Minimum Wage Increase is Crushing It!
Sears and Kmart have been closing stores right and left, and a recent minimum wage study showing huge future job losses explains what is ahead, and why!
In Canada, up to 185,000 jobs in Ontario will be at risk if the provincial government does not back off plans to hike the minimum wage to $15 in just over a year from now, according to a study released on Wednesday.
The Canadian Centre for Economic Analysis (CANCEA) concluded the government should instead roll out gradual implementation of the planned minimum wage hike over five years instead of 15 months. Then jobs at risk would decrease by 74 per cent in the first two years, according to the assessment.
“Our risk assessment of the act is that there is more risk than reward for Ontarians despite the stated goal of the legislation in helping Ontario’s more vulnerable and the economy,” said Paul Smetanin, president of CANCEA, which performed the study on behalf of Ontario and Windsor’s chambers.
Many places in North America have been on the $15 an hour minimum wage kick, and the damage is already being felt. Seattle recently saw a mass closing of small business restaurant closures due to their minimum wage law. McDonald’s all over are replacing employees with kiosks. California added to their financial disaster this year, implementing a minimum wage law, exasperating the already huge rush of businesses leaving the state.
Recently, Sears Holdings announced the closure of 68 Kmart stores and 10 Sears stores and minimum wage costs are a prime reason!
“The decision to close stores is a difficult but necessary step” said Sears Holdings CEO Edward Lampert
“Competition from online merchants that don’t have to collect sales taxes was another drag on sales. Higher minimum wage costs also hurt performance”, Lampert said.
The Political Insider reports:
California, New York, and other states are raising the minimum wage, thanks to pressure from President Barack Obama and liberal state politicians.
But those increases hurt companies in serious ways. Now, the Sears Holdings company has announced that 68 Kmart stores and 10 Sears stores will close immediately this summer to cut losses.
This is on top of 50 closings which have already been scheduled, after a disappointing Christmas sales season in the Obama economy.
Entry level jobs at places like Kmart and Sears are supposed to allow young people the opportunity to gain on-the-job experience. After becoming productive members of the work force, they will advance to higher paying jobs.
Thanks to liberals increasing minimum wages, these entry level jobs are being priced out of the market and places that offer them like Kmart and Sears are closing everywhere.
California recently passed a law hiking the minimum wage to $15. Governor ‘Moonbeam’ Brown admitted openly that the move did not make economic sense:
“Economically, minimum wage may not make sense. But morally, socially, and politically they make every sense…”
Economically, minimum wages may not make sense…Economically, high minimum wage may not make sense…Economically, government controlled minimum wage may not make sense….Hear what you just said Governor Brown?
Intentionally or not, Governor Brown just told us something we already knew: that a high minimum wage makes bad policy by forcing price increases and pricing low-skilled workers out of the labor market.
A survey of LA County businesses confirms these negative effects, and that doesn’t even begin to touch on the impact for less urban areas, which will have an even harder time complying with $15/hour.
— Forbes (@Forbes) April 6, 2016