Tuesday, June 02, 2015

When Will They Ever Learn?

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McDonald’s Responds To Protesters Demanding $15 Minimum Wage, They Won’t Be Happy

"It’s simple economics. In order for a business to suddenly increase the wages of its employees, it must either pass on the expense burden to the public by increasing its prices or downsize its pool of employees to match its current revenue stream."
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"In light of the misguided protests by people across America wanting to raise the minimum wage to an arbitrary $15 per hour, McDonald’s is taking the latter approach of downsizing its staff by replacing their once human-operated cashier machines with fully-automated ordering kiosks."


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Lammam and Clemens: Increasing the minimum wage won't reduce poverty

 

"The new NDP government in Alberta has indicated that it will aggressively increase the province’s minimum wage from $10.20 to $15 per hour over the next three years. There are a number of problems with this campaign promise that is now becoming policy. Ignoring experience and pursuing policies based on good intentions and ideology will not solve the province’s pressing problems.


"First, and contrary to some pundits, there is a preponderance of evidence, particularly from Canada, that minimum wage increases adversely affect low-skilled and young workers. A recent comprehensive review of international research led by Prof. David Neumark, one of the world’s foremost experts, concluded that the balance of the research shows that minimum wage hikes negatively affect employment among low-skilled and young workers.


Canada is often used for minimum wage research because of the variation between provinces. In fact, there are over a dozen Canadian studies examining provincial minimum wage increases. The Canadian evidence finds that, on average, a 10 per cent increase in the minimum wage decreases youth employment by between three and six per cent.



Simply put, when governments impose a minimum wage higher than what would otherwise prevail, and without corresponding productivity increases, employers find ways to operate with fewer workers and/or reduced labour costs. While the more productive workers gain through a higher wage, their gain comes at the expense of those who now have fewer employment opportunities. Young and low-skilled workers are most adversely affected because of their dearth of experience and skills."

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