The unintended consequences of raising the minimum wage. From the desk of markEwatkins

It was recently announced that Lowe’s was launching an experiment in using robots to serve as shopping assistants in their stores (http://online.wsj.com/articles/newest-workers-for-lowes-robots-1414468866) though unstated, this does appear to be an attempt to use less in-store clerks in order to reduce their payroll. This comes on the heels of several mid-level chain restaurants, such as Applebee’s and Chili’s starting to use tablets for customers to place orders and thus reducinmg the need for servers.

in his weekly address this past weekend President Obama once again complained about Congress’s lack of raising the minimum wage (like what works in California works in Montana), he also talked about the non-existent wage disparity between men and women workers (nothing like a little class warfare on the eve of the elections). What they fail to state or understand is the  adverse effect of following these policies. The purpose of working a minimum wage job is to be a starting place, a way to gain experience, prove someone’s willingness to show up for work and put in the effort. Once someone proves their worth to their employer they can be rewarded with more responsibility, more hours and a higher wage.

As it stands right now the unemployment rate among young black males hovers around the 40% mark. This is actually a fulfillment of the reason that America first came to set a minimum wage. In 1931, the Davis-Bacon Act was passed thus establishing the requirement for paying the local prevailing wages on public works projects for laborers and mechanics. This was passed as the fear of “colored workers” moving north,  causing the unions to worry that they would be willing to work for lower wages. Economist Thomas Sowell has eloquently written on this phenomena quite ofter, here is just one example:  http://townhall.com/columnists/thomassowell/2013/09/17/minimum-wage-madness-part-ii-n1701833/page/full.

In addition to more automation reducing the need for lower wage and skilled employees with it’s racist aspect it can also be pointed out that this serves as an inducement for employers to use illegal immigrants and others that are willing to work off the books. As long as they can get away with it, it serves both groups purposes to pay a lower wage . The advantage to workers is to actually earn more money without having to pay taxes and for the employers to use cheaper labor thus not needing to follow all the government regulations.

Progressives fail to understand when they push their feel good policies, such as raising the minimum wage or free health care for all, rather than letting capitalism and  the free market adapt to best serve the people, that it leads to unintended consequences that cause undue harm to the people that they are purportedly trying to help.