Minimum Wage Laws

No Job Apparently a Greater Good

Minimum wage laws hurt the very people they are supposed to help--those in the lowest paid jobs.  The law of unintended perverse consequences applies most powerfully in such cases.  Blogger Patterico profiles the case of Seattle, which passed just such a law.

Seattle Pizzeria Will Close Due to Higher Minimum Wage

Filed under: General — Patterico @ 5:51 pm 

Shocker:

It may be one of the first casualties of Seattle’s new minimum wage law. The owner of Z Pizza says she’s being forced to close her doors, because she can’t afford the higher labor costs.  Devin Jeran was happy to get a raise, when Seattle’s minimum wage went up to $11 an hour at the beginning of the month. “I definitely recognize that having more money is important,” he says, “especially in a city as expensive as this one.”

Sorry, Devin.

Unfortunately, he’ll only enjoy that bigger paycheck for a few more months. In August, his boss is shutting down Z Pizza and putting him and his 11 co-workers out of work.  “Fortunately she keeps us in the loop, she didn’t just tell us last minute.”

Ritu Shah Burnham doesn’t want to go out of business, but says she can’t afford the city’s mandated wage hikes.  “I’ve let one person go since April 1, I’ve cut hours since April 1, I’ve taken them myself because I don’t pay myself,” she says. “I’ve also raised my prices a little bit, there’s no other way to do it.”

Small businesses in the city have up to six more years to phase in the new $15 an hour minimum wage. But Shah Burnham says even though she only has one store with 12 employees, she’s considered part of the Z Pizza franchise — a large business. So she has to give raises within the next two years.

“I know that I would have stayed here if I had 7 years, just like everyone else, if I had an even playing field,” she says. “The discrimination I’m feeling right now against my small business makes me not want to stay and do anything in Seattle.”

The organizations who pushed a higher minimum wage, upon being informed of this, gave this thoughtful reply:

We reached out to 15 Now Seattle, the organization that pushed for the higher minimum wage. Director Jess Spear hadn’t heard about Z Pizza’s decision to close. So she wouldn’t comment specifically on that, only saying: “Restaurants open and close all the time, for various reasons.”

In brief? They don’t care.

Jeran wonders about all the rallies that were supposed to be about making life better for people like him.  “If that’s the truth, I don’t think that’s very apparent. People like me are finding themselves in a tougher situation than ever.”

Hard to believe that government monkeying around with the economy could harm the lives of lower-paid workers, isn’t it?

If you answered “not really,” then you have been paying attention.