The Stupidity and Futility Of The Living Wage

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By John Hubbuch

It is hard for me to believe that I voted twice for Ronald Reagan as President of the United States. Having lived in Oak Park since 1976, almost all of my conservative beliefs have been washed away by the warm liberal/progressive waters of Oak Park.              

Yet ever so often there stirs a memory of my University of Chicago Law School education from 1971-1974. At that time,  you didn't really study law, but a hybrid of law and economics. Among the things I learned was the Principle Of The Unintended Effect. The principle recognized that sometimes the best of intentions sometimes  cause things to get worse rather than better. Some of you may recall the TV sit com WKRP In Cincinnati episode when the radio station dropped Thanksgiving turkeys from a helicopter , but unfortunately for the recipients on the ground,  the turkeys  were frozen.            

Many Oak Parkers probably  favor this  idea of "a living wage" wherein workers would be paid a $15 hour minimum wage--almost double the  current Illinois minimum wage of $8.25 per hour. My initial impulse was to think that a  living wage  was a great idea. Almost 15 percent of Americans are below the poverty line, and the growing gap between the plutocrats and the rest of us is a scandal. 

The problem is the unintended effect. Mandate $15 per hour and employers will lay off workers, be incenticized to automate and to lay off the poorer educated workers for better educated ones. Think Trader Joe's and Starbucks. The result of a living wage would almost certainly be an increase in the already high unemployment rate of our most needy. And of course the cost of the doubled wages would be passed on to the consumer. Even Oak Parkers may not be ready for a 2 dollar value menu. The  plight of millions of  unskilled, uneducated workers is a big problem in the country, but doubling their wages is not the solution.


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Reader Comments

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David Hammond from Oak Park, Illinois  

Posted: September 20th, 2013 1:38 PM

Why you can't have good food, good service and a good price? These are not mutually exclusive qualities. Surely, you and many here have been to places that have all three qualities. I'll name three local places off the top of my head: Katy's, George's and Jerusalem Café. Easy.

Uncommon Sense  

Posted: September 20th, 2013 12:22 PM

A Consumer, you have the triangle of common sense when it comes to restaurants. You have: Good Food, Good Service, and Price. You can only pick TWO. If you want good food and good service, price is going to be high. If you want a low price and good service, most likely, the food will suck. Or if you want good food and a low price, the service is going to be bad. So if you raise the cost of workers, restaurants will have to raise their prices.

Violet Aura  

Posted: September 19th, 2013 9:59 PM

@A Consumer: You sound like quite the gourmand. :/

A Consumer  

Posted: September 19th, 2013 4:19 PM

It is a pleasant experience to buy something at Starbucks, Trader Joe's and Culver's, because the people who work there are pleasant. A big contrast to the attitudes you encounter at Wendy's and Jewel. Plus at Wendy's and to a lesser extent McDonald's they just can never get your order right.

Uncommon Sense  

Posted: September 19th, 2013 3:54 PM

John, the legacy of liberalism is a host of unintended consequences. A living wage won't work for the very reasons you mention. Cost of goods will go up along with unemployment. I suspect many places would seek to automate the lowest skilled positions. The technology to eliminate cashiers altogether at fast food restaurants is now available. Right now it is cost effective to keep them, but a living wage quickly changes that math...

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