More jobs lost due to a $15 minimum wage

May 17, 2016

As if any more evidence is needed that an artificially high minimum wage will result in fewer job opportunities for the lowest skilled workers, comes news of more job reductions, courtesy of the $15 Now movement.

Wendy’s is the latest in a long line of food service establishments to announce it will begin replacing workers with self-service ordering kiosks to reduce labor costs.  The move comes after many locations have increased prices to offset the wage hikes.  The company is also preparing to launch mobile ordering and mobile payment, another labor saving move. 

McDonalds has already installed self-serve kiosks in many of its US stores, and has relied on the cost-saving technology for years in high-wage countries like France.  Former McDonald’s CEO Ed Rensi warned the new $15 minimum wage being enacted in some cities and states would be a job-killer, saying the massive increase in labor costs will force employers to “raise prices and cut costs, which means getting rid of people.”  

Even liberal universities are not immune to the Econ 101 principles that predict the impacts of a $15 minimum wage.  The University of California at Berkeley recently announced it will eliminate 500 staff jobs over the next two years as the school struggles to balance its budget in the wake of higher labor costs.  The low-skill jobs the school will eliminate include those who clean buildings, work in food services and health clinics.  No faculty or administrative positions will be cut, only the low skill jobs that the lowest skilled workers rely on for entry into the work force.

While UC Berkeley did not attribute the job reductions to California’s newly increased minimum wage, the announcement was made just after the state passed a $15 minimum wage law.  To be fair, the school was in financial straits before the state’s minimum wage hike, and would have likely been forced to cut some jobs.  But the new $15 minimum wage means those cuts are much deeper than they would have been.

Sign up for the WPC Newsletter