Harvard Study Shows Minimum Wage Increases Kill Businesses

By Keely Sharp – Re-Blogged From Eagle Rising

While there are McDonald fry cooks out protesting for $15 an hour to flip burgers and almost always get our orders wrong, some of us can actually see the harm in minimum wage hikes.

When wages are increased, then a business must then charge more for their product in order to cover the costs, due to inflation. For example, you may go from $7.25 an hour to $15 an hour, but now a gallon of milk jumps from $4 to $8. So you aren’t really able to afford anything more than you were in the first place, and it hurts the businesses.

A new Harvard Business School study found that minimum wage hikes lead to closures of small businesses. “We find suggestive evidence that an increase in the minimum wage leads to an overall increase in the rate of exit,” the researchers conclude.

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Economists Report that a $15 Minimum Wage Only Hurts Low Wage Workers!

From the Daily Caller News Foundation:

The push by labor unions and activists to raise the minimum wage to $15 an hour may hurt young and less-educated workers the most.

In 2013, the Obama administration proposed an increase to the federal minimum wage from $7.25 to $9.00 an hour. President Barack Obama has continued to call for an increase in the federal minimum wage.

The fight focuses on $15 as the new minimum acceptable number to activists and labor leaders. Seattle raised its minimum wage to $15 in 2014, followed by San Francisco and Los Angeles. Gov. Andrew Cuomo signed into law a new $15 minimum wage for New York state in 2016, and the University of California has proposed to pay its low-wage employees $15.

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Wendy’s Replacing Workers With Kiosks In Response to ‘Fight For $15’

By – Re-Blogged From Infowars

Wendy’s announcement leads to fully robotic restaurants. In response to recent minimum wage hikes, Wendy’s is now replacing fast food workers with robots.

The fast food chain announced it will start automating all of its restaurants by installing self-serve kiosks in 6,000 locations by the end of the year.

Although McDonalds has already been experimenting with kiosks, Wendy’s announcement is the largest roll-out to date and will likely spark a trend leading to fully robotic restaurants.

“Wendy’s President Todd Penegor said it will be up to franchisees to decide whether or not to adopt the kiosks in their stores, noting that many franchise locations have had to raise prices to offset wage increases,” Slashdot reported. “California’s decision to gradually raise the minimum wage to $15 by 2022 will impact Wendy’s 258 restaurants, all of which are franchise-operated.”

“About 75% of 200-plus Wendy’s restaurants are run by franchisees in New York, a state that is also on its way to $15.”

It’s simple economics: when labor costs are too high to stay in business, owners will look for alternatives – including burger flipping robots.

One such robot, developed by the San Francisco start-up Momentum Machines, can replicate a fast food worker by shaping burger patties from ground meat, grilling them, adding the specified amount of ingredients, and serving them to customers on a conveyor belt.

Many fast food chains may be forced to outsource jobs to these machines because they cannot afford to stay in business paying workers $15 an hour, given the number of restaurants that have already closed after Seattle enacted such a minimum wage.

“The businesses that couldn’t afford it either shut down or laid off workers, and the businesses that could afford it simply shifted some money around by eliminating benefits and putting those dollars toward wages,” Joshua Krause of the Daily Steeple reported. “What the supporters of a higher minimum wage just don’t get, is that it hurts poor unskilled workers the most.”