Steve Lunetta | It’s Time to Throw Out the Minimum Wage


Yep. I said it. It’s time for us to seriously consider suspending the minimum wage temporarily until our economy can get back on track. The minimum wage was strangling our economy before COVID-19; it will do far worse if we allow it to continue after the health emergency is over.

In the months leading up to coronavirus, the new minimum wage requirements were forcing employers to cut back staffing, reduce service and replace workers with automated kiosks.

C’mon. We all saw it. Almost every fast food joint in the Santa Clarita Valley now has these huge interactive TV sets that take our orders to so that a human is eliminated. Even the most liberal of liberals could see that people were losing their jobs over this.

Now, businesses are crumbling under the weight of forced closures due to the pandemic. Stock replacement orders are not being made. Rents are not being paid. Workers have been furloughed. Or terminated. Small and large businesses are hanging on by a thread.

And don’t think that unemployment benefits will help much or for very long. More than 3 million people applied for unemployment benefits over the last couple weeks. This is unprecedented — not to mention that the state of California simply does not have that much cash lying around. 

There ain’t enough money even with the $2 trillion that Congress just gave America. No, people need jobs and to get back to work. 

Lee Iacocca, the former chairman of Chrysler and the genius behind the Mustang, once famously said, “I have thousands of jobs at $17 per hour but none at $20 per hour.” Maybe we need to do the same thing.

Businesses need their employees to stock shelves, wait on customers, swing hammers, drive trucks, clean windows, arrange flowers, pack food, call clients, and all the other things that businesses do.

But, they can’t pay $15 per hour. If they hire one person at $15 but they really need three, what good does that do? They either have to pay overtime at $22.50 or simply not do the extra jobs. Equipment maintenance will not get done. Cleaning will not happen — this could be disaster in the food industry.

Want to fly on an airplane that was serviced by a short staff?

What if, just for argument’s sake, we allow businesses to pay employees $5 per hour for a short time? Now, our hypothetical business can hire three employees and get back on its feet.

With employees making less, there will be a downward pressure on prices. A current Big Mac Happy Meal runs about $4-$5. Maybe McDonald’s can think about selling them for $2-$3?

People tend to forget that capitalism works the other way, too. When demand goes down for an item, the seller must decide to either go out of business or reduce the price. 

Impossible you say? Not at all. For our theoretical Happy Meal, McDonald’s can go back to the french fry manufacturer (mmm, love those McDonald’s fries) and say, “Hey, I can buy 2 million pounds at 17 cents a pound but none at 34 cents? What’s it going to be?” 

You see, the free market can make those types of adjustments. This is something that socialists like Bernie Sanders just cannot grasp. The market quickly and immediately responds. A huge, centrally planned economy like the old Soviet Union could not do this. That is why it failed.

What if we let the market decide what the minimum wage is as opposed to some government bureaucrat? Are we brave enough? Maybe the market for a McDonald’s worker is not $5 but really $8 per hour. We won’t know unless we try.

No, my liberal friends. It will be the forces of capitalism that save us from the current economic disaster, not socialism. 

Has anyone else noticed other liberal bastions falling to the side? Yesterday, I was in Ralphs over at Granary Square and they outlawed reusable bags. Now, only single-use plastic can be bagged by their staff.

So much for that turtle with the straw jammed up his nose. 

A funny side comment about my Ralphs visit. The checkout clerk told me that “a great use for these plastic bags is that you can use them to take out the trash.” \

Golly. Never thought of that one.

The world is going to be a much different place soon. Temporary suspension of the minimum wage may be one of the emergency measures that we will need to enact if we have any hope of restarting our economy. 

We’ve got lots of jobs at $5 per hour, but none at $15.

Steve Lunetta is a resident of Santa Clarita. Liberals who don’t understand capitalism should pick up a copy of Thomas Sowell’s “Basic Economics.” He (Steve) can be reached at [email protected].

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