Misleading and ridiculous study on chain restaurant minimum wage jobs “cost” to taxpayers

You really can make data say anything if you torture your assumptions enough. A liberal think tank has come up with a new study claiming that fast food companies are costing taxpayers more than billions of dollars annually.

How can businesses that employs hundreds of thousands of Americans annually actually harm the economy? That’s easy, just assume that every American already has a “living wage” and then subtract any shortfalls created by fast food workers’ low incomes. After all, if these workers require ANY government assistance at all, this is inherently the responsibility of their employer, right?

Reminds me of the old joke about economists: A physicist, a chemist and an economist are stranded on an island, with nothing to eat. A can of soup washes ashore. The physicist says, “Lets smash the can open with a rock.” The chemist says, “Let’s build a fire and heat the can first.” The economist says, “Lets assume that we have a can-opener…”

Sorry folks, but the default status of humanity in this world is not a living wage. It is poverty. And, to the extent that a minimum wage job raises someone above abject poverty, it is a good, not a bad thing (not to mention the experience you gain). For example, I worked at a Wendy’s back in the day. This was useful in my professional growth.

Also, unlike government programs that are supposedly meant to ameliorate poverty, fast food companies deliver desired products that create value. Government just taxes other productive areas of the economy including the fast food industry. Then they transfer that money to other programs which may or may not have their desired result.

Of course, if fast food chains took the economically-ignorant advice of increasing the minimum wage to $15 an hour, more Americans would be unemployed because the industry would automate even more of its stores. I’m not sure how that would be good for workers. Lastly, if you do want to earn $15 an hour in fast food, check out North Dakota. Closer to home, I hear Midland, TX with an unemployment rate hovering near the lowest in the nation is also paying high wages to fast food workers.

To the extent that college graduates and other skilled workers are getting stuck in fast-food jobs, we need to look at national and state economic policies that are killing good-paying jobs…ObamaCare, lack of Keystone XL approval, just to name two…

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One Reply to “Misleading and ridiculous study on chain restaurant minimum wage jobs “cost” to taxpayers”

  1. Automation does not hurt the economy, it makes workers more productive and boosts the overall economy. It is a desirable effect of capital accumulation and technological progress. Otherwise this blog is excellent.

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