Sunday, June 1, 2014

Who Will Lose Their Jobs Because of a Hike in the Minimum Wage?

By Robert Wenzel

Here is some speculation on my part.

Obviously, layoffs are most likely for those who have jobs that currently pay below proposed new minimum wage levels.Low-level workers won't all get laid-off at once, though there will be some immediate layoffs, but if they leave their job, it will likely be impossible for those with such low productivity to find new jobs.

Here is some data on the lowest paying jobs that was put together by


As I reported some time ago, in San Francisco, where the minimum wage is already pretty high, you rarely see hostesses at such diners as Denny's (One of Murray Rothbard's favorite night owl restaurants, I'm told.), though I have seen them in places like Chicago. The hostess jobs appear to be eliminated in SF because of the high minimum wage. This will happen in other regions that hike the minimum wage.

Looking at this list, shampooers are likely to be quickly whacked. In every other city I have gotten my haircut, there have always been a shampooers, comparable hair salons in SF don't. One would think that bartender helpers will also be vulnerable.

Then, of course, waitresses and cashiers will start to be replaced with automation.

I'll bet manicurists and  pedicurists end up working from a model where they are independent contractors that rent space on a daily basis rather than employees.

Also, goodbye coatroom clerks.

Robert Wenzel is Editor & Publisher of and author of The Fed Flunks: My Speech at the New York Federal Reserve Bank.


  1. I'll go out on a limb and add my prediction: not one single federal, state, or municipal employee will lose their job due to a hike in the minimum wage.

  2. Robert:
    You've done a brilliant job in laying out the case for why an increase in the minimum wage will result in more unemployment now, and less jobs in the future.
    Unfortunately, this issue is a win-win for the democrats/socialists, and a lose-lose for America. Here's why.
    If by some miracle the increase in the minimum wage does not result in more unemployment, the democrats/socialists can claim that this proves that capitalists are greedy (not to have paid higher wages) and the state must intervene in the economy to insure 'fairness'. If the increase in the minimum wage results in unemployment, the democrats/socialists can claim that this proves that capitalism is unable to provide jobs for people at a 'living wage' and the state must intervene in the economy to insure 'fairness'.

    1. That tragic thing will be that unemployment may very well not change all that dramatically but you can bet that those who are employed today, will be let go eventually in favor of better educated workers that can't find a job in their chosen field. You can also bet that the higher minimum will act as a magnet and attract workers from surrounding areas. If the government passes a law that required no new car to sell under $40k, am I going to go buy a car that previously sold for $20k or one that sells for an amount closer to the minimum. Substitution is going to be very harsh for these low skilled workers. Sadly, the uneducated will be exploited as they always are by the left and they will be told to blame other things and not the left wing loons own policies that always fail time and time again.

    2. Anon 4:19

      Appeals to emotion always attract the simple minded. We're surrounded by pathetic idiots!