I remember when I was working for a major retailer and a state-wide minimum wage hike was on the ballot. All my hourly employees were elated as it was looking as it would pass. When they would ask me about it, I always had the same answer- be careful what you wish for.
Our payroll budget, I would explain, is given in dollars; not “hours.” So if the cost of labor goes up, the hours will go down. The budget is fixed; not the hours used.
Payroll Budget ($x)/ $per labor hour = hours available.
They (wrongly) assumed that if the cost of labor went up that the company would simply have to “eat the cost” out of profits.
The company didn’t. The wage hike passed and we had fewer hours to schedule. The result was laying-off several of the small-schedule part-timers (mostly high school and college kids) who were most excited about the hike. The regulars worked the same number of hours for a slightly higher wage, but had to work much harder to cover the productivity loss of the extra hands.
Everyone suffered.
Minimum wage is a red-herring argument. It will never be enough, it will always be eaten up by inflation, and honestly, it hurts the middle class far more than it helps the poor.
Be careful what you wish for…
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