Posted on by Californiacontrarian

Blast From the Past XVIII

This was written two years and still holds true today.

Why ?  

Here in California we are use to practices that hurt the poorest among us. For the most part these are initiated and subsequently pushed by the liberal Sacramento politicians here in our state. But why?

First, Increasing the minimum wage.

From Forbes, 2017:

The restaurant industry is the most intensive user of of minimum wage labour. A useful, although not wholly accurate, rule of thumb is that 50% of those making minimum wage are in restaurants, and that 50% of those working in restaurants are on minimum wage. So, whatever the employment effects of a minimum wage rise are they’re going to show up in the restaurant industry. Meaning that if w want to study the minimum wage effects on employment then restaurants are a great place to go looking.

The evidence suggests that higher minimum wages increase overall exit

rates for restaurants. However, lower quality restaurants, which are already closer to the margin of exit, because of very slim profit margins, are disproportionately impacted by increases to the minimum wage. Estimates suggest that a one dollar increase in the minimum wage leads to a 14 percent increase in the likelihood of exit for a 3.5-star restaurant (which is the median rating), but has no discernible impact for a 5-star restaurant (on a 1 to 5 star scale).

In other words not only are those that work medium rated restaurants more likely to lose their jobs, but restaurants in the less affluent neighborhoods that are frequented by less affluent patrons are also more likely to disappear. Furthermore the effect of Covid on restaurant closings is only going to aggravate this situation. 

Second, raising the gas tax.

Without question here in California the poorest among us cannot work from home, and so they are the most likely ones that have to commute to their workplace. On a national level the scuttlebutt is that there is proposal in the works to institute a “gas tax” based on miles driven, ergo the main effect of this would be on those who must commute longer distances because they cannot live in the more affluent city areas where their jobs are.

Third, raising the price of gas even before a tax kicks in.

Doing things like closing pipelines will inevitably cause the price of gasoline to go up. Surprise, surprise it is already happening! Likewise the fracking moratorium on federal lands will only increase the cost of heating homes in the next year or so. Who will suffer the most from this? Predictably, the poorest among us for a variety of different reasons.

Why do Democrats promote policies that are seemingly intended to hurt those who can least likely afford them?

Next the Dems will be going after the Costco $5.00 chicken.

2/21/21

2/18/23

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