Broken: The Failure of Washington State’s Minimum Wage Law” [Maxford Nelsen, Freedom Foundation of Washington]

Labor roundup

A minimum wage non-paradox

Obama wage-hour chief David Weil told the Wall Street Journal that leaders of the National Retail Federation approached him urging a hike in the federal minimum wage. Apparently readers are meant to infer that this policy is so obviously fair, or overdue, or beneficial to the national economy, that even big business leaders who will be paying the higher wages favor it. The anecdote is not even the tiniest bit paradoxical, however, once you realize that major national retail operators already tend to pay over the minimum and wouldn’t mind kneecapping their smaller, less-established, or lower-margin competitors who don’t [WSJ and blog, Donald Boudreaux, Tim Worstall]

Meanwhile: “More Seattle restaurants close doors as $15 minimum wage approaches” If only anyone could have predicted! [Shift WA via J.A. Cohen] But note this Seattle Times piece in which the owners of the four closing restaurants say the wage hike wasn’t the reason.

“Rises In The Minimum Wage Really Do Destroy Jobs”

A new study indicates that “a 30% rise in the minimum wage means that 1 million people lose either their jobs or even the opportunity to work.” [Tim Worstall, James Pethokoukis] This and all other studies should be taken with caution, of course: “[We’ve] been talking about [it] confidently, as if we know for sure what will happen when these laws take effect. In fact, it’s very hard to study what happens when we raise the minimum wage.” [Megan McArdle] David Henderson on sneakily pro-union Los Angeles hotel minimum wage enactment [EconLib] Donald Boudreaux corrects The Guardian [Cafe Hayek] And Borderlands Books in San Francisco, threatened with closure after the city’s electorate voted in a minimum wage increase, may survive if it can get enough fans and customers to cover some of its costs in a sponsorship plan.

Minimum wage closes much-loved S.F. bookstore

Don’t believe minimum wage hikes hurt real people? After March 31, a famed sci-fi bookstore on Valencia St. in San Francisco’s Mission District will no longer be able to cater to your taste in fantasy:

The change in minimum wage will mean our payroll will increase roughly 39%. That increase will in turn bring up our total operating expenses by 18%. To make up for that expense, we would need to increase our sales by a minimum of 20%. We do not believe that is a realistic possibility for a bookstore in San Francisco at this time.

And this, which speaks for itself:

In November, San Francisco voters overwhelmingly passed a measure that will increase the minimum wage within the city to $15 per hour by 2018. Although all of us at Borderlands support the concept of a living wage in [principle] and we believe that it’s possible that the new law will be good for San Francisco — Borderlands Books as it exists is not a financially viable business if subject to that minimum wage. Consequently we will be closing our doors no later than March 31st. The cafe will continue to operate until at least the end of this year.

Early reactions from customers online run heavily to two themes: 1) anguish that a beloved cultural institution is passing from the scene and 2) reflections that they, the fans and customers, had supported the minimum wage hike too when it was on the ballot. (It might restrict businesses’ rights, but who cares about that?) But in this world — as in so many of the well-crafted alternative worlds of science fiction — the link between actions and their logical consequences, foreseen and intended or otherwise, is not to be broken. [Reprinted from my post at Cato at Liberty]

Coyote read the letter in recognition:

I found the language here familiar because I spent most of last year writing such letters to angry customer bases. In our case, fortunately, we had the ability to raise prices so the letters were to defuse customer irritation rather than to announce a closure.

And Mark Perry at AEI identifies why a bookstore in particular cannot adjust the way a restaurant or a dry cleaner might:

There’s a limit to how much a bookstore can increase book prices to offset higher labor costs because the publisher sets the list price of the book and it’s printed on the book cover.

Meanwhile, in Philadelphia, a new minimum wage law hits nonprofits, which ask for more taxpayer money so they can comply [Inquirer]

Labor and employment roundup

  • Obama wants Hill to force paid leave on employers. What, his rule-by-decree powers didn’t stretch that far? [RCP, USA Today] Department of Labor, using funds taxed from supporters and opponents alike, happy to act as frank advocate for legislation [its blog]
  • Employers brace for salaried-overtime mandate, wrought by unilateral Obama decree [KSL, earlier at Cato]
  • Related: “Employers To Face More Litigation In 2015 As Plaintiff Lawyers Swoop In” [Daniel Fisher on Gerald Maatman/Seyfarth Shaw report] Here come more NLRB decisions too [Tim Devaney, The Hill]
  • Krugman on minimum wage: two economists in one! [Donald Boudreaux, Cafe Hayek via Coyote, @Mike_Saltsman (“Min wage in France is closer to $12/hr US. But Krugman still being inconsistent bc he’s also backed $15 US minimum”)]
  • Five pro-de Blasio unions — SEIU/1199, teachers, hotel workers, doormen/building staff, CWA District 1 — help enforce NYC mayor’s agenda [NYDN]
  • Testimony: “worst-kept secret” in Philly ironworkers’ union was that you could get ahead through violent “night work” [Philadelphia Inquirer; earlier on Quaker meetinghouse arson here and here, related here]
  • Loads of new compliance burdens: “Changes in California Employment Law for 2015″ [Baker Hostetler] And it wouldn’t be California without many more employer mandates pending in legislature [Steven Greenhut]