The Corporate Law Group

$100 Minimum Wage

100 Dollar BillWe love markets and we don’t have so much love for people making up stuff to replace markets. Markets is all of us. People making up stuff is not all of us, it’s some of us telling all of us what to do, so that’s not our favorite. Politicians setting pay levels is ‘other people making up stuff.’ That includes the minimum wage. We say, if you’re going to set a minimum wage, then it should be $100. “Oh, no,” you say. “That’s too much.” Based on what we ask? If you want to ignore the market and set a wage at something, why stop at $15? Are you mean spirited? Are you cheap? If you’re going to just make something up why not make it big and bold and beautiful? In Washington State they set a minimum wage ar $15 an hour and now many Seattle restaurants are closing. Seattle Magazine reports, “Washington Restaurant Association’s [Anthony] Anton puts it this way: ‘It’s not a political problem; it’s a math problem.’ He said that restaurants spend 36% labor, 30% on ingredients, and 30% on everything else. The remaining 4% has been profit so that a restaurant grossing $1,000,000 a year makes about $40,000. The $15 an hour minimum wage sometimes represented an increase in labor costs that wiped out the profit and then some. So they are closing. I don’t know about you but running a million dollar operation with the hassles of hiring, ingredient deliveries, customer complaints, food prep, ratings, etc. to make $40,000 sounds like a huge risk. I’d close too. So this is Seattle’s loss. And one last thought. Why doesn’t anyone speak of minimum service or minimum work when they speak of minimum wage? No two employees are identical; why pay them identically?