California's Minimum Wage Hikes Actually Working Out Very Well, Thank You!
And with just a 15 cent increase on a four dollar burger.
When it was first announced that fast food workers in California would soon make at least $20 an hour, there was no shortage of critics insisting it would lead to calamity and $45 Big Macs.
And yet! Just like every other time the minimum wage has been raised and people predicted doom and gloom … it’s actually worked out quite well and none of the bad things have happened. It’s almost as if it would be entirely possible for us all to manage living in a country in which every person has enough to live.
Which, to be clear, it absolutely would be. I’d also like to note that the people who traditionally insist it is not are the same people who go around screeching about the birth rate all of the time. (Yes, we all know they’re talking about the white birth rate, but still.)
The Center on Wage and Employment Dynamics at UC Berkeley has released research showing that while wages went up by 18 percent, employment remained stable and menu prices increased by just 3.7 percent. Oh no, that sounds like it might be a lot? Nope. It is an extra 15 or so cents on a hamburger.
None of this should be surprising. Most employers, especially in that sector, are going to employ the fewest number of people they can get away with regardless of how much they are paid. In my life I never worked at a retail store that was not chronically understaffed. Additionally, they can’t actually charge more than people are willing to pay for a product. Like, sure, you can try to sell a Big Mac for $45, but you’re going to lose a ton of money waiting around for someone to buy that.
Previously, another study from researchers at Harvard and UC San Francisco found the same damn thing. They also found that the increase also did not lead to a decrease in benefits or on how many hours people were assigned.
US Americans typically think of things in terms of impact to the individual — raising the minimum wage is supposed to be bad because if people can reasonably live off of working at McDonalds, they won’t be “motivated” to try to do more but at the same time if people who own McDonalds franchises are not making bank, no one will be “motivated” to buy a McDonalds franchise. And, because it’s assumed that the people who own the franchises have to continue making the same amount of money they previously were, it’s then assumed they will “have” to charge customers much more in order to continue making what they were making.
If we thought of things in terms of what’s best for us as a society, we would realize that if we want people to work at McDonalds, it can’t cost more to work at McDonalds than it pays to work at McDonalds. People have to be able to live in or reasonably close to the community where they work, they have to be able to pay their bills so they can shower and feed themselves so they don’t smell or pass out during their shift, they have to be able to get to and from their jobs (either with a car or with public transit). That is the bare minimum. Ideally, we also want those people to have disposable income so that they can contribute to our economy and the tax base. This latter part is likely the reason why all of the bad things people predict when raising the minimum wage never actually come to pass.
The more money that people at the bottom have to spend, the more money there is to make for those in the middle, who then have more disposable income of their own to reinject into the economy. But, if we keep going the way we’re going, the only viable money to be made will be in selling things to the rich — and that is a relatively limited customer base. Rich people, for the most part, are not the ones eating at McDonalds, so their ability to profit lies in those at the bottom and in the middle being able to afford to eat there.
It is fine that Americans feel so importantly about “motivation,” but it can’t be at the expense of a functioning society.
This is why this happens the same way every time. It’s why the sky never falls. It’s why other studies show that minimum wage increases actually lead to more employment, not less. Hell, it’s even why all of the Universal Basic Income experiments have turned out so well and usually have the exact opposite effect that critics insist they will have.
There are no studies showing the opposite. Not any. None. There are no studies or even observances showing that we benefit in any way from people not making enough to live on or not being able to afford rent or basic living expenses. There’s no evidence that this is creating a better world for any of us, or even that extreme income inequality is the motivating factor that people believe it is.
So why not just do the things that work, instead of the things that could totally work given the exact right circumstances and even then will only work for a very small number of people?
OPEN THREAD!
PREVIOUSLY ON WONKETTE!
It is immoral that the Federally mandated minimum wage is still $7.25 for non-tipped and less than half that for tipped workers. If the Dems take back the House and keep the Senate it is long past time to bring the minimum wage into line with reality,
A little nugget of truth, a typical single McDonald’s restaurant has almost the same annual revenue as Trump’s Truth Social enterprise. Which has strangely seen a big jump in stock prices since it dropped to a still way overpriced $12 a share and now has a stock value of around $6 billion. I wonder who is propping up that stock and what they expect to gain if Trump is elected. “Remember Donnie, I bought $50 million in Truth Social shares back in October to prop up prices. I expect to see something out of it.”