Here’s what happens when real businesses (not hypothetical ones) face a rising minimum wage, as just happened in the state of New York.

Being a business owner, I sit with four of my restaurant managers in a weekly strategy meeting. We all know our prices are already as low as possible in order to attract a much needed market share (ie, remain competitive), and to serve people in a struggling economy (ie, remain viable). Lower prices too much and there’s no business to do business with.

Which means our margins are tight.

Very tight.

So where do we account for the labor increase to our minimum wage employees? It has to come from somewhere. We don’t just pull it out of thin air like Washington does.

No matter what bureaucrats purport, businesses all make up for labor upticks in the same place: price point.

Which means the very people who got the apparent boost in their wallets are now charged more for the products they were buying before. It’s an endless cycle.

So why do it? Who’s the real winner?

Whoever’s collecting taxes.



The Miller Brothers · 29 Jan ’14 at 12:48 pm

Nailed it. Great post, Christopher.

    Christopher Hopper · 29 Jan ’14 at 1:05 pm

    Thanks, Miller Bros. Brothers in battle, brothers in business.

Beth Walrath · 30 Jan ’14 at 9:30 am

Couldn’t agree more! Those of us that get more than minimum wage pay for it the most. We don’t get raises. Usually those getting paid a higher wage work hard to get it.

    Christopher Hopper · 30 Jan ’14 at 10:08 am

    And worse still, those who are self-employed don’t get a mandatory raise, so they’re left to arbitrarily raises their prices without the plausibility for explaining it to their customers.

    You’re a hard worker, Beth. Keep going!

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