Minimum Wage

San Diego's Experiment With Higher Minimum Wage: 4,000 Fewer Restaurant Jobs

San Diego's restaurant recession is another data point suggesting that making it more expensive to employ people causes fewer people to be employed. Shocker.

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Peggy Peattie/ZUMA Press/Newscom

California is hiking the statewide minimum wage to $15 per hour by 2023, and San Diego is getting a head start on the higher wage mandate—and, maybe, the consequences of it.

Rather than inch upward from $10 per hour to $10.25 per hour in January 2016, as the rest of the state was doing, San Diego jumped its minimum wage to $11.50 per hour. In the year and three months since then, the number of food service jobs in San Diego has dropped sharply, with perhaps as many as 4,000 jobs lost, or never created in the first place.

"If job growth in the restaurant sector had just kept pace with the state's performance … the industry could have created 5,200 jobs instead of the 1,300 that took place," Lynn Reaser, chief economist of the Fermanian Business & Economic Institute at Point Loma Nazarene University, told Dan McSwain, a columnist with the The San Diego Union-Tribune.

Economists say the restaurant industry is a good barometer for the consequences of minimum wage increases because those businesses rely heavily on low wage workers, operate on small margins, and have high rates of turnover (that is, restaurants tend to pop-up quickly in some areas and go bust just as quickly in others).

That seems to be what's happening in San Diego. While the growth of food service jobs in California has slowed since the higher wage mandates went into effect in 2016, McSwain reports, those jobs have actually dipped into negative growth within the borders of San Diego.

"San Diego's head start, which places many of its employers at a temporary disadvantage, makes the city a test bed for competing theories about whether the overall economy is harmed or helped by large increases to wage floors," McSwain writes.

So far, that test is going about as you'd expect. Restaurateurs are raising menu prices and laying off workers to keep revenue ahead of expenses. McSwain's whole piece is worth a read as it does a fantastic job of breaking down the arcane economic math into real world consequences for small business owners and their employees.

San Diego might be the latest real life test case for the consequences of hiking the minimum wage, but it's hardly alone. Thanks to progressive activists, we're getting a real life economics experiment on a grand scale. In addition to Washington, D.C., local officials in Seattle, Los Angeles and New York have approved laws mandating $15 per hour. Whole states are following suit, with measures already passed in California, New York and Oregon.

It's no secret what will happen after these laws take effect.

"Economically, minimum wages may not make sense," admitted California Gov. Jerry Brown just moments before putting his name on a bill that could cause disastrous economic consequences for the already-impoverished rural parts of his state. "A $15-an-hour national minimum wage would put us in uncharted waters, and risk undesirable and unintended consequences," wrote Alan Krueger, a former chairman of President Obama's Council of Economic Advisers, in the New York Times last year.

San Diego's decline in restaurant jobs might be a blip based on a small sample size or caused by some other factor, but there's no doubt that it's part of an emerging trend in cities where minimum wage hikes have been enacted.

Like Washington, D.C., where restaurants shed 1,400 jobs during the first six months of 2016, following an increase in the city's minimum wage. Meanwhile, restaurants in the Maryland and Virginia suburbs added 2,900 jobs during the first six months of the year.

"Despite what we hear from unions, the Fight For 15 crowd and other minimum wage advocates, the evidence from D.C.'s restaurant industry—an industry often considered as 'ground zero' for minimum wage effects—demonstrates that demand curves for low-skilled workers actually do slope downward," Mark Perry, an economist at the American Enterprise Institute, a free market think tank based in D.C., told me at the time, referring to the basic law of economics that says demand for a product or service will decrease as the cost increases.

Perry took to Twitter this week to highlight a sharp decline in restaurant jobs across the whole country.

Even if it's only a small part of the reason, the economic data should start to worry city and state officials who have backed radical minimum wage hikes over the coming years.

Perhaps more officials will do what Baltimore Mayor Catherine Pugh did earlier this month. Though she had supported a higher minimum wage during last year's campaign, Pugh decided to veto a proposal to set a $15 per hour minimum wage in Baltimore, citing concerns raised by businesses and nonprofits in the city.

The Wall Street Journal reports this week that four municipalities in Cook County, Ill., have opted out of the county government's move to raise the minimum wage in the Chicago suburbs to $13 an hour by 2020. Iowa Gov. Terry Branstad, a Republican, approved legislation in March to roll back higher minimum wages already approved in four counties. In Flagstaff, Ariz., council members just amended a minimum-wage increase approved by voters in November to slow the pace of increases.

The populist left led the push for upping the minimum wage—initially calling for $10.10 per hour, which quickly ballooned to $15 per hour—during the latter half of the Obama administration. Minimum wages going up, though, is pushing employment opportunities down.

San Diego's restaurant recession is another data point suggesting that making it more expensive to employ people causes fewer people to be employed. Sometimes it's really that simple.

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141 responses to “San Diego's Experiment With Higher Minimum Wage: 4,000 Fewer Restaurant Jobs

  1. People just never f-cking learn, do they?

    1. I predict that waiters, waitresses, cooks, and bartenders, etc., will ALL soon be replaced by robots, which will be joystick-controlled and Waldo-style-controlled by remote control, by human operators in India, Berzerkistan, Stanstanstanstanistan, etc., all of whom will be paid $1.34 per hour or so… American CEOs controlling the IP for this, and making the needed bribes… Ooops, I mean, campaign contributions, to facilitate all this, will meanwhile rake in untold $$$$billions…

      1. One can only hope.. maybe they’ll be able to get my order right and keep my drink full.

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      2. Why do we need American CEO’s for this? We can farm them out just as easily as we can anybody else. I acknowledge we may have to pay $25.00 per hour for a CEO, but I think we can afford it.

    2. Apparently not. Extrapolate out the phrase: “Higher pay means higher unemployment.” First reverse it to: “Lower pay leads to higher employment.” Now reduce the pay to zero. Everyone will have a job! Amazing, isn’t it! Hard workers can even have two or three jobs! Unemployment will be ZERO! Astonishing! Why hasn’t anyone wrote an article about it! So, you are right! People just never f-cking learn, do they?

      1. Extrapolate out the phrase: “Higher pay means higher unemployment.” First reverse it to: “Lower pay leads to higher employment.”

        You’re incorrectly assuming a causal relationship. In fact, interventions in the economy can easily produce pretty much any combination of pay and unemployment… except for the ones you actually want; those are hard to produce.

      2. If one cat can eat one rat in one minute, how long would it take one cat to eat 10,000 rats?

        The rats would eat the cat. That’s what happens when you extrapolate a trend beyond where it can make mathematical sense.

    3. If by “people” you mean libertarians, youre right, theyre still pushing their radical ideology after fifty years of failure.

  2. US Restaurant Job Growth Fell to a 6-Year Low in March. Are Minimum Wage Hikes (and Threats) Causing a Restaurant Recession?

    No, reduced growth is not negative growth.

    1. I didn’t see where that was implied.

      While the growth of food service jobs in California has slowed since the higher wage mandates went into effect in 2016, McSwain reports, those jobs have actually dipped into negative growth within the borders of San Diego.

      Job growth has slowed everywhere, but in San Diego, that has dropped into negative growth.

      1. I didn’t see where that was implied.

        The word “recession”.

        1. Which except for the Tweet (which lacked context) is used in context of San Diego and the McSwain reports… have gone into… recession.

          1. Which except for the Tweet

            Which is what I quoted and was responding to.

      2. “Negative Growth” you can file with “Alternative Facts”

        As they point out, there has been a net increase of 1,200 jobs in the industry.

        That is not a negative number.

        End of story.

        1. So the annual growth in resto jobs decreasing from 4 percent to 2 percent in one year is no big deal? We have to wait till we have “negative growth” before it’s a story? Job losses are not a concern? Damn, am I sounding like Judge Nap??

    2. Reduced growth in San Diego, negative “growth” elsewhere … aka DC *losing* 1400 restaurant jobs.

    3. Yes reduced growth is negative growth. It is referring to the loss in rate of change not net loss of jobs. A net loss of jobs would be referred to as job loss not negative growth. This is an important concept to understand because net job growth can still be positive but if it is lower than population growth it means fewer people are working per capita which is generally a bad thing.

      1. Ding, ding, ding. Winner!

      2. I would disagree about negative job growth being bad for the economy. Actually, artificially tying everything to an ancient concept of “job”, the inelastic soul-crushing health-destroying government-regulated 40-hr a week curse no longer means anything in the 21st century. It’s productivity that matters, not jobs. Output, not input. I’m surprised so many people still hold Marxist views, extolling the input (jobs), especially on this site. If the output depends on robots doing low skilled work, or people having more flexible gigs in the new economy, working here and there on their own schedule, and not listed on any B(L)S database as gainfully employed, so be it. Let’s not fetishise the concept of jobs.

  3. Restauranteurs are raising menu prices and laying off workers to keep revenue ahead of expenses.

    Greedy. Look, if workers are not getting a living wage, should they be allowed to enslave themselves? No, that is a Sophie’s Choice that should only be made together, and collectively we choose not to let slavery exist.

    1. No one is forcibly stopping them from getting the education or experience that would make them worth more to their employers.

      However it’s the the government that *is* forcing them to be unable to work if they’re not worth that much to an employer.

      Slavery is being forced to do what others tell you. Who is it that’s using the force? Government.

    2. I can’t quite tell whether you’re being serious or sarcastic.

      1. Poe’s Law…

  4. There are four possible outcomes that can happen when minimum wages increase.

    1) Businesses do not raise prices or shed workers, and instead take a cut on their profit margins. This is the most unlikely outcome. It’s simply against any entity that is profit-seeking’s best interest to act in this way. As the author also points out, this is just about an impossible result in the restaurant industry with already thin profit margins.

    2) An increase in the value of the dead-weight loss created by a price floor in the supply and demand curves for unskilled labor (also known as an increase in unemployment).

    3) An increase in prices (i.e. excess inflation). Areas that heavily utilize unskilled labor could naturally increase their prices to make up for some of the additional personnel cost. Unfortunately, these types of businesses generally have a higher proportion of lower income customers. This can actually hurt the people whom the policy is trying to help most.

    4) An increase in underemployment, as businesses look to cut down on full-time employees in lieu of part-time workers.

    This can happen in various degrees and mixtures. Whenever someone sites an economic study that shows a certain area that did not see an increase in unemployment when a minimum wage increase was enacted, ask how prices changed in low-skill labor business sectors and how the full-time and part-time employee numbers changed.

    1. This can happen in various degrees and mixtures.

      Yes, it’s usually a mixture of all the above.

      Places that are struggling collapse more quickly. Places that were making good profits get a squeeze and either take the squeeze on the chin (Bernie Sanders’ and Kshama Sawant’s believed outcome) or they raise prices and cut hours.

      If they could have found a way to raise minimum wage for Mercedes dealerships or Yacht Sales, no one would have noticed. But it doesn’t work that way, and the lower income people have to absorb the higher prices themselves. In addition to absorbing their own hours, jobs or benefits being cut.

      1. What’s needed is to identify some a good sampling of businesses prior to the minimum wage going into effect, then see where they specifically are at later points after the mw is in effect.

        1. You mean you believe there are some “rational” players in the legislatures?

          Hmm, well I guess there are and their favorite song is “I wanna be reelected forever”.

    2. On 1) the other problem is … what margin?

      Restaurants mostly have thin ones, and some of them run a loss half the year (made up with a busy season).

      There’s a reason restaurants close so much.

      (And a raise to $15 to the employee means more SS matching “contribution”, too…)

    3. I would add (5) the business decreases other expenses, the prime of which would be rent. If the wage increase causes fewer new restaurant openings and some existing ones to go out of business, supply/demand should soften rents.

      1. I can imagine more smaller places selling food where only a few people (even only one) work. No worries about minimum wage if you are self-employed. Also, the economy will move underground (or at least there would be more unreported income) which means less revenue for the state which means higher taxes on those still willing to report income and expenditures. Push it far enough and you could start a kind of “death spiral”.

      2. The problem there is rents *don’t drop*. Governments have been busy increasing property taxes and the costs of utilities. That puts building owners in the same pinch that raising wages does business owners.

        Even in areas with a surplus of business space (empty buildings) the other cost pressures don’t allow rental rates to go down.

        Another thing with empty business buildings is property companies keeping them empty to offset profits on other buildings to balance their taxes. Taking a loss on an empty strip mall keeps the company from being taxed out of operating their other buildings. That empty building is helping to keep rents down elsewhere. Without it, the rents in occupied buildings would have to increase, which would hurt the businesses occupying them.

    4. Inflation is always a monetary issue (per Milton Friedman), i.e. tied to the money supply, not an increase in the prices of burgers.

      And you are leaving many options businesses would have off the table -e.g., automating more, outsourcing certain departments (e.g., website design), investing less in product development and more in lobbying (simply to stay alive), buying cheaper ingredients -perhaps less healthy, etc. There are many ways to cope with shitty laws.

  5. You guys are missing the big picture. The greater good for the children fair living wage that makes a really good civilization big picture.

    Duh.

    1. “You guys are missing the big picture. ”

      Yes!

      “The greater good for the children fair living wage that makes a really good civilization big picture.”

      No.

      Minimum wage employees tend to vote for Democrats and don’t generally understand economics, but do understand the promise (however illusory) of more money.

      Meanwhile, small business owners tend to vote for Republicans.

      1. There’s another way to look at it: minimum wage workers like gambling. Voting for a minimum wage increase is a gamble. You could lose your job, or you could get an entirely non-illusionary increase in your wage. The article claims that 126,000 people are still employed in the industry. Compared to the 4,000 people who didn’t get jobs they otherwise would have, how many people got a raise?

        1. How many will continue to get raises? How many will see those raises eaten up by inflation? How many will lose their jobs in the future? It’s gambling with no ability to take your chips off the table.

        2. How many of those 126,000 were making less than the new minimum wage?

        3. Compared to the 4,000 people who didn’t get jobs they otherwise would have, how many people got a raise?

          If I started 2yrs ago and worked my way from $10/hr to $12.40/hr by increasong my skills- am I gonna get bumped to $17.50/hr?

          Or, do I just tell the boss to piss off when I’m expected to train a newbie who makes as much as I do?

          1. Bonus Question:

            What about people in actual skilled industries who made 15$ an hour? Why stress out as, for example, a paramedic who probably makes ballpark $15-$20 an hour when you can just fuck around in a Target doing inventory for the same wage.

            Either paramedics are going to get a big raise, or there will be fewer paramedics.

      2. It’s not illusory if you’re getting more money.

        But whatever, small business owners tend to vote for Republicans and don’t generally understand economics, either. Most people – owners, workers, retirees, welfare recipients, whatever – only understand the economics that directly affect them personally in the short term. The idea that a small business owner has some inherent extra insight isn’t really based on anything. It’s not like there’s some magical insight that business owners develop. How many owners prioritize short-term gains over long-term stability / growth? Lots. Because they don’t understand economics any better than their minimum wage employees do.

        1. It’s not like there’s some magical insight that business owners develop

          There is, actually. It’s called “experience.” People who (1) run small businesses, and (2) can do math, have this magical insight. They know how much it costs to run a business: how much rent is, how much merchandise or food costs, how much equipment and maintenance costs, how much they’re paying for labor, how much they’re paying in taxes, how much they’re paying for advertising and promotions, how much (if any) profit they’re making.

          What do employees know? They know how much they’re making and how much their employer is charging for food and/or merchandise.

          No one has chains on these employees. They can go work somewhere else, and if they think they’re not making enough money and that they’d be able to run a business better themselves, no one is stopping them from starting their own.


          1. “…no one is stopping them from starting their own.”

            Except the United States Federal & State government themselves, who love throwing entry barriers and hurdles up in people’s way from starting said business to protect special interests who are already in said business. (Or just because they can, and FYTW)

            It’s at the point where kids can’t even run a lemonade stand. The sad part is this isn’t hyperbole, lemonade stands have in fact been shut down by the authorities in some districts.

            1. True, and despicable, yes. But I don’t believe that translates to “people are entitled to a government mandated such-and-such wage from such-and-such employer because it would be difficult for a competitor to start a business.”

  6. The concept of a minimum wage needs to die. There is zero justification, economically or morally, for a minimum wage. All it is is protectionism against less skilled workers.

    The same smug leftist assholes that say “if a business can’t pay you X, they don’t deserve to be in business”, they are really saying “if you don’t have a certain skill level, you don’t deserve to be employed. Now get dependent on government and vote for us”

    1. I completely understand this reasoning, but I also finding it “incomplete” for lack of a better term. In many areas, the federal minimum wage of $7-whatever is not even close to a living wage. Simultaneously, the most available jobs pay minimum wage or close to it. The people who have these jobs end up in the unenviable position of working full time and still not being able to make ends meet, and assistance programs make up the difference.

      What is the free market answer to this? I get that minimum wages are a blunt-force tool of dubious effect, but what’s the alternative for poor people who want to pay rent AND eat?

      1. Remove zoning restrictions that make flophouses illegal?

        That’s how the Facebook-fodder “FDR’s 1935 living wage!!!” of $4.35 or so (adjusted) worked; people paid very little to live in small spaces with lots of other people and shared food arrangements, mostly.

        1. Let’s bring back slumlords? Yeah, someone how I don’t think most people would consider that a solution.

          I agree on housing policy more generally though. There are way too many restrictions.

      2. The free market answer is to allow the market to set wages without interference. That allocates resources most efficiently. Then, society can decide whether people who can’t eat and pay rent (or won’t do what is necessary for such) should be subsidized in some way.

        1. Isn’t that exactly how we ended up where we are, though? People worked for shit wages in shit situations in the early 1900’s, and slowly various things were put in place to protect workers and raise the overall quality of life.

          1. No, that is because we were still developing economically. Jesus, people. We didn’t have child labor and low wages because we lacked regulations, but because we didn’t have the capital to make people productive enough to have more. It wasn’t until we developed economically that those things were not necessary. Remember, regulations / government always lags behind reality, then it takes credit for it.

            The “poor” in the US have it better off then 90% of the world, and have it better off than the middle class did 50 years ago, because of Capitalism and growth, not because the government dictated it.

          2. New Zealand, followed shortly by the USA, were the first two countries to enact minimum wage laws, in 1938.

            Take a look at inflation since then, and how it’s gone in every country that has minimum wage laws.

            Then there’s Denmark, which has no minimum wage law yet also has very high wages. A fast food worker there makes $20 USD an hour or more. But naturally the prices are sky high to make up for that AND the country has very high taxes. A $20 job there nets about $12.50 after income taxes. But then there’s all the other taxes, fees etc that come along with daily life so at the end of the paycheck that $20 an hour is more like $7.

            In other words is Bernie’s dreamworld. High wages that look great on paper but everyone is in reality no better off, and government gets most of the money.

        2. The compromise is to eliminate the Federal minimum wage and let state figure out what works locally, but I guess it’s more fun for many to force other people to do what they think is “best” for them.

      3. There are over 1.3 BILLION people living (or at least surviving) on less than $1.25 per *day*. $7/hr is a little over $1,200/mo. That’s just a hair less than I’m living on now. While I would have a hard time making it on that in a large, expensive city, it would also be fairly comfortable in a town that costs less than the city I’m in now. If I got a roommate I would be fairly comfortable on it even here since over half of my earnings go to nothing but rent.

      4. The federal poverty level in 2017 is:

        $12,060 for individuals
        $16,240 for a family of 2
        $20,420 for a family of 3
        $24,600 for a family of 4
        $28,780 for a family of 5

        Two people, each earning the minimum wage and working full time would bring in $30,160. That is greater than the FPL for a family of 5. They also have a very good chance of being teenagers just starting out and can expect to make more than the minimum wage within a year or two.

        Your answer is that these people are entitled to earn more than their productive output. Your answer is slavery.

        1. I’m not pushing for anything in particular, I’m just asking questions about what I see as a hole in the “abolish minimum wage!” logic. Minimum wage as a concept wasn’t made up for no reason, it was made so people can actually pay bills.

          In any case, you basically made an argument in favor of the minimum wage. Even with it at what it is now, someone working full time can at least get above poverty level. At least that outrageously low bar has been cleared.

          1. Minimum wage as a concept wasn’t made up for no reason, it was made so people can actually pay bills.

            No, it wasn’t. Originally, it was designed to keep blacks out of the labor market. As it evolved over time, it became associated with first-time employment and jobs requiring little to no skill. It was NEVER meant for supporting a household. Anyone in that predicament is there by dint of his/her own decisions that led to that point.

            1. thank you, I was going to say that.

              Repeat after me, the minimum wage is PROTECTIONISM AGAINST LOWER SKILLED LABOR! It has nothing to do with “paying bills”. Jesus Christ.

              Did you know that in some places, the minimum wage for blacks was higher than for whites? This was to keep them unemployed.

              Also, Unions fight for minimum wage increases because it helps their workers. They don’t give a crap about other workers, then care about making it more expensive to hire non-union labor. And in some cases, they actually fight to EXEMPT UNION MEMBERS FROM THE MINIMUM WAGE.

              Jesus Fucking Christ. I can’t believe that after 50 years of a thorough debunking of the minimum wage, people still buy into that crap.

              1. “Did you know that in some places, the minimum wage for blacks was higher than for whites? This was to keep them unemployed.”

                Did you know that in some places “medicine” was putting leeches on your body to suck out the demons?

                It’s 2017, make an argument based on current reality.

                1. So does it feel like you’re doing something good when you advocate for the government coercion to determine what employers have to pay employees, regardless of the circumstances and preferences?

                2. The Davis-Bacon Act from the 1930’s still exists and it is still used to prevent lower-skilled workers from competing based on price. Federal projects have to follow Davis-Bacon rules and the law still hurts less-skilled workers. Is that current enough reality for you?


                3. “It’s 2017, make an argument based on current reality.”

                  How about the L.A. Union’s that want businesses that use their union to be exempt from the minimum wage laws so that they have a competitive advantage against non-unionized labor?

                  http://www.latimes.com/local/l…..story.html

                  The minimum wage is a weapon used by the connected to maintain their power. Same as it ever was. If you had half a brain, you would realize that everything connected to progressivism has always been about keeping minorities in check. Nothing has changed. The irony of people choosing progressivism to help the people their programs are designed to hurt is palpable.

                  You see, those minorities are just so inferior they don’t know any better. It’s not like they have agency. This is the subtext to almost everything I’ve ever read by a progressive, and in fact was the overt opinion of the progressive’s of the prior generation.

                  They just learned to tone down the more obvious bits but their conclusions have not changed a bit, just some of the excuses.

                4. The “current reality” is that people are not entitled to jobs, and the market will find a way to compensate them commensurate with their skills, experience, and employability. The higher minimum wages rise, the larger the group of people the market will decide that number is $0.

                  The higher the government raises minimum wages, the fewer people employers will be able to hire. They will therefore seek out the best employees (those capable of handling/producing the most work, but who require the least intervention and administration). Mediocre, inexperienced, indifferent, incompetent, or unpleasant workers who require higher-touch management will not be hired, or will be quickly bounced off the curb if they are.

                  Employment is going down in municipalities that have raised the minimum wage. Employers are being more selective. This means higher unemployment rates. Unemployment rates are higher in countries that have high minimum wages. That’s current reality. But, you know, no one is stopping you from running a business and paying low-skilled people $20 an hour yourself. Have a blast.

        2. All that says to me is that clearly the FPL is set way too low.

          1. How do you know?

      5. the federal minimum wage of $7-whatever is not even close to a living wage

        That is true. It is also not meant to be such a wage. Take a look at who is paid minimum – students who live at home, part-timers supplementing regular jobs of their own or of a spouse/partner/other household member, the least skilled (a condition that is the opposite of permanent) – and you should easily conclude that minimum was never ever designed to be the sole means of support for anyone.

        1. Minimum wage may never have been designed to support someone, but the sheer amount of people earning the minimum wage (or close to it) has forced it in to that discussion.

          This is essentially the conundrum as I see it: lots of people, lots of non-student people, earn near minimum wage. Approximately all of them have to eat, and pay other bills. Presumably, if there was a better job, they’d get it. We can debate the macroeconomic effects of minimum wage until we’re blue in the face, but those people still aren’t getting what they need. Now I don’t know what the solution is, but there’s no reality where average wages go UP if minimum wages are gotten rid of.

          1. Now I don’t know what the solution is

            Write a check out of your pocket?

            1. exactly. you proggies are free to give away all your money to help others. Or better yet, start your own business and pay everyone 100$ a hour.

            2. exactly. you proggies are free to give away all your money to help others. Or better yet, start your own business and pay everyone 100$ a hour.

            3. exactly. you proggies are free to give away all your money to help others. Or better yet, start your own business and pay everyone 100$ a hour.

          2. The ‘sheer amount’?

            No. Not really, from Forbes–

            “According to the Bureau of Labor Statistics there are about 3.6 million workers at or below the minimum wage (you can be below legally under certain conditions). That is 2.5 percent of all workers and 1.5 percent of the population of potential workers. Within that small group, 31 percent are teenagers and 55 percent are 25 years old or younger. That leaves only about 1.1 percent of all workers over 25 and 0.8 percent of all Americans over 25 earning the minimum wage. ?

          3. mortiscrotum, I’ve read that 3 percent of employees make the minimum wage and 2 of those 3 make more than that after 2 or 3 years. Don’t screw things up for everybody by having the government artificially increase wages.

            1. Looks like Azathoth!! beat me to this information. All Hail Azathoth!!!

          4. mortiscrum|4.12.17 @ 12:17AM|#
            “Minimum wage may never have been designed to support someone, but the sheer amount of people earning the minimum wage (or close to it) has forced it in to that discussion.”

            Mortiscrum for pete’s sake, quit making an ass of yourself.
            You’re a pathetic lefty who is forever posting talking points that have been debunked years ago and it seems every one but you has gotten the memo.
            Please fuck off.

          5. I know this is a dead thread, but…

            In 2015, 78.2 million workers age 16 and older in the United States were paid at hourly rates, representing 58.5 percent of all wage and salary workers. Among those paid by the hour, 870,000 workers earned exactly the prevailing federal minimum wage of $7.25 per hour. About 1.7M had wages below the federal minimum. Together, these 2.6M workers with wages at or below the federal minimum made up 3.3 percent of all hourly paid workers. The estimates of workers paid at or below the federal minimum wage are based solely on the hourly wage they report, which does not include overtime pay, tips, or commissions.

            Age. Minimum wage workers tend to be young. Workers under age 25 made up about half of those paid the federal minimum wage or less. Among employed teenagers (ages 16 to 19) paid by the hour, about 11 percent earned the minimum wage or less, compared with about 2 percent of workers age 25 and older.

            Education. Among hourly paid workers age 16 and older, about 6 percent of those without a high school diploma earned the federal minimum wage or less, compared with about 3 percent of those who had a high school diploma (with no college), 3 percent of those with some college or an associate degree, and about 2 percent of college graduates.

            Marital status. Of those paid an hourly wage, never-married workers, who tend to be young, were more likely (5 percent) than married workers (2 percent) to earn the federal minimum wage or less.

      6. You’re missing the point though. The argument is t that min wage laws are too blunt; it’s that they are counterproductive.

        Some people get wage increases, other lose their jobs or lose hours of work altogether; the former get a bump and the latter starve.

        1. “Some people get wage increases, other lose their jobs or lose hours of work altogether; the former get a bump and the latter starve.”

          Not really, Look at employment stats in areas than had an increase in MW versus surrounding areas (states, counties, whatever) didn’t. They always track pretty much identically.

          1. Um, please read the article again.

          2. The real minimum wage is zero, doofus. For some reason, lots of retards forget this truism.

      7. but what’s the alternative for poor people who want to pay rent AND eat?

        Two jobs? Roommates? Improve your skills?

    2. Well put.

  7. “San Diego’s Experiment With Higher Minimum Wage: 4,000 Fewer Restaurant Jobs”

    Elitist progressives aren’t the ones paying that price. At least, they aren’t the ones who will lose their jobs because of a rising minimum wage.

    Mostly, the people who will pay with fewer jobs are like suburban wealthy kids, whose parents still make them work–because laziness is disgraceful.

    This is actually pretty good for illegal immigrants, many of whom work in the back of restaurants throughout Southern California and especially San Diego.

    You can eat at a Chinese restaurant, an Italian restaurant, or go for some Indonesian, but if Mexican food is food prepared by Mexicans, then wherever you go, you’ll be eating Mexican food.

    *DiCanti’s (Rancho Bernardo) alumnus.

    1. This is true Ken, although they will turn around and bemoan the fact that their favorite corner bistro ‘inexplicably’ goes out of business or moves inconveniently far away from them.

  8. The sad thing is, the economic illiterates pushing these initiaives already have stark examples of why the minimum wage is a bad idea, curtesy of American Samoa, the Northern Marianas Islands, and Puerto Rico:

    The impact on the economies of American Samoa and the Northern Mariana Islands was devastating. In American Samoa, by 2009, after only three of the ten scheduled minimum-wage increases, overall employment dropped 30 percent ? 58 percent in the critically important tuna-canning industry. Real per capita GDP in American Samoa fell nearly 10 percent from 2006 levels. In the Northern Mariana Islands, by the end of 2009, employment was down by 35 percent, and real per capita GDP off by 23 percent.

    […]

    Between 2007 and 2013, Puerto Rico’s GDP per capita declined by nearly 7 percent, while over the same period it was unchanged nationwide. As a result, many Puerto Ricans left for the U.S. mainland. The migration of young, mobile, working-age Puerto Ricans created an imbalance as the aged and less ambitious remained behind.

    1. To be fair, there was a lot more going on in the world economy at that particular point in time than just some minimum wage hikes so I’m unsure how useful that anecdote is. I’d be shocked if unemployment didn’t rocket up in a small Western nation in 2009 no matter the wage.

  9. In the year and three months since then, the number of food service jobs in San Diego has dropped sharply, with perhaps as many as 4,000 jobs lost, or never created in the first place.

    It strikes me that this number is about as impossible-to-disprove as ‘jobs created or saved’ thanks to Obama’s policies.

    1. I noted that too. “Never created” isn’t a good thing to hang your hat on.

      1. When you have a comparable nearby area that had been historically running about the same employment growth before the increase and yet afterwards there is a significant difference, it pretty safe to say that you’re most likely dealing with the changes due to just the increase with most other causes being held equal.

        Cities making that kind of change lately have all been proceeding the same way. A growth rate that is significantly lower (or even negative) in the city increasing the wages itself than the surrounding areas that hadn’t increased theirs, even if they had always been running about the same before.

    2. I just linked through to the original article. According to the Bureau of Labor Statistics, the minimum wage has gone from $8/hr to $11.50/hr between 2014 and 2017. Same source, the year over year changes in restaurant industry jobs has gone from +6.6% to -0.3%.

  10. That’s fine. Those are shitty jobs. Hopefully those burger flippers can get some other skill set.

    1. I just hope the robots don’t screw up the orders.

      1. Yup- I hope to finally find a restaurant “employee” who understands “no mayo”…

        1. You ‘n’ me both. I, for one, welcome our robot overlords, because if I press the “no mayo” button, I think it will be honored. The human distraction or indifference factor will have been eliminated. *fingers crossed*

      2. Computers (robots) never make mistakes. However, programmers do.
        https: //www.engadget.com/2017/03/08/ burger-flipping-robot-flippy/

  11. Good for them. The government has protected them from evil designs of evil restaurant owners. They can make a living by joining Bernie Sander’s rally now.

    1. Bernie can provide them free stuff, well, as long as he can get the government to pay for it. What’s funny is that a recent issue of Mother Jones mag criticized Betty DeVos for pointing out to Bernie that the stuff he says is free is not really free. How dare she say that to Saint Bernie!

  12. What is seldom noted is that seven liberal states — led by California and Washington state — require that “tip” employees receive the FULL minimum wage PLUS tips. As a result, on the Left Coast, the best job a liberal arts college graduate can usually aspire to is snagging a waiter job in an upscale restaurant.

    It’s not uncommon for such waiters go receive $20-$35 an hour in tips, PLUS their minimum wage. Or more. In one upscale Los Angeles hotel restaurant, waiters averaged $65 an hour in tips during meal times.

    Valets, casino dealers and other “tip” jobs in CA are highly sought after positions. As a result, overeducated (useless liberal arts degree holders brainwashed by liberal professors at considerable taxpayer expense) applicants “crowd out” less educated but quite competent blue collar workers who could do the job as well. It’s what economists call a “misallocation of resources” — specifically labor.

    1. Tip jobs drive Las Vegas, and it’s why any number of people far removed from being considered students are concierges, bellhops, work the taxi line at hotels, and of course, wait tables. And that does not include those in the gaming industry.

      1. Like most states, if a Nevada employee receives tips, their minimum wage is only $2.13 an hour. If their tips do not total $7.25 an hour (the Nevada and federal minimum wage), then the employer has to make up the shortfall.

        In CA, we let the employees receive the full minimum wage (currently a minimum of $10.50 an hour, depending on location) PLUS whatever tips they receive.

        1. If their tips do not total $7.25 an hour (the Nevada and federal minimum wage), then the employer has to make up the shortfall.

          If their tips don’t total that amount, they tend to not stay employed. Are you serious? And I imagine in CA you have to do what’s done because it’s so ridiculously expensive to live there.

          1. Your last sentence might be more accurate this way:

            And I imagine in CA it’s so ridiculously expensive to live there because you have to do what’s done.

          2. Seems you missed the point. In Nevada, you don’t get the full minimum wage PLUS tips. Only 7 states do that. The result is that a person waiting tables in San Diego (where the minimum wage will shortly hit $15 an hour) will easily make $25-$50 an hour. GREAT! Except that cost is cranked into the restaurant bill, resulting in people eating out less frequently — and a number of marginal restaurants closing their doors. Longer term, automation will eliminate many of the jobs.

            For instance, Applebees is now offering the ability to order your dinner using a tablet on the table — with just a busboy involved in the meal. Liberals can still overpay for a meal by using a waiter, while sane, cost sensitive people will gravitate to the electronic waiter. To each his own.

            Now does THAT help waiters? Did you note that there are FEWER jobs as a result (the point of the article)? I suspect not.

        2. I worked restaurants in the early 80’s- We had a waiter that got “audited” in 1983. The typical dodge was to claim a bit more tips than needed to exceed the minimum wage- $3.85 at the time

          The IRS absolutely bent him over. The IRS said “You’re deducting $xxxx.xx in mortgage interest, $yyy.yy in credit card interest (you could do that back then), but you are only claiming $9K in income- let’s talk about that…

          He was probabaly making $30K/yr in tips. It didn’t go well for him.

      2. The craziest thing I saw in Las Vegas was at the Bellagio. Their waiters and waitresses and other employees all have either the US State or country they’re from on their name badges.

        There was this blond waitress with Hawaii on her badge, but she was saying “Drinks heah” in the thickest New Jersey accent I’ve ever heard. Sure she was from Hawaii.

    2. It’s because everybody thinks that the lower minimum wage for tipped workers is what millions of people are actually making. They think all these servers are making $3.50/hour, which absolutely isn’t the case. When the added tips don’t meet the minimum wage, they’re still required to be paid the minimum wage.

  13. Even without the wage hike, our local area has had a large collapse in the number of restaurants, both corporate and privately owned. With thin margins and an abundance of restaurants, there may be much more fallout.

  14. San Diego has dropped sharply, with perhaps as many as 4,000 jobs lost, or never created in the first place.

    Surely this figure is wrong. It is more like 1,000,000 jobs never created in the first place.

  15. Even if it’s only a small part of the reason, the economic data should start to worry city and state officials who have backed radical minimum wage hikes over the coming years.

    Agreed. Maybe they can look at the same chart and figure out there was that job growth from 2011 to mid 2013

  16. The average profit margin for a sit-down restaurant is 3%. VERY competitive business!!

  17. Taxpayers pay over $150 billion/year in entitlements to people who have jobs.

    “About 52 percent of fast-food workers rely on public assistance, followed by 48 percent of home-care workers and 46 percent of child-care workers.”

    This means you and I are using our tax dollars to fund the profits of Walmart/McDonald’s/etc. anyway.

    “No business which depends for existence on paying less than living wages to its workers has any right to continue in this country.” -FDR

    I am a small business owner. I am OK with teenagers/minors making $8/hour. I’m not OK with adults making that little. Any business, especially a huge corporation with billions in cash on hand, that depends on paying pennies to their workers to stay open, can shut its doors as far as I’m concerned; they’re not providing real value to society. Good riddance to them and their jobs that do nothing to help their employees be self-sufficient.

    The problem… And this is fact, not opinion… is that wealth is becoming more and more concentrated towards the wealthy.

    The economy has grown, but wages have not.

    In order to have a good economy, businesses need customers (people) that earn enough to buy their products and services.

    It is my opinion that no one who is working full-time should be in poverty, requiring government assistance in the United States.

    http://www.cbsnews.com/news/ho…..on-a-year/

    1. This means you and I are using our tax dollars to fund the profits of Walmart/McDonald’s/etc. anyway.
      Wrong.

      The economy has grown, but wages have not.
      Wrong. The collective wages of Americans has grown, you are focusing specifically on the median wage which is a single percentile. Check out the mean and you’ll see growth, albeit stratified growth.

      It is my opinion that no one who is working full-time should be in poverty, requiring government assistance in the United States.
      Your opinion, if implemented, is going to lead to a vast uptick in people working zero hours a week.

    2. “No business which depends for existence on paying less than living wages to its workers has any right to continue in this country.” -FDR

      FDR had a lot of idiotic ideals – like a 2nd Bill of Rights (i.e affirmative handouts at someone’s else’s expense).

      And of course his “New Deal” was an abject failure that put the “Great” in the Great Depression.

    3. I am OK with teenagers/minors making $8/hour. I’m not OK with adults making that little.

      Oh, gosh. Where to start.

      First off, you should be paying for the work, not the person’s age. No one is stopping you from paying someone a high wage if you want to. If you think a 35-year-old worker deserves $20 an hour just because he’s 35, when he’s doing the same work and providing you no better value than a 15-year-old employee, then on behalf of smart, capable 15-year-olds everywhere, let me be the first to say “fuck you.”

      Workers are people with agency, not helpless victims. They have choices. Most have plans that have nothing to do with you. They make various choices in life that have led to your doorstep. For most adult low-wage workers, those choices have been to bypass economic and educational opportunities in favor of expensive pursuits like childrearing, drug/alcohol use, or travel. Hell, maybe they’ve been in prison. No one has them pinned by the arms.

      People can, at any time, reinvent themselves: they can choose not to grunt out a bunch of kids; they can choose to finish high school and pursue scholarships for college or trade school; they can choose not to commit crimes or do drugs; they can choose to move to areas that have better jobs; they can choose to learn valuable skills that will earn them better wages. Inaction, too, is a choice, and millions of adults mark out their paths by choosing not to act.

  18. Define death spiral:
    Low skill employees take service jobs at minimum wage.
    They give poor service because they hate minimum wage jobs.
    Customers get poor service and go elsewhere.
    Low skill service workers get laid off and the remaining low skill service workers have to take on more work.
    Low skill service workers give poorer service because they are mad about the extra workload.
    Customers get worse service at the places they went to because of bad service at the first places; so they quit going out, and business drops to zero.
    Low skill workers get laid off, and are surprised and angry about that.
    Democrats campaign for higher minimum wages.

  19. unless the restaurant market is flush with employees. not every job market has a continuous rise in employees especially when better jobs are becoming available, supposedly. Now if restaurant employees are being laid off then you have definitive proof.

  20. Some math:

    BurgerSurprise is forced to raise their cost for a flipper 10% from $10.00 to $11.00, which raises the hard working flipper from $20,000/year to $22,000/year

    BurgerSurprise raises the cost of a burger 10%, causing all us burger eating tech wizards to demand a proportionate raise, which we get because we have marketable skills. Our wage now goes up 10% from $100,000/yr to $110,000/yr.

    Prior to the minimum wage increase, the wage gap between the flipper and me was $80,000. After, the wage gap was $88,000. All because we both got a well deserved 10% increase….

    Not exactly the story we hear as to the cause of the increasing wage gap, but hey, fake news…

    1. “Prior to the minimum wage increase, the wage gap between the flipper and me was $80,000. After, the wage gap was $88,000….”

      Causing Paul Krugman to write a nasty screed about how gap between the rich and poor is growing, there fore we need a higher M/W.

  21. Could the new jobs not materializing be due to less turnover and better employees now taking more hours? I know it’s freakanomics. But they don’t say what determines a “New” job in this industry so we’re not sure if normal hiring and turnover is way down or if restaurants actually aren’t opening and growing.

    Or did I miss a paragraph? ..dog ate my glasses :/

  22. OK, read the SDT article – numbers could get worse as numbers are down overall nationwide…The move to 15$ will probably create a new large quasi-poor working class. Many at 16-19/hr would fall back to $15. Throw the rest in the welfare class. Those left behind better GTFO of Cali because overall service jobs will keep shrinking as businesses that can’t keep up shut down. The most efficient will create the future business model. Forget cute hostesses, cashiers, get your own refills and forget the endless bread sticks at Olive Garden. Shoot.

  23. I’d like to see an analysis that 1.) adjusted for the change in the political environment that did not threaten undocumented workers; and 2.) does not use data from the American Enterprise Institute. Otherwise, all we have is a politically biased screed.

    1. “I’d like to see an analysis that 1.) adjusted for the change in the political environment that did not threaten undocumented workers;…”

      What you did there, lefty, it has been seen.
      Well, just require impossible conditions before *you* will accept the results!
      How…
      lefty…
      stupid…

  24. When I worked fast food decades ago, we had someone whose entire job was to fill cups with ice & drink and deliver them to customers. Today, I was handed an empty cup and did it myself. One less employee.

  25. Another big problem with a high minimum wage is that in some parts of the country where everything is very expensive it might make sense but in a lot of places the kind of money those workers want is as much as people make there in jobs they have to be skilled or work hard labor.

  26. Higher wages for poor workers and fewer jobs for illegals. Looks like a win-win to me.

    A few years ago, Michael Dukakis, the Democratic presidential candidate in 1988, specifically advocated raising the minimum wage to reduce illegal immigration. Quote from Dukakis on the subject.

    “”If we want to reduce illegal immigration,” they wrote, “it makes sense to reduce the abundance of extremely low-paying jobs that fuels it.””

    No less a libertarian than Alex Tabarrok stated

    “I will give Dukakis and Mitchell this, their logic is impeccable”

    Of course, Alex Tabarrow favors low-wage jobs for illegals…

    Will raising the minimum wage reduce the number of low-wage jobs?

    Yes, and that is a very good reason for raising the minimum wage now.

  27. The left will say, “see restaurant worker now make $15/h and the world has not stopped.”

    And they do this while willfully ignoring the “unseen” which are those who not longer have a job because of liberal policies.

    If liberals want wages to go up, they should volunteer to pay more at the counter when they buy a hamburger or whatever they are buying at a low-margin restaurant.

    Liberals are deniers.

  28. This is a propaganda piece, pure and simple. And not a very good one at that. It even starts in the title by taking two facts that may or may not (and anywhere in between) be connected and phrasing them to lead commenters to believe they are directly related. Did anyone catch the partial phrase “…or never created in the first place.” “if”, ‘economists say’, “might be”, “could cause”… This is ridiculous! I’ve always expected better from Reason, and this time I am very disappointed. The author should have been sent to one of those sensationalist ‘conservative’ sites that thrive on propaganda.

    1. Note that there is no mention of that uptick at the beginning of the curve, and the first downtick following that.

      Neither of that was related to minimum wage hikes?

      “4,000 jobs that were lost or never created” takes the cake, though.

  29. When one thinks about going out to eat, there are many factors each person weighs differently. Time, convenience, etc. But COST is a pretty important one.

    When weighing dine out cost, one has to compare with eating at home. Prepared meals from Costco, grocery stores, etc. are a competitive option, and cost about 1/5 what the total dining out option costs. As the minimum wage soars in San Diego and elsewhere, that 5-1 ratio is moving closer to a 7-1 cost differential.

    I’m not quite in the hated 1% rich, but we are well-to-do. That higher cost differential has caused us to reduce our dining out frequency, even though we could easily afford the higher prices (unlike most). It’s just galls us to realize how easily and more cheaply we can eat at home. Plus, when we DO dine out, we now tip less.

    Gosh, are we the only people who include economic factors when making buying decisions?

  30. Most people who dine out pay TWICE if the minimum wage rises. Once for the higher meal prices and AGAIN when they mindlessly calculate their 15-20% tip.

    BTW, too many include the sales tax in the bill — the basis for their tip. And then they puzzle about having more trouble making ends meet.

    1. Yes, people who dine out and tip 15-20 are the segment that is puzzled about making ends meet.

      You are a moron, Richard.

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