What do you get when a city leader makes a stupid financial decision? A city that has to deal with the ramifications.
New York’s governor Andrew Cuomo gave the okay to require all companies with 30 or more stores (nationwide) to provide $15/hour as a minimum, it had an impact. Unfortunately, it may not have been the impact that he was wanting as it was a catastrophe for restaurant workers.
The Daily Wire discusses Cuomo’s decision and the after effects:
That plan looks like it was a disaster, because following the implementation of that recommendation, New York City showed the greatest plunge in restaurant jobs in almost 20 years.
The 2015 recommendation meant that wages among fast-food restaurant workers in New York City would rise to $15 an hour by December 2018. A survey published near the end of 2018 found “76.50% of full service restaurant respondents reduced employee hours, and 36.30% eliminated jobs in 2018 … 75% of limited service restaurant respondents report that they will reduce employee hours, and 53.10% will eliminate jobs in 2019 as a result of mandated wage increases that took effect on December 31, 2018. … When the tip wage increased 50% in 2015, and since doubled, annual employment growth dropped from 6.67% to less than 1% as of November 2018.”
So those are the FACTS.
So what is convincing the masses that the wage increase is a good idea? I would call it the stupidity of oversimplified math. I know that a lot of people need simple math, but just look at the example below:
Simple math. If I raise the minimum wage that people are getting, then the people getting minimum wage will make more money- at least until the actions of raising the wage results in losing the job. That’s a painfully simple concept, but it’s true. The problem is that the concept of economics is a lot more complicated than a simple 1+1=2.
But now New York is suffering from their own stupidity, and even those bright young stars who have a degree in economics don’t really get it. Sound like anyone you know?
Recently, The Hill wrote a piece on one of New York’s “experts” in economics:
While an undergraduate student at Boston University, Ocasio-Cortez’s coursework in economics apparently didn’t make much of an impression about the power of market enterprise.
The problem with her myriad of “free” giveaways is it’s unbelievably naïve and empirically falsifiable to think the federal government is more cost-efficient than the free market. The first rule of economic thinking is that “there’s no such thing as a free lunch.” Choices have costs.
Economics helps us understand that it is entrepreneurs, inventors and new ideas propelled by ordinary people that power an economy. She should have learned that at BU.
If you want to see young, successful people who are making a real difference, look at someone who started his or her own business, got his or her foot in the door at a prestigious company or worked for what they achieved.
Business owners actually do get it. They’ve needed to work with a budget, make hard decisions, and understand that there are consequences to making bad decisions just because the oversimplified math might look good at first. There’s no such thing as a free lunch:
Ocasio-Cortez would do well to understand that the path to prosperity is not built on government handouts but on free people unleashing their human creativity to advance the common good. An honest to goodness economics debate between Ocasio-Cortez and her opponent could have been a sorely-needed corrective lesson. By exposing the flimsy arguments of central planners like Ocasio-Cortez, it may have helped young people understand economics better than any college course ever could.
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