Seeing No Evil on the Minimum Wage

Last month, Pastor Jack Mosley was forced to close his Hillsdale, Michigan restaurant, Tastes of Life because Michigan’s recent minimum wage increase made it impossible for him to stay in business.

Proponents of raising the minimum wage say that cases like Pastor Mosley’s don’t exist. The labor union-backed National Employment Law Projecteven maintains a “Cry Wolf” project to argue that stories about job loss are no more than business talking points.

Tell that to Pastor Mosley and his employees. Tastes of Life specialized in hiring employees with troubled lives. Some dealt with health or drug issues; others had criminal records or disabilities. Yet the job gave them a chance build skills, make friends, and earn a steady paycheck. However, as a partial consequence of Michigan’s minimum wage increase on September 1st, they’re now unemployed.

Similar stories are popping up among small businesses across the country. More are likely to come in the wake of four states and several cities voting to raise their minimum wages on Election Day.

In San Francisco, for example, longstanding eatery Luna Park is closing its doors at year’s end, with the owner AJ Gilbert citing the city’s impending $15 minimum wage as the reason. “The rising costs in San Francisco are a really important factor,” he says. Gilbert also highlighted Luna Park’s general manager, who 15 years ago started at the restaurant as a bus boy – the type of entry level jobs that are eliminated when the minimum wage increases.

Further down the coast, Hollywood comic book store owner Gaston Letelier is barely hanging on, telling the Los Angeles Times that he regularly forgoes his own pay so that he can pay his employees their $9 minimum wage and keep his store running. Los Angeles Mayor Eric Garcetti wants a $13.25 wage floor in the city, but Letelier says that’s a dealbreaker: “I can’t do more.”

These anecdotes build on an overwhelming majority of economic research that points to job loss at higher minimum wages. Yet minimum wage proponents keep their blinders on and say that opponents are crying wolf. They would be wise to remember how that fable ends.