04/13/2017

Surprise, San Diego's Minimum Wage Rise Appears To Be Killing Restaurant Jobs

Tim Worstall, Forbes.com

It's a common enough complaint that we who focus upon the costs of the minimum wage appear to be fixated on the restaurant industry. You know the idea, a rise in the minimum wage will make millions better off so why this concern about a few waiters and burger flippers? The answer being that whatever the effects of a rise in the minimum wage are going to be it's the restaurant industry where we're going to see them first. Simply because that's where the minimum wage binds. Roughly, even if not accurately, 50% of people in restaurants get the minimum wage and some 50% of the people who get it work in restaurants. So, if we're looking for the effects of the minimum wage restaurants are a real good place to go looking.

Which is just what has been done in San Diego:

Rather than inch upward from $10 per hour to $10.25 per hour in January 2016, as the rest of the state was doing, San Diego jumped its minimum wage to $11.50 per hour. In the year and three months since then, the number of food service jobs in San Diego has dropped sharply, with perhaps as many as 4,000 jobs lost, or never created in the first place.

"If job growth in the restaurant sector had just kept pace with the state's performance … the industry could have created 5,200 jobs instead of the 1,300 that took place," Lynn Reaser, chief economist of the Fermanian Business & Economic Institute at Point Loma Nazarene University, told Dan McSwain, a columnist with the The San Diego Union-Tribune.

It is indeed just the one report so far and of course it needs checking to see whether it's wholly true. That's the way science works, a result must be replicable:

Amid an abrupt slowdown in growth, nearly 4,000 food-service jobs may have been cut or not created throughout San Diego County from the beginning of 2016 through February of this year, according to an analysis of federal payroll data by Lynn Reaser, chief economist of the Fermanian Business & Economic Institute at Point Loma Nazarene University.

“This was at a time when both overall economies performed similarly well,” Reaser said. “If job growth in the restaurant sector had just kept pace with the state's performance … the industry could have created 5,200 jobs instead of the 1,300 that took place.” Last month growth turned negative, as the sector actually lost jobs.

Don't forget what our measure of the effects of the minimum wage is. It is not that there are more jobs, or even fewer, after a minimum wage rise. The economy is more complex than that. What we want to know is what is the specific effect of a minimum wage rise after we've managed to extract only that effect? And the easiest way to do that is to look at a place where the minimum wage has risen and then compare it to another which is broadly similar but didn't have the wage rise.

This is what the University of Washington did when looking at Seattle's rise. This is what has been done here in a slightly rougher fashion. The entire state is probably too broad an example to give us detailed information on exact numbers but useful enough in showing us the direction of travel.

Read full article



You May Also Like:

Trump’s Tangle Of Rhetorical Inadequacy Peggy Noonan, The Wall Street Journal

ISIS Claims Responsibility For Barcelona Terrorist Attack [Watch] Iain Burns and Dave Burke, Daily Mail

Who’s Next, George Washington? Harry Stein, City Journal

Leftist Revolutions Have No Limits Max Madison, American Greatness

Venezuela's Starving People Are Now Eating The Zoo Animals Tim Worstall, Forbes.com

Take Down The Statues Of Robert Byrd Daniel John Sobieski, American Thinker

Gary Cohn Is Suddenly The Most Important Person In Washington And On Wall Street [Watch] Jake Novak, CNBC

Shep Smith Claims Republicans Are Unwilling To Defend Trump’s Comments [Watch] Martin Walsh, Western Journalism

Silicon Valley Billionaires Are The New Robber Barons Victor Davis Hanson, National Review

How To Know You’re In A Mass Hysteria Bubble Scott Adams’ Blog

Americans Are Rapidly Descending Into Madness Michael Krieger, Liberty Blitzkrieg

Privatize The Public Monuments Ryan McMaken, Mises Institute

Chart: Global Income Distributions From 1800 To 2015 Andrew Moran, Economic Collapse News

Lib Media Hiding Dark Secret About Woman Who Toppled Confederate Monument Martin Lioll, Conservative Tribune

So When Will China’s Debt Bubble Finally Blow Up? Wolf Richter, Wolf Street

Missouri Senator: ‘I Hope Trump Is Assassinated!’ Chuck Ross, Daily Caller

What Exactly Fuels The Anticapitalism Of Pope Francis? Helen Andrews, Library of Law and Liberty

Politicians Can't Get Enough Energy Cronyism Veronique de Rugy, Reason

ObamaCare Failure: The Uninsured Are Turning To Over-The-Counter Animal Drugs Brendan Pringle, Red Alert Politics

For More go to the Home Page >>>

Search

SIGN OUR PETITION

FreeMarket Central

TELL CONGRESS: STOP THE POLITICS.

PASS A HEALTH CARE BILL THAT PUTS PATIENTS FIRST



Americans need a health care bill that serves needs of individuals—not those of Washington and big corporations.

 

Read more

Bookshelf

FreeMarket Central

Some titles recent, all recommended -

Special Video Feature

FreeMarket Central

Voices From The 2017 International Students For Liberty Conference

In Search Of History

When America Was Truly The Land Of Opportunity

For [early immigrants] America was truly the land of opportunity. For the first time in their lives, many were truly free to pursue their own objectives. That freedom released the human energies which created the United States. There were few government programs to turn to and nobody expected them. But also there were few rules and regulations. There were no licenses, no permits, no red tape to restrict them. They found, in fact, a free market, and most of them thrived on it. 

-- Milton Friedman,

Shadow Stats Snapshot


FreeMarket Central

ShadowStats alternate economic indicators are based on the methodology of noted economist John Williams, specialist in government economic reporting.

  • Unemployment:
    FreeMarket Central BLS: 4.35%
    FreeMarket Central Shadow Stats: 22.1%
  • Inflation:
    FreeMarket Central July Year-to-Year: 1.63% (CPI-U*)
    FreeMarket Central Shadow Stats: 9.3%

*[cpi-u is the Bureau of Labor Statistics inflation rate for all urban consumers]