Minimum Wage the $15 an Hour Dream

Hmmmm, not sure if anyone saw this one coming, yeah right? The minimum wage in New York City is currently $15, set by the Minimum Wage Act (Article 19 of the New York State Labor Law), which went into effect on December 31, 2021, and there are plans to make it higher. I know the “experts” all claim that increasing the minimum wage will not have an effect on the things that a consumer will purchase, but if you stop and take a few minutes, it is easy to see that they are certainly tied together.

Let’s look at the $15 french fries and we will just say that they are from ABC restaurant. If the farm that is growing the potatoes, has to pay a higher price for their fertilizer and fuel for the tractor, they will pass that increase onto the consumer. Both fertilizer and fuel prices are currently at an increased price. Then the farmer has to pay a higher wage for their workers and the fuel to haul those potatoes to the market. This means that if the farmer normally sells a pound of potatoes for $1, he now has to sell them at $2 a pound in order to cover his expenses.

The potato company (we will call it “My Potatoes”) has to pay a higher wage to its employees and pay higher costs for the electricity, then they would normally sell their french fry cut potatoes for $2 a pound, but now they have to sell them for $4 a pound in order to cover their costs.

ABC restaurant normally purchases their frozen french fry cut potatoes for $2 a pound is now spending $4 a pound, and is having to pay a higher wage for their employees, a higher cost for their electricity and their water, plus they are having to pay a higher rate for their paper products like the fry container, and the paper bag, all translates to a large increase in the price that they sell their food for, including their french fries.

Now, this is the point that just about every economic brainiac jumps in and starts to wave their bullshit flag and then spouts off some BS formula. But I’m here to tell you plain and simple, this is a cause-and-effect scenario and there is no other way to look at it.

ABC restaurant can’t go from paying an employee $7 an hour to $15 an hour and not pass that cost onto the consumer. We tend to forget that a business is in business, to make money. That is why I run a business, this is why you go to work every day. So if they are now having to pay double for their employees, and pay double for their products and double for their utilities, advertising, rent/mortgage, and so on, then, of course, the consumer will pay more.

When I saw this article from DNYUZ all I could say was Duh!