More Victims of the $15 Minimum Wage
To illustrate the damage, the Employment Policies Institute is maintaining a catalog of suffering businesses across the country, highlighting stories of raised consumer prices, increased unemployment, reduced working hours, and outright business closures.
I’ve pointed to several of those stories in the past, and in four new videos, EPI offers fresh glimpses of the devastation, further illuminating the minimum wage’s cramping influence on human enterprise, creative service, and economic diversity.
Non-Profit Michigan Restaurant Closes Down
Pastor Jack Mosely is the executive director of Life Challenge, a faith-based recovery program in Hillsdale, MI. In 2012, the group started a nonprofit restaurant called “Tastes of Life” with the goal of training and empowering program participants.
When the State of Michigan raised the minimum wage to $9.25, restaurant operations were no longer feasible and all 12 employees were let go. To remain open, the restaurant would have had to raise prices by 40% even while attracting 200 to 300 new customers per month.
“Working here at the restaurant gave them the opportunity to interact with other employees and to talk to customers and feel like they were a part of something, instead of separated and isolated by themselves like they used to be,” says one of the leaders at Life Challenge. “Without the restaurant here, they don’t really have a place that they can go to every single day.”
Subway Franchise Takes a Hit in Seattle
Over 11 years ago, Heidi and Karam Mann bought a Subway franchise in Shoreline, WA, viewing the restaurant as an opportunity for training and mentorship for low-skilled employees. Despite having a small number of staff, they are considered a “big business,” forcing them to raise their wages by $3 per hour.
“I have in the past helped employees who I’ve known have had drug or family issues, and have been with them as a mentor in a way,” says Karam. “Now we just don’t have margins to hire experienced employees anymore.”
In the wake of Seattle’s minimum wage policies, sandwich prices have increased by an average of 86 cents, causing sales to slow, and decreasing the workforce from seven to three employees.
New York City Teens Can’t Find Summer Jobs
In New York City, youth unemployment is reaching new heights, a trend not helped by stricter requirements and higher wage minimums.
“Being a teen in New York City is rough,” says one teenager who was unable to get a summer job, despite filing numerous applications. “I feel like if teens had more opportunities to get jobs it wouldn’t be as rough for our parents or us growing up to really get somewhere where we want to be in life.”
Business Owner Moves Operations from New York to Pennsylvania
Despite being a designated enterprise zone, the City of Owego was still subject to the onerous minimum wage increase passed by the State of New York. For business owner Jim McCanney, the 66% increase in labor costs would be unsustainable for his business. Thankfully, he was able to relocate his operations across the Pennsylvania border.
“The furthest thought from my mind was to move from this town, but once the state passed a minimum wage increase, I had no choice,” says McCanney. “I can locate anywhere. I’m very lucky in that regard. I feel very sad for the people who cannot relocate, who are stuck in this state, who will never be able to make this work.”
New York’s restaurants haven’t been so lucky, with scores of eateries closing across the state. “Very soon, all the Brooklyn diners will be gone [because of] the minimum wage,” says Larry Georgeton, owner of Del Rio Diner.
This article has been republished with permission from Acton Institute.