8/18/15 Minimum Wage

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Fifteen dollars is the amount activists are demanding when it comes to raising the minimum hourly wage.

Seattle, San Francisco and Los Angeles were the first cities to implement the new rate.

The Seattle raise is being phased in.  On April 1st, the rate jumped to $11 an hour.  However, there’s been zero change in the so-called welfare effect.  The number of people on welfare in April was virtually identical to the number before the raise took effect.  Perhaps this is because some minimum wage workers are requesting employers reduce their hours so they may continue to receive welfare and other public assistance benefits.

More significantly, Seattle lost about one-thousand restaurant jobs in the month following the wage hike.  It lost 1300 restaurant jobs between January and June.  This is the exact opposite of the national trend when more than 130,000 restaurant jobs were created.

A comic book store owner was a big supporter of raising the minimum in San Francisco. But he was appalled when he realized he’d need an additional $80,000 in revenue each year just to cover salary increases.  He says he’ll lose customers if he tries to charge more for comic books than the price printed on the cover.

And in Los Angeles, the AFL-CIO, which lobbied for the $15 wage, wants to be exempt because the cost is too high.

However,  critics allege it’s a strategy to encourage employers to unionize their workforce to reduce costs.

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