“It’s less complicated to Fool world Than the Is to convince Them that They have Been Fooled.” – mark Twain

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Arizona’s Prop 206, the state’s new minimum wage and also mandatory PTO initiative passed by voters in November 2016, could be the poster child for the quote above. The offer line provided by large Labor to swing the vote their way was a tug top top the heartstrings that the casual observer of politics. After ~ all, that doesn’t desire to check out someone make an ext money for your labor and have state government tell employers how to clues time off to your employees? C’mon! it’s the fair point to do! Right?

Well, perhaps not.

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Despite warnings by employers and also a library full of researches saying that state-sponsored rises in the minimum wage would have an adverse effects, Prop 206 passed anyway. In January 2017, employers raised hourly pay to minimum wage employees from $8.05 to $10.00. That’s rise of 24%. Employers instantly went to work raising prices, cutting the hrs of your employees, downsizing your workforce and also exploring technology to do the work previously done through people.

I go my very own informal survey appropriate after January 1. Every time i wound my means through a rapid food drive-through I noted the prices on your menus. When I ordered, i asked the human being taking my order if prices had gone up. “Yes, they went up around the very first of the year,” was the usual answer. Indeed, prices had gone up 10-15% as close to as I could tell.

The owner that a chain the casual dining restaurants told me this story. He to be in one of his restaurants in ~ the dinner hour walking with to check how everything was going. A customer that had brought his wife and two youngsters into the restaurant come eat stopped the owner and also asked, “Have you raised your prices?” The owner stated that prices had gone up on January 1 due to the i of Prop 206. The customer then responded indignantly, “Hey, i voted for Prop 206…but ns didn’t think that would impact me!” (See headline.)

“It’s no the employer who pays the wages. Labor only handle the money. That the customer who pays the wages.” – Henry Ford

Starting July 1, employers are currently responsible because that allocating and also tracking time turn off earned by hourly workers in a method that added yet another layer of big government regulation compliance come already-overburdened businesses, many of them little businesses without HR specialists or some other devoted employee to execute the compliance work. The new laws are complex and loaded with booby traps that can quickly land the employee in court. Only time will tell just how much damage and also discouragement about doing organization in Arizona this element of Prop 206 will certainly create.

Perhaps the crown jewel that “I told you so” about state-sponsored minimum wage idealism came from Seattle critical week. Local government in Seattle has arisen quite a reputation for passing all kinds of laws that are nothing brief of social engineering, including a an extremely aggressive minimum fairy law. A group of economists at the university of Washington i was delegated by the City of Seattle performed a examine on the effects of Seattle’s three-year old minimum wage law. A Washington post article top top the study’s conclusions stated, “…some employers have not to be able come afford the increased minimums. They’ve reduced their payrolls, placed off hiring, lessened hours or let workers go…”

The study uncovered that, “The prices to low-wage workers in Seattle outweighed the benefits by a ratio of three to one.” Indeed. The study approximates the mean low-wage worker in Seattle lost $125 a month since of the hike in the minimum.

In situation you’re wondering about the veracity the the study, it was released by the national Bureau of financial Research and was called “highly credible” by David Autor, one economist at the Massachusetts institute of modern technology (MIT). Autor was not associated in the study, yet merely the evaluation it. He called the research, “sufficiently compelling in the design and also statistical power that the can adjust minds.” (Again, see the title of this essay.) Autor added, “If i were a Seattle lawmaker, I would certainly be reasoning hard about the $15 one hour phase-in.”

“Most of the energy of political occupational is dedicated to correcting the impacts of mismanagement of government.” – Milton Friedman

The value of labor need to be collection by sector forces and what the human being selling his or her job brings to the equation, not by the heavy hand that government. I of Prop 206 method Arizona is a less competitive state. Just put, higher costs of labor pressure companies to look somewhere else to do business.

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For the record, here is how Arizona stacks up against surrounding says in minimum wage levels:

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In my opinion, i of Prop 206 go something probably far an ext damaging. As Jacob Vigdor, an economist at the university of Washington and one the the writer of the research states, “Basically, what we’re (state-sponsored man-made increases in minimum wage) doing is removed the bottom rung on the (labor) ladder.” Put another way, minimum wage work are overwhelmingly organized by students and also people start the workforce. Just a tiny percentage of employees making minimum wage space breadwinners for your families. No one gets a second job without having actually a an initial job.