The Damage That Minimum Wage And Other Government Controls Cause

A much established and supposedly beloved landmark Boston restaurant, Durgin Park is closing. It opened in 1827, and according to Wikipedia it “is also a partial hold-over from the time of its founding as the waitstaff have been encouraged to adopt a ‘surly’ attitude and ‘backtalk’ the clientele.”

Why, I remember being there once in the early 1980s, and the waitresses seemed to be “big and strong,” carrying heavy trays (that I probably wouldn’t have been able to carry), and they did seemed to be “surly” and wisecracking, etc.

But now the restaurant is closing, and so no more “surly,” sarcastic waitresses.

The manager stated that the main reason for the restaurant closing is the minimum wage, which Massachusetts has just increased from $11 to $12, and to go up to $15 at some point after many more jobs will already be lost due to minimum wage.

In California, with several cities having raised their minimum wage, San Francisco saw the closing of 350 restaurants in 2017.

Sadly, many proponents of minimum wage laws don’t understand the costs involved in running a business and employing workers. Investor’s Business Daily writes:

Economic Illiteracy: This week, Alexandria Ocasio-Cortez “swung by” to say goodbye to a restaurant where she used to work. What she didn’t say is that it is closing because the owners can’t afford New York City’s soon-to-be $15 minimum wage — the very job-killing policy Ocasio-Cortez and her fellow Democrats want to impose nationwide.

Co-owner Charles Milite told the New York Post that the main reason was “the minimum wage is going up and we have a huge number of employees.”

As a result, Milite’s 150 workers will soon see their actual wage drop to zero.

As Murray Rothbard shows, government-forced minimum wage laws make it illegal to pay a worker less than what bureaucrats like Ocasio-Cortez order by diktat.

And as George Reisman wrote, minimum wage forces low-skilled workers to have to compete with higher skilled workers. Following the imposition of the government-mandated higher wage, such as $15/per hour, the now

unemployed clerks, telemarketers, factory workers, and whoever, who otherwise would have earned between $8 and $15 per hour, will have no reason not to apply for work in fast food, which will now pay as much as any other occupation that is open to them. And since those workers are more capable, it is overwhelmingly likely that to the extent that they do seek employment as fast-food workers, they will be preferred over the low-skilled workers who presently work in fast-food establishments. Thus, the rise in the wage of the fast-food workers will serve as an invitation to the competition of large numbers of workers who do not presently think of working as fast-food workers and who, being better qualified, will almost certainly take away their jobs.

Listen to economists Walter Williams and Thomas Sowell discuss minimum wage laws.

There are all sorts of unintended consequences of the commands and plans forced on the rest of society by bureaucrats. But it isn’t just with minimum wage laws.

Michael Rozeff recently commented on Alexandria Ocasio-Cortez’s big plans for society, including her supposedly wanting to retrofit every building in America for “state-of-the-art energy efficiency, comfort and safety.”

It is amazing how ignorant of economics and history these bureaucratic intruders really are. As Rozeff noted, “The experiences of Nazi Germany, the Soviet Union and Venezuela will prove instructive, as they instituted their widespread plans.”

Do Alexandria Ocasio-Cortez and her fellow comrades know what is going on in Venezuela right now? It’s in the news right now, for crying out loud. Now, if they have never heard of “Soviet Union,” I’ll forgive them for that, given the quality of today’s education, most of which is run or controlled by government.

One major problem in Venezuela is that the ruling bureaucrats, led by President Nicolás Maduro, seized the means of production of food, the producers and distributors. And when government expropriates the means of production, or imposes wage and price controls, this causes shortages (or overstocks), empty store shelves, long lines, mass starvation, violence, and chaos. “Planned chaos,” as Ludwig von Mises would call it, as referenced just today by Jacob Hornberger.

These empty store shelves or very limited choices and a much lower standard of living are what most characterized the Soviet Union. In great contrast, in mostly capitalist America, we have stores and shelves filled with food, many choices and varieties, and at low prices that most people can afford. That is because of the freedom that the producers and distributors have to control their own resources and economic activities.

Ocasio-Cortez, Elizabeth Warren and many others now are either ignorant of economics and history or they are just intentionally manipulating emotions with their rhetoric to get people to vote for these bureaucrats and to support the policies that empower the bureaucrats and enrich them as well. Or if they really are that ignorant, they need to learn about freedom, and how it was freedom including economic freedom that led to the biggest rise in the standard of living of most people in society.

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