We’ve said it over and over again. Minimum wage hikes will not do a thing to help anyone. They result in either higher prices or layoffs, but they hurt small, local businesses the most. It seems the first casualty confirming our fears has been tallied in über-liberal San Francisco. Borderlands Bookstore will be closing its doors, thanks to the minimum wage increase:
In November, San Francisco voters overwhelmingly passed a measure that will increase the minimum wage within the city to $15 per hour by 2018. Although all of us at Borderlands support the concept of a living wage in principal and we believe that it’s possible that the new law will be good for San Francisco — Borderlands Books as it exists is not a financially viable business if subject to that minimum wage. Consequently we will be closing our doors no later than March 31st.
There is so much wrong with this. For one, small businesses often operate at a very narrow profit margin. Fluctuations in rent and competitors’ prices can have a devastating effect on whether or not a small business will stay open. They don’t need minimum wage hikes, on top of all the other variables, making it impossible for them to stay in business. It should be obvious that closing a business, and thus having no jobs available, would be worse than having jobs available with a slightly lower wage.
And furthermore, there is no real indication that minimum wage hikes actually help anyone. Businesses that stay in business after the hikes generally survive by raising prices, shrinking services (or portions), or laying off employees. If they raise prices, then the employee with a “higher” wage just spends more to get the same things. Which results in no net gain. Because it is all about buying power. The money you receive in wages is only as good as what you can buy with it.
Which brings up the most important issue here: monetary policy. If the civil government really cared about benefitting people who don’t make much, they should just fix the dollar. The minimum wage in 1964 was $1.25. But our money was still connected to silver until 1965. If you took the five circulated silver quarters ($1.25) you had been paid in 1964, and you sold them today, each of them would be worth between $3.25 and $6.50, depending on their year. That’s between $16.25 and $32.50 an hour! Even at the bottom end, that’s better than the minimum wage hike that just devastated Borderlands bookstore.
So how about all these living wage, minimum wage hiking, liberals start crying about our monetary policy and tell the civil government to fix our currency. Now that’s something I could get behind.