The $5.00 Hamburger

By now even those of you reading this blog that don't watch the news should now that in the near future the federal minimal wage is going to be raised. Soon minimal wage employees will be making $7.25 per hour. Now other than some four letter words directed at the television set when I first heard of this brilliant piece of garage the liberal majority cooked up I hadn't given the idea much thought. It wasn't until this afternoon when I went to a local fast food restaurant for lunch that I realized the implications of this new legislation. Thirty minutes after I placed my order I finally got the hamburger and fries that I had ordered. Now I'm sure the first thing that comes to your mind when you hear that it took that long is that the restaurant was really busy. Well what would be your next thought if I were to tell you that only one other persons order was being prepared while I was waiting? By now I'm sure you've come to the conclusion that the only other reason why the food could have taken that long is the people that were preparing, and if you have come to this conclusion you would be correct. In fact while waiting for my food I learned that clerk A thinks clerk B should break up with her boyfriend because hes no good for her, and that clerk c was going to the club later in the day. Now this is nothing new with getting poor service at a fast food restaurant. The part of this story that is new, is that these people are going to be paid $7.25 to give me poor service. Now you might think that this isn't really a problem, and on its own it doesn't really seem like one. But have you stopped to think about the implications of the raise in the minimal wage. Assume that the restaurant has 5 minimal wage employees that work 40 hours a week. The minimal wage is increasing roughly $2 an hour. So in one week the employer is having to pay out an extra $400. Now multiply that number by 52 weeks. That's $20,800 per year that the employer is going to have to pay out. So where is the extra money going to come from? There are only two ways that an employer can compensate for the extra overhead. They can either absorb the costs, or they can raise the price of the goods that they are selling. The value meal that I ordered in this situation already costs $5.15. How much do you think this combo will cost when the increase takes affect? $6 or $7 perhaps? Could it become even more than that? And if the level of service that I received at this restaurant continues to be poor, the customer base is sure to diminish with the price increase. And what do employers do when they aren't getting as much business as they were before? They fire employees to lower their costs. This cause and effect will not only be seen in the restaurant business. Its simple economics, if the price of a good increases, the demand for that product will decrease. So if this cause and effect occurs then the unemployment rate will rise and those that manage to keep their jobs with the new wages will in the end spend their increased income on the same products they purchased before at the new higher rates. On paper the democrats will be able to say that they've helped the lowest end of America, and on paper out country will look better than it did before, but in fact we all lose because of this legislation. High minimal wages are bad for us all, and that folks is just Common Sense.