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AOC Returns to the Scene of the Minimum Wage Crime

AOC wage crime sceneRep. Alexandria Ocasio-Cortez, D-N.Y., an advocate for a $15 minimum wage, returned to work as a bartender for one day.

Ocasio-Cortez said: “All labor has dignity, and the way that we give labor dignity is by paying people the respect and the value that they are worth at minimum. We have to make one fair wage, and we have to raise the national minimum wage to $15 an hour, nothing less.”

The issue is simple: Does a government-mandated minimum wage help or hurt the very workers and job seekers that Ocasio-Cortez wants to help?

Ask her former boss, who owned The Coffee Shop diner in Union Square where AOC used to work. Late last year, The Coffee Shop closed its doors after 28 years, sidelining 150 employees. How successful was the place, where diners often came to celebrate special occasions?

About the Coffee Shop, Forbes wrote last year: “For nearly 30 years, serving those many occasions has added up to enormous success. According to Restaurant Business magazine’s 2017 ranking of the 100 highest-grossing independent restaurants in the U.S., Coffee Shop served 314,000 meals and pulled in an estimated $14.3 million in sales, good enough to land in the 79th spot on the list. Coffee Shop stands out as one of few non-steakhouses (there are 24, mostly in New York and Las Vegas) or bottle-service meccas (the Tao Group has five on the list) to crack the top 100, and to do so consistently for nearly two decades.”

But co-owner Charles Milite citied higher rent and the increased minimum wage as the reasons for the closure. New York’s minimum wage law would have added tens of thousands a month to his labor costs in 2019.

Milite said: “I know it doesn’t sound like much — $2 an hour. But when you multiply it by 40 hours, by 130 people, it becomes a big number. It was going to increase our monthly payroll $46,000.”

New York City’s minimum wage for businesses with 11 or more employees had gone from $11 in 2017 to $13 in 2018. And then it increased to $15 in 2019. Milite said: “It’s a wakeup call for our industry in general. When a restaurant is one of the top-ranked restaurants in America, sales-wise, and can no longer afford to operate, you have to look at that and say there’s a shifting paradigm in the business.”

Proponents of raising the minimum wage argue that it actually stimulates employment. To make that case, they turn to a famous study known as the Card-Krueger study.

The study, cited by Democratic politicians such as Bill Clinton and Barack Obama, supposedly demonstrated that when New Jersey hiked its minimum wage, there was either no effect or a small positive effect on employment at fast-food restaurants relative to the adjacent state of Pennsylvania, which did not raise its minimum wage. These results stood the bulk of economic research about the minimum wage on its head.

But there were numerous problems with the study, not least of which is that it covered only an 11-month period, starting two months before the minimum wage increased. Initially, fast-food employers in New Jersey raised prices and saw little to no adverse impact. But medium-term and long-term, other researchers found a lessening of economic activity as a result of the minimum wage, relative to Pennsylvania.

The other problem is that Card-Krueger just asked employers whether they hired people. Other researchers, attempting to replicate the results of Card-Krueger, examined actual payroll records. These researchers found that, contrary to what employers told Card-Krueger, hiring and hours fell off relative to the hiring and hours of those in Pennsylvania.

Diana Furchtgott-Roth, former chief economist of the U.S. Department of Labor, wrote: “Card and Krueger do not include information on the portion of employment at minimum wage at any date in time. No information was given on whether the minimum law was binding, and to what extent, for this sample. The studies did not include information by county, such as income, unemployment, teen unemployment, labor force, and labor-force-participation rates. Neither did it include changes in state taxes and franchise fees.”

Then there is the December 2014 study by the National Bureau of Economic Research, called “The Minimum Wage and the Great Recession: Evidence of Effects on the Employment and Income Trajectories of Low-Skilled Workers.” The results confirmed the consensus among economists: Minimum wage laws do harm.

It concludes: “We find that binding minimum wage increases had significant, negative effects on the employment and income growth of targeted workers. Lost income reflects contributions from employment declines, increased probabilities of working without pay (i.e., an “internship” effect), and lost wage growth associated with reductions in experience accumulation. … We estimate that these minimum wage increases reduced the national employment-to-population ratio by 0.7 percentage point.”

In short, fewer workers get hired, new hiring gets deferred or not done at all, or current workers work fewer hours — just as traditional economics 101 tells us. Or we could simply ask AOC’s ex-boss.

Reprinted with permission from - The Epoch Times - by Larry Elder

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Laura Bader

And what is so magical about $15 an hour? Why not $17 or $20 or $25? There should be no minimum wage. Let the free market determine what employers pay. If they don’t pay enough, people will not work for them.

Robert Goidel

I do not know how AOC got elected in her area of New York. I cannot believe the voters are that uninformed about their representatives. Hopefully, AOC will be primary out of her office as soon as New York has someone else more mature
more educated and can represent the voters in this area of the Country

Jeanette

They’ve done this over and over, and always prices go up and more inflation. Raising the minimum wage only causes costs to go up and everyone suffers in the end.

Wayne

I find it hard to believe there are people in government that are actually walking around with no brain and then there are people with no brain that are actually voting for these idiots!

Jack Thomas

Congresswoman Alexandria Ocasio-Cortez is a young rookie who is misguided, and clearly ignorant of how business works. She should be told that the two primary objectives of being in business are to make a profit and TO REMAIN IN BUSINESS. You can’t do that if the government mandates increases to the minimum wage that become an unsustainable payroll burden which balloons “overhead” and cuts into profits. The short-term result is fewer jobs, less profits, impeded growth or none at all — while the long-term result, sadly, is often going out of business. The benefit to workers is marginal at best and is invariably eroded by inflation and further payroll taxes somewhere down the line. It’s not a “win-win” solution that socialist politicians like AOC, Bernie Sanders, or Elizabeth Warren try to promote; these folks are literally “clueless” because they never owned a business and don’t understand the nuts and bolts… Read more »

steve harmon

$15/hr? “Digity? Hey AOC, why not $50/hr? $100/hr? $!,000,000,000/hr? After all, wages aren’t tied to a businesses profit, right? What a Dolt. smh

Linda

Wages go up, so cost of food, and everything else goes up. Then the companies try to have fewer people to do the jobs. They are already talking about robots making hamburgers. Leftists have no common sense.

ahem tonto

The very concept of an enforced minimum wage encourages depressed wages. Compensation should be established between the employee and the employer based upon several factors, not the least of which should be the employers ability to employ someone at a rate that considers the employees contribution to the bottom line of the business. The employer has provided the finances to establish and operate the business and must provide for the ongoing expenses of operation, taxes, l maintenance, insurance, supplies, licenses, advertising, utilities, depreciation, employee salaries and wages, employee benefits etc. etc. and still make enough profit to make it worth while to remain in business. The employer is there to make a reasonable return on their investment. An employee’s fair wage/salary must be based solely on their contribution to the success of the business.

Pete from St

I think she should run for President. Today she said that the concept of people buying houses is passe: people should be given houses by the government. Sounds like a real solution to the housing crisis. We underestimate her willingness to spend other people’s money. What a gal!

William Rojahn

All wages for all jobs are driven by supply and demand. If you didn’t prepare yourself to enter the workforce you get the short end of the stick. There are a lot of people out there to wait tables and wash dishes. Whatever happened to personal responsibility in the USA. Go to school or learn a skill that’s useful and you’ll be paid far more than $15.00 per hour

carol

Minimum wage as AOC puts it, isn’t about the dignity of the person performing that job but about what it would cost to replace that person should that person leave that job! If anyone can do a job with minimum training, then the cost of that worker is low because anyone can fill that job if the person doing the job goes bye bye! However, a heart surgeon may make bookoo bucks cuz you have to have years of training and not everyone can do that job, not to mention that a person’s life is on the line! Therefore, those jobs pay more! This is basic economics and if AOC doesn’t know this, she wasted her time in the indoctrination camp called college and should demand her money back! Folks like AOC play up this idea of high minimum wage to get folks used to the idea of a living… Read more »

Fran

How AOC got elected is a perfect example of apathy from thy he voters in her district. They didn’t even take time to see what she was about. Just looked a fresh new face. Well I hope they are awake now. She is so radical and does not care about American values or history .

Vikki C

Wow, this nitwit is making over $90/hour…way more than she’s worth to us in the House. Now the House wants to raise their own salaries….is there any end to the foolishness of the Dems? Seems to me that We the People should be able to vote on their salary increases and term limits. But that’s never going to happen, just like they will never pass term limits for themselves.

Rick J.

Just think AOC is the future leader of the democrats!!! If that statement comes true so will the next one.
The country is in deep —- (U fill in the blank)

Mike B.

I worked for most of my civilian carrier on a commission basis in sales. I did rather well and now I’m enjoying a comfortable retirement. I feel wages /compensation should be based on the income an individual brings to his employer. Most employers are willing to pay wages according to what an individual brings to the organization. If you feel you are not being compensated justly, you can always move on. To give someone $15 Hr.+ to flip burgers or perform a menial task, will only result in lost jobs to automation. If we can make cars and planes that drive/fly themselves, how difficult could it be to have a machines to flip burgers or take out the trash? On the other hand we could create new manufacturing jobs.

Bob Hegerman

I’d like to see her tax returns to see if she paid taxes on all her tips!

Joyce E Carey

These jobs were jobs most young people started as their first jobs. Then you would go on to a job where you may stay with permanently. You were paid what the free enterprise market was paying at that time and moved up the ladder. Expecting a minimum wage amount is politicians falling into the politically correct pressure in order to get votes.

Brenda Blunt

AOC has done it again. People out of work due to high cost of doing business. People paying the price for it.

Garland

If I happen to be paying Rep(?) Cortez what she was worth I’m afraid 0.15. Would be an over reach. The Federal, State, County and City governments should stay out the wage business. They ARE NOT the not themselves paying these salaries. Over time these problems correct themselves between the parties involved. I’ve had 85 years to observe

Jim

AOC has no common sense on who the wage payers really are? The “CONSUMERS ARE” so how much are they really able to afford before they quit buying???