Minimum Wage Increase Fails to Benefit Workers… And No One is Surprised

minimum wage increaseProponents of raising the minimum wage typically argue that the increase is a practical way to improve living standards for the working poor and reduce financial inequality. However, for many restaurant chains, the minimum wage hike signals a sharp increase in job cuts, resulting in the opposite effect its supporters tout.

In an interview with Fox Business, Zane Tankel, the CEO of Apple-Metro Inc., which operates 40 Applebee’s restaurants in the New York metropolitan area, revealed that he has been forced to cut at least 1,000 servers from the chain in the past year due to New York City’s minimum wage increase.

“I’ve always said increasing minimum wage is technology’s best friend”, Tankel said, explaining how Applebee’s restaurants now run on a “concierge” model, the employees mainly greeting guests and  assisting them with the tablets found at each table.  Other fast food and casual dining chains have followed suit and are using technology to cut down on labor as well, using tablets for placing orders and payment. By increasing automation, restaurants try to offset the costs of the higher minimum. Tankel noted that although minimum wage proponents tend to ignorantly assume that simply raising menu prices can fix the problem, this approach is not a realistic option nor a viable solution to the larger issue at hand.

“[…] it’s because of Cuomo, DeBlasio, the liberal agenda”, Tankel stated later in the interview, discussing how New York’s impractical liberal policies are largely to blame for the job cuts.

With Applebee’s currently facing a two-thirds reduction of their total workforce, evidence of job losses and layoffs among other chains continue to pile up as well. This raises questions about the effectiveness of the minimum wage in helping workers—evidence indicates that increasing the minimum wage disproportionately harms the people it is supposed to help, ultimately reducing employment among less-educated and low-skilled workers. Furthermore, chain owners like Tankel have observed that even with a higher wage, the difference in productivity of low-level workers is not large. “It’s just a lot more money for the exact same job description”, Tankel says.

Economists believe that New York City’s overall drop in restaurant growth could be attributed to the state’s minimum wage hike, its harmful effects becoming glaringly apparent as time goes on. It has been shown that an increased federal minimum wage does more harm than good for employees, as it reduces the likelihood of upward mobility by cutting off the first “rung” of the employment ladder where workers typically gain the skills and experience needed to move up the economic food chain. It also puts low-skilled workers at a disadvantage and inhibits the creation of new jobs, disrupting the balance of the free market. With overwhelming evidence indicating wage increases are not only ineffective, but completely counterintuitive, liberal policymakers continue to ignore reality and support what is essentially economic suicide.

Tankel remarked that the minimum wage increases in New York are “all really good if you have a job”. But the wage hike certainly hasn’t done much good for the 1,000 employees Tankel was forced to cut this past year.  He added, “If you don’t have a job, $100 an hour doesn’t help you out a whole lot, does it?”

Those who advocate for higher minimum wages and “Fight for $15” may want to reconsider their principles, as their efforts are clearly not in the best interest of those they claim to be “helping”.

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48 Comments on "Minimum Wage Increase Fails to Benefit Workers… And No One is Surprised"

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Minimum wage @15…….A whole lot more will become un-employed. Its being sold as a “living wage”, its not. Its an entry level wage for people with don skills that will allow them to gain skills and thus increase their experience and knowledge. It is being sold as a lie and once again the bottom rung is removed ostensibly to help the lower rung…and the lower rung? Suffers once again. Dont you just liberalism? It is all a lie,sold as a lie and bought as a lie. The left want s to feel good about what they did and do and dont care to talk about the consequences on the back end much less the front end.

Progressively Communist Democrats don’t refer to it as “Minimum Wage” anymore, it’s now called a “living Wage” because as we all know: “Everyone is NOW ENTITLED to a Living Wage”.
These “young” Bernie Sanders followers think everyone is ENTITLED TO MAKE A GOOD LIVING, but at a College recently when students were asked to “donate” a portion of their “achieved” GPA to “help” low GPA students come up to a higher standard GPA, they screamed “you can’t reward students that didn’t study as hard as they did, that’s just not fair!” … Duh, notice the hypocrisy!!! … These Liberals are only getting Progressively Stupid at a younger age!

Rik, It couldn’t have been said any better. This is how things are taught in many colleges today and liberal professors pushing the liberal agenda and in result as Rik said above “only getting Progressively Stupid at a younger age”

Did that really happen?? That’s so cool. How do you donate a portion of your gpa? That just seems so wrong. Honest Rik, did that really happen? This made my day!

The old utopian dream repackaged. Many college graduates feel like they are employment ready and deserve to set their own wage. Maybe they get it from some congress and federal employees who feel they are entitled to their privileged class of compensation. ‘Minorities’ are taught that they deserve special privileges against the ‘White establishment’. They are not taught that education just gives them their training wheels. But some are innovative enough to go out an establish their own businesses. Do they practice their progressive indoctrination? Some don’t while others do the kabuki dance while hiring green card labor or setting up businesses in foreign countries that don’t follow progressive ideal. They are living hypocrites. But there are a few businesses like Mozilla that do follow progressive trends and seemly survive. How long is unforeseen. How long will the newly graduates from the sheltered academic world wake up to see that… Read more »

“…Those who advocate for higher minimum wages and “Fight for $15” may want to reconsider their principles, …”

Yeah! Like THAT’S gonna happen!

Liberals, progressives, whatever you prefer to call them, only look at those few who are aided by their policies and ignore those tossed aside and trampled by those same policies.

Much better than the previous version on the same subject that you ran earlier this week. The real world impact highlighted by the CEO of Apple-Metro provides the readers with a tangible example of the economically distructive nature of progressive policies.

Lots of folks find out that after the law is passed their new minimum wage becomes $0.00.

This law is also called ‘the permanent youth unemployment act’

Additional evidence of progressive ‘negative help’

Good shot, old man. Love your handle.

As I read this article the thought occurred to me; What if the results of this “plan” was engineered in order to force small business owners to employ illegals and pay them “under the table”, as a matter of survival? This is all starting to make sense to me now. Their choices are to either pay some highschool kid $15 an hour, or an illegal alien $8… as long as they keep quiet about it.

Larry in PRNJ (People\'s Rep of NJ)

Nailed it Jerry. Doesn’t matter if that was their plan, it WILL be the result !

Simple economics! Profit is the paycheck of the self employed. If he can not make enough money, he is not going to stay in that business. If $15/hr for low skilled workers cuts to deep into the self-employed persons compensation, he will invest his time and money somewhere else.

Just like everything else the liberals do to get votes and and stay in office, it hurts the people that voted for them. It amazes me that Democrat voters don’t understand this. They are lead by the nose to believe that the Democrats are there to help them, where as Democrats care not about them. All they care about is their power, and not the people.

Another great comment by Terry Hunt. You called it. These “sheeple” as I like to call them will be led to the edge and right off the cliff. Those of us who are not sheep in a herd go our own way and will survive whatever comes our way where others will perish

Libs seldom use common sense which is proven by this. Minimum wage jobs for other than high school kids looking to make some spending money just doesn’t work.

Why does anybody at all still think that the Democrat Party is on the side of the so-called “Little Guy”? Sure, at one time long ago they were. Now they represent the interests of the Globalist/Communists and are working to utterly subvert the Constitution and this nation as a whole. They KNOW their economic policies are destructive that’s why they push them. Their objective is the elimination of Free Enterprise and replacing it with government control of everything – COMMUNISM. Trashing the economy is one method of achieving that end. One only needs to read history, study a bit of economics, learn a little about sociology and take a crash course in political science to understand what it is that the “Democrat” Party is all about in today’s world. Therein lies the rub. They don’t teach those things in our schools to any useful extent any more. Jimmy Carter’s Communist… Read more »

Also as the wage is increased so is the price of every thing. So in a lot of cases a 1.00 increase can cost you more then that dollar will make you when you pay more for every thing and you pay more federal taxes, and social security taxes, and local taxes to pay for that raise, Plus a down turn in product because it lost in the cost with companies from other counties, so lost work on top of that

These people are Communists. They do not understand economics. Business must make a profit or why be in business? People are not required to spend their money with you. So raise prices all you want- but it’s not going to happen! Competition in a free enterprise system determines cost and quality. liberals think just because you raise prices people are required to pay it. Numb skulls! All communists countries fail unless they do business with free counties. China is a good example.

And they have been stealing Western technology, they are not that innovative.

A minimum wage was never designed to be a “living wage”. People who want an increase in the minimum wage because they cannot live on it need to get more experience or education so they can earn more. They need to quit doing things which impede their ability to get an education or training.

They are arrogant and lazy, if I had access to the resources they have now, Vo-Techs and the internet, I could have excelled.

Even in the Washington st area,, Oregon ,, all over,, the fast food industry is cutting jobs and going robot!! :-) :-) Some of these can even identify a hammer..

In a way those who go for the living wage mantra are digging their own graves, they are providing the incentives for employers to robotize, automate and use A.I. On the other hand as robots and A.I. improve and become more sophisticated, it seems like much of working populous will end up unemployed. It’s kind of a Brave New World future prospect. Only the Elite will be left with a few token servants.

Join the discussion But this is what they want, the demonraps.. They want the U S of A to be subserviant to the world government.. UN agenda 21.. Agenda 2020 & 2030. Saul Alinsky covered this in his book.. If you’re going to overthrow a country,,,,,,,,, start with the children.. I want hire a dem. & all others have to pass an English test.. Some can’t even identify a hammer.. Like in the liberty mutual commercial,,, he’s holding a crowbar and the other says maybe on a lug wrench.. You learn how to change a tie on a computer..

Nick Hanauer gave an interesting TED talk in which he promotes the $15/hr minimum wage, claiming that Seattle has seen positive results with increased prosperity and decreased dependence on welfare and food stamps. He’s in the 1% zillionaire group and says that group should be doing more to lessen the gap between rich and poor. Where does the truth lie?

Janet, just this week, I saw a discussion of Seattle’s new problems because of the $15/hr minimum wage. The speech by Nick Hanauer must have been BEFORE Seattle started realizing the REAL effects. Please google to update your information. Seattle workers have lost employment because of this law. My guess is that the speech by Nick Hanauer was SPECULATION and not supported by facts. Google Australian minimum wage for an amazing education on this idea that NEVER works.

Join the discussion The only thing that’s positive about seattle is the fisherman’s worf..

The leftist socialist politicians in this country know exactly what they are doing. They know that a so called Living Wage will be most harmful to the least among us, but in order for them to hold on to their power it is necessary to maintain a permanent underclass. Mandating employers to pay artificially higher wages, which forces them to fire lowskilled Americans or to hire illegal aliens to do the work achieves their goal. As a conservative and someone who truly cares about my fellow man, I demand that all our leaders work to insure a Living IQ so those at the lower end of the economic spectrum can lift themselves up and provide a more abundant lifestyle for their self and their family.

As the old saying goes: Be careful what you ask for. You may just get it. Seems like this holds true right about now. Funny thing though, many of those pushing so hard for an increase in the minimum wage don’t now and never did have to work for minimum wage.

Will the Democrats ever learn?

Join the discussion

They have learned. They know that there are enough stupid voters that they can say anything and get elected, no matter how stupid or illogical.

Only education and opportunity will benefit workers. Propping up the uneducated and ignorant with a “living wage” subsidized by others will ultimately result in collapse of the system.

Tom Wilde

I took your suggestion and just finished reading the 45 Communist Goals and it was a definite eye opener. I didn’t even know about these. I’m glad you mentioned this because it was enlightning to say the least.

Living wage or minimum wage call it what you will, but I saw what would happen (decreases in available jobs) based on what happened over my years of work and how pay increases effected number of employees scheduled. Any employer who runs a successful business controls costs and one of the highest costs has become labor, plus nowadays most businesses need to achieve profit to keep succeeding. Raises in labor cost effect all costs to companies. But staffing needs should be a stable number based on efficient productive workers. You achieve this with effective training and follow up on performance. Raises should only be expected if companies achieve a reasonable profit level without drastic changes to overall costs. Which means cost is predictable and should not effect labor staffing, but ever raise in the last few decades has decreased staffing ( employees) needed for jobs based on efficiency models set… Read more »

I worked my way through by working in a gas station. Every car, I put the gas in, washed all the windows and checked.the air in all the tires. Now, in most cases you do it yourself. Great result from higher minimum wage, fewer jobs and no service.