News Item: “Fast food outlets in California…have slashed almost 10,000 jobs in response to the state’s newly implemented $20 minimum wage. The figure was released by the Hoover Institution, a public policy think tank affiliated with Stanford University…The law, first introduced in September 2023 [which came into effect on April 1, 2024. requires restaurant chains with 60 or more locations nationwide to raise their hourly wages from $16.21 to $20. Major chains such as McDonald’s, Burger King and In-N-Out Burger have increased their prices to compensate for the wage hike…. Many have reduced employee hours, and others are accelerating the transition to automation.”
I wrestled over which of the clips from the Ethics Alarms Hollywood Clip Archive best fit this infuriating story. I settled on Major Clipton’s final words that end “The Bridge on the River Kwai,” reserved for “when an incident or argument makes no sense whatsoever, or that drives me to the edge of insanity,” but was also tempted to use the old knight’s “He chose poorly” from “Indiana Jones and the Last Crusade” (“Commenting on a particularly incompetent, irresponsible, or otherwise unethical decision with disastrous consequences“), or that Ethics Alarms standby, Sheriff Bart’s eloquent description of the good citizens of Rock Ridge from “Blazing Saddles,” “You know…morons!”
Mistake, stupidity, or insanity? I finally chose the latter, because there is no question that the progressive Democrats who voted for this irresponsible law and the governor who signed it knew exactly what the results would be, knew that it would be a disaster, and did it anyway.
In this they were re-enacting the human fallacy so eloquently explained in Barbara Tuchman’s “The March of Folly.” As bad ideas, policies, decisions and projects start rolling along, plenty of those involved, sometimes everyone involved, realize that the end result will be failure, catastrophe and even mass death and destruction, but nobody has the guts to stop the “march.”
The “March of Folly” problem is particular tempting for ideologues, with which the 2024 version of the Democratic Party is especially stuffed. To such people, it is better to do what the ideology says is the right thing even when all evidence indicates that the ideology in a particular case is not only delusional but mired in magical thinking and fantasy. The “living wage” socialist myth sounds good, and virtuous, and reasonable, but we know, and those who passed the stupid law knew, that raising the minimum wage by 25% would lose jobs while putting establishments out of business and making it economically prudent to replace human beings with machines.
But what mattered, you see, was looking virtuous. Showing they cared. Following the dream. Moving forward. Progress! Facts didn’t matter; facts seldom matter to those who prefer the abstract to reality.
And the funniest part of all is that the very people who will suffer most because of this pathological way of thinking will keep voting for the officials responsible for their sad fates.
Madness. Madness.
Ethics Alarms 
It’s purely asinine at this point. Some people believe in magic.
But I’m sorry- if a market can only bear, let’s say, $1,000,000 in wages and the entrepreneurs distribute those wages to 5,000 people at $200 per person and you arbitrarily demand that each person gets $400…. Well- the entrepreneurs don’t magically have double the available cash to pay out… so, $1,000,000 divided by $400 is what?
Half the people getting paid than there were before.
Oh and those people are getting over worked now. Or the entrepreneurs are going out of business trying to find ways to get the additional cash and now no one has work.
Entrepreneurs raise the prices of the products to compensate or lower the quality by finding cheaper material inputs and now fewer people are interested in buying. Sending revenue down. The same revenue meant to pay people.
Or people complain about the higher cost of products and demand their wages be higher to accommodate….
Also the fun thing that people have to be more selective in their purchasing and the overall economy slows and ossifies as people become very set in what they purchase or not.
Wasn’t that one of McDonald ‘s longest lived and most successful advertising campaigns ? If you believe in magic.
looks just as successful as Obama’s hope and change.
No, wait! I think we’re missing the forest for the trees here. When quality (using the term very loosely here) goes down and prices go up, shouldn’t this eventually result in these Godawful feed troughs dying their long-overdue deaths? Shouldn’t there be a positive-feedback loop to the above? Then, the void will be filled with real food that wont kill you. Oh man, talk about magical thinking.
There’s one compounding factor not often mentioned, and probably not considered by the morons pushing the $20 minimum. That figure becomes the base, the wage for new and/or inexperienced workers, but that’s not the end of it. Everyone else already making $20 or less will want, and rightly feel they deserve, something like a $5 increase in their hourly rate (or salaried equivalent) as well. Then, not only will employers have to decide how to deal with increased costs past the new minimum, but also the personnel issues that could arise and further cripple the business.
You paid attention in your Economics classes. This is why unions advocate for higher minimum wages for the non unionized.
This is a wonderful idea since it is going to spur on the development of robotic and automative technologies. Hopefully that can transition to the drones that work for the government.
For those inclined to look beyond the headlines on the economy.
The Shocking Truth Behind the May Jobs Report’s Rosy Number (dailysignal.com)
It is astounding that the labor force declines by nearly 400,000 in the last 6 months yet all these new jobs are being filled. By whom?
Long ago I would have thought these people who passed this minimum wage increase were merely stupid and had no idea how the economics of this increase would impact business. That’s was long ago, and now it’s pretty obvious they knew exactly what they were doing. Also, what’s obvious is that all those that voted for this increase are themselves always insulated from its disastrous effects. As you allude to Jack, this euphemism “living wage” is completely divorced from its original intention, which was to provide young people with their first exposure to the business world and employment, and was never meant to be a career choice. But now we have a segment of society who are uneducated, unskilled, and apparently with little ambition seeking to live and even raise families and live well on these minimum wage jobs. This just isn’t possible, and whatever government does to try to make it possible always has negative consequences.
I can’t buy the March of Folley analysis and hypothesis. As I mentioned in commenting on the Margaret Brennan quote in the preceding post, I can only believe the chaos these “follies” create is intended. Chaos will lead to revolution and the ushering in of a worker’s paradise and the end of history. These people are not virtue signaling, they are viciously destructive. They HATE capitalism and want to destroy it ASAP.