I know a woman whose husband died two years ago; since then she's kept his business afloat. She employs half a dozen workers in a small business that netted less money last year than I did. The woman, who now oversees the business and takes care of the books and payroll, is the lowest paid employee of the company (incorporation requires that she draw a salary). I told the prospective politician that a $15/hr minimum wage would put the woman out of business--and her 6 employees out of work. It's not that they don't make $15/hr already, but why would someone who makes $16/hr want to do a strenuous job when plenty of non-strenuous jobs will be available at about the same pay? The prospective politician's reply was that of someone who only understands Marxist economics: just raise prices! His belief was that if all prices went up a little, the increased pay would help those on the lower end of the pay scale a lot. I looked at him incredulously: don't you think if she thought the market would bear increased prices, she'd already have raised them? He stopped the debate at that point, having no response to my real-world application of his fantasy world economics.
He did not win the election.
We've read (and I've posted) many stories about businesses that shutter or leave California for lower cost environs, but the utopians press on. "When the facts contradict your expectations, believe the facts"--but they don't, they believe only their own failed ideology, despite the evidence:
Bibliophile Kelley Ulmer closed her Almost Perfect Book Store on Wednesday after 25 years of business at Rocky Ridge Drive and Douglas Boulevard in Roseville, saying that the added expense from minimum-wage increases had made it impossible for her to continue operating.Note that this stinging article comes from the major Sacramento newspaper, which is firmly left-wing.
“We used to joke that this was like the Hotel California: Once you got here, you’d never leave,” Ulmer said. “And realistically, it wasn’t a bad deal prior to the ever-increasing minimum wage. I had a profit-share with my employees, so at the end of the week, when they got their paychecks, whatever money didn’t go toward bills or whatever, I shared with them. They actually made more money at $7 an hour than they make at $10"...
Ulmer’s six employees have worked for her for 10 years or more. Jeffrey “Scott” Singley, who has worked there for 24 years, said that he’s still in shock over the closure and that he’s angry with lawmakers. “I’m going to take advantage of the government’s largesse since they put me in this position, so it’s unemployment as of tomorrow,” he said. “Or, at least I’m going to file as of tomorrow.”
Ulmer said she hasn’t had one unemployment claim in 25 years, but now the state will have six of them...
“I could either pay my employees or pay my rent. I paid my employees,” Ulmer said. “Now I can’t do either. It’s just too much. There’s literally no place to absorb the cost. They were like, ‘Well, the businesses can just absorb it.’ OK, where? Can we not pay our taxes? I get no government funding, no subsidies, no tax breaks, and I’m taxed at the same level that the big corporations are.”
Hat tip to reader MikeAT for the link.