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Higher wages? No, minimum thinking

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Saturday, Oct. 19, 2013, 9:00 p.m.
 

Two new reports on the plight of fast-food workers conclude that the minimum wage is costing taxpayers a bundle for society's so-called “safety net” costs, which presumably could be offset if the minimum wage is raised.

Just pay no attention to the ugly unintended consequences.

A study by economists at the University of California at Berkeley and the University of Illinois at Urbana-Champaign states taxpayers are spending up to $7 billion a year on public assistance, such as Medicaid, for fast-food workers, who earn an average of $8.69 an hour, the Los Angeles Times reports. And this, when these companies pay $53 million in salaries to top execs, according to a report by — surprise! — the Big-Labor-backed National Employment Law Project.

“In its quest to unionize the fast-food industry, the SEIU has demonstrated that it will leave no stone unturned,” says Michael Saltsman, research director at the Employment Policies Institute. As for the public-assistance argument, it earns a higher grade in creative writing than it would in any high school economics class, Mr. Saltsman says.

To wit: What happens to these entry-level jobs if employers are forced to raise salaries? There'll be fewer jobs and more automation. Consider, for example, the outcome of innovations such as E-ZPass and automated checkouts at supermarkets.

The researchers didn't consider the public's cost if thousands of fast-food workers are pink-slipped. But if Big Labor can take a bite, even a small one, out of the fast-food industry, who cares, eh?

 

 
 


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