Seattle Mayor Ed Murray – as well as Seattle Socialist City Council member Kshama Sawant – has proposed raising the city’s minimum wage to $15 per hour, a large sum that is not based on any economic theory or models and one that would hurt the uneducated, the unskilled, youth and immigrants. Compulsory unemployment Murray Rothbard called it.
In a letter written to the Seattle mayor, a group of business owners warned that if the city goes through with its minimum wage proposition then it could dramatically hurt immigrants who rely on minimum wage service jobs when they first arrive in the United States.
The letter noted that it wasn’t necessarily concerned with its own profit margins but noted that any substantial wage hikes would hurt the most vulnerable, particularly in this case immigrants, because the businesses would be forced to cut jobs that would be given to low-skill immigrant workers and instead allocate them to workers with higher skills.
“The financial cost to our businesses will be staggering, considering our low profit margins and the proposed 40 percent increase in wages — without factoring payroll taxes and compensations,” the letter stated. “Large portions of our staffs are immigrant workers. These are people who come to this country with very little skill or English proficiency. They arrive at our various businesses seeking jobs because we provide a landing zone for them to get their foot in the door and learn valuable skills.”
The restaurant business is indeed a difficult one. The profit margin for restaurants is quite low because it has a lot to take care of operating costs: labor costs, rising food prices, real estate charges, hydro costs and so on.
If such a move does take place then it could affect a significant number of immigrants and refugees. It has been reported that the aforementioned account for roughly 19 percent of Washington State’s population, and that figure is growing exponentially.
Indeed, the likes of Murray and Sawant may have good intentions but their lack of economic understanding will have devastating consequences to the very people they are supposedly trying to help.
For more information on the negative effects of the minimum wage, check out the articles below: