My Mom always said that if something was too good to be true, it generally was. She was trying to teach me that we all need a healthy level of skepticism to avoid being taken in by the dishonest and unscrupulous. Or naïve.
I’m reminded of Mom every time I hear about increasing the minimum wage and how all of society will benefit. People have a “right” to a “living wage” so that they can feed the kids and run the house.
In California, different communities are at different stages of ramping up the minimum wage with the eventual goal being a $15-per-hour target. Sounds great, right?
Not so fast.
The early returns are coming in and it doesn’t look so good. I’m sure most of the folks reading this have seen the automated order-takers in fast food restaurants. It’s really fun hitting those buttons and watching your order come together!
Just realize that the buttons you are hitting means someone is not taking your order. People are expensive and that computer is acting as a replacement. And, why are they expensive? Increasing minimum wage requirements.
San Francisco is a little bit further down this road and has instituted very liberal minimum wage laws in their city. As of July 1, the minimum wage in the city is now $15 per hour.
So, how are they doing? A recent article in the New York Times (June 25, Emily Badger) sheds some light on the topic.
In one upscale restaurant, a Greek joint called Soulva, the diners are now required to wait on themselves. You order your food at the counter, get your own water, and find your table. A runner will bring your food out to you.
No more waiters, waitresses, or hosts. They have been eliminated.
San Francisco is discovering that there is a high cost for socialism. Commercial rents have skyrocketed, there is little affordable housing, and most concerning is the high cost of labor.
Many liberals claim there are fewer servers because the cost of living is so high in SF. That may be part of it but the column clearly states that, “Restaurateurs who say they can no longer find or afford servers are figuring out how to do without them.”
Restaurants are a business and labor is an expense they can no longer bear.
I wouldn’t be surprised if some in San Francisco begin discussing raising the minimum wage beyond $15 per hour to address this issue. Because, clearly, people need to make more and this would allow them to live in the city and be able to work as servers in downtown restaurants.
Maybe they should get $20 per hour? Maybe $25?
The article goes on to say that a dishwasher can now make $18-$19 per hour. Add to this that San Francisco also requires businesses with 20 or more employees to provide benefits such as health care beyond the requirements of the Affordable Care Act.
So, what is a business supposed to do? Yep, you guessed it. Fire people. Because people are expensive.
As I recall, this was the very topic discussed on these Signal opinion pages a few years ago when the topic of minimum wage changes were being considered. As my Mom would say, “told you so.”
Instead of creating more opportunities for young people, folks who are unskilled, and recent immigrants to our land, we are closing off the traditional avenue for people to become involved in our economy.
These “liberal” increases in minimum wage laws have done the exact opposite of what their supporters envisioned: They are limiting opportunity and hurting poor people.
To add to that, the business model being employed by Soulva appears to be spreading. Other San Francisco eateries are moving to a customer-based service approach and eliminating servers. Soulva is also considering exporting their model to other cities as they grow and expand.
And Los Angeles is not far behind. As our minimum wage requirements rise, I wonder how many people will be thrown out of work and prevented from participating in our economy?
With the great surge in homelessness funding, I wonder if we will see a great societal shift from less employment and more homelessness due to the simple fact that this is where the resources and money will be.
We were promised that increasing the minimum wage would be a great boon for us all. It was too good to be true. Mom was right.
Steve Lunetta is a resident of Santa Clarita and is very thankful for his Mom. He can be reached at [email protected].
