Democrats have been fighting to use their slim majority in Congress to impose a national $15 minimum wage. But the minimum wage wouldn’t be $15 — it would be zero, as it always has been.
The Kroger Company is the most recent illustration of this point. The largest grocery chain in the country shuttered two stores in Long Beach, California, that it described as “underperforming.” The move came after the city approved a “hero pay” ordinance, mandating that certain businesses increase the hourly wages of their employees by $4 an hour.
Kroger similarly announced the closure of two Seattle stores and three locations in Los Angeles over similar “hero pay” measures.
Democrats were quick to tout the that the Congressional Budget Office found that raising the federal minimum wage to $15 an hour would lift nearly 1 million people above the poverty line. Often ignored or downplayed is that the CBO projected it would also send a net total of 1.4 million people to the unemployment line. Kroger is playing that scenario out in real-time, even if you contend that Kroger is just being cheap and that, as the largest grocery chain in the country, it could afford the minimum wage hike, smaller businesses could not.
That’s made clear by Amazon, which already has its minimum wage set at $15 an hour, lobbying in favor of making it a national mandate. For giants like Amazon, the goal is suffocating smaller competitors.
It’s also made clear by Chipotle, which said that raising the minimum wage would result in a “manageable” hike in menu prices. Of course, it’s so manageable that Chipotle hasn’t decided to raise its own minimum wage to $15 an hour, but it knows it can take the hit. Smaller competitors cannot.
In normal times, it’s recognized that a minimum wage hike would hurt both small businesses and young and low-skilled workers looking for work. It’s even more baffling now, in the aftermath of a pandemic that saw lockdowns shutter businesses and throw millions out of their jobs. Nearly 60% of businesses that closed during the pandemic did so permanently. Four million more people were unemployed in March 2021 than in February 2020.
The minimum wage for people who can hold on to their jobs would be $15. For those who cannot find work or get laid off as businesses avoid massive labor cost increases, as Kroger did, it would be $0, and there would be more of them now than there are already. Kroger is offering Democrats a glimpse into the future they are seeking. We would all be better off were they to heed the warning.
