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February 5, 2021

President Biden and Congressional Democrats keep calling for a national $15-an-hour minimum wage, ignoring the devastating consequences for already-struggling small businesses and unskilled workers whose jobs will disappear if they’re priced above market value for labor. They insist that despite years of evidence to the contrary, arbitrary government wage increases don’t kill jobs.

Well, here’s the latest example of politicians who know zip about business ordering higher wages and having it blow up in their (and everyone else’s) faces.

The city council of Long Beach, California, decided to honor grocery workers who worked through the pandemic by ordering supermarkets to give them “hero’s pay” of a $4-an-hour raise. Since the minimum wage there is $14, one of the highest in the US, that means the lowest-paid worker would be getting $18 an hour. The politicians there (whom I assume have never run a business, and certainly not a supermarket) declared that large corporations are making record profits and should be forced to share the wealth with their workers.

So Kroger, the parent company of Ralph’s and Food 4 Less, announced that 25% of their stores in the Long Beach area would be shutting down. Criticized for doing this when the corporation was making strong profits, Kroger replied that many of the local stores were already struggling to stay open (supermarkets operate on notoriously slim profit margins, while the new raise would have increased the stores’ labor costs by 30%.)

I agree that the people who worked through the pandemic are heroes who deserve to be celebrated, but the Long Beach city council, through its cluelessness about private enterprise, just “honored” a lot of them out of their jobs. All things considered, I think they might have preferred a parade instead.


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