One national business is taking action regarding a possible increase in the federal minimum wage to $15 an hour.
What business am I taking about?
This is the same Kroger that is closing two of its marginally performing food markets in Long Beach, California after the City Council rammed a $4/hour pay increase – so-called ‘hero pay” - down the throats of only a few selected businesses in the city. Kroger decided it was no longer worth the effort to continue doing business there because the two marginal markets, Ralph’s and Food 4 Less, were now money-losing businesses and it no longer made sense to keep them open.
What is Kroger doing to help mitigate the effects of the possible rise in the federal minimum wage?
Launch a pilot test of a 100% self-checkout store in Dallas, Texas.
I expect the “usual suspects” will scream bloody murder about “greedy capitalists” stealing from and “exploiting the poor” for profits by eliminating all of the cashier/bagger jobs. But if businesses don’t make a profit they don’t stay in business long, something these economically ignorant/delusional Social Justice Warriors choose to demonize. If the cost of labor rises to the point where a business stops making money and is now losing money, the business has only a few choices: raise prices which may cause customers to go elsewhere; reduce costs by reducing staffing, i.e. lay off employees; go out of business.
The first choice is a ‘Devil’s’ choice, meaning all it may do is delay the inevitable, but the end is still the same: going out of business.
The second choice isn’t much better because people will lose their jobs, the business owners will have to put in more hours to cover the work an employee would normally cover, and maybe the business will survive.
The third choice is the worst of the three because the business owner will reach the conclusion it’s no longer worth the time and effort needed to keep things going, or will see that the only future for the business is bankruptcy and will pull the plug. The jobs the business was providing will disappear along with the business.
The argument could be made that raising the minimum wage hasn’t caused businesses to go out of business, but there have been times when it has cost people their jobs, and even then the increase in the minimum wage was nowhere near the level being suggested, in this case more than doubling the federal minimum wage. On average, federal minimum wage increases have been between 9 and 13% since the 1960’s. The minimum wage increase being proposed is a 107% increase, something unprecedented. It will also have a much larger effect on the economy than previous minimum wage increases since for a lot of younger inexperienced workers it means the end of their jobs even of they aren’t receiving the present minimum wage. (Someone making $10/hour would also get a hell of a pay raise – 50% - something many of the $15/hour minimum wage proponents have chosen to ignore.) They may also lose their jobs if they can’t return $15.01 in economic gain to their employers.
If Kroger’s experiment works well enough, we may well see more supermarkets going the same route – no cashiers, no baggers, and fewer jobs. That could extend to other retail operations if Kroger’s experiment succeeds.
As such, we need to remind the aforementioned economically ignorant/delusional Social Justice Warriors of one simple fact that no amount of ‘feelz’ or excuses can explain away:
The actual minimum wage is $0 and always will be.
(H/T Granite Grok)