Minimum wage mania may lead to loss of jobs

Raising the minimum wage is getting a lot of support from low-paid workers who may soon find themselves unemployed.

The city of Los Angeles is patting itself on the back for raising the minimum wage to $15 an hour over the next five years; it should get a swift kick in the rear.

We are in completely uncharted economic territory when it comes to the size of the recent spate of minimum wage increases that has energized so many unions and left-leaning activists. And don’t forget: Employers have to add health insurance on top of the wage increase.

Defenders claim that several economic studies show little or no adverse impact on those with the fewest skills and least experience. But those studies generally look at small wage increases, not jumps of 50 percent or more. Los Angeles imposed a 67 percent increase from the current $9 per hour. When health insurance is included, many employers are looking at close to paying about 100 percent for the same low-income worker.

How many of you as consumers would continue to buy a product or service if the price doubled, even if it’s over a few years?

The National Conference of State Legislatures says that 29 states, plus Washington D.C., have imposed minimum wages higher than the current $7.25 federal level. Most of them tend to be around $9 or will be by January of next year. No state has passed a $15 minimum wage.

But three cities have: Seattle, San Francisco, and now Los Angeles. Chicago has a $13 minimum wage.

Now, do the math with me. A minimum wage increase to $15 an hour is more than double the current $7.25 rate, and about a 60 percent-plus increase for those states that have passed something close to a $9 minimum wage.

But we can’t stop there, because employers with 50 employees or more must provide health insurance.

A worker at the current federal minimum wage of $7.25 makes about $15,000 a year. Obamacare has already increased that cost by $4,411, or about 30 percent.

But with the $15 minimum wage, the minimum wage worker goes from costing the employer $19,400 in wages and health insurance to $35,600.

So I ask again, if you could afford to spend $15,000 on a new car, or even $19,400, does that mean you can afford to spend $35,600?

And remember, for employers it’s not just a one-time, one-person increase. A $15 minimum wage increase captures all of the employees below that level. And those whose experience and skill had them making above some of their minimum wage coworkers — but less than the new $15 minimum — will reasonably want a proportional increase to, say, $17 to $20.

The good news — if you can call it that — is that the growing number of minimum wage laws at the state and local level may quash any federal efforts to raise the national minimum wage.

But the minimum wage mania has gotten out of hand. Politicians are trying to outbid each other — only they’re doing it with employers’ money, not their own.

And they are getting a lot of support from lowpaid workers who may soon find themselves unemployed.