Newton’s third law says “For every action there is an equal and opposite reaction.”

Many who push for hikes in the minimum wage saying the current level isn’t a living wage seem to think business can and will absorb increases in their operating costs without consequence.

Several news outlets are reporting how Washington, D.C., in 2014 raised its minimum wage from $8.25 per hour to $11.50. In January, the District of Columbia’s mayor called for another increase, to $15 an hour. The D.C. City Council is also considering other mandates on businesses including that employers would be subject to fines for changing schedules.

A survey was conducted of 100 employers in Washington to gauge their reaction to the proposed $15 minimum wage. Would they reduce employees? Would they have to reduce hours?

Most interesting is that the survey found, ”Nearly half of employers surveyed had already taken one of these steps — suggesting that (the) 2014-2016 minimum wage increases haven’t been absorbed through higher prices alone.”

More than half of the businesses surveyed said they planned to raise prices to offset the proposed wage hike. More than a third said they would likely reduce staffing and nearly 40 percent said they would reduce hours. Twenty percent said they may move to nearby communities where wages were less.

The Employment Policies Institute that conducted the survey reported the results are consistent with other research that finds increases in minimum wage levels reduce employment for younger and less-educated employees.

The mayor’s opinion wasn’t changed by the survey results, saying there was “a consensus” that the $15 minimum wage was the right thing for the District of Columbia.

It doesn’t sound so right for so many of the 100 businesses surveyed that predict they’ll eliminate jobs, reduce hours or may close and move to other communities.

The businesses surveyed reported many had already eliminated jobs and cutback hours to try to operate under the current $11.50 minimum wage. That would make it seem likely that raising wages again, especially so soon and especially by another 30 percent, would just cause more of the same.

Is it really the consensus these wage hikes benefit workers if more lose jobs, more have hours cutback and then everyone has to pay more to buy things in the area because local businesses have to hike their costs to offset the higher wages?

We’ve seen reports how the Wendy’s Fast Food Company is installing order-taking kiosks in stores across the country, where customers can place their own orders — meaning those stores can eliminate positions and/or cut back on hours, offsetting wage costs in an effort to hold down prices.

Newton’s law seems to fit. It sounds good to raise the wages, until doing so causes people to lose hours or their jobs.

 

WILL CHAPMAN

PUBLISHer