The Fight For $15 Fizzles

Investor’s Business Daily

8/11/2017

Economics: Last year, the "Fight for $15" movement was said to have unstoppable momentum, driven by labor unions, left-wing politicians and a sympathetic press. Then reality struck. Too bad it didn't strike sooner.

"This is a trend that cannot be stopped." "The political earth has shifted." "This movement continues to build." "Even economic experts who oppose the increased rate see it gaining momentum." That's what all the "experts" were saying last year.

It was easy to make such assumptions. Protests and strikes were on the rise, hitting 340 last year. In 2015 alone, 14 cities and states approved $15 minimum wage laws. Unions were pouring tens of millions of dollars into the effort. The Democratic Party made a national $15 minimum wage part of its 2016 party platform.

That was then. Now the unstoppable movements looks like it's grinding to a halt. According to the Employment Policies Institute, which opposes minimum wage hikes, there have been just 33 strikes and protests this year.

What's more, some Democrats have started backpedaling. Baltimore's new mayor, Catherine Pugh — who had campaigned on a $15 minimum wage — vetoed a $15 wage bill passed by its city council, saying it would hurt the city's economy and its unemployed.

In August, Cleveland's city council rejected a proposal to hike the city's minimum wage to $15 an hour.

What happened? Well, put simply, economic reality intruded.

Cities that took the Fight for $15 bait are coming to realize that, in the real world, forcing businesses to raise wages for low-skilled workers costs jobs and hurts the very people it's supposed to help.

The biggest blow came when economists at the University of Washington studied Seattle — which had boosted its $9.47 minimum wage to $11 in 2015 and $13 last year, on its way up to $15 for all companies in the city by 2021 — and looked at the wage's impact on city workers.

What the economists found was that low-wage workers lost more in hours than they gained in hourly wages.

"We conclude," the economists said, "that the second wage increase to $13 reduced hours worked in low-wage jobs by around 9%, while hourly wages in such jobs increased by around 3%."

As a result, the average low-wage employees in Seattle saw their income drop by an average $125 a month thanks to the minimum wage increase.

This should not have come as a surprise to anyone, since the adverse effects of minimum wage hikes are well documented.

In fact, University of California, Irvine, economist David Neumark examined more than 100 credible minimum wage studies of the past two decades and found that 85% of them "found consistent evidence of job loss effects on low-skilled workers" — including lost jobs, reduced hours and closed businesses.

You don't need to be a trained economist to understand why this happens. As any high school student who's learned about the supply/demand curve in an economics class can tell you, when the price of something goes up, demand goes down. That's true whether it's cellphones, hamburger, houses, or entry-level jobs.

The only mystery is why so many on the left — who always claim to be guided by science — refuse to admit this scientifically validated truth.

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Can you guess - what John Samuelsen president of TWU & Local 100 fights for?

Grandmothers!

The lights are on but nobody’s home.