San Diego minimum wage hike a lesson for Nevada

Victor Joecks’ May 24 column about reasons not to increase the minimum wage (“Honing skills best path for raising wages”) provides an excellent analysis of why this idea would hurt those in entry-level jobs.

To take it a step further, let’s consider what has happened in San Diego, where the minimum wage was increased to $11.50 an hour in January. Numerous analysts have concluded that about 4,000 jobs have been lost, the majority in the restaurant business, due to this government intrusion. Most restaurants have increased prices while some have even added a surcharge to diners’ checks to make up for their losses. Others have installed self-serve kiosks or other robotic devices to avoid the higher labor costs.

Not only eateries are affected. Apartment complexes, for example, must pay their employees more, which in turn, means higher rents. Guess who lives in rental properties? The working poor. Retailers running on tight margins, such as grocery stores and discount stores, must raise wages too, leading to higher merchandise and grocery prices. Guess who has to bear that burden disproportionately? The working poor, again.

Predictably, some firms are moving their operations to Texas, joining the exodus of California businesses looking for greener pastures. Others have outsourced their customer service call centers to the Philippines.

None of this bodes well for Nevada’s economy or future should we decide to increase minimum wages each year, rather than allowing the free market to decide labor costs.