How the $15 Minimum Wage Upended NYC’s Car Wash Industry

The video above by Reason TV’s managing editor Jim Epstein “The $15 Minimum Wage Is Turning Hard Workers Into Black Market Lawbreakers” is an in-depth look at New York’s car wash industry, and the real world consequences of politicians interfering with a complex industry they don’t understand by artificially raising the minimum wage to $15 an hour..

To paraphrase Thomas Sowell: Many New York politicians and minimum wage proponents who have never run one business for one day are nevertheless confident thatThe minimum wage activists had no understanding of how those wage hikes would adversely affect the complex car wash industry. they know exactly how much business owners should be mandated to pay car wash workers—a minimum of $15 an hour. Despite their professed expertise, the anointed minimum wage activists had no understanding of exactly how those artificial, above-market wage hikes would adversely affect the complex car wash industry and never considered all of the secondary, unintended negative consequences of the wage hike to $15 an hour, like the incentive to automate car washes, downgrade service, or close down car washes, which have all happened in New York City and eliminated jobs for car wash workers.

It’s really unfortunate that there’s no academic discipline that has studied and researched labor market dynamics, market forces, and the history of government price, rent, wage and interest rate controls over hundreds of year, and documented all of the many unintended and predictable consequences of government interference in the market with distortionary public policies like minimum wage laws.

This article is reprinted with permission from the American Enterprise Institute.