Red Robin will offset minimum wage hikes by canning busboys | New York Post

The Red Robin article is a lesson in fundamental economics which the average politician nearly always fails to comprehend. If the cost of labor goes up due to a government-mandated increase in the minimum wage, one or two outcomes are certainties. One, employees will be laid off or fewer will be hired, as in the case of Red Robin. Hours are cut back on kitchen and counter staff and the manager removes the “Now Hiring” sign from the entrance door. Two, companies may have to raise prices for goods and services, or in the case of Red Robin raise prices and/or cut back on their portions. The once classic half-pound burger is reduced to seven ounces, maybe six . The once-mighty side of fries, enough to slake the appetite of a high-school linebacker, is discernably smaller. Or Red Robin decides to start buying a lower grade of ground beef. Or all of the above.

The average consumer, or citizen, or voter, thinks increases in the minimum wage are good, especially for low-income, low-skilled workers.  Sadly, nothing could be further from the truth.

The signing ceremony makes the headlines and the evening news. The politicians who sponsored the increase are hailed by the media and talking heads as champions of the disadvantaged, having triumphed over the tight-fisted, mean-spirited opposition financed by evil Big Business. Unfortunately, the consequences mentioned above never make the headlines. If Red Robin raises its prices, lays off employees, imposes a hiring freeze, or cuts back on their portion sizes in response to the minimum-wage increases, will the media hop right on it? Not bloody likely. Will the company hold a news conference explaining that the lay-offs, price increases, and smaller portions are directly attributable to the state-mandated increase in the minimum wage? Again, not bloody likely.

The political establishment and their dutiful, fawning media just want you to hear the fun stuff.  Then they box it up, put a bow on it, and attach a cutesy jingle to it like “America’s Getting a Raise !!”  Then it’s repeated ad nauseum till the woefully ignorant electorate unconsciously swallows it hook, line, and sinker.   

The laws of economics are universal, transcendent, and immutable.  They always have the last word.  Unfortunately, they are seldom heard.

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