When Government Gets Involved…

On a recent trip to a local restaurant where you order at the counter, my husband noticed the addition of about five or six order kiosks. They were sort of cute, and looked as if they might be fun to operate. I didn’t really think anything about it under I read an editorial in today’s Wall Street Journal.

The editorial is entitled, “Another Minimum Wage Backfire.” President Obama has supported raising the minimum wage, and a number of states have raised it on their own. Now we are beginning to see the impact of raising the minimum wage.

The editorial reports:

Last week the Wendy’s Company did a public service on its second-quarter earnings call by explaining how mandated wage hikes will lead to fewer jobs for the low-skill workers that progressives claim to be helping.

First, CFO Todd Penegor talked about the pressure to pay higher wages and said that “we continue to look at initiatives and how we work to offset any impacts of future wage inflation through technology initiatives, whether that’s customer self-order kiosks, whether that’s automating more in the back of the house in the restaurant. And you’ll see a lot more coming on that front later this year from us.”

Translated loosely, that says that Wendy’s is a business who does business to make a profit. The company will do whatever it has to do to keep making a profit and keep its stockholders happy. If people lose their jobs because of federal regulations, that is unfortunate, but the blame should be on the federal regulators–not the company.

I would like to note here that the reason the unions like higher wages is that they feel that if the minimum wage is higher, unions can ask for higher wages when they bargain. However, an increased minimum wage will have a strong impact on the food industry because that is the industry where many teenagers get their first jobs as busboys, kitchen workers, etc. More of these jobs will be replaced by machines, and less teenagers will have the experience of having a first job. An increased minimum wage will also cause an increase in prices in many of the restaurants that are still inexpensive enough to bring the whole family.

Raising the minimum wage is another idea that although it it well meaning, does not consider the law of unintended consequences. Very few people are supporting families on minimum wage jobs, generally these jobs are entry level jobs for people just entering the job market. Raising the minimum wage does not accomplish anything–it simply takes away the opportunity for teenagers to begin a working career.