Minimum Wage - Poverty

The main selling point over the years for increasing the minimum wage was that it would supposedly reduce poverty. (See HERE and HERE and HERE and HERE and HERE)

The argument is made, each time, that the current minimum wage isn't sufficient for people to live on, and is well below the poverty level, not "family friendly," and needs to be raised so that the poor can better survive. (See HERE)

When Obama ran for the presidency in 2008, he said: "“because no one who works full-time in America should have to live in poverty, I will keep making the case that we need to raise a minimum wage that in real terms is lower than it was when Ronald Reagan took office.“ (See HERE)

According to the NY Times: "In his State of the Union address in February [2013], President Obama made raising the federal minimum wage his banner economic proposal. The White House argued that increasing the wage to $9 an hour from its current $7.25 and indexing it to inflation would lift hundreds of thousands of families above the poverty line." (See HERE) "Today, a single parent earning minimum wage takes home $15,080 a year. That’s $3,400 below the federal poverty line for a family of three. That’s wrong...in the wealthiest nation on Earth, no one who works full-time should have to live in poverty.” (Quoted HERE)

As recently as Dec. 4th, 2013. President Obama has said: "We know that there are airport workers, and fast-food workers, and nurse assistants, and retail salespeople who work their tails off and are still living at or barely above poverty. And that's why it's well past the time to raise a minimum wage that in real terms right now is below where it was when Harry Truman was in office." (Quoted HERE)

The national minimum wage is currently $7.25 an hour (see HERE), which amounts to about $14,500 annually (assuming a 40 hour work week and 50 weeks a year), whereas the poverty threshold for a family of four, is $23,500. (See HERE)

Who wouldn't want thousands if not millions of people brought above the poverty level?

And, as popular as this appeal is among Americans (see HERE and HERE), it is important to put the issue into proper perspective. Tom Woods, senior fellow of the Ludwig von Mises Institute, has said: "Almost all full-time workers (99.4%) are earning more than the minimum wage, and almost all full-time hourly workers (98.3%) are earning more than the minimum wage. Most importantly, the fact that more than three out of four teenagers (77.2%), who are the least skilled and least educated group of workers, earned more than the minimum wage in 2011 would suggest the minimum wage is mostly an entry-level wage for beginning workers with no skills. The reality of the labor market is that even a large majority of previously unskilled teenage workers are earning more than the minimum wage as soon as they acquire minimal jobs skills and work habits, and can demonstrate their value to employers." (See HERE)

Furthermore, "Minimum-wage workers under 25 are typically not their family’s sole breadwinners. Rather, they tend to live in middle-class households that do not rely on their earnings—their average family income exceeds $65,000 a year. Generally, they have not finished their schooling and are working part-time jobs. Over three-fifths of them (62 percent) are currently enrolled in school. Only 22 percent live at or below the poverty line, while two-thirds live in families with incomes exceeding 150 percent of the poverty line. These workers represent the largest group that would benefit directly from a higher minimum wage, provided they kept or could find a job....Adults who earn the minimum wage are less likely to live in middle- and upper-income families. Nonetheless, three-fourths of older workers earning the minimum wage live above the poverty line. They have an average family income of $42,500 a year, well above the poverty line of $23,050 per year for a family of four. Most (54 percent) of them choose to work part time, and two-fifths are married." (See HERE)

Even still, there is a significant number of minimum wage bread-winners living below the poverty level. As such, the serious question becomes: "Does the minimum wage, or raising the minimum wage, bring people out of poverty as intended?" "Does raising the minimum wage help the poor and make them better off?

As indicated in the previous post on Income Inequality, minimum wage laws have been around in the U.S. since 1912, and federally they have gone from less than $1 an hour (prior to 1960), to the current level of $7.25 an hour. (See HERE)

Here, again, is a graph of minimum wage increases posted at Wikipedia. (ibid)

Notice that in nominal dollars the minimum wage has steadily climbed over the years.

Now, if raising the minimum wage actually reduced poverty, then we can expect that the graph for poverty in the U.S. would show a steady decline from the 1940's until the present.

Here are two graphs posted a Wikipedia showing poverty levels from 1959 to 2011.

As may be seen, poverty levels declined during the 60's and early 70's when increases in minimum wage were relatively nominal. However, since then the number of people in poverty has climbed while minimum wage increases were the most substantial.

Since the last increase in minimum wage in July of 2009 (see HERE), the poverty level has steadily risen, and is poised to rise to its highest level since the 60's. (See HERE)

In other words, the leftist LUNC here is that the main selling point for raising the minimum wage, is a myth. For the most part, and particularly in the last half century, raising the minimum wage hasn't reduced poverty levels as intended, but has seen poverty increase contrary to what was claimed. (See HERE and HERE and HERE and HERE and HERE and HERE and HERE and HERE and HERE)

There are various explanations for why raising the minimum wage doesn't work, or works the opposite from what is intended and claimed. For example, a Heritage Foundation report indicated:

"Minimum wage positions are typically learning wage positions—they enable workers to gain the skills necessary to become more productive on the job. As workers become more productive they command higher pay and move up their career ladder. Two-thirds of minimum wage workers earn a raise within a year. Raising the minimum wage makes such entry-level positions less available, in effect sawing off the bottom rung of many workers’ career ladders. This hurts these workers’ career prospects.

"Even if minimum wage workers do not lose their job, the overlapping and uncoordinated design of U.S. welfare programs prevents those in need from benefitting from higher wages. As their income rises they lose federal tax credits and assistance. These benefit losses offset most of the wage increase. A single mother with one child faces an effective marginal tax rate of 91 percent when her pay rises from $7.25 to $10.10 an hour. Studies also find higher minimum wages do not reduce poverty rates. Despite the best of intentions, the minimum wage has proved an ineffective—and often counterproductive—policy in the war on poverty. (See HERE)

In short, raising the minimum wage so as to reduce poverty, is somewhat illusory or a wash given the subsequent reduction in hours, reduced corporate benefits, and reduction in various means-tested government programs for the poor. What some minimum wage workers may gain from the rise in minimum wage, they will lose in entitlements. This may be good in terms of decreased cost to the government--which the country can certainly use right now given the annual deficits, but it is of little net value to the poor. (See HERE and HERE and HERE and HERE)

[Update 7/26/15: Seattle Sees Fallout from $15 Minimum Wage as Other Cities Follow Suit and Seattle Raises Minimum Wage, Workers Demand FEWER HOURS to Keep Their Welfare.Benefits]

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For an explanation as to why these Leftist LUNCs may occur, please see: Gov: Wrong Tool for the Right Job - Introduction and Cold Nanny as well as The Politics of Compassion, Emotions, Ignorance, Denial, Blame-Shifting, and Victimization

Minimum Wage - Income Inequality

Arguments by the Left for increasing the minimum wage are primarily "based on fairness and redistribution." (See HERE).

Among these arguments, concerns regarding "income inequality" loom large. (See HERE and HERE and HERE and HERE and HERE and HERE and HERE)

And, one of the key planks of Obamanamics was to shrink the financial disparity between the rich and poor. (see HERE and HERE)

In certain respects this is an admirable goal.

Investors.com reported that: "When President Obama first ran in 2008, he claimed his economic policies would 'foster economic growth from the bottom up and not just from the top down.' He said he'd put in place 'an immediate rescue plan for the middle class' and would end the 'tired, worn-out, trickle-down ideologies we've been seeing for so many years.'"(See HERE)

More recently, in a speech delivered in December of 2013, President Obama indicated: "Some of you may have seen just last week the pope himself spoke about this at eloquent length: 'How can it be,’ he wrote, ‘that it’s not a news item when an elderly homeless person dies of exposure, but it is news when the stock market loses two points.’ But this increasing inequality is most pronounced in our country. And it challenges the very essence of who we are as a people...The combined trends of increased inequality and decreasing mobility pose a fundamental threat to the American dream, our way of life and what we stand for around the globe." (Cited HERE and HERE)

This speech put the country on notice that the President intended to renew his commitment to decrease income inequality, and this through, among several things, advocating for raising the minimum wage. (See HERE)

Whether this renewed commitment will eventually end up any different from Obama's broken promises about minimum wage increases in the past (see HERE and HERE), is yet to be seen.

Regardless, it brings up the important question whether minimum wage laws actually work in decreasing income inequality as intended?

This question can easily be answered by tracking minimum wage increases and comparing them to annual changes in income levels between rich and poor.

Minimum wage laws have been around in the U.S. since 1912, and federally they have gone from less than $1 an hour (prior to 1960) to the current level of $7.25 and hour. (See HERE)

Here is a graph of minimum wage increases posted at Wikipedia. (ibid)

Notice that in nominal dollars the minimum wage has steadily climbed over the years.

As for earnings differences between the rich and poor, here is a graph I created using the Census statistics cited below:

Notice that for each of the income categories (very poor, poor, lower middle, middle, upper middle, rich, and very rich) they all increased from 1967 to 2009, although they increased at different rates. This means that the poor got richer and the rich got richer, but their respective incomes became increasingly disparate over time. Whereas, in 2009, when Obama took office, the rich and very rich continued to get richer, but the middle class and poor either stagnated or got poorer, thereby expanding the disparity even greater than before. (See HERE and HERE and HERE and HERE and HERE and HERE and HERE) (See more recent data HERE and HERE and HERE and HERE and HERE and HERE and HERE)

In short, the Leftist LUNC here is that even though the minimum wage rose periodically over the years, income inequality didn't decrease as intended, but instead went steadily up, and expanded most radically after Obama took office in 2009 and the last increase in minimum wage was enacted. At best, then, increasing the minimum wage does nothing to curb income inequality, and at worse it may accelerate the gap between rich and poor. Raising the minimum wage does exactly the opposite from what was been intended.

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For an explanation as to why these Leftist LUNCs may occur, please see: Gov: Wrong Tool for the Right Job - Introduction and Cold Nanny as well as The Politics of Compassion, Emotions, Ignorance, Denial, Blame-Shifting, and Victimization

Minimum Wage - Immigration

By and large, we in the U.S. are proud of our country and are happy to share our bounteous blessings and dreams with people from other lands. After all, we are a nation of immigrants and owe a good portion of our exceptionalism to the best and brightest and decent and hardworking people who have immigrated here.

Our challenge, then, isn't with reasonable immigration policies or the millions of people who have legally flocking to our shores over the years. Rather, it is with the millions of people who have, perhaps unintentionally, disrespected our generosity, flaunted our laws, put undue burden on our economy, and in some ways placed our nation at risk.

Nearly 5% of the U.S. population has resided here illegally. Because of the economic and political strain this puts on our country, it is expected that each election cycle would be devoted, in part, to debating and solving this growing problem, the last five or so years being no exception.

And, while the down economy for the last half decade has made it somewhat less attractive for illegals to come here, and may have even encourage some to leave, nevertheless there are non-immigration policies currently under consideration by liberals that could inadvertently reverse this emigration trend while still making the economy worse.

As a general rule, labor tends to follow capital--meaning, that employees will likely migrate to where they have the ability and potential to make the most money. For example, the minimum wage in Mexico is $.61 hr. (in U.S. dollars), and the minimum wage in the U.S. is currently $7.25. (See HERE) Economically, this creates an enormous incentive for employees in Mexico to migrate to the U.S., even given the down economy and 18% unemployment rate among unskilled workers (see HERE).

In principle, the same holds true for laborers in other third-world or emerging countries.

Statistical evidence supports this claim: "Going back to 2009, when President Obama took office, [which is the last year that the minimum wage was increased--see HERE] Rubenstein’s found that foreign-born employment increased by 1.65 million workers or 7.6 percent while during the same period native-born employment rose only by 26,000 or 0.02 percent. (See HERE)

With this in mind, it doesn't take a rocket scientist to figure out what may well happen if the liberals get their way and raise the minimum wage to $10 or $15 an hour.

Granted, some liberals have argued that the jobs taken by illegals and other immigrants are jobs that Americans don't want and wont do. So, what's the problem? However, leaders in the African-American community disagree, and contend that jobs are being taken away from poor citizens, particularly within the inner cities. (See HERE and HERE)

Either way, immigration (legal and otherwise) causes unemployment (see HERE), which is all we need when joblessness in the U.S. is still a major concern, and even more so among minimum wage workers. (See HERE)

The unintended consequence here, then, is that as liberals make a pretense of resolving illegal immigration on the one hand, they may unwittingly exacerbate the immigration and economic problems on the other hand by raising the minimum wage.

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For an explanation as to why these Leftist LUNCs may occur, please see: Gov: Wrong Tool for the Right Job - Introduction and Cold Nanny as well as The Politics of Compassion, Emotions, Ignorance, Denial, Blame-Shifting, and Victimization

Minimum Wage - Unemployment

The economic woes over the last half decade or more have heightened the critical importance of getting Americans back to work. President Obama has indicated: "Jobs must be our number-one focus" (see HERE and HERE), and  "I will not be satisfied until everyone who wants a good job, are offered some security, has a good job." (ibid)

Who can argue with this?

Yet, even though under Obama's watch unemployment recently dropped to 6.7% for December of 2013 (see HERE), and is just below the highest level of unemployment reached during the Bush administration (ibid), the workforce participation rate (the proportion of the population older than 16 who are actively working or looking for work--see HERE) has dropped to 62.8% (see HERE), which is the lowest point since 1979 (see HERE and HERE).

Said another way, even though unemployment has declined in the last 3 years, there are still more than 2 million less people who have jobs and are looking for work today than when Obama first took office. (See HERE and HERE) This is disturbing.

What relevance does this have to the issue of minimum wage?

First, whatever arguments or emotional appeals may be made in favor of increasing the minimum wage, it really is of no value to people who haven't a job. The minimum wage could be set to where everyone makes as much money as Bill Gates and Warren Buffet, but it would be meaningless when the wages for the unfortunate who are out of work, remains at zero. Minimum wage laws do not help the unemployed poor.

Second, in spite of the disagreement among economist and pundits, the overwhelming majority agree that raising the minimum wage will result in increased unemployment. (See  HERE and HERE and HERE and HERE and HERE and HERE.and HERE)

This makes sense in basic economic terms because, generally speaking, increased costs result in decreased demand. (See HERE)

Also, increased human resource costs may cause a shift in demand to less costly substitutes. "It sounds compassionate to alleviate poverty by mandating that employers raise wages, but employers often replace low-skill workers with machines. Think self-checkout machines in supermarkets, or computerized call centers....The minimum wage of $7.25 an hour, plus the mandatory employer's share of Social Security, unemployment insurance, and workers' compensation taxes, brings the hourly employer cost to $8, even without benefits." (See HERE)

The significance of these points, and the Leftist LUNC here. is that under conditions of the worst economy since the Great Depression (see HERE and HERE and HERE), and alarmingly high unemployment and low workforce participation (see HERE), liberals are currently posturing to raise the minimum wage yet again, which will likely increase unemployment further and move even more people out of the workforce.

This is unprecedented in modern times, if not completely mind-boggling. "Congress has not voted to raise the minimum wage when unemployment stood above 7.5 percent since the Great Depression ended." (See HERE)

If jobs are supposedly the number one focus of the Obama administration, then what sense does it make to enact minimum wage laws that will cause the loss of more jobs? 

Worse yet, the sector where unemployment tends to increase most when the minimum wage is increased, is the very sector that the increase is intended to help. And, unemployment rates among minimum wage earners is already between 10.3% to 29.8%, as compared with 7.8% for the general population. (See HERE)

With friends like the liberals, who needs enemies?

The question, then, isn't so much whether raising the minimum wage will cause unemployment, but the degree to which it will cause unemployment--the trade-off being a function of elasticity of demand. (See HERE  HERE)

Supporters for raising the minimum wage will often point to Australia where the minimum wage is relatively high, but over-all unemployment is relatively low. (See HERE and HERE and HERE)

Whereas, opponents may point to the heart-wrenching example in the U.S. territory of American Samoa, where in 2007 the minimum wage was incrementally raised to the national level of $7.25 hr., and the result was "overall employment in American Samoa fell 14 percent and inflation-adjusted wages fell 11 percent. Employment in the tuna canning industry [the territory's primary industry] fell 55 percent. The GAO attributed much of these economic losses to the minimum wage hike." (See HERE)

Factoring out the extremes, credible economists have calculated the trade-off in the U.S. to be around 3% to 5% job loss for every 10% increase in minimum wage (see HERE and HERE). This means that if the liberals are successful in enacting the 38% increase in minimum wage currently under consideration, from $7.25 hr to $10 hr, it would cause between 11% to 19% of minimum wage earners to lose their jobs, thus increasing unemployment for that group from around 18% to as much as 37%. (See the numbers above) Not good!

However, some liberals may assert that the trade-off is worth it, and argue that the sacrifice of a few is outweighed by the benefit to the many. In a way, this is correct. Using the figures above, the trade-off is a net positive of $2.72 billion annually ($7.13 billion gained in increased wages minus $4.41 billion in loss of wages).

As nice as it may seem for 1.3 million workers who will make $2.75 more an hour, it is small comfort to the 304,000 who may lose $7.25 hr because they are no longer working.

The trade-off becomes all the less attractive when considering that it is more likely that the disabled segment of the minimum wage population will be the ones to lose their jobs and the middle-class teens will be the ones having their wages increased. (See HERE and HERE and HERE)  In other words, the minimum wage segment that would be hurt the most is the segment that needs the wages most, and the segment that will be hurt the least is the segment that needs the wages the least.

[Update 08/03/2016: Raising Minimum Starting Wages to $15 per Hour Would Eliminate Sevn Million Jobs]

[Update 01/03/2016: New(est) Evidence on the Minimum Wage]

[Update 09/07/2015: Wage Increase in S.F. Causes Job Loss Through Shift to Technology and Walmart Store Closures , and S.F Restaurant Installs Ipads, and Seattle Raises Minimum Wage, Workers Demand FEWER HOURS to Keep Their Welfare.Benefits, and McJobless in Seattle]

[Update 04/05/2013 Sharbucks Raises Minimum Wage Causing Huge Labor Cuts]

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For an explanation as to why these Leftist LUNCs may occur, please see: Gov: Wrong Tool for the Right Job - Introduction and Cold Nanny as well as The Politics of Compassion, Emotions, Ignorance, Denial, Blame-Shifting, and Victimization

Minimum Wage - Discrimination

An important rallying cry, if not the prime directive for liberals, is EQUALITY.

Few things animate the Left more than prejudice and disparities of various sorts, including within the workplace.

In some respects, this may be to their credit.

Nevertheless, in ways remarkably inconsistent, liberals have discriminated against a small segment of employees and employers (about 1.6 million workers--see HERE), robbing this minority of their power to freely negotiate their own wages and receive value-for-value according to supply and demand just like the rest of labor market.

Within industries such as health care, technology, finance, education, transportation, entertainment, news, sports, etc., employees and employers alike get to set wages wherever they deem best. If the free market says that a person is worth millions of dollars a year for dribbling a basket ball and shooting it through a hoop for a couple of hours a day over several months a year, and another person is only worth tens of thousands of dollars for putting in countless hours nearly year-around teaching vital information and skills to our children and youth, then the respective parties in those industries are at liberty to exchange payment for labor services at those levels. They aren't told by the government what should or should not be paid.

But, not within the minimum wage sector. There, laws have long been enacted which arbitrarily stick the government's nose into this sector's business. There, the liberal government has presumed to know better than the market the value of unskilled labor. There, the liberal government has inadvertently institutionalized prejudice and inequality.

Now, the liberals my attempt to justify their prejudice by claiming that the ends of income equality or reduction of poverty justify the means of inequality and discrimination before the law.

However, the Leftist LUNC here is, and as will be established in the posts to follow, the hypocritical means do not achieve the desired ends, but tend to make matters worse for the very people it was intended to help the most..

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For an explanation as to why these Leftist LUNCs may occur, please see: Gov: Wrong Tool for the Right Job - Introduction and Cold Nanny as well as The Politics of Compassion, Emotions, Ignorance, Denial, Blame-Shifting, and Victimization

Minimum Wage - Restricted Freedom

For a variety of reasons, markets are typically designed to function, and function best, when exchange between buyers and sellers, or demand and supply, is voluntary.

Experience suggest that we are more likely to buy and sell things that fit our own personal preferences than when subjected to the preferences of other people.

As puzzling as it may seem to older generations, young people may get more value from listening to rap music than classical music, and will be more inclined on their own to purchase rap albums than Mozart and Beethoven, and may even feel averse to being forced to buy tickets to the symphony.

I suspect that for most of us, one of the reasons we want to grow up and get out on our own, is because we want the freedom to make our own choices and do what makes us personally happy and not be forced to do what our parents wanted, and this no more so than with consumer and business decisions..

Yet, in some respects, minimum wage laws do exactly the opposite. They restrict the freedom of certain employers and laborers to decide for themselves whether to employ or work at a wage level that they each think is worth it at the time, and instead have forced upon them the wishes of a parental government. In a way, it is like moving back home to live with mom and dad and according to their house rules.

In fact, the first two times that minimum wage laws were brought before the Supreme Court (once regarding state laws, and the other regarding the federal law), they were struck down as unconstitutional. (See HERE)

Now, some people may argue that some infringement on freedom is worth the alleged benefit of unskilled laborers finally being able to make more of a living wage. And, while in future posts I will demonstrate in several respects that the supposed benefits of minimum wage tend to be outweighed by the costs to unskilled laborers and the economy as a whole (ironically, laws enforcing minimum wage often negatively impact most the people it was designed to help most), one Leftist LUNC of minimum wage laws is a parental/child-like restriction of freedom.

Contrast this with how the free market is designed to work. If employers and workers are at liberty to exchange labor value equal to wage value, and if labor and wage values aren't sufficient for the employees to make a decent living, then instead of the government arbitrarily compelling increased wage levels, laborers may naturally increase their wages by increasing their value to the market--i.e. by increasing skills and productivity, etc.

In other words, the solution to low or non-subsistence wages for the poor isn't through restricting freedom by way of minimum wage laws, but through enhanced freedom through increased employee value. This way all parties are benefited rather than made worse off (as will be shown to happen with minimum wage laws).

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For an explanation as to why these Leftist LUNCs may occur, please see: Gov: Wrong Tool for the Right Job - Introduction and Cold Nanny as well as The Politics of Compassion, Emotions, Ignorance, Denial, Blame-Shifting, and Victimization

Minimum Wage - Intro

Liberals typically posses the cherished quality of caring deeply for the poor.

Because of this, it is expected that they will periodically raise public consciousness over the plight of the unfortunate, and rightly complain about the significant and growing number of Americans who can't afford to properly feed and clothe themselves and their children, or put a roof over their heads, or keep themselves warm in the winter, or afford adequate health care, etc.

Liberals are also not content with just raising public consciousness. They are highly motivated by the over-abundant despair, and disparity between rich and poor, to rectify this socio-economic ill (or injustice as they consider it).

To me, this kind of driven and compassionate concern should be widely encouraged.

Accordingly, there have been and continue to be various federal and state campaigns to raise the minimum wage. (See HERE)

As a candidate for the presidency in 2008, Obama promised to raise the minimum wage each year, and committed to increasing it to $9.50 by 2011. (See HERE and HERE)   And, while the minimum wage was increased to $7.25 hr during his first year in office (see HERE), Obama's promise and commitment were broken with the minimum wage remaining unchanged through at least December of 2013 (ibid), though the President has recently recommitted himself to that end. (See HERE)

For additional quotes and comments, see HERE.

Be that as it may, as with many Left-wing causes, their admirable ends are too often pursued through questionable means that inadvertently produce unintended consequences that are not infrequently the opposite from what was originally hoped. Big-hearted objectives have been put into the hands of cold-hearted bureaucrats, with lamentable results.

As will be demonstrated through the remainder of the month of January, and in the posts to follow, minimum wage laws are no exception. Aside from being used at times manipulatively to distract attention away from other political disasters (such as Obamacare), and in spite of its popularity, minimum wage laws have caused and may well yet cause a number of Leftist LUNCS (Law of Unintended Negative Consequences), including:

• Restricted Freedom
• Discrimination
• Unemployment
• Illegal Immigration
• Income Inequality
• Poverty

I should note that this series of LUNCs on minimum wage was inspired by, and will borrow heavily from, a free online lecture and Q&A session in Economics 101, given by Gary Wolfram, the William E. Simon Professor of Economics and Public Policy and Director of Economics at Hillsdale College, as well as follow-up discussions among course attendees. (See HERE and HERE and HERE and HERE)

See also this article by Jason Stevens regarding the experience of blacks like Thomas Sowell. Furthermore:

More PragerU videos on the topic:

• Does the Minimum Wage Prevent Poverty?
• How the Minimu Wage Hurts Young People
• How does the Minimum Wage Work?
• Is Raising the Minimum Wage a Bad Idea?
• The Truth About the Minimum Wage

[Update 3/13/2014: The Silent Majority Website reports: "Five hundred economists, including three Nobel laureates, on Wednesday urged Congress to junk President Obama’s proposal to boost the minimum wage to $10.10, claiming it will cut jobs and raises prices. Instead, the 500 urged in a letter to Congress that Washington pass a comprehensive package to deal with poverty. 'One of the serious consequences of raising the minimum wage is that business owners saddled with a higher cost of labor will need to cut costs, or pass the increase to their consumers in order to make ends meet. Many of the businesses that pay their workers minimum wage operate on extremely tight profit margins, with any increase in the cost of labor threatening this delicate balance,' they warned." (See HERE)]

[Update: 8/5/2015: Earlier this year, three cities (San Francisco, LA, and Seattle) instituted laws raising the minimum wage to $15.00 an hour--see HERE and HERE and HERE. It didn't take long for the LUNCs to manifest themselves: see HERE, and HERE and HERE and HERE and HERE and HERE and HERE and HERE and HERE and HERE and HERE and HERE and HERE.and HERE 

Also, several months back a well-intended CEO leveled the pay to $70K a year for everyone in his company, including himself. Itr also didn't take long for the un-thought-out experiment to manifest significant LUNCs--see HERE and HERE and HERE and HERE and HERE)]

[Update 2/7/2017: Raising the Minimum Wage in Seattle Had Utterly Predictable Results. ]

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For an explanation as to why these Leftist LUNCs may occur, please see: Gov: Wrong Tool for the Right Job - Introduction and Cold Nanny as well as The Politics of Compassion, Emotions, Ignorance, Denial, Blame-Shifting, and Vic, timizatio, n