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Minimum Wage Tag

Though Arizona Senator Kyrsten Sinema is not a Republican, she’s shown an independent streak during her time in the Senate, letting Sen. Majority Leader Chuck Schumer know on more than one occasion that she will play by her own rules and not necessarily her party's when it comes to making policy decisions for the people of her state.

The House of Representatives passed the Raise the wage Act, 231-199, that would raise the federal minimum wage to $15 from $7.25. The bill states it has to happen by 2025. While the left celebrates the news, the bill may never see the light of day in the Republican-controlled Senate.

The progressive push for higher minimum wage laws has had perfectly predictable results: lower-income people are most harmed, businesses switch to robots, businesses shutter, or as in the case of west coast Restaurants Unlimited, Inc., they simply file for bankruptcy. The chain closed six restaurants prior to filing.

The progressive city of Seattle pushed its minimum wage up to $15 dollars an hour but a new study from economists at the University of Washington suggests the measure is hurting the very people it was intended to help. This is an issue the left often refuses to understand. If you force a higher wage than the market demands, employers are forced to adjust in ways that are less favorable. Ben Casselman and Kathryn Casteel report at FiveThirtyEight:
Seattle’s Minimum Wage Hike May Have Gone Too Far As cities across the country pushed their minimum wages to untested heights in recent years, some economists began to ask: How high is too high?

California's Bay Area is is a technological capital of this country, where thousands of highly trained computer and engineering professions strive to created the latest digital and mechanized wonders. In a move so rich with irony that the Russians are looking for mining rights, San Francisco politicians are mulling a ban on one of the most recent creations: Delivery robots.

Legal Insurrection has often chronicled the unintended consequences of minimum wage hikes across the country, from worker struggles in Seattle, automation replacing service personnel, the closing of a popular eatery in New York, and the loss of jobs at UC Berkeley. Now, in my home town of San Diego, diners are being served-up a surprise along with their bills as a result of voters approving a minimum wage hike in last June: A dining surcharge.
Girding for the second minimum wage hike in six months and the fourth in 2-½ years, many of San Diego’s full-service restaurants are introducing for the first time an average surcharge of 3 percent of the meal’s cost to help cover increased labor expenses that some operators say amount to hundreds of thousands of dollars in a single year. ...Hoping to preserve what restaurateurs insist are already thin profit

We've been blogging about the push to raise the minimum wage to $15 and the correlation with the rise of automated kiosks since 2014. Fast forward two years and the machines have won. I blogged in 2014:
This is all basic economics, really. As costs of labor increase, the added cost must be offset. In order to satisfy operating costs, produce a product consumers want to purchase, and still turn a profit, it’s perfectly reasonable for a company like McDonald’s to look for cost-cutting alternatives. As Forbes pointed out, the added pressure to increase wages only serves to expedite technological solutions.
The pursuit of a "living wage" comes at a high price -- countless jobs have been lost to newfangled technological overlords and businesses with small profit margins have shuttered nationwide. Neither were giants in the fast food industry immune to the $15 minimum wage disease.

Minimum wage hikes sound great on the surface, but as we've been reporting here at LI, such hikes tend to do the opposite of their proponents' stated intention.  From forcing businesses to fire employees, cut hours, and find technological replacements for workers, minimum wage hikes are counter-productive, even destructive to low-income workers. For example, a new study from Seattle shows that "there was almost no effect on workers' average total earnings" due to a combination of factors including fewer hours and a more difficult time finding a second job to make up those lost hours. The Washington Post reports:
[T]he actual benefits to workers might have been minimal, according to a group of economists whom the city commissioned to study the minimum wage and who presented their initial findings last week.

Being replaced by machines is probably not what the Raise the Wage! crowd had in mind, but here we are. Again. For almost two years, McDonald's has been flirting with automated ordering machines, and has introduced the new mechanical overlords to some of its locations. I blogged about this back in 2014:

New York's new minimum wage is being cited as the main reason that a popular Albany restaurant is closing its doors after serving the community for decades. Mental Recession reports:
Beloved Upstate Restaurant Closes, Cites Minimum Wage Hike As Major Reason An Albany area fish fry restaurant is closing its doors after nearly 70 years in business, and the owner is pointing to New York’s $15 minimum wage as a major reason for his establishment’s downfall. Bob and Ron’s Fish Fry, described by New York Upstate as an “Albany institution” featuring “the best fish fry in the Capital Region,” announced they’d be closing their doors in less than two weeks.