Seattle: $15/Hour, but No Hours

Gary North - April 20, 2017

Seattle's City Council has not repealed this law of economics: "When costs rise, less is demanded."

The City Council passed a minimum wage law: $15/hour. This was done to help workers. We have heard this before: "I'm from the government, and I'm here to help you."

The "helped" workers are not worth $15/hour. If they were, businesses would compete against each other by bidding up wages. So, business owners in Seattle will say "no deal." They can fire workers. They can substitute robotics. Or they can move. Fact: if you can run a profitable business in an expensive city, you can run an even more profitable business in a less expensive city.

This business owner is going to shut down. There are greener pastures elsewhere.

Her 11 employees will have to scramble. They will soon be without jobs.

This has been the story of minimum wage legislation ever since they first were legislated in the 1950's.

Fortunately, most city councils are not as economically ignorant as the Seattle City Council. Local minimum wage laws are comparatively rare. The federal minimum wage has not been raised since 2009: $7.25/hour. That was when Obama had a majority in both houses of Congress.

I am of the opinion that H. L. Mencken was correct: "Democracy is the theory that the common people know what they want, and deserve to get it good and hard."