Tuesday, November 21, 2017

Minneapolis Businesses Brace For Minimum Wage Hikes

minimum wage hikes, minneapolis, capitalism

The end of a fiscal year and the beginning of new one usually sucks. Why, you might ask? Minimum wage hikes–that’s why.

Governing magazine recently published a report with the headline, “Minneapolis Joins the $15 Minimum Wage Club.” Yes, that is true. Minneapolis, Minnesota is the latest large, Democrat-controlled municipality to fall victim to the pipe dream that is a $15 minimum wage floor for all the city’s low skill and entry level workers.


The Minneapolis Wage Hike: A Timeline

Starting July 1, 2018, the new minimum wage hike takes effect in a progressive, multi-year scheme to get the current $10 per hour rate to $15 per hour by 2024.

City council approved the measure on June 30, mandating all businesses within city limits to pay at the $15 per hour rate. Smaller, locally owned businesses have seven years from the law’s effective date to pay the new minimum wage, as well.

Below is the progression of the wage increase over the next 5 years:

Date Large business: five years Small business: seven years
Jan. 1, 2018 $10 No increase
July 1, 2018 $11.25 $10.25
July 1, 2019 $12.25 $11
July 1, 2020 $13.25 $11.75
July 1, 2021 $14.25 $12.50
July 1, 2022 $15 $13.50
July 1, 2023 $15 indexed to inflation $14.50
July 1, 2024 $15 indexed to inflation $15

Source: Minneapolis City Council 

The $15 per hour minimum wage makes the city one of several, nationwide, that offer such a high wage floor. Other cities that have the same rate, notably, are places like Seattle, Washington D.C. and San Francisco.


Impacts on Small Business Owners

Even though the city council installed this new ordinance, the calls of concern of small business owners appeared by unheeded. In a video produced by the Southwest Business Alliance, three business owners spoke of the potential risks and challenge their establishments will face once the new minimum wage goes into full effect.

One of the owners, named Jane Elias, said that the entire concept of a $15 minimum wage was troubling.

“It’s extremely difficult to make ends meet,” Elias said. “I am a bleeding heart liberal, and I am a big Bernie Sanders supporter; but, this whole flat out $15 one-size fits all is just wrong.”

With minimum wage hikes, businesses face increased labor and operation costs that then reflect in the services or products they sell with increased prices.

Other threats to the local businesses also include being put at a market disadvantage because of a labor price control such as minimum wages. Whether you support minimum wage hikes or not, the real root of the issue is that workers are being placed on a pedestal while businesses–the sources of income for workers– are cast as unimportant.

If it weren’t for businesses, workers won’t have jobs or wages and goods and services will not be sold or bought because there is no one producing them.  As mentioned prior, the concept of higher minimum wages are well intentioned, yes; however, when put into action, more harm is done.

Prices increase, cost of living will increase more so without a higher minimum wage, and businesses who can’t keep up fail and close because of a burdensome intervention in the marketplace sponsored by a governmental entity.

There are no benefits when the negative factors outweigh the positive factors.

What Should Your Minimum Wage Be?
$15 Minimum Wage Gives Rise to Job-Replacing Kiosks, Small Business Closures
Why Government Should Never Dictate A Minimum Wage

  • Bill S DiMenna

    no sympathy for a bernie supporter…I mean if your supporting him, what did you think you were supporting?

    • WORSEKarma

      No one accused Sandernistas of being smart, son.

  • dirtdad

    These increases in minimum wage will result in higher prices for goods and services across the board, i.e. inflation. Inflation reduces the buying power of the dollar. The resulting inflation will most likely offset any benefit of increased minimum wage, i.e. minimum wage earners will realize no improvement in their standard of living.

    • WolfenStorm

      I don’t call them Dimmies for nothing…they are not capable of understand reality.

    • Mark Hayward

      The Government wasting and Borrowing money causes inflation too .. reducing taxes and Government spending reduce inflation ..

  • Mark Hayward

    Bernie Sanders Says “We need the $15 per hour minimum wage so we can tax workers at 50% so they can make $7.50 per hour .. “

  • suzyshopper

    Let the LAYOFFS begin!!!

  • Richard Harkins

    Welcome to democrat vote buying world.

  • Vale Torres

    Higher wage increases will bring about a rise in goods and services? That’s the whole point of long overdue wage increases. Everything costs more and services costs more but the wages have remained the same for too long. Now your logic is “things”will cost more if wages go up? You probably complain because the family ahead of you in the grocery store is paying with food stamps. Who can support a family with these measly wages? If both husband and wife work one paycheck goes towards daycare. Right back to one earning to support a family. Rent,utilities,taxes,cars,repairs all have gone up except…

    • Mark

      Minimum Wage was never intended to be what you call a living wage. It is a starting point. Don’t you think people should be responsible for their actions? Pregnancy? Hell you Libs practically give contraceptives as prizes in cereal boxes. If you can’t afford children don’t have them. Quit blaming everyone else!

    • kay

      The cost of products keep going up as the cost of insurance provided by the employer does, the cost to meet all the millions of new regulations, the unions demanding more and more income and benefits. In the mean time when minimum wages increase it also adds to the burden the employers have and the costs go even higher. You can also thank the government. Due to section 8 housing rental properties demand higher rent to meet the rents the federal government shells out, and food stamps added cost to our food due to the cost of processing and collecting from them, medicaid has caused doctors to charge more to paying customers and insurance companies to make up the loss from excepting medicaid. In other words, the unions and the government are the root cause of inflation. No amount of a raise in minimum wages is going to fix squat as it will cause unions to ask for more and get it, rentals to go up, utilities to go up, the cost of what you buy to go up and the benefits you may be receiving may be cut off because you now earn too much.

  • maddaddyssa

    A robotic arm programmable to prepare fast food costs aprox $35k. They can replace up to 3 employees per shift and work 24/7. $15/hr based on a 40 hr work week=over$30k/yr+benefits. Even factoring in maintenance, repairs, upgrades and depreciation a robot could potentially save a typical fast food joint over $250k in employee salaries. Plus they added benefits, robots don’t need to be drug tested. Nor do they call in sick or flie OSHA complaints. And they’re incapable of filing discrimination suits. That is, unless “Robotic American” becomes a new protected class. HMM, better keep my big mouth shut or the libs will get more stupid ideas….

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