California and New York ready to join Seattle in destroying jobs with new minimum wage laws

Economics is a social science, and as such it can be greatly affected by the emotional demands of a given people or culture.  And just as the government, Federal Reserve, and Wall Street helped create the political climate of the 2016 election through their full buy-in of crony capitalism, so too are states signing their own economic ‘death warrants’ by giving into the demands of a $15 minimum wage.

Last year, places like Seattle, Washington signed new legislation imposing a $15 minimum wage on businesses and government employees, and the results were as expected by economists who look at the true data rather than those who are bought into the political spin.

As the implementation date for Seattle’s strict $15 per hour minimum wage law approaches, the city is experiencing a rising trend in restaurant closures. The tough new law goes into effect April 1st. The closings have occurred across the city, from Grub in the upscale Queen Anne Hill neighborhood, to Little Uncle in gritty Pioneer Square, to the Boat Street Cafe on Western Avenue near the waterfront.

The shut-downs have idled dozens of low-wage workers, the very people advocates say the wage law is supposed to help. Instead of delivering the promised “living wage” of $15 an hour, economic realities created by the new law have dropped the hourly wage for these workers to zero.

Advocates of a high minimum wage said businesses would simply pay the mandated wage out of profits, raising earnings for workers. Restaurants operate on thin margins, though, with average profits of 4% or less, and the business is highly competitive. - AEI

And now on April 5, two more states can be added to the growing list of mandatory $15 minimum wages as California and New York both signed their own $15 minimum wage legislation yesterday.

However, as opposed to Seattle’s paradigm of businesses shutting down, California and New York are about to experience something just as big, and that is companies leaving the state entirely.

Perhaps in the most poetic cause and effect scenario, once the people realize that items such as minimum wage actually do nothing but hurt their chances for gaining employment or starting a small business, they leave the state in droves.

Based on a study of IRS tax returns, over 250,000 California residents moved out of the state between 2013-2014.

It’s no better in the other “minimum wage hiking state”, New York, where United Van Lines data shows that out of all of their relocation contracts, New York comes in second for “high outbound.”

Now that higher minimum wages are a reality, we’re certain these numbers won’t get any better in future years. - Zerohedge

And lastly, the third paradigm shift coming for both states and businesses due to their lack of economic understanding when it comes to wages is the rise in machines replacing human labor in facilities that cannot afford to pay $15 per hour to unskilled workers who don’t merit the value cost.

Wages and salaries in a free market system should always be commiserate on the value that labor provides to a business, and where their production is greater than the cost paid for their skill and work.  And this is why a computer programmer will always garner $40+ dollars per hour while a person flipping burgers will only be worth $7-10 no matter the output.  And when you try to force higher costs on lower value productivity, the end results are layoffs, moving the business to a more amenable environment, or at worst, complete insolvency and business shutdown.

Kenneth Schortgen Jr is a writer for,, and To the Death Media, and hosts the popular web blog, The Daily Economist. Ken can also be heard Wednesday afternoons giving an weekly economic report on the Angel Clark radio show.