A minimum wage non-paradox

Obama wage-hour chief David Weil told the Wall Street Journal that leaders of the National Retail Federation approached him urging a hike in the federal minimum wage. Apparently readers are meant to infer that this policy is so obviously fair, or overdue, or beneficial to the national economy, that even big business leaders who will be paying the higher wages favor it. The anecdote is not even the tiniest bit paradoxical, however, once you realize that major national retail operators already tend to pay over the minimum and wouldn’t mind kneecapping their smaller, less-established, or lower-margin competitors who don’t [WSJ and blog, Donald Boudreaux, Tim Worstall]

Meanwhile: “More Seattle restaurants close doors as $15 minimum wage approaches” If only anyone could have predicted! [Shift WA via J.A. Cohen] But note this Seattle Times piece in which the owners of the four closing restaurants say the wage hike wasn’t the reason.


  • This is anecdotal but – the several people that I chat with at the restaurants I frequent are mostly people who are not teenagers, and are working 2 jobs or supplementing SS. Very few are college students. These are mostly fast food places.
    At the places I go to with waitstaff, most are in their career. At least, none says they are just waiting until they get that breakthrough movie/TV role. I can only guess that the folks in the kitchen are mostly the same. Either, their career. Or, new immigrant. Or, not smart enough for additional education.
    The supermarkets are similar.

    The minimum wage needs to be raised every now and then.

  • Yes, Yes, Yes. Here is an example of what regulation is for. Companies that try to do right for their employees should not be disadvantaged by their action. This is why we have affirmative action requirements so that the costly burden of providing for race mixing falls on all. Regulation is for companies – big guys – not for little guys. This is why Senator Warren of Massachusetts is so pernicious. Little guys try to game the system and are prevented by arcane rules. For example, some people use their credit cards in lieu of a revolving line of credit and avoid thereby business advice from a banker.. When little guys win, everybody else, including most little guys, lose.

  • Before my retirement from the Woolworth Corporation (now Foot Locker) in 1994 I was Chairman of the NRF Committee on Employment Law in the mid 80’s, as well as the Chair of several task forces over the years that were formed to address previous efforts of Congress to raise the minimum wage. In the retail industry there was always a dichotomy between the large department store employers, some of the large chains, and the backbone of the industry, the smaller independents and mom and pop retailers over what the industry stance should be. During those days cooler heads prevailed on the evils of minimum wage laws per se, but, if what is reported is true, the large retailers now are acting in a way to hinder their smaller, local brethren. It is a shame it has come to this.
    Minimum Wage Laws have a negative effect on employment, the economy, and should never be supported by clear thinking employers and their associations.