Look What Minimum Wage Increases Are Forcing SONIC to do

General Views From A Sonic Drive-In Ahead Of Earns Reports

Plenty of State governments are feeling the Bern, apparently.

Fourteen cities approved $15 an hour minimum wages in 2015, as did California this year.

We already know what modest increases in the minimum wage would do – as is visualized by the Congressional Budget Office chart below:

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So if a $10.10 an hour would cost upwards of 1 million jobs, who knows what $15 an hour would do.

It’s incredible that there is still any denial that the minimum wage comes at a cost. As the Conservative Tribune reports, SONIC is just one of many businesses that will be adversely affected by the trend in rising minimum wages nationwide.

That little tidbit of basic economics knowledge was recently shared by the CEO of Sonic restaurants during a recent company conference call, according to WPTV.


Clifford Hudson said that if the minimum wage for entry-level unskilled workers is raised, most of the restaurants in his corporation will be forced to increase the price of menu items simply to stay in business.

Though there are also fears that an increased minimum wage could lead to lost jobs, Hudson doesn’t believe that any of his restaurants will be forced to let any employees go. Left unsaid is the fact that jobs will be “lost” by having never been created in the first place, with restaurants foregoing hiring new employees at a rate higher than they are worth.

The last statement (in bold) is key, as it’s one of the many ways that the job killing effects of the minimum wage can be masked.

Suppose no jobs were initially lost following a minimum wage hike. Liberals would declare that the policy was a success. But if it was projected that (a hypothetical) 1,000 jobs were to be created over the next year, and only 500 were, the minimum wage technically cost 500 jobs even though it didn’t show up in the statistics.



Analytical Economist

About Analytical Economist

The Analytical Economist is a freelance financial, political, and economics writer. His work has appeared in a variety of publications, including National Review, the Foundation for Economic Education, Ludwig von Mises Institute, among many others.

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