The Minimum Wage Worker Strikes Back
Sarah Kendzior

Government rules make employees more expensive. If you work full time, your employer has to provide healthcare. Social security taxes cost 12.4% of your wages. Medicare taxes cost another 2.9%. This is thousands of dollars in taxes and wages employees miss out on because of government rules. If you get promoted to management, your employer now has to be willing to pay you at least $50k a year. This is invaluable experience that employees may never get. Yet somehow, people have come to the conclusion another government program will fix the problem? This article is filled with people responding to economic incentives. Moving in with family to save on rent, paying for bus fares one at a time, to avoid having to shell out a two days wages up front. Do these workers believe that fast food restaurant owners won’t respond to their own economic incentives? Industry wide, pay roll averages 26% of costs, and profit margins are 3%. Taking Missouri as an example, if the minimum wage goes up from $7.65/hour to $15/hour, that’s a 96% increase. If all else stays the same, that would bring a fast food restaurant’s labor costs to 40%, and profits far into the negative. If a restaurant even manages to stay open, a few veteran employees may do better, but most will be gone. Automation will take over. Digital touch screen kiosks instead of cashiers, and large industrial production equipment for the food; slicing, frying, packaging, etc. all automated. Where will all these people work then? People don’t need government imposed minimum wages to get out of poverty. They don’t need to unionize. They need three simple things. They need to graduate from high school. They need to avoid having children until after they are married (and avoid marriage until at least age 21). And they need to work full time. Can we work on one thing at a time, and start with recognizing that raising Chipotle’s labor costs to 40% is not going to increase Patrick’s chances of working full time and getting out of poverty. It’s going to increase his chances of being unemployed.

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