Alayne Unterberger’s Jan. 4 Other Views column, A bright spot for low-income workers, on the benefits of Florida’s minimum wage increase, claims the raise will be a bright spot. The evidence suggests the opposite.
Businesses that hire entry-level employees and pay them minimum wage, such as restaurants or grocery stores, keep two to three cents in profit from each sales dollar and can’t just absorb the increase. Raising prices on cost-conscious customers typically isn’t an option either, because sales fall as a result.
Businesses are instead forced to provide the same service at a lower cost, which means more self-service and fewer job opportunities. The evidence overwhelmingly backs up this intuition: 85 percent of the most credible economic research from the last two decades points to job loss following a wage hike.
Michael Saltsman, Research Fellow, Employment Policies Institute, Washington, DC