We frequently eat lunch at a slightly scruffy neighborhood café. My spouse’s favorite is the bacon, lettuce and tomato sandwich. In 2010, the BLT price was $6. In our our most recent visit, it was $15.
We retirees on limited income certainly realize that inflation has been grinding upward during those years. The BLT example of more than 200% price rise is typical. For example, some nearby housing prices have doubled and tripled.
Now, because of union and other pressures, our state of California, as some other states already have, will impose a minimum wage of $15 an hour. Of course, it will be welcomed by first-job teens, new immigrants and others who must struggle in the lowest pay scales.
However, their joy will soon be tempered with reality. Restaurants and other employers with low-paid workers will just pass the higher wage costs on to customers. For example, our neighborhood café will increase the BLT price to $20.
Further, to continue competing in the marketplace, the café owner may also decide to cut staff. Of course, this is already happening in American industries. Recently Ford announced it’s opening a major auto manufacturing plant in Mexico. Current minimum hourly wage there is about $4.25.
For years, Apple and other tech firms have been relocating their equipment production to China and other Asian locations. Current minimum wage in China’s capital city of Beijing is about $3 an hour. Many thousands of American workers continue to lose their jobs in this ever-growing outsourcing stampede.
Now, with the requirement of $15 an hour as our nation’s minimum wage, it will only speed up the job loss process. Concurrently, it will accelerate the already fast-rising inflation. The result will be that those earning minimum wage will win no added buying power from their higher income.