by Mitch Kokai
Senior Political Analyst, John Locke Foundation
Jed Graham at Investor’s Business Daily explores the results of recent increases in government-mandated minimum wages across the country. The Heritage Foundation’s “Insider Online” highlights the results.
Hiring at restaurants, hotels and other leisure and hospitality sector venues slowed markedly last year in metro areas that saw big minimum-wage hikes, new Labor Department data show. Wherever cities implemented big minimum-wage hikes to $10 an hour or more last year, the latest data through December show that job creation downshifted to the slowest pace in at least five years. Liberals fighting for a dramatic increase in the minimum wage have insisted that there would be a negligible impact on job creation. Though the data are preliminary and overly broad, Washington D.C., Oakland, Los Angeles, San Francisco, Seattle and Chicago seem to be finding out that the reality isn’t so benign.
The data from D.C. are the most reliable because they are confined to the city limits. The latest data show that job gains ground to a halt in the nation’s capital in 2015, with average monthly leisure and hospitality sector employment in the fourth quarter virtually unchanged from a year earlier. That was a sharp drop from the 3% annual job gains in 2014, meaning restaurants, hotels and other employers went from adding 2,000 jobs to adding zero. That’s no small thing in a city with a 6.6% jobless rate. The timing coincides with the $1 minimum-wage hike to $10.50 an hour last July. That jump followed a boost from $8.25 to $9.50 an hour that took effect in mid-2014. Another jump to $11.50 is set for this July. The Windy City’s $1.75-an-hour minimum-wage hike to $10 an hour took effect in July. Annual employment gains averaged just 1.1% from October through December, less than half the pace seen in 2014. Leisure and hospitality sector job growth in the Bay Area slumped to a five-year low after San Francisco and Oakland adopted what was, at the time, the highest citywide minimum wage in the country of $12.25 an hour last spring. Employment gains slowed to just 2.5% from a year ago in fourth quarter, down from 4.7% a year earlier.