“Payroll Tsunami”: Small Businesses Layoff Workers To Comply With Minimum Wage Law

In what has become just one more example of government intervention going the exact opposite of what socialists intend, minimum wage laws are driving a “payroll tsunami.”  Small businesses are being forced to lay off workers in order to comply with a law demanding an increase in wages.

This isn’t all that surprising. Economists, small business owners, and other analysts have said that the net result of higher wages is a loss of jobs. And small businesses, who don’t have the capital or return that large corporations do, are feeling the proverbial pinch. According to Fox News, several mom-and-pop coffee shops and restaurants, are responding by cutting hours, eliminating jobs or closing down entirely because they can’t keep up with rising wages under the law.

Similar effects were seen after employers were dictated to comply with the Obamacare law.  Instead of giving full-time employees health insurance paid for by the company, many workers were simply cut to part-time.

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Government intervention in the market has proven disastrous in just the past several years, and yet people still believe there isn’t enough totalitarianism. Complying with laws such a minimum wage increase also has the horrible effect of seeing jobs sent overseas – something people hate to hear, but the fact is, no one goes into business to lose money and the United States has become rather effective at driving out businesses as those businesses will always seek more hospitable environments.

This is the ugly side to the highly touted wage hikes, economists say.  The side of the issue socialists disregards in order to pat their own backs because they had “feelings” that they are entitled to more money without actually providing the business with more value.  Economists added that these “bumps in the road” can unleash a “payroll tsunami” for smaller businesses already stretched thin from rising rents and soaring health care costs.

“For some of these businesses, the minimum wage hikes tip the balance between staying in business and going out of business,” Panos Mourdoukoutas, professor of economics at LIU Post in New York, wrote in Forbes.

After winning her House race last year, New York Rep. Alexandria Ocasio-Cortez, D-N.Y., “swung by” to say goodbye to the Coffee Shop in Union Square where she used to work.

She tweeted: “The restaurant I used to work at is closing its doors. I swung by today to say hi one last time, and kid around with friends like old times.”

What the Communist failed to mention to her ignorant followers, is that that popular coffee shop was shuttering its doors permanently because it couldn’t afford the $15 minimum pay raise that Ocasio-Cortez has gone on to strongly support.  There is no need for logic when it comes to socialism or communism, however, and the fact that this woman was somehow elected proves Americans are lacking.

“The times have changed in our industry,” co-owner Charles Milite told The New York Post. “The rents are very high and now the minimum wage is going up and we have a huge number of employees.” It simply costs too much to employee people, and provide jobs anymore.

The American Action Forum calculates that minimum wage hikes will kill 261,000 jobs. Most of the losses concentrated in New York and California, where the tax burden and housing costs are already quickly eliminating the middle class with force. Homelessness is already a problem and it’s going to continue to worsen.

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California, Illinois, Massachusetts, New Jersey, and New York all have approved a $15 minimum wage, as has the District of Columbia. Phoenix, Arizona employees are on track for the hourly pay bump on May 1, along with the job losses that will come with it. In all, there are 20 states that have or will move toward a $15 wage.

It seems like no matter how much evidence is out there that increased totalitarianism doesn’t help in the labor market, the masses cannot possibly be bothered to do anything else but beg the government to write laws for their own salvation.  We live in a nation full of bleating sheep.

This article has been contributed by SHTF Plan. Visit www.SHTFplan.com for alternative news, commentary and preparedness info.