Minimum wage, maximum damage

Raising entry-level workers' pay would spur economic death spiral

Do you like self-service kiosks?


Enjoy speaking to automated voice systems?

Rather interact with a touchscreen instead of a friendly face?

If so, call your elected representatives today and urge them to increase the nation’s minimum wage from $7.25 to $10.10.

That way, you can help accelerate the pace at which entry-level workers – those people most likely earning minimum wage – are replaced by machines.

As a bonus, you’ll also help class-warfare-waging Democratic politicians and their special interest groups achieve a symbolic but meaningless “victory.”

To envision what higher minimum wages would look like in the United States, take a gander at the slow-growth, high-unemployment European nations where labor markets have been overregulated for decades.

In France, for example, where the jobless rate exceeds 10 percent and the minimum wage equates to about $12.22 in U.S. dollars, McDonald’s operators have resorted to installing self-serve kiosks in all locations to cut labor costs.

France’s more prosperous neighbor to the east, Switzerland, apparently has had enough of artificial wage manipulations. An overwhelming majority of Swiss voters recently voted down a proposal to raise its minimum wage to about $17.60 in U.S. dollars.

The overwhelming rejection – the vote was 76 percent to 24 percent – indicates the Swiss do not view low wages as a problem, or at least not a problem for the government to solve.

“A fixed salary has never been a good way to fight the problem,” Swiss Economic Minister Johann Schneider-Ammann said. “If the initiative had been accepted, it would have led to workplace losses ... . The best remedy against poverty is work.”

Instead of taking a cue from the been-there, done-that socialist nations and implementing proven but less-populist measures to generate real growth in wages and employment, America’s leading liberals are pandering to low-income voters and labor unions with policies that eventually will drive the lowest-skilled workers to government assistance.

Then the death spiral begins as the formerly productive become dependent on the state and continue voting for wasteful policies until the entire system crashes, as it has at a municipal level in cities such as Detroit.

Seeing the writing on the wall, and perhaps not wanting to draw the attention of President Obama’s regulatory bureaucrats, some major U.S. companies have stopped fighting the minimum-wage hike and are shifting resources labor-saving technologies that reduce the need for low-skilled workers.

Restaurants such as Applebee’s and Buffalo Wild Wings are rolling out programs that let customers order and pay with a tablet. McDonald’s is testing a tablet program that would let customers customize their burger toppings.

“If the minimum wage goes up for everybody, it becomes a form of inflation for the entire industry,” acknowledged Panera Bread CEO Rob Shaich, who recently announced his 1,700-store chain is replacing cashiers with computers.

Smaller companies unable to absorb higher labor costs or make investments in technology could go out of business. The higher barriers to entry would discourage the formation of new businesses, reducing competition.

“With increases to health-care costs, higher taxes, more costly regulations, and now a dramatic minimum-wage increase, small-business owners simply can’t afford another excessive government mandate,” the National Federation of Independent Businesses’ Ashley Fingarson said.

The natural laws of economics have proved time and again that the key to boosting employee earnings is through increased productivity, not artificial wage manipulations.

Of course, if we want to go the artificial route, we also should be prepared to communicate with more artificial employees.



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