Uncomfortable amounts of money

Everything costs uncomfortable amounts of money these days. Maybe it always did, and maybe it’s no worse than it ever was. But it’s still tough!
For businesses, it’s a pretty basic calculation: Revenues must exceed costs, or what’s the point? A Calgary restaurant owner asked himself that question recently, and the answer was that there was no point in continuing. So he’s shutting his joint down and blaming the minimum wage laws.
Fair enough on that. If his margins are that small, higher wage costs could be the proverbial back-breaking straw. Best not to draw any broad conclusions, though, on the basis of one example – especially when other factors are likely involved.
Minimum wage hikes are not new, and many studies on their impact have been done. The results are inconclusive as to the negative impacts, broadly speaking. But they are quite conclusive when it comes to the positive one, which in short is more money in the pockets of workers. This money mostly gets recycled right back into the economy. One study shows the overall economic impact to be pretty much a wash, with the losses canceled out by the gains, plus a bit on the benefit side. That’s on the macro scale, of course. It does not take into account individual cases of hardship, of which there are bound to be a few.
Whatever. Minimum wages are creeping up or leaping up all over the world, and nowhere has it killed an economy. It has caused difficulty for individual employers – yes. And some industries are harder hit than others. Those that employ few people at low wages won’t notice any difference. Those that employ a lot will be forced to become more efficient. Some jobs will be cut in that process. In some cases, prices will be raised. In some cases service or selection will be scaled back. And some that are right on the edge may decide to throw in the towel.
But on the whole, the world will not stop turning.
And for those opposed for ideological reasons to what they see as ‘socialist redistribution of wealth,’ ……. Well, that’s one way of looking at it. There are others.
Government intervention in the free market, as annoying as it may be for the rich and powerful generally, helps make life tolerable for the majority who aren’t. We’ve got our health care system to thank for it, as one strong example. Turn that over to the free market and you would have the best health care money can buy. And not much left over for those who can’t afford it.
Meanwhile, it’s possible the minimum wage thing could be handled better. There are examples out there of one set of minimums for working kids and another set for working adults. That might be worth looking at.

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