By Matthew Vadum ——Bio and Archives--July 31, 2015
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That reminds [me] of something I read recently to the effect that liberals have hearts that bleed so profusely that it often prevents oxygen from getting to their brains and results in extreme lightheadedness, and cloudy and defective decision-making.Perry cites another article from the Washington Policy Center that reports that just before the law took effect the Emerald City's dining-out economy was contracting in anticipation of the law as the city "experienc[ed] a rising trend in restaurant closures."
The shut-downs have idled dozens of low-wage workers, the very people advocates say the wage law is supposed to help. Instead of delivering the promised "living wage" of $15 an hour, economic realities created by the new law have dropped the hourly wage for these workers to zero. Advocates of a high minimum wage said businesses would simply pay the mandated wage out of profits, raising earnings for workers. Restaurants operate on thin margins, though, with average profits of 4% or less, and the business is highly competitive.
When prices rise consumers seek alternatives, a behavior economists call the "substitution effect," which results in lower demand for the higher-priced product. In the case of restaurants, consumers have access to the ultimate substitution--they can stay home. Fewer people will be able to afford to dine out, and as a result there will be fewer great restaurants to enjoy. People probably won't notice when some restaurant workers lose their jobs, but as prices rise and some neighborhood businesses close, the quality of life in urban Seattle will become a little bit poorer.Perry also cites a Seattle Magazine item with the self-explanatory headline, "Why Are So Many Seattle Restaurants Closing Lately?" Restaurateurs tend not to be members of the hated "1 percent." A restaurant lobbyist notes that an eatery that pulls in $700,000 a year can yield a meager $28,000 a year in profit for its owners. But again, the Left is only concerned with intentions, not results. Stoking the raging flames of class warfare by flogging a minimum wage hike helps the Left in several specific ways. Raising the minimum wage benefits President Obama's comrades in organized labor. It helps the cartels also known as unions by restricting competition among those offering their labor. It also helps unions because many collective bargaining agreements mandate automatic pay raises for those covered by the agreement when the minimum wage is increased. It has long been an open question whether leftists fail to grasp basic economic principles or whether they understand economics but choose to ignore economic realities because such things stubbornly defy the left-wing narrative. Conservative commentator Jonathan M. Hanen wrote about these defective progressive thought processes earlier this year. Left-wingers regard the economy as a living thing, or rather a plaything, that can easily be manipulated to serve social-justice ends. He noted that Sen. Elizabeth Warren (D-Mass.) embarrassed herself on Capitol Hill two years ago when she posed a bizarre question about a weird abstraction to someone who actually understand economics.
Warren made headlines at a congressional hearing in 2013 by advocating tripling the minimum wage to a job-killing $22 per hour, well beyond Obama's proposed hike from $7.75 to $9.00. Warren tried to sell her dubious proposal as "indexing the minimum wage." She asked, presumably with a straight face, University of Massachusetts economics professor Arindrajit Dube, "If we started in 1960, and we said that, as productivity goes up--that is, as workers are producing more--then the minimum wage is going to go up the same. And, if that were the case, the minimum wage today would be about $22 an hour. So, my question, Mr. Dube, is what happened to the other $14.75?""If this question had been asked at a convention of economists," Hanen opined, "the laughter would have been deafening." With that said, unfortunately, public opinion polls have shown for years that fairly large majorities have succumbed to the siren song of minimum wage hikes. In some polls even self-identified Republicans and conservatives support increasing the hourly rate, albeit by bare majorities. People believe it doesn't cost them anything. They believe that the burden is borne entirely by well-heeled corporations, instead of by individual shareholders like themselves who have invested in, for example, mutual funds. Some economic ignoramuses on the Left have even convinced themselves that when workers take a low-wage job that the business that hired them is effectively receiving a subsidy from taxpayers on the theory that the workers will have to avail themselves of social welfare programs in order to survive. The Left sees any and all situations as opportunities to make government bigger. The lure of raising the minimum wage, even at the expense of the workers they supposedly champion, is far too powerful for left-wingers to resist.
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Matthew Vadum, matthewvadum.blogspot.com, is an investigative reporter.
His new book Subversion Inc. can be bought at Amazon.com (US), Amazon.ca (Canada)
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