Data Point- DC Minimum Wages up, employment down - Granite Grok

Data Point- DC Minimum Wages up, employment down

How’s that higher minimum wage working out for jobs in DC?

The nation’s capital has been leading the way on the minimum wage front and the Fight for 15 crowd couldn’t be happier. Still, those not invested in the future of the unions and the Social Justice Warrior movement have questions which deserve answers. Just this week we looked at the effects of a $15 minimum wage on one small business owner in Ohio, but how about from the perspective of the workers? In DC there are a lot of food industry employers who hire plenty of lower wage workers, so that should prove to be a leading indicator when addressing the question. The District has already raised their minimum wage once recently and there’s more of the same on the way.

DCfoodMinWage

The American Enterprise Institute has run the numbers for us, and the initial results are not promising at all.

Cities and states around the country that are considering a hike in their minimum wages to $15 an hour might want to take a look at how that’s working out in the nation’s capitol. Despite what we hear from unions, the Fight for 15 crowd, and other minimum wage advocates, the evidence from DC’s restaurant industry – an industry often considered as “ground zero” for minimum wage effects – demonstrates that demand curves for low-skilled workers actually do slope downward.

New BLS data for restaurant employment in July for both the District of Columbia (city only, see dark line above, data here) and the surrounding suburbs in Virginia and Maryland (full DC MSA data here, the light blue line shows the MSA minus the city of DC) are displayed above and tell the story pretty clearly. Since the DC minimum wage increased last July to $10.50 an hour, restaurant employment in the city has increased less than 1% (and by 500 jobs), while restaurant jobs in the surrounding suburbs increased 4.2% (and by 7,300 jobs). An even more dramatic effect has taken place since the start of this year – DC restaurant jobs fell by 1,400 jobs (and by 2.7%) in the first six months of 2016 between January and July – that’s the largest loss of District food jobs during a 6-month period in 15 years.

Economic Laws are as immutable as the Laws of Thermodynamics and no amount of political fiddling will cause them go sideways – but peoples’ live, especially at the bottom rungs of the economic ladder, will. Emphasis above is mine.  Make something arbitrarily more expensive and the demand for it will go down.

Minimum wage laws are nothing more than:

  • Politicians pandering for votes
  • Activists getting the ideological jones taken care
  • The government outsourcing welfare to the private sector.

(H/T: Hot Air)

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