I must admit I have never really thought about the question “What happens when a business doesn’t pay the minimum wage?” I guess I just always assumed that if they couldn’t pay they went out of business. The below video made me realize there is another option, ignoring the law. Of course there are consequences for that. What if the employee is just fine with that and makes a deal with the shop owner? Are they both criminals for flouting the law or just the business owner? Wages are, after all, a price. The business owner is buying labor and the employee is selling it. The wage the worker gets is his price for that labor.
Several states have passed or are considering passing boosts in the minimum wage. I contend these measures are highly shortsighted even if they are well intentioned.
Think of it this way, you’re on the road in your car and there’s another car coming out of the McDonald’s waiting for a break in traffic so they can get out onto the road. Thinking that you want to be a nice guy you decide to stop and let them out. They pull onto the road, give you a friendly nod and you go on your way feeling pleased with yourself that you’ve done a good deed. What you failed to realize however, is that your stopping meant that the 10 cars behind you had to wait. You decided that helping one person not wait was worth making 10 people wait. More than likely everyone reading this has found themselves on one end of this situation.
The minimum wage is a bit like that too. People see someone working and not making much and they think they will be wonderful human beings and force a business to pay them more. If they think of the business at all it’s to think they can stop being greedy and fork it over. More than likely voters are only thinking of the poor suffering worker who needs more cash for doing the exact same work they are currently getting less cash for.
The reason a person is making low wages has everything to do with the life choices of that person. So the do gooders decide that a business should pay those people more money for the same amount of work. rather than tell the person to make different life choices. It becomes the forced responsibility of others to take care of them. Make no mistake, that’s what a minimum wage is. It’s forcing a business owner to take care of someone else against his will. If it weren’t against his will, meaning if he or she wanted to pay a particular high wage, they would do so without the need of the threat of law. I hear people argue that the reason they don’t is because they are greedy business owners! Maybe. Maybe they just can’t afford it but would pay more if they could. But so what if they are greedy?
Do we really want to make greed a crime? How about lust: should we make that a crime too? Let’s tackle obesity while we’re at it and make gluttony a crime. No one ever expects the Spanish Inquisition do they? At it’s core the minimum wage is forced morality. “You should pay higher wages because it’s the right thing to do and you’re a bad person if you don’t – but since you don’t want to be a good person on your own – we’re going to force you to be.” Such people never stop to realize that doing so makes them a bad person in the process. They’re too busy letting one person in the lane to see the 10 cars behind them.
In one of the states where this issue has recently been on the ballot (Arizona) with what they called Prop 206 the shortsighted do gooders that voted in favor of it may have just caused the closer of a long standing non profit dedicated to helping the handicapped. Susan Bastian, the director of this organization called The Blythe Center, was interviewed by local news in Arizona. She told them:
“We can’t cut anymore. We have requirements by the state to have certain ratios,” Bastian said, “just like in a classroom for teachers we have to have one staff per every 4.5 students. We can’t change our ratios. We can’t change the price of our rent or overhead. We can’t change the price of our services. It’s not like a restaurant where we change the price of a hamburger.” (12 News, 2016)
Not only does she demonstrate how the minimum wage is going to adversely affect their business, and thus the employees, but she rightly points out that in other industries, like food service, the minimum wage causes the price of goods to increase. Sure, Joe Worker gets paid more, but Joe Worker has to spend more since the cost of items have just gone up to compensate thus sucking away any gain he got from the minimum wage.
For those businesses that can’t increase prices for one reason or the other the only alternative is to lay off workers. Who enjoys an increased minimum wage when they are laid off? The greed of a business owner seems less than that of a worker who protests the person giving them a job when one of their fellow workers walks out the door, unemployed, to pay for their raise.