Government programs, political campaigns and wishful thinking can’t trump economics. In the end, economics always wins.
Chipotle’s recently announced menu price hikes bear this out.
The federal minimum wage hike didn’t make its way into the coronavirus stimulus bill passed by the Senate last week, but it is an idea that won’t die. With Biden in the White House and Democrats controlling both houses of Congress, the issue will almost certainly come up again sooner rather than later.
Proponents of a $15 per hour minimum wage claim it will help pull people out of poverty. And it will help some people. But it will hurt others. The real minimum wage is always $0 and no law can change that reality.
I get really frustrated by people arguing vociferously about things they don’t know anything about. And on no subject is this more prevalent than the debate over the minimum wage. Bring up the “fight for $15” and you will suddenly get high school dropouts who can’t do basic multiplication yelling at you emphatically about the benefits of government-imposed wage floors. Because, you know, they feel like it should work.
Raising the minimum wage might be good politics, but it’s bad economics – despite what some economists say.
Last week, the Maryland legislature overrode the governor’s veto and adopted a $15 per hour minimum wage. It was a major victory for the “Fight for $15” crowd, but it almost certainly won’t be for low-skilled workers — at least not the ones who whose maximum wage will be $0 per hour because they cannot find jobs.