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Once while a legislative body was considering raising the minimum wage, a member of that body visited a leader of a local employer.
Never mind which legislative body.
Never mind which member.
Never mind which leader.
Never mind which local employer.
Their identities aren't pertinent here.
What's pertinent is that the leader showed the member an aspect of the local employer's operation and explained that if the minimum wage rose, the local employer would lay off every employee in, and then automate, this aspect of the operation.
The member didn't believe it.
After the minimum wage went up, the member again visited the local employer and saw that the local employer had indeed automated this aspect of its operation. All the employees were gone.
To put it in economic terms: What the leader had tried to convey, and what the member didn't grasp until it was too late, was that the local employer's demand for labor was more elastic than the member believed.
In other words, the member mistakenly thought the local employer would eat all of the increased cost.
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You may have heard family members or friends expressing dissatisfaction that they have to wait on themselves in some local establishments.
Think, for example, of the increasing number of self-checkout lanes at some stores.
Or think, for example, of some restaurants at which you place your order not with a person but at an automated kiosk.
Such stores and restaurants are analogous to the local employer that the member visited: They've replaced people with machines, because the machines cost less.
No one should be surprised when this phenomenon increases all across New York now that the state government has increased the minimum wage in the state.
The increase takes the wage well above the minimum wage in nearby Pennsylvania.
Some elected officials will tell you that employees need to make more money.
That may well be true. In fact, let's assume it's 100 percent true.
The point that some such officials are missing is the elasticity of the demand for labor.
Because of such elasticity, an increase in the minimum wage such as New York's large increase means that some employees, rather than seeing a pay increase, will see a pay cut.
A pay cut to zero.
Zip.
Zilch.
Because their employers, rather than paying the increased minimum wage, will lay off some employees.
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Those who have ever been laid off know how gut wrenching it can be.
You've been a good employee: You've shown up on time, done your job well, worked well with others, and done everything you were supposed to do.
Nevertheless, you were laid off, and it wasn't your fault.
It's sad enough when the economy somehow changes and any employees are laid off.
It's especially sad when government in effect brings about the layoffs.
Does that mean there shouldn't be a minimum wage? No, it doesn't.
What it does mean is that elected officials would do well to think through the consequences of their actions before, not after, taking their actions.
This includes New York's large increase in the minimum wage in the state.
This also includes New York's raising the minimum wage at all, rather than adhering to the federal minimum wage.
Whether those who supported increasing New York's minimum wage understand it or not, the increase is so large that it will, in effect, force some employees out of their jobs.
And by making the minimum wage significantly higher than neighboring states', such as Pennsylvania's, the state will in effect drive jobs out of New York.
Even more jobs than New York has previously driven out.
That won't help employees make more money.
Randy Elf joins those who understand what it's like, at some time in their lives, to have been laid off through no fault of their own.
COPYRIGHT 2024 BY RANDY ELF