Surprise: Rising Minimum Wage Causes Prices To Rise

A random act of journalism from the Associated Press, as reprinted at WRAL

Prices rise as the minimum wage increases in several states

At Granny Shaffer’s restaurant in Joplin, Missouri, owner Mike Wiggins is reprinting the menus to reflect the 5, 10 or 20 cents added to each item.

A two-egg breakfast will cost an extra dime, at $7.39. The price of a three-piece fried chicken dinner will go up 20 cents, to $8.78. The reason: Missouri’s minimum wage is rising.

Wiggins said the price hikes are necessary to help offset an estimated $10,000 to $12,000 in additional annual pay to his staff as a result of a new minimum wage law taking effect Tuesday.

“For us it’s very simple. There’s no big pot of money out there to get the money out of” for the required pay raises, Wiggins said.

Some will say “meh, it’s only 5, 10, 20 cents.” But, that will happen everywhere everyday. As the article points out, there are many states and cities which are raising the minimum wage, and many by a lot. Even double the federal minimum wage.

At Granny Shafffer’s in Joplin, waitress Shawna Green will see her base pay go up. But she has mixed emotions about it.

“We’ll have regulars, and they will notice, and they will bring it to our attention, like it’s our fault and our doings” that menu prices are increasing, she said. “They’ll back off on something, and it’s usually their tips, or they don’t come as often.”

Economic studies on minimum wage increases have shown that some workers do benefit, while others might see their work hours reduced. Businesses may place a higher value on experienced workers, making it more challenging for entry-level employees to find jobs.

There are many studies on this, and most do not paint a rosy picture for the workers. At best, for one from Seattle, some workers saw $10 more a week in their paycheck. Of course, that increase will just go to pay for the higher cost of living. Further, many who employ low wage workers will simply replace them with self-serv kiosks. A McDonald’s close to me, one which gets a lot of traffic being on a major Raleigh road (Capital Blvd) near a mall and near Raleigh’s outer beltline (540) just remodeled and put in 4 self serv kiosks. It’s not all about the push for a higher minimum wage, to be sure, but, you can bet it is a big part.

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3 Responses to “Surprise: Rising Minimum Wage Causes Prices To Rise”

  1. Dana says:

    The Kroger on ByPass Road in Richmond has four self-checkout stations, which I figured was about normal, until I saw the Kroger on Euclid Avenue in Lexington, near where my daughter lives. Wile I didn’t count the self-checkout stations, my best guess is that there were 12 of them. That’s twelve cashiers who don’t have jobs.

    The Euclid Avenue store is near the University of Kentucky campus, which means that a lot of its customers are college students. With the students being younger and more computer-savvy, you can expect far more self-checkout stations, and far fewer living human beings as time goes on.

    Not everybody can grow up to be a rocket scientist or brain surgeon. There are some people — we’ll call them ‘liberals’ for short — who are just not that smart or talented, the people who filled the mostly unskilled positions in the past. What are the liberals going to do for work once those jobs have all been filled by computers?

  2. […] There’s more at the original; hat tip to William Teach. […]

  3. david7134 says:

    Don’t forget that many contracts are tied to the minimum wage so that even higher paid works will be getting more and thus increasing the cost of goods.

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