It happened in Seattle — pay goes up, business goes down. As Western Journalism reported about the city’s $15-per-hour minimum wage law, an article in Seattle Magazine raised the red flag about the red ink a number of local restaurants would be facing because of the increasing labor costs.
The publication noted that a “major factor affecting restaurant futures in our city is the impending minimum wage hike.” Anthony Anton, president and CEO of the Washington Restaurant Association, told the magazine: “It’s not a political problem; it’s a math problem.”
Los Angeles, too, is feeling the heat from a significant minimum wage hike mandated by city officials intent on helping low-skilled labor — workers who just might find themselves out of work because of the law of unintended consequences coming down hard on the City of Angeles. Western Journalism reported on that minimum wage hike that even the L.A. labor unions are now trying to avoid for their members.
As Los Angeles prepares for a significant minimum wage hike over the next several years, the negative connotations of paying unskilled laborers $15 per hour are already being realized.
Hollywood has been synonymous with the American film industry for generations, though some see the added business costs associated with paying support staff such a relatively high wage as a deal breaker.
Now the state of New York is bracing for a possible minimum wage increase that could be imposed not by voters or the state legislature, but — as The Washington Free Beacon reports — by an unelected “three-member board that is debating a potential $15 wage at chain restaurants.”
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And the results of such a minimum wage skyrocket being set off by this board at the urging of the liberal Democrat governor could be devastating on fast food outlets, according to a new report that finds some 20% of those restaurant owners surveyed said they could be forced to shut down if Gov. Andrew Cuomo gets his way.
“The Employment Policies Institute, a free market think tank and critic of minimum wage hikes, surveyed nearly 1,000 self-described fast food entrepreneurs about how they would respond to statewide, industry-specific wage hikes. More than 20 percent of respondents said they were ‘very likely’ to go out of business if the state raises the minimum wage for fast food joints to $15, a 70 percent increase from the current $8.75 statewide minimum wage.”
Plus, argues a spokesman for the International Franchise Association interviewed by the Free Beacon, the Democrat governor is playing politics with the minimum wage proposal.
“…Cuomo’s targeting of fast food is about politics, not populism. The state, he said, has more than 8,000 local franchisees, many of which are owned by local entrepreneurs, rather than the big corporations Cuomo has portrayed them as.”
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Meanwhile in St. Louis, the city’s governing body, the Board of Aldermen — vigorously supported by the mayor — is considering a measure that would essentially double the city’s minimum wage from the state-mandated $7.65 per hour to the increasingly popular $15 level. The St. Louis Post-Dispatch reports that the proposed hike could be facing a court challenge.
So far, various business groups have organized to oppose the minimum wage hike, but none have officially announced plans for a legal challenge.
Still, a 2014 Missouri Supreme Court decision restricted charter counties, like St. Louis, from creating laws contrary to state law — which could throw the matter into legal controversy.
Protesters across the country insisting on a $15 minimum wage for fast food workers have also been met with another kind of resistance that goes to show how their efforts can be brutally counterproductive. Instead of people behind the counter making more money, there could be “robots” with absolutely no wage demands.
CNN Money noted the tech trend in a recent report:
In a widely cited paper released last year, University of Oxford researchers estimated that there is a 92% chance that fast-food preparation and serving will be automated in the coming decades.
With artificial-intelligence technology like IBM’s Watson platform making strides in advanced reasoning and language understanding, it’s not hard to see how robots could be designed to provide more sophisticated interactions with restaurant customers than kiosks can manage.