The Human Cost of a Minimum Wage

As always, it started with the best of intentions. In January, Long Beach, California City Council passed an ordinance requiring large grocery chains to pay their employees an additional $ 4 an hour. The idea was to reward them for the risks they took by doing their job amid the Covid-19 pandemic.

It didn’t turn out that way. In response to the regulation, Kroger Co. announced that it would close two supermarkets in Long Beach. Again the workers were sacrificed to greed. As local union leader John Grant told the Washington Post, “It’s ruthless capitalism that runs amok.”

But is it?

As one of the largest retailers in the world, Kroger is a simple bad guy. But instead of blaming “reckless capitalism”, could the mistake be with the reckless politicians who passed this measure? Thanks to their intervention, nearly 200 grocers are now running out of paychecks instead of finding an extra $ 4 an hour in their paychecks unless they are transferred to another business or find another job. It is just the latest example of the dictum of economist Thomas Sowell that the real minimum wage is always zero, whatever a government dictates.

What happened to these workers should be taken into account when Congress debates whether to raise the federal minimum wage. Although the Long Beach Ordinance was called “hero’s wage” and was intended to be temporary, it served the affected food workers as a minimum wage increase. And just as Long Beach City Council passed it unanimously and didn’t think much about the harm than good it could do to these workers, those who were now pushing for Congress were pushing the $ 15 an hour minimum wage into its Covid- 19-Facilitation to include package ask us to believe that the cost would be non-existent or minimal.

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