Say Anything Blog

I’ve long said that raising the minimum wage, since it essentially represents a tax on low wage workers, depresses employment by inflating the price of labor for employers.  A reader, who is also an employer, emails this along bearing that out:

Rob,

Love the blog.  I run a small convenience/grocery store in [location removed] and just this morning filled out paperwork to give five people working for me a raise in advance of the July 24th deadline for raising the min. wage to $7.25/hour.  It galls me to give raises to people not because they deserved them or needed them but because the government said that I, as their employer, have to.

Like most retailers, I calculate my payroll in relation to the amount of sales I do.  By July the minimum wage will have gone up $2.00/hour since 2006.  My sales have not grown nearly as fast (in fact they’ve been stagnant thanks to the economy), so to pay for these mandatory raises I’ve had to deny other employees raises they earned.  I’ve also eliminated one part time position.

So all the good the minimum wage has done at my place of business is one less job, and fewer raises for people who earned them.  I hope Congress is happy.

I suspect that there are a lot of employers in the country going through a situation similar to this.