Monday, January 11, 2016


6 Big Cities Find Out What Happens When You Hike Up the Minimum Wage 

FYI - Minimum wage in Wisconsin is a paltry $7.75 / hour - enough for a high school student to make some spending cash, but not a job for an adult of need.  The $7.75 / hour is commensurate with the costs locally - in more expensive markets (NYC, SFO) the Wisconsin minimum would not fly.  

This article calls to mind recent strikes and protests by worker’s unions and fast-food workers clamoring for a $15.00 / hour national “living wage.”  My local Dane County passed a referendum in 2014 asking for the State of Wisconsin to  move minimum wage to $10.10 per hour.  

Interestingly, Panera Breads locally is currently preparing to implement "ordering Kiosks” reportedly in anticipation that minimum wage will increase (which is not currently likely in Wisconsin), and to maintain the profit margins (and not to attempt a price increase to cover the looming increased labor costs) Panera's will apparently either axe employees or reduce current hourly employee's hours downward once the Kiosk’s are on-line.  

My take on the sudden appearances of Ordering Kiosk’s at chain restaurants:

The NLRB issued a controversial ruling in 2014 that makes independent franchisers for McDonalds subject to union organization (for example, by the SEIU) and other workplace rules through the new legal concept of “Joint Employment.”  How “Joint Employment” will work is still being litigated, and whether it will apply to large corporation’s exclusive supply chain partners is an open question.  

At the time of the ruling, McDonalds did not even know the names of the franchisee’s employees, and has been moving to comply with the NLRB FATWA, and is developing a system of record keeping of the franchisee’s employees, which will in-turn be made available to the SEIU when they file to organize McDonalds through the corporate entity.  

Like it or not, the market is like a balloon - you squeeze on one area, and it pops out the other side.  Raise food prices, loose revenue, layoff employees, close stores - or, put automation in to avoid the labor increase.  They are all interrelated, and people change their behavior accordingly as the market reprices products in response to regulatory changes.  

Everyone should read Thomas Sowell’s Basic Economics.   

It’s a free country.  If $7.75 / hour workers can convince the legislature to raise minimum wage to $15.00 / hr (or more), then more power to them - but don’t be gobsmacked when the total number of jobs decrease (just blame it on George W. Bush, Dick Cheney, Halliburton, and 'alien probing').  

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